RMBS

More than 55% of all purchase loans included in agency and government transactions were given to people who had not previously owned their residence, Intercontinental Exchange said.

Among the options is a synthetic risk transfer backed by a portfolio of about $5 billion of home loans originated when interest rates were lower.

Flat growth is expected for mortgages and auto loans, while credit card loan growth will slow down.

The coupons on the class A notes steps up after four years by 100 basis points, but the coupons are subject to a net weighted average coupon (WAC) cap.

Meanwhile, issuance in the far smaller private-label residential mortgage-backed securities market has shown relative strength so far this year, as forecast.

The sponsor sourced the mortgage collateral from a range of originators, but none of them accounts for more than 10% of the pool balance.

The A1 tranche of $172 million (66.8%) is rated as AAA by Fitch and KBRA.

All of the loans were originated by CrossCountry Mortgage, which previously had a relationship for this product with Starwood.

High interest rates and constrained inventory will take its toll on originations and securitization activity in 2024, the rating agency commented.

The market appears strongly divided, as commercial real estate presents investors with stark choices and big risk-management decisions, often differing by region and by sub-sector.

Home equity investment (HEI) agreements homeowners receive upfront cash payments in exchange for giving an investor a stake in the property and the right to collect returns.

For large banks, the agencies wanted to go above the global standards for residential mortgages, as well as some business loans, to avoid giving those lenders a competitive advantage over smaller peers, according to another person familiar with the proposal.

Among the nonperforming assets 44.01% are either in foreclosure or referred for foreclosure; 19.32% are in default; 7.17% are liquidated and 1.75% are in bankruptcy.

Various affiliated companies participated in the creation of the transaction, including its publicly traded REIT, which owned a significant portion of the mortgages.

Deterioration in credit quality should put strain on collateral originated in late 2021 and early 2022, affecting performance, Barclays Credit Research said.

A&D Mortgage originated a vast majority of the pool, 96.7%, and the company plays a number of other roles on the film, such as servicer and provider of the R&W.

Collateral characteristics are slightly weaker than previous deals, due to a higher proportion of loans underwritten to alternative income documentation.

Even among the non-QM loans in the reference pool, pegged to the SOFR, most of their characteristics fall in line with what is considered prime.

Under Home Partners Holdings’ right to purchase (RTP) program, RTP prices exceed purchase valuations by about $33.2 million, and on 817 properties.

Credit enhancement includes subordination, shored up by excess spread generated from excess spread between the cash flow on the collateral and the certificates.