RMBS

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.