RMBS

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.

The pool includes a high concentration of loans originated through alternative underwriting, and on investment properties. Just 10.3% of the pool received COVID forbearance.

All of the loans are non-prime loans, and this is the first transaction that BREDS will sponsor using the BINOM shelf.

The collateral pools consists of 578 loans, and the trust uses a senior-subordinate, shifting-interest structure that helps maintain a longer subordination period.

The deal also provides a sequential principal distribution to all of the certificates at all times, unlike recent non-prime securitizations.

The proposed acquisition comes just days after Better.com announced plans to buy London-based online loan broker Trussle Lab.

So far companies plan on using roughly the same number of employees as they shift from handling payment suspensions to assessing borrowers who have seen long-term declines in their incomes.

With little transitional disruption, the bigger players on the non-agency side could gain a hefty share of non-owner-occupied mortgage volume as a result of Fannie Mae and Freddie Mac’s caps on such purchases, a KBRA analysis finds.

The deal was constructed under Angel Oak’s social-bond framework, in which the firm intends to use the proceeds to help finance residential loans for underserved borrowers.

The mortgage real estate investment trust has been a first-mover regarding innovations in the private securitized market, and others tend to follow its lead.

Oaktree Re VI 2021-1 will market $531 million in CRT notes that will provide NMI with partial reinsurance on a $45B pool of GSE-eligible loans.