Oceanview Trust launches $ 351 million in jumbo mortgages


As the US economy gradually shifts into a pandemic foreclosure mode, several aspects of residential mortgage borrowers are also returning to pre-COVID-19 levels, including levels of independent borrowers in the Oceanview Mortgage Trust 2021-3, or OCMT 2021-3, which is expected to issue $ 351 million in notes.

Independent borrowers represented 18.7% of the borrowers in the pool guaranteeing the transaction. For 2020 and 2021, the average combined percentage of independent borrowers was 19.5%, according to rating agency Kroll Bond.

Independent professionals posted slightly weaker credit fundamentals as they were hit harder by the pandemic due to business closures, according to KBRA. For example, the original FICO score for the self-employed was 773, while full-time workers had a FICO score of 779. The original combined loan-to-value ratio (CLTV) for the self-employed on the underlying loans was by 61.6%. , compared to 69.3% for full-time workers.

In the aggregate pool and on a weighted average basis, CMO 2021-3 borrowers had substantial and documented cash reserves of $ 553,483 for blue chip jumbo loans. Compared to recent transactions, borrowers have also been shown to have high residual income.

All loans in the pool were qualified mortgages, which KBRA considers positive credit.

In view of the fact that jumbo mortgages are often created with high real estate prices, the pool has significant exposure to assets located in California. This state accounted for 22.6% of the pool balance, while Virginia, Texas, Florida and Maryland respectively represented 10.3%, 9.8%, 7.2% and 4.7%.

Another aspect of jumbo loans is that the clients are often high net worth borrowers. Even though the underwriting terms of these loans are conservative, they present a risk for RMBS jumbo loan pools, as a single loan can represent a significant portion of the pool balance.

From a different perspective, the top five basic statistical domains (CBSA) were Washington, DC (11%); Los Angeles (6.5%); San Francisco (5.4%) Dallas, Texas (4.0%) and Philadelphia (3.4%).

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