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Angel Oak Capital Advisors has announced that it has completed AOMT 2016-1, a $132.65 million securitization primarily backed by non-Qualified Mortgages (non-QM). This securitization marks the second offering of its kind by Angel Oak Capital and represents the firm’s commitment to revitalizing the non-QM mortgage market, which has been dormant for nearly eight years.
Angel Oak Capital’s two securitizations are primarily backed by mortgages originated through the firm’s two affiliate residential mortgage lenders—Angel Oak Mortgage Solutions LLC (wholesale) and Angel Oak Home Loans LLC (retail). AOMT 2016-1 also included collateral from another affiliated lender, Angel Oak Prime Bridge LLC. In addition to sourcing the collateral through its trusted affiliates, Angel Oak Capital, through one of its accounts, has retained five percent of the offered securities, to satisfy risk retention requirements of the Dodd-Frank Act, and 100 percent of the remaining classes of subordinate securities—aligning interests of all parties.
“Angel Oak’s mortgage lenders have seen a steady increase in non-QM mortgage origination volume since the inception of these programs,” said Angel Oak CEO and CIO Sreeni Prabhu. “Our lending platforms are on pace to originate approximately 3,100 loans totaling approximately $800 million by year end. Angel Oak Capital will continue to selectively purchase the loans we feel fit best within securitization parameters and meet investor requirements.”
AOMT 2016-1 issued approximately $119.38 million of senior classes of certificates and approximately $13.26 million of subordinate classes of certificates for a total deal size of approximately $132.65 million.
“There is a stark difference between the collateral in our non-prime loans today and the sub-prime products issued prior to the financial crisis,” said John Hsu, Angel Oak’s head of capital markets. “Today’s loans adhere to the ‘ability-to-repay’ (ATR) regulation and require significant downpayment.”