Fitch Assigns Expected Ratings To AOMT 2023-1 Non-QM Securitization

Fitch Ratings said recently is has assigned expected ratings to Angel Oak Mortgage Trust 2023-1 (AOMT 2023-1).

The residential mortgage-backed securities certificates to be issued by AOMT are supported by 1,073 loans with a balance of $580.47 million as of the cutoff date. It is the 27th Fitch-rated AOMT transaction and the first in 2023.

The certificates are secured by mortgage loans mainly originated by Angel Oak Mortgage Solutions LLC and Angel Oak Home Loans LLC. All other originators make up less than 10% of the loan pool. 

Of the loans, 67.4% are designated as non-qualified mortgage (Non-QM) loans, while 32.6% are investment properties not subject to the Ability to Repay (ATR) Rule.

Fitch assigned the its expected ratings as follows:

• A-1: AAA (sf)
• A-2: AA (sf)
• A-3: A (sf)
• M-1: BBB- (sf)
• B-1: BB (sf)
• B-2: B (sf)
• B-3, R: Not rated.

Class A-1, A-2, and A-3 certificates are fixed rate, capped at the net weighted average coupon (WAC), and have a step-up feature. Class M-1, B-1, and B-3 certificates are based on the net WAC; class B-2 certificates are based on the net WAC, but have a step-down feature in which the class becomes a principal-only bond at the point that class A-1, A-2, and A-3 step-up coupons take place. In addition, at the point the class A-1, A-2, and A-3 step-up coupons take place, the waterfall will prioritize the payment to the A-1, A-2, and/or A-3 cap carryover amounts prior to paying B-3.

Of the pool, 65.8% represents loans whereby the borrower maintains a primary or secondary residence, while the remaining 34.2% comprises investor properties based on Fitch's analysis. Fitch determined that 18.4% of the loans were originated through a retail channel.

The pool contains 128 loans over $1 million, with the largest amounting to $3.5 million.

The full report is available at www.fitchratings.com.