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Fitch Assigns Expected Ratings To Non-QM Offering STAR 2022-4

David Krechevsky
Jun 20, 2022
Fitch Ratings New logo.

Of the loans in the pool of 673 loans with a balance of approximately $357.4 million, 54.5% are designated as Non-QM.

Fitch Ratings has assigned expected ratings to Starwood Mortgage Residential Trust 2022-4.

Fitch said it expects to rate the residential mortgage-backed certificates to be issued by Starwood Mortgage Residential Trust 2022-4, series 2022-4 (STAR 2022-4), as follows:

  • A-1: AAAsf
  • A-2: AAsf
  • A-3: Asf
  • M-1: BBBsf
  • B-1: BB-sf
  • B-2: B-sf
  • B-3, XS, A-IO-S: Not rated.

The certificates are supported by 673 loans with a balance of approximately $357.4 million as of the cutoff date. This is the fourth Fitch-rated STAR transaction in 2022 and the 10th STAR transaction Fitch has rated since 2020, the company said.

The certificates are secured primarily by mortgage loans originated by third-party originators, with Luxury Mortgage Corp., HomeBridge Financial Services Inc., and CrossCountry Mortgage LLC sourcing 87.6% of the pool. The remaining 12.4% of the mortgage loans were originated by various originators that contributed less than 10% each to the pool. Select Portfolio Servicing Inc. is the servicer and Wells Fargo Bank is the master servicer.

Of the loans in the pool, 54.5% are designated as non-qualified mortgages (Non-QMs), while 45.5% are not subject to the Consumer Finance Protection Bureau's Ability to Repay Rule (ATR Rule).

The collateral consists of 31 adjustable-rate loans that reference one-month Secured Overnight Financing Rate (SOFR) and fixed rate loans. The class A-1 certificates will be fixed rate and capped at the net weighted average coupon (WAC) and will have a step-up feature where the coupon will equal the lesser of (a) the sum of (i) the class A-1 fixed rate (ii) 1.00% and (b) the net WAC Rate for the related Distribution Date; class A-2 and A-3 certificates are fixed rate and capped at the net (WAC), and the class M-1, B-1, B-2 and B-3 certificates are based on the net WAC.

The collateral consists of 15-year, 30-year, fixed-rate fully amortizing loans (77.4%); 17.3% fixed-rate loans with an initial interest-only (IO) term; 5.4% 7/1 and 10/1 adjustable-rate mortgages (ARMs) with an initial IO term. The pool is seasoned at approximately four months in aggregate, as determined by Fitch.

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

Published
Jun 20, 2022
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