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.
