Fitch Ratings states that the COLT 2022-1 Mortgage Loan Trust consists of 50.9% of loans where the borrower maintains a primary residence and 49.1% is comprised of an investor property or second home. Additionally, 14.2% of the loans were originated through a retail channel and 57.2% are non-qualified mortgages, where the QM rule does not apply.
The company rated the non-QM credit quality negative, with collateral consisting of 656 loans, totaling $347 million, and seasoned approximately five months in aggregate (as calculated as the difference between origination date and cutoff date). The borrowers have a moderate credit profile (738 model FICO and 42% model debt to income ratio and leverage (79% sustainable loan to value ratio and 72% combined LTV), according to Fitch.
Fitch also reported that approximately 85.2% of the pool were underwritten to less than full documentation, and 44% were underwritten to a 12- or 24-month bank statement program for verifying income, which is not consistent with Appendix Q standards and Fitch's view of a full documentation program. The pool received a negative loan documentation rating.
Fitch rated the COLT 2022-1 Mortgage Loan Trust with a positive designation. The company states that the transaction “benefits from a material amount of excess cash flow that provides a benefit to the rated certificates, before being paid out to class X certificates.”
