Within Bravo's pool, 31.9% of the loans were originated through a retail channel and 3.7% are designated as a qualified mortgage (QM) loan, while 61.5% are Non-QM and for the remainder the ability to repay rule (ATR) does not apply, according to Fitch. Lastly, 4.4% of the loans are 30 days' delinquent as of the cutoff date.
The company also revealed that Bravo Residential Funding Trust's loans in the pool consist of borrowers that have a moderate credit profile — a 706 model FICO, a 46% debt-to-income ratio (DTI), which includes mapping for debt service coverage ratio (DSCR) loans — and leverage as evidenced by a 71.2% sustainable loan-to-value ratio (sLTV). Additionally, the pool consists of 66.7% of loans treated as owner-occupied, while 33.3% were treated as an investor property (28.5%) or second home (4.8%).
Close to 71.4% of the pool was underwritten to less than full documentation, and 35.6% was underwritten to a 12-month 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, according to the company.
These loans adhere to underwriting and documentation standards required under the Consumer Financial Protections Bureau's ATR, which reduces the risk of borrower default arising from lack of affordability, misrepresentation or other operational quality risks due to rigors of the ATR mandates regarding the underwriting and documentation of the borrower's ability to repay, added Fitch.
Fitch also states that loans in the pool were originated by multiple originators and aggregated by an investment vehicle managed by Pacific Investment Management Company LLC's (PIMCO) U.S. residential mortgage team. The loans are serviced by AmWest Funding Corp., Rushmore Loan Management Services LLC, Select Portfolio Servicing, Inc., and Specialized Loan Servicing LLC.
