Fitch Rates EFMT 2023-1 Non-QM Securitization Supported By LendSure, AHL

Fitch Ratings said Tuesday it has assigned final ratings to EFMT 2023-1, residential mortgage-backed certificates supported by non-qualified mortgages originated by LendSure Mortgage Corp. and American Heritage Lending (AHL).

EFMT 2023-1, Mortgage Pass-Through Certificates, Series 2023-1, are supported by 796 loans with a balance of $330.37 million as of the cutoff date, Fitch said. It is the eighth EFMT transaction rated by Fitch and EFMT’s first transaction in 2023.

The certificates are secured mainly by Non-QM loans as defined by the Ability to Repay (ATR) rule. Approximately 48.8% of the loans were originated by LendSure, a joint venture between LendSure Financial Services Inc. and Ellington Financial Inc. Approximately 23.8% of the loans were originated by AHL. The remaining 27.4% were originated by other third-party originators that contributed no more than 10% each to the pool, Fitch said.

Of the pool, 57.75% of the loans are designated as Non-QM; the remaining 42.25% are investment properties not subject to ATR. 

Fitch's analysis of the pool, determined that self-employed, non-debt service coverage ratio (non-DSCR) borrowers make up 50.4% of the pool; salaried non-DSCR borrowers make up 16.2%; and 33.4% (33.5% per the transaction documents) comprises investor cash flow DSCR loans

Fitch assigned its 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, A-IO-S, X, R: Not rated.

Rushmore Loan Management Services LLC will be the servicer, and Nationstar Mortgage LLC will be the master servicer for the transaction.

To read the full report, visit www.fitchratings.com.