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The underlying collateral, comprising 502 residential mortgages, is characterized by a significant concentration of loans underwritten using alternative income documentation. The mortgage loans, seasoned approximately 10.4 months, include both fixed-rate mortgages (69.2%) and adjustable-rate mortgages (30.8%). Additionally, approximately 18.3% of the pool has an initial interest-only period.
Approximately 73.6% of the loans were categorized as non-qualified mortgages (Non-QM) under the Ability-toRepay/Qualified Mortgage (ATR/QM) rule. The remaining loans were either QM Safe Harbor (5.0%), QM Rebuttable Presumption (1.3%), or exempt from the ATR/QM rule due to being originated for business purposes (20.2%).
Borrowers in the subject pool possess a non-zero WA original credit score of 746 and exhibit substantial equity in each mortgaged property, with WA LTV and combined LTV (CLTV) ratios of 68.7% and 68.7%, respectively. The collateral consists of mortgages originated by various lenders, including AmWest Funding Corp. (AmWest; 25.2%), Sprout Mortgage, LLC (21.5%), and LendSure Mortgage Corp (12.0%), among others. All loans in the transaction will be serviced by AmWest (25.2%), Select Portfolio Servicing (SPS; 42.1%), Selene Finance LP (30.4%), and Fay Servicing (2.3%).
According to KBRA's ratings, there is minimal TRID compliance risk and some weaknesses among the representation and warranties framework.