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KBRA Assigns Preliminary Ratings to AOMT 2021-5

David Krechevsky
Aug 25, 2021
Angel Oak Mortgage REIT Logo

Nearly 80% Of Mortgages In $389.6M RBMS Offering Are Non-QM Loans

KEY TAKEAWAYS
  • The loans were originated by Angel Oak Home Loans LLC and Angel Oak Mortgage Solutions LLC.
  • The underlying collateral, comprising 982 residential mortgages, is characterized by a notable concentration of alternative income documentation.

Kroll Bond Rating Agency said today it has assigned preliminary ratings to six classes of mortgage pass-through certificates from Angel Oak Mortgage Trust 2021-5 (AOMT 2021-5), a $389.6 million, non-prime residential mortgage-backed securities (RMBS) transaction.

The underlying collateral, comprising 982 residential mortgages, is characterized by a notable concentration of alternative income documentation, with approximately 64.8% of the loans underwritten using bank statements.

KBRA assigned preliminary ratings as follows:

  • A-1: AAA
  • A-2: AA+
  • A-3: A+
  • M-1: BBB+
  • B-1: BBB-
  • B-2: BB-
  • B-3, XS, A-IO-S, R: Not rated.

KBRA’s rating approach incorporated loan-level analysis of the mortgage pool through its RMBS Credit Model, an examination of the results from third-party loan file due diligence, cash-flow modeling analysis of the transaction’s payment structure, reviews of key transaction parties, and an assessment of the transaction’s legal structure and documentation. KBRA’s analysis and preliminary ratings are based on information regarding the underlying mortgage loans and the terms of the securitization as of Aug. 25, 2021.

Approximately 78.9% of the loans were designated as non-qualified mortgages (non-QM) and do not benefit from the safe harbor legal protections, and are potentially at heightened risk of litigation-related losses. The remainder of the collateral pool is exempt from the ATR Rules as the loans were originated for investment properties.

The loans were originated by Angel Oak Home Loans LLC and Angel Oak Mortgage Solutions LLC, with a pool cutoff date of Aug. 1, 2021.

Select Portfolio Servicing Inc., an experienced servicer, will service all of the loans. The master servicer is Wells Fargo Bank, N.A.

For the full report, visit www.kbra.com.

Published
Aug 25, 2021
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