Skip to main content

KBRA Assigns Preliminary Ratings To Non-QM Offering OBX 2022-NQM6

David Krechevsky
Jun 23, 2022
KBRA New Logo

The $387.9 million non-prime RMBS transaction is characterized by a notable concentration of alternative income documentation (87.7%).

KBRA has assigned preliminary ratings to six classes of mortgage pass-through notes from OBX 2022-NQM6 Trust (OBX 2022-NQM6), a $387.9 million non-prime residential mortgage-backed securities transaction. 

The underlying collateral, comprising 623 residential mortgages, is characterized by a notable concentration of alternative income documentation (87.7%). Based on the Ability-to-Repay/Qualified Mortgage (ATR/QM) rule, approximately 60.1% of the loans were categorized as non-qualified mortgages (Non-QM). The remaining loans (39.9%) were exempt from the ATR/QM rule due to being originated by a Community Development Financial Institution (CDFI) or for business purposes (i.e., investment properties).

KBRA said the transaction contains loans it generally considers to be non-prime due to certain loan or borrower characteristics, which include borrowers with blemished credit histories and the use of bank statements and other forms of alternative documentation for verifying income.

The loans in the OBX 2022-NQM6 collateral pool were originated by relatively small, unrated entities and underwritten to non-traditional income documentation, KBRA said. All lenders contributed less than 15% of the mortgage loans, with the largest originator being Amwest Funding Corp. (13.6%).

KBRA said it assigned preliminary ratings as follows:

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

KBRA said its rating approach incorporated loan-level analysis of the mortgage pool through its U.S. RMBS Mortgage Default and Loss 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.

The full report is available at (registration required).

Jun 23, 2022
More from
Non-QM Lender Newrez Offers Temporary Buydowns

Options offer borrowers a reduced interest rate in first years of a loan.

Nov 18, 2022
Logan Finance Credits OptifiNow TPO For Sales Team Growth

Non-QM wholesale lender credits CRM’s flexibility and innovative features as key to managing rapid growth.

Nov 17, 2022
Angel Oak Home Loans Selling Retail Lending Business

Non-QM lender selling ‘brick-and-mortar’ locations, staff to Cross Country Mortgage.

Nov 10, 2022
ACC Mortgage Promotes Industry Vet To Western Regional Sales Manager

Dave Greene has 30 years of experience in the mortgage industry.

Nov 10, 2022
New American Funding Lays Off 240

Calif.-based company has now cut 941 jobs in 2022.

Nov 08, 2022
Non-QM Lender Angel Oak Posts 3rd Straight Quarterly Loss

New CEO says he remains confident the company is uniquely positioned for success.

Nov 08, 2022