KBRA Assigns Preliminary Ratings To Non-QM Offering OBX 2022-NQM6 – NMP 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 www.kbra.com (registration required).

Published
Jun 23, 2022
More from
Non-QM
CFPB Director: Agency Reviewing QM Rules, Other Regulations

In a blog post, Rohit Chopra says the goal is to “more clearly communicate the agency’s expectations.”

Regulation and Compliance
Jun 21, 2022
Fitch Assigns Expected Ratings To Non-QM Offering STAR 2022-4

Of the loans in the pool of 673 loans with a balance of approximately $357.4 million, 54.5% are designated as Non-QM.

Non-QM
Jun 20, 2022
Angel Oak Mortgage Adds 7 New Employees

Focus for Non-QM lender is on account executives.

Non-QM
Jun 20, 2022
FGMC Launches Non-QM Loan Program To Tap Equity

Explorer Equity program offers flexible guidelines and expanded credit parameters for borrowers who may not otherwise qualify.

Non-QM
Jun 16, 2022
KBRA Assigns Preliminary Ratings To Non-QM Offering VERUS 2022-6

The $524.5 million non-prime RMBS  transaction consists of mortgages originated by various lenders, including Castle Mortgage.

Non-QM
Jun 16, 2022
Deephaven Mortgage Hires Regional VP Of Wholesale Sales

Paul Howarth Responsible For Growing Wholesale Team In Western U.S.

Non-QM
Jun 09, 2022