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Provident Funding Mortgage Trust 2021-J1 (PFMT 2021-J1) is a prime RMBS transaction comprising 629 residential mortgages with an aggregate principal balance of $461.7 million as of the Sept. 1, 2021 cut-off date.
The underlying collateral consists of jumbo non-agency (53.1%) and agency eligible (46.9%), fully amortizing, fixed-rate mortgages. The pool is characterized by significant borrower equity in each mortgaged property, as evidenced by the WA original LTV of 62.8% and WA original CLTV of 63.0%. The weighted average original credit score is 778.
“Provident Funding Mortgage Trust 2021-J1 (PFMT 2021-J1) represents the seventh PLS transaction from the Provident since the first securitization off the PFMT shelf in 2019,” according to KBRA. “It is the first transaction sponsored by Provident which is comprised of mostly jumbo non-agency mortgage loans in addition to agency eligible loans. However, the high credit profile is consistent with the previous PFMT issuances, with a weighted average FICO score of 778 and CLTV of 63.0%. All loans are originated to QM Safe Harbor requirements.”
KBRA also stated that servicing and subservicing have been instrumental in maintaining profitability during periods of slower lending for Provident, with over $45 billion currently serviced. Over 80% of the servicing portfolio is for Provident-originated loans which have notably low servicing costs, according to the report.