Skip to main content

KBRA Assigns Preliminary Ratings To RCKT 2021-4

Sep 20, 2021

Includes 1,002 Residential Mortgages With An Aggregate Principal Balance Of $968.4M

Kroll Bond Rating Agency (KBRA) has assigned preliminary ratings to 46 classes of mortgage pass-through certificates from RCKT Mortgage Trust 2021-4.

RCKT 2021-4 is a prime residential mortgage-backed security (RMBS) transaction issued by Woodward Capital Management LLC. It comprises 1,002 residential mortgages with an aggregate principal balance of $968.4 million as of the Sept. 1, 2021, cut-off date. The underlying collateral consists entirely of 30-year fixed-rate mortgages originated by Rocket Mortgage LLC, all of which are subject to the Ability-to-Repay/Qualified Mortgage (ATR/QM) rules.

The preliminary ratings assigned by KBRA are as follows:

  • A-4, A-10, A-12, A-16, A-22, A-X-1, A-X-3, A-X-6, A-X-7, A-X-9, and A-X-12: AAA
  • B-1, B-X-1: AA+
  • B-2, B-X-2: A+
  • B-3: BBB+
  • B-4: BB+
  • B-5: B+
  • B-6, R, LT-R: Not rated.

KBRA said its 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.

In December 2020, the Consumer Financial Protection Bureau (CFPB) issued the General QM Final Rule (QM 2.0) which took effect for loans with application dates on or after March 1, 2021. While mandatory compliance with QM 2.0 has not yet taken effect, all the mortgage loans in RCKT 2021-4 fall under the scope of the QM rules, with 100% of the loans designated as QM Safe Harbor (average prime offer rate) under QM 2.0.

All loans in the pool were originated after the World Health Organization declared a worldwide pandemic on March 11, 2020, which was followed by global lockdown orders. KBRA said it expects loans underwritten post-pandemic to benefit from positive selection and tightened employment verification standards. However, it said, this expectation is somewhat tempered for loans originated to self-employed borrowers, who were more adversely affected by the pandemic due to business closures and other COVID-related restrictions. RCKT 2021-4 has a self-employment percentage of 35.7%, which is larger than the approximate 20% average rate seen in prime RMBS 2020 and 2021 (YTD).

To view the full report, visit www.kbra.com.

About the author
David Krechevsky was an editor at NMP.
Published
Sep 20, 2021
Fairway Acquires Hallmark Home Mortgage Through Asset Purchase

Hallmark to become new Fairway division, gets access to Fairway's Fairway's product portfolio, tech, and support resources

Jun 13, 2025
Trigger Leads Bill Clears Senate

Final push now left to House; reconciled bill needed next

Housing Market Outlook: Brighter Days To Come

NAR Chief Economist Yun calls lower mortgage rates ‘magic bullet’ to boost home sales

Jun 11, 2025
Redfin Shareholders Say Yes To Acquisition By Rocket

Nearly 99% of Redfin shareholders vote to approve merger, though fewer vote yes to compensation for company’s execs

Jun 10, 2025
Play Ball: Ishbias Could Add Another Team To Their Roster

Justin Ishbia in agreement to potentially take over as owner of Chicago White Sox — but not for several years yet

Jun 09, 2025
Rift That Could Shift The Housing Market

Trump-Musk breakup this week could have implications for federal economic policies as well as the housing and mortgage markets