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KBRA Assigns Preliminary Ratings To SEMT 2021-6

David Krechevsky
Sep 16, 2021

Pool Of 497 First-Lien Loans Combined Have A Principal Balance Of Nearly $449M

Kroll Bond Rating Agency (KBRA) said Tuesday it has assigned preliminary ratings to 55 classes of mortgage pass-through certificates from Sequoia Mortgage Trust 2021-6 (SEMT 2021-6), a prime residential mortgage-backed security (RMBS) transaction sponsored by RWT Holdings Inc.

SEMT 2021-6 contains 100% QM (Safe Harbor) non-conforming mortgage loans, with 75% of the pool originated to QM 1.0 and categorized as QM Safe Harbor, and approximately 25% designated as QM Safe Harbor (APOR) under QM 2.0, KBRA said.

The mortgage pool is composed of 497 first-lien loans with an aggregate principal balance of nearly $448.9 million as of the cut-off date, Sept. 1, 2021, the agency said.

The underlying collateral consists entirely of fully amortizing, fixed-rate mortgages, KBRA said. The pool is characterized by substantial borrower equity in each mortgaged property, as evidenced by the weighted average original loan-to-value (LTV) of 67.5% and weighted average original combined LTV of 67.6%, the agency said. The weighted average original credit score is 773, which is within the prime mortgage range., it said.

KBRA’s preliminary ratings are as follows:

  • A-9, A-12, A-18, A-21, A-IO1, A-IO9, A-IO10, A-IO12, A-IO13, A-IO18, A-IO19, A-IO21, A-IO22: AAA
  • B-1: AA
  • B-2: A
  • B-3: BBB
  • B-4: BB-
  • B-5, A-IO-S, R, LT-R: Not rated

KBRA said its rating approach incorporated loan-level analysis of the mortgage pool through its KBRA 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. Its analysis is based on information regarding the underlying mortgage loans and the terms of the securitization as of Sept. 14, 2021, KBRA said.

The loans will be serviced by Select Portfolio Servicing Inc. (SPS). Redwood Residential Acquisition Corp. will retain the servicing rights on the SPS sub-serviced loans. The master servicer is Nationstar Mortgage LLC.

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