Two new rental-backed private label deals hit the market


This month, after a July slump when there were no agency-qualified private-label securitizations (PLS) backed by residential investment property mortgages. Blue River Mortgage III LLC.

The prime PLS offering, called GCAT 2022-INV3, is backed by a pool of 1,259 mortgages worth $423 million. Over 97% of the loans in the pool are agency eligible investment properties and the rest are second homes.

In addition, another non-prime (non-agency) private-label offering, backed by mortgages on investment properties, hit the market as well in August. That offering, Verus 2022-INV1, is his $389.5 million deal with underlying collateral consisting of mortgages on 853 rental properties.

According to KBRA’s bond rating presale report, the main loan originators offering GCAT are: loan depot35.8%; home point28%; and ark home, 21.6%. The majority of loans on sale were originated in California, at 29.8%. New York, 11.6%. Texas has him at 10.4%. Deal sponsor his Blue River Angelo Gordon & Company LPis a global wealth management company with approximately $50 billion in assets under management.

The Verus offering is VMC Asset Pooler LLC,along with Wels Mortgage Capitalis an affiliate of Invictus Capital Partners LP — Alternative asset manager focused on real estate credit.

“All loans in this transaction are [were] It was launched by a variety of lenders, but none accounted for more than 10% of the pool. ” Kroll Bond Rating Agency (KBRA)’s pre-sale rating report on the Verus deal states:

The bond rating presale report does not identify the name of the lender. The majority of the loan volume provided by Verus PLS was originated in California, at 37.2%. Florida, 18%. and New York, 10.4%.

Two new investment mortgage deals so far in August show that the PLS market still serves as a liquidity channel for some deal sponsors. Based on the data, the pace of deals so far in July and August (a total of 3 non-prime deals and only 1 prime deal) is down significantly from the beginning of the year.

Year-to-date through mid-August, 28 prime private label securitizations (PLS) backed by $12.8 billion worth of investment property loans and $2.6 billion worth of loan pools There were 9 non-prime deals. According to KBRA.

In total, in the year ending mid-August, a total of 37 PLS securitizations across the prime and non-prime markets were collateralized by $15.4 billion of investment real estate collateral. Institution owner.

During the same period in 2021, there were a total of 15 prime PLS investment property deals worth $6.1 billion and five non-prime PLS backed by $1.1 billion in investment property mortgages. However, the second half of last year began to heat up on the deal front, with prime and non-prime deals combined delivering 68 PLS backed by investment property loan pools worth about $28.7 billion for the entirety of 2021. I was. KBRA data show.

As such, as of mid-August 2022, the PLS market is expected to match or exceed its 2021 performance in terms of number and volume of investment property deals. In fact, by his June of this year, an average of more than five of his PLS investment property deals hit the market each month across prime and non-prime sectors.

Then in July, deal flows slowed in the investment property residential mortgage-backed securities (RMBS) sector, with only two non-prime PLS deals and none of the prime securitizations, KBRA data shows. shown.

A report recently released by the Atlanta-based digital mortgage exchange Maxis Echo the KBRA data. The report attributed the slowdown in PLS trading in July to lingering risk aversion on recession fears and curtailed originations in the face of interest rate volatility.

“There were no agency-qualified (prime) investor securitizations in July,” he said. Maxis market report state. “A combination of factors, including [loan] Issuance has been restrained by supply, widening spreads and low-risk investment appetite. ”

It remains to be seen how August balances play out on the trading front. But MAXEX’s report offers some bright news at the forefront of loan trading.

The loan aggregator, which serves approximately 320 bank and non-bank originators and over 20 major investors, reported “increased investment property loan locks” through its platform in July. This indicates that the pace of selling could start picking up again this fall — given that loans are typically seasoned for several months before securitization.



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