NEW YORK--()--Fitch Ratings assigns the following ratings to Sequoia Mortgage Trust 2013-3, mortgage pass-through certificates, series 2013-3 (SEMT 2013-3):
--$150,196,000 class A-1 certificates 'AAAsf'; Outlook Stable;
--$411,000,000 class A-2 certificates 'AAAsf'; Outlook Stable;
--$150,196,000 notional class A-IO1 certificates 'AAAsf'; Outlook Stable;
--$561,196,000 notional class A-IO2 certificates 'AAAsf'; Outlook Stable;
--$11,404,000 class B-1 certificates 'AAsf'; Outlook Stable;
--$9,904,000 class B-2 certificates 'Asf'; Outlook Stable;
--$8,102,000 class B-3 certificates 'BBBsf'; Outlook Stable;
--$3,001,000 class B-4 certificates 'BBsf'; Outlook Stable.
The 'AAAsf' rating on the senior certificates reflects the 6.50% subordination provided by the 1.90% class B-1, 1.65% class B-2, 1.35% class B-3, 0.50% non-offered class B-4 and 1.10% non-offered class B-5. The class B-5 is not rated by Fitch. The Class A-3 and Class A-IO3 that were presented at the time of marketing will not be issued, and as a result, Fitch has withdrawn its ratings.
Fitch's ratings reflect the high quality of the underlying collateral, the clear capital structure and the high percentage of loans reviewed by third party underwriters. In addition, Wells Fargo Bank, N.A. will act as the master servicer and Christiana Trust will act as the Trustee for the transaction. For federal income tax purposes, elections will be made to treat the trust as one or more real estate mortgage investment conduits (REMICs).
SEMT 2013-3 will be Redwood Residential Acquisition Corporation's third transaction of prime residential mortgages in 2013. The certificates are supported by a pool of prime fixed rate mortgage loans. The loans are predominantly fully amortizing; however, 2.4% have a 10-year interest-only (IO) period. The aggregate pool included loans originated from First Republic Bank (14%), Cole Taylor Bank (9.1%), United Shore Financial Services (8.8%), PrimeLending(7.5%), Flagstar Capital Markets Corporation (6.0%) and Fremont Bank (5.2%). The remainder of the mortgage loans was originated by various mortgage lending institutions, each of which contributed less than 5% to the transaction.
As of the cut-off date, the aggregate pool consisted of 746 loans with a total balance of $600,210,241; an average balance of $804,571; a weighted average original combined loan-to-value ratio (CLTV) of 67%, and a weighted average coupon (WAC) of 3.819%. Rate/Term and cash out refinances account for 58.1% and 8.8% of the loans, respectively. The weighted average original FICO credit score of the pool is 772. Owner-occupied properties comprise 95.8% of the loans. The states that represent the largest geographic concentration are California (43.1%), Massachusetts (10.5%), and Texas (6.3%).
Additional detail on the transaction is described in the new issue report 'Sequoia Mortgage Trust 2013-3'.
Additional information is available at 'www.fitchratings.com'. The ratings above were solicited by, or on behalf of, the issuer, and therefore, Fitch has been compensated for the provision of the ratings.
In addition to the information sources identified in Fitch's criteria listed below, Fitch's analysis incorporated data tapes, due diligence results, deal structure and legal documents from the 17g5 website available on 'www.structuredfn.com'.
Applicable Criteria and Related Research:
--'Global Structured Finance Rating Criteria', June 6, 2012;
--'Counterparty Criteria for Structured Finance Transactions', May 30, 2012;
--'Criteria for Special-Purpose Vehicles in Structured Finance Transactions', May 30, 2012;
--'U.S. RMBS Rating Criteria', July 20, 2012;
--'U.S. RMBS Loan Loss Model Criteria', Aug. 10, 2012;
--'U.S. RMBS Cash Flow Analysis Criteria', April 19, 2012;
--'U.S. RMBS Representations and Warranties Criteria', June 29, 2012;
--'U.S. RMBS Originator Review and Third-Party Due Diligence Criteria', April 27, 2012;
--'U.S. Residential and Small Balance Commercial Mortgage Servicer Rating Criteria', Jan. 31, 2011;
--'U.S. RMBS Surveillance Criteria', Aug. 10, 2012.
Applicable Criteria and Related Research
Global Structured Finance Rating Criteria
Counterparty Criteria for Structured Finance Transactions
Criteria for Special-Purpose Vehicles in Structured Finance Transactions
U.S. RMBS Rating Criteria
U.S. RMBS Loan Loss Model Criteria
U.S. RMBS Cash Flow Analysis Criteria
U.S. RMBS Representations and Warranties Criteria
U.S. RMBS Originator Review and Third-Party Due Diligence Criteria
U.S. Residential and Small Balance Commercial Mortgage Servicer Rating Criteria
U.S. RMBS Surveillance Criteria