NEW YORK--(BUSINESS WIRE)--Kroll Bond Rating Agency, Inc. (KBRA) assigns ratings to six classes of mortgage pass-through certificates from Homeward Opportunities Fund I Trust 2018-1 (HOF I 2018-1), a $485.5 million non-prime RMBS transaction issued by Homeward Opportunities Fund I LP as sponsor.
HOF I 2018-1 represents the first non-prime RMBS transaction from Homeward Opportunities Fund I LP, an affiliate of Neuberger Berman Investment Advisers LLC. The transaction primarily consists of non-prime collateral, with most of the loans underwritten using non-traditional income documentation sources, such as bank statements (63.1%) and investment property cash flow (22.6%). None of the pool’s 1,199 loans are “qualified mortgage” loans, as they were either designated as non-qualified mortgages (Non-QM, 67.7%) or investor properties loans that were exempt from the ATR rule (32.3%).
The underlying collateral consists of a mix of hybrid adjustable-rate mortgages (70.3%) and fixed-rate mortgages (29.7%), with 15.2% of the pool possessing an interest-only period. Loans in the pool exhibit substantial borrower equity in each mortgaged property, as evidenced by the WA original LTV and CLTV of 66.8% and 66.9%%, respectively. The non-zero weighted average original credit score is 725.
KBRA’s rating approach incorporated loan-level analysis of the mortgage pool through its Residential Mortgage Default and Loss 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. This analysis is further described in our U.S. RMBS Rating Methodology.
For complete details on the analysis, please see our pre-sale report, Homeward Opportunities Fund I Trust 2018-1, which was published on July 31, 2018 on www.kbra.com.
Representations & Warranties Disclosure
All Nationally Recognized Statistical Rating Organizations are required, pursuant to SEC Rule 17g-7, to provide a description of a transaction’s representations, warranties and enforcement mechanisms that are available to investors when issuing credit ratings. KBRA’s disclosure for this transaction can be found in the report entitled, HOF 2018-1 Trust Representations and Warranties Disclosure.
Related Publications: (available at www.kbra.com)
- HOF I 2018-1 Trust Pre-Sale Report
- HOF I 2018-1 Trust Tear Sheet
- U.S. RMBS Rating Methodology
- Residential Mortgage Default and Loss Model
- U.S. RMBS Rating Methodology for Assessing Non-QM Risk
- KBRA Expects TRID to Have Limited Impact on RMBS Enhancement Levels
About KBRA and KBRA Europe
KBRA is a full-service credit rating agency registered with the U.S. Securities and Exchange Commission as an NRSRO. In addition, KBRA is recognized by the National Association of Insurance Commissioners as a Credit Rating Provider and a certified Credit Rating Agency (CRA) by the European Securities and Markets Authority (ESMA). Kroll Bond Rating Agency Europe Limited is registered with ESMA as a CRA.