Verus Securitization Trust, 2022-6, is preparing to come to market with a $524.4 million mortgage-backed securities (MBS) deal, due out by the end of the month.
The pool is comprised of 973 mortgages, which range in type and include seasoned and unseasoned, fixed and adjustable-rate residential loans.
The property types vary, too, and include single-family residences, planned-unit developments, two- to four-family residential properties and mixed-use properties, according to S&P Global Ratings.
Citibank is playing a central role in the deal, as paying agent, registrar of the notes and certificates, according to S&P.
VMC Asset Pooler is sponsoring the transaction, which has a diverse pool of originators. Castle Mortgage is the largest originator in the collateral pool, representing a 16.5% portion of the collateral, by pool balance. The rest of the originators each make up less than 10% of the collateral, and the top five account for 47.6% of the pool balance.
Among servicers, NewRez accounts for 93.1%, while Fay Servicing will handle 6.8%. Master servicer responsibilities for the whole pool fall to Nationstar Mortgage.
The Verus Securitization 2022-6 transaction has a high concentration of loans that were underwritten using alternative documentation, such as bank statements and profit and loss statements. Some 351 loans in the pool were verified this way, representing 47.7% of the pool. Otherwise 469 loans, or 32.9% of the pool, were either asset depletion loans or property-focused investor loans, which did not consider the borrower’s income or employment in the approval process.
On a weighted average (WA) basis, the collateral pool has an original cumulative loan-to-value ratio of 71.9%, an updated FICO score of 725, debt-to-income ratio of 34.2%, and a non-zero debt-service coverage ratio of 1.3%.
Purchase loans (58.5%) and cash-out refinancing mortgages (30.4%) were the two most prevalent purposes for the mortgages, while the type of property finances was almost evenly divided between owner-occupied homes (54.6%) and investor properties (41.5%). Single-family homes, including planned-unit account for a large majority (76.6%) of the property types.
Fixed-rate loans dominate the portfolio, at 90.5%, while adjustable-rate mortgages (ARM) and loans with interest-only payments represented 9.5% and 22.5%, respectively.
