A pool of non-prime and primarily fixed-rate residential mortgages, will secure $328.8 million in residential mortgage-backed securities (RMBS), coming to market from sponsor SLC BINOM Sponsor.
Primarily, the collateral securing the notes from BINOM Mortgage Loan Trust, or BINOM 2026-NQM2, is either non-qualified mortgages or those that are considered exempt, making up 97.9% of the pool, according to Kroll Bond Rating Agency.
The 683 home loans in the collateral pool are considered non-prime for a range of reasons, which include a borrower's flawed credit history or loan underwriting methods that rely on bank statements to verify income.
BINOM 2026-NMQ2 consists of about 15 tranches of notes, composed of class A, M and B classes issued to investors, plus an excess servicing strip, a tranche to capture prepayment charges and a residual piece, KBRA said.
The two most senior tranches of the deal are first cash flow (FCF) and a last cash flow (LCF) tranche, KBRA said. All the senior tranches, from A1 through A3, will repay noteholders on a pro rata basis, while the A1A and A1B notes, just after the FCF and LCF in the waterfall, will distribute initial exchangeable notes.
Almost all five A1 tranches benefit from credit enhancement levels of 26.10%, KBRA said. The A1A tranche, however, has a credit enhancement level of 36.10%. The A2 and A3 notes benefit from 20.0% and 10.95% in credit enhancement, respectively.
The mezzanine and subordinate tranches will repay noteholders sequentially, and credit enhancement levels range from 6.95% on the M1 notes to 1.70% on the B2 notes, KBRA said.
Aside from the modified sequential payment structure, the notes get credit enhancement from excess spread. BINOM 2026-NMQ2's structure also includes a 120-day stop-advance provision. As the advancing party, SLC BINOM is prohibited from forwarding any interest and principal on loans that are more than 120 days delinquent, KBRA said.
On average, the mortgages have a balance of $481,410, with an original FICO score of 751. Leverage is moderate, with a loan-to-value (LTV) ratio of 71.0%. Also, KBRA says, borrowers have a median income of $306,602 and WA liquid reserves of $398,661.
KBRA assigns AAA ratings on the A1 notes; A+ and A to the A2 and A3 notes; BBB to the M1 notes; and BB+, BB and B to the B1A, B1B and B2 notes.
