A pool of 1,057 primarily fixed-rate residential mortgages will serve as collateral for approximately $505.5 million in residential mortgage-backed securities (RMBS) issued under the BRAVO Residential Funding Trust 2026-NQM8, which will offer 13 tranches.
The latest BRAVO Residential Funding Trust securitized transaction, sponsored by Loan Funding Structure VI, is expected to close Sept. 3, according to S&P Global Ratings. JPMorgan Securities is the lead underwriter. Rocket Mortgage is the master servicer.
BRAVO 2026-NQM8 is the eighth non-QM RMBS transaction issued under the BRAVO shelf in 2026.
S&P reports that 97.25% of the mortgage pool consists of fixed-rate loans, with adjustable-rate loans making up the remaining 2.75%. Of these, 0.64% feature an interest-only component. The pool is primarily made up of first-lien, fully amortizing U.S. residential mortgages, including both fixed- and adjustable-rate loans, extended to prime and nonprime borrowers.
The mortgage pool comprises loans backed by 1,057 properties; 28.66% are safe-harbor qualified mortgages, and 0.49% are higher-priced qualified mortgages. It also includes 33.96% non-QM ability-to-repay loans and 36.89% not covered-exempt loans. The loans have a weighted average seasoning of about three months. Most have 30-year maturities, while some carry 15-, 20-, or 40-year terms, S&P says.
The collateral exhibits comparatively strong borrower credit and equity characteristics, according to S&P. The mortgage pool comprises loans to borrowers with "better-than-archetypal" home equity. This is based on the loan pool's 67.95% weighted average original CLTV ratio and a weighted average used FICO score of 760.
In the deal, investor-property loans account for 39.9% of the pool by balance. The transaction includes 537 loans—33.15% by pool balance— that are property-focused investor loans where 536, or 32.91% by pool balance, were underwritten utilizing a debt service coverage
ratio (DSCR) calculated from actual or estimated property rents.
S&P said 399 mortgage loans, or 52.68% by pool balance, verified income with alternative documentation. These include bank statements and third-party prepared profit and loss statements. Meanwhile, 34.6% used other documentation methods such as DSCR, asset depletion, or asset qualification.
"We view income verification using alternative documents to be a weaker standard than full documentation of income and increase our loss coverages for these loans by applying an adjustment to the foreclosure frequencies," S&P says.
Loans originated by AmWest Funding Corp. account for 37.26% of the pool by balance, while loans from Rocket Mortgage represent another 34.13%. The remaining 28.61% comes from other originators.
According to DBRS Morningstar, which also rates the deal along with S&P, the pool averages three months of seasoning, with loan ages ranging from zero to 16 months.
AmWest Funding Corp. originates approximately 37.3% of the pool by unpaid principal balance (UPB), and Rocket Mortgage d/b/a Rushmore Servicing originates roughly 34.1% of the pool by UPB. Other originators account for the remaining mortgage loans, each comprising less than 10% of the pool by UPB.
Meanwhile, Rocket Mortgage d/b/a Rushmore Servicing services about 52.8% of the pool by UPB, while AmWest Funding Corp. services 38.2% of the pool by UPB.
