Investment banking firm Brean is selling $206.5 million in asset-backed securities (ABS), backed by a pool of reverse mortgage loans.
Brean Asset-Backed Securities Trust 2025-RM11 will offer its notes through eight tranches. The notes will repay investors through a senior-subordinate structure, and they all—from the A1 and A2 classes, to the M5 class—have a stated final maturity date of May 2065, according to Morningstar DBRS.
On a cumulative basis, advance rates on the notes range from 95.4% on the A1 notes to 121.8% on the class M5 notes, DBRS said.
As of the transaction's May 1, 2025 cutoff date, the collateral had about $171.38 million in unpaid principal balance from the 430 performing, fixed-rate, jumbo, reverse mortgage loans. First liens on a range of properties, including single-family homes, condominiums and co-operatives, but single-family homes account for the largest portion, 83.1%.
Single women account for the largest portion of borrowers, by pool balance, at 33.9%, and on a weighted average (WA) basis, they are 78 years old. Couples, where the woman is younger, account for the next-largest segment of borrowers, at 29.9%, and on a WA basis are 75 years old.
Nationwide Equities, South River Mortgage and Smartfi Home Loans originated the loans, which are typically offered to borrowers who are at least 62 years old. Borrowers can tap home equity through a lump sum or stream of periodic payments without periodic repayment of principal and interest.
Several circumstances trigger a maturity event, including if the borrower dies, sells the leveraged property, does not occupy the residence for a year or if it is no longer the borrower's primary residence, according to DBRS.
If the deal fails to repay the notes in full by the expected May 2030 repayment date, Brean ABS Trust 2025-RM11 must conduct an auction within 180 days of the expected repayment date to raise the repayment proceeds, DBRS.
Almost half the mortgage assets in the pool, by cut-off balance, are in California, 49.3%, the rating agency said. Florida and New York have the next largest amounts, with 17.50% and 6.91%, respectively.
DBRS assigns AAA to classes A1 through AM; AA to the M1 notes; A to the class M2 notes; BBB to the M3 notes; BB to the M4 notes; and B to the class M5 notes.
