A pool of reverse mortgages extended to seniors will serve as collateral for $191.3 million in mortgage-backed securities coming to market from Brean Asset-Backed Securities Trust, series 2025-RM10.
Brean is slated to close at the end of the month, selling notes through eight tranches of classes A and M notes, according to Morningstar | DBRS, the one rating agency assessing the notes. All the notes in Brean ABS Trust 2025-RM10 have a stated final maturity date of January 2065.
As of the deals January 2 cutoff date, the pool was composed of 395 reverse mortgages. One was called due after the borrower's death, while the rest are performing, according to DBRS.
California accounts for the largest portion of loans, with 47.0%, DBRS said, adding that none of the properties in the pool, however, were in the impacted areas.
Independent investment bank Brean Capital, is the structuring lead and Nomura Securities is on the deal as joint lead, according to Finsight. The class A1 notes have the lowest cumulative advance rate, which combines the interest and mortgage insurance rates to show the monthly increase in the line of credit, at 95.5%. That is the lowest such metric in the deal's capital structure, according to DBRS.
Throughout the rest of the deal the cumulative advance rate falls between 112.5% on the A2 notes and 119.1% on the class M5 notes, according to DBRS.
In reverse mortgages lenders require repayment if the borrower dies, sells the mortgages residence or if the borrower stops living at the property for an extended period—usually a year. Repayment is also required if there is a taxor insurance default or if the borrower fails to keep the property maintained, the rating agency said.
Nationwide Equities, South River Mortgage and Smartfi Home Loans originated the loans in 2024, with ages ranges from one to four months. All loans are fixed rate, with a weighted average (WA) coupon of 9.2%, the rating agency said. Single women accounted for the largest share of borrowers, at 40.7%. Among couples, those with where women are the younger member accounted for 23.3% of the pool.
DBRS assigned to the A1 through AM notes; AA to the M1 notes; A to the M2 notes; BBB to the M3 notes; BB to the M4 notes and B to the M5 notes, DBRS said.
