Caliber Home Loans is marketing a residential mortgage-backed securitization mainly backed by nonprime loans, called COLT 2016-1 Mortgage Loan Trust.

The securities in the offering will be backed by 368 loans originated and serviced by Caliber, with a total principal balance of $161.7 million. The securities, which were broken up into six classes, were assigned between A and BB ratings by Fitch Ratings and DBRS.

Caliber's securitization comes at a time when supply has remained a hurdle in the way of efforts to revitalize the market for subprime securitizations.

The mortgage loans in this offering were originated under five programs offered by Caliber, which target borrowers who generally do not meet the standards for agency, government or private-label nonagency prime jumbo products. Still, Caliber originated the loans to fulfill the Consumer Financial Protection Bureau's ability-to-repay rules.

A 51% majority of the underlying loans are non-QM, while 41% were designated a higher-priced QM. The remainder was categorized as a safe harbor QM. Roughly 4% of the loans were not subject to QM.

Additionally, 64% of the pool consists of five-year hybrid adjustable-rate mortgages. And nearly a third of the pool by unpaid principal balance had a debt-to-income ratio above 43%.

Fitch noted that 47% of the pool by principal balance, or 60% by loan count, had a prior credit event, including foreclosure, bankruptcy and short sale.

In Fitch's case, the ratings were capped at an A rating because of the limited nonprime performance of Caliber and the offering's asset manager, Hudson Americas LP. Of the loans originated under the five programs to date, only 14 ever fell 30 days delinquent, with most self-curing shortly.

Fitch also noted the results of a third-party review, including an examination of the pool for exposure to problems related to the TILA-RESPA integrated disclosure rules. Of the 368 loans in the pool, 251 were subject to TRID, and 57 loans had TRID errors.

Among the loans with TRID errors, 38 mortgages, or 10% of the overall pool, carried potential risk of statutory damages. For all of these loans, Caliber completed a redisclosure.

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