A pool of conforming residential mortgages with mixed purposes will serve as collateral for the $738.2 million in mortgage-backed securities (MBS) from the Fannie Mae Connecticut Avenue Securities Trust, 2023-R05, on a smaller pool compared with previous deals.
Citibank is on the deal in several capacities on the deal known as CAS 2023-R05, including as custodian, investment agent and trustee, according to ratings analysts from S&P Global Ratings. The pool consists of about 63,955 loans, significantly smaller than previous transactions, according to comparisons of previous deals going back to CAS 2021-R01.
A vast majority of the pool, 86.35%, consists of primary homes, S&P said. Investment properties and secondary homes, meanwhile, account for 11.29% and 2.36% of the pool, respectively.
On a non-zero weighted average (WA) basis, the loans have a FICO score of 748, and they have an average balance of $316,234, the rating agency said. Other characteristics indicate moderate to strong characteristics, such as an original loan-to-value ratio of 75.3%, and a current rate of 4.8% on a WA basis, S&P said. The mortgages also show a WA debt-to-income ratio of 37.3%.
Rate and term refinance loans make up 6.58% of CAS 2023-R05, down from the 11.25% in CAS 2023-R04, the rating agency said.
Top sellers to the pool include Rocket Mortgage, providing 7.51%, United Wholesale Mortgage, with 6.02%, and Wells Fargo Bank, contributing 5.57%. Among the seven top servicers in the reference pool are Lakeview Loan Servicing, accounting for 10.30% of the pool by balance, United Wholesale Mortgage represents 6.02% of the pool; and JPMorgan Chase Bank, with 5.93%.
S&P expects to assign ratings of 'A-' to the 1M-1 notes; 'BBB+' to the 1M-2A and 1M-2B notes; 'BBB' on the 1M-2C and 1M-2 notes; 'BB+' on the 1B-1A notes; 'BB-' on the 1B-1B notes; and 'BB-' on the 1B-1 classes of notes.
