COLT 2025-6 Mortgage Loan Trust has issued $331.24 million in residential mortgage pass-through certificates. The RMBS transaction is backed by first-lien, fixed- and adjustable-rate, fully amortizing residential mortgage loans, some with interest-only periods, to prime and non-prime borrowers.
The loans are secured by single-family residential properties, planned-unit developments, condominiums, a townhouse, and two- to four-family residential properties. The pool consists of 687 loans, which are qualified mortgage (QM)/non-higher-priced mortgage loan (HPML), QM/HPML, non-QM/ability-to-repay (ATR)-compliant, and ATR-exempt loans.
The transaction's credit enhancement is provided through each class of rated certificates having subordination in the form of certificates that are lower in payment priority and excess spread. This preserves subordination, S&P says.
The transaction includes 415 loans (44.12% by pool balance) that are property-focused investor loans underwritten using a debt service coverage ratio (DSCR) based on actual or estimated rents from the property. The weighted average non-zero DSCR is 1.13.
Of these 415 property-focused investor loans, 20 (2.92% by pool balance) were identified as short-term rental properties.
SA&P says 113 (14.15% by pool balance) have DSCRs less than 1.00 under the property-focused investor loan program. The DSCR calculations provided by the issuer for these 113 loans ranged from 0.73 to 0.99, with a weighted-average DSCR of 0.84. These loans have a weighted average FICO score of 759, which is higher than the pool's weighted-average FICO score of 742; however, the weighted-average used combined loan-to-value (CLTV) ratio of 70.94% is slightly stronger than the overall pool weighted average used CLTV ratio of 72.34%.
COLT 2025-6 is the fifth non-qualified mortgage (non-QM)/investor loan securitization being issued this year by Lone Star Funds, S&P says. Lone Star Residential Acquisitions is a mortgage loan aggregator which predominantly focuses on non-agency loan aggregation and securitization.
The transaction's sponsor is Lone Star Residential Acquisitions, the depositor is Colt Securitization Depositor, the master servicer is Computershare Trust Co. and the trustee is U.S. Bank Trust Co.
The originators are The Loan Store with 38% of the pool balance, Foundation Mortgage Corp. with 15.1%, and other companies with 46.9%.
S&P has assigned AAA to the class A-1 notes, worth $227.89 million, AA to the class A-2 ($22.02 million), A to the class A-3 notes ($35.6 million), BBB to the class M-1 notes ($16.89 million), BB to the class B-1 notes ($12.58 million), and B to the class B-2 notes ($10.43 million). It didn't rate the class B-3 notes ($5.79 million).
S&P said the ratings reflect its analysts' view of the transaction's credit enhancement, associated structural mechanics, and geographic concentration, among other factors.
