Credit Suisse’s DLJ Mortgages is marketing a re-performing mortgage securitization, according to Kroll Bond Rating Agency.
Kroll will rate the sixty-nine classes of certificates to be issued from the deal, called RPMLT 2014-1.
The pool is comprised of 3,027 first-lien re-performing mortgage loans with an aggregate principal balance of $644,122,531 as of the cut-off date. Approximately 90.2% of the loans in the pool are fully-amortizing, fixed-rate mortgages; 7.6% are fully-amortizing, adjustable-rate mortgages; and 2.3% are adjustable-rate mortgages that pay only interest for periods of either seven or 10 years. The loans are seasoned 98 months on average.
Bank Of America in a report last month said it expects significant growth for RPL/NPL securitizations. From 2009 to 2012 issuance volume for the asset class averaged just under $5 billion a year but in 2013 $14.7 billion in bonds were issued. So far this year, over $12.4 billion has been issued; and according to the bank, year-end volume is expected to reach $18 billion.
Barclays analysts echoed the optimistic forecast in a report last week. The bank said that securitization of NPL alone has already reached $7 billion, an increase from the $5 billion issued in total over 2013.
“Banks, GSEs, and the HUD own about $300+ billion of 90+ delinquent loans,” Barclays' report states. “Ginnie Mae has shed its NPLs regularly via public auctions as have banks through periodic sales in the loan market. While GSEs have so far held on to most of their delinquent loans, any move by the GSEs to offload some of their NPL holdings in 2015 remains a possibility and could add a big chunk of supply to the NPL market.”
BofAML believes that there is about $32.9 billion in RPL and NPL bonds that remain outstanding, as outlined in the chart below.