Two Harbors Investment Corp. is teeing up another securitization of fixed-rate, 30-year jumbo mortgages to borrowers with strong credit, according to Kroll Bond Rating Agency.

The $299 million of loans backing Agate Bay Mortgage Trust 2015-5 have significant borrower equity; the weighted average loan-to-value ratio of 64.9%, providing a margin of safety against potential declines in home prices.  

The credit quality of the borrowers is also strong, as evidenced by weighted average original and current credit scores of 770 and 767, respectively. The weighted average annual income and liquid reserves are $308,998 and $326,883, respectively. Additionally, income, employment and assets for the pool’s borrowers were generally well-documented and verified.

Another strength of the deal, according to Kroll, is scarcity of “super jumbo” loans that account for a disproportionate percentage of the pool.  The largest is approximately $1.95 million, or 0.7% of the pool.

Furthermore, all of the loans meet the criteria for “Qualified Mortgages” giving originators a legal safe harbor from ability to repay rules.

The top originators are George Mason Mortgage, LLC: 14.4%; NYCB Mortgage Company, LLC: 13.2%; Commerce Home Mortgage, Inc.: 7.8%

DBRS assigned a ‘AAA’ rating to the senior trances of notes to be issued by the deal. 

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