Five Oak Investment Corp, a real estate investment trust that manages a portfolio of agency and non-agency RMBS, is back with a second securitization this year, according to Kroll Bond Rating Agency.
Oaks Mortgage Trust Series 2015-2 is backed by $251.2 million worth of mortgage loans aggregated from the sponsor's platform, called Five Oaks Acquisition. Kroll assigned 'AAA' ratings to the senior notes on offer.
Five Oak's mortgage aggregation and securitization platform, established in 2013, acquires prime jumbo loans through bulk and flow channels while also participating in prime jumbo RMBS transactions.
The sponsor's inaugural RMBS transaction, OAKS 2015-1, was completed in April 2015.
The latest deal pools 345, fixed-rate, mostly 30-year loans (0.2% of the pool is comprised of 20-year loans). The loans have a weighted average FICO of 762 and a weighted average loan-to-value ratio of 71.4%. The top three mortgage originators contributing to the pool are: Pacific Union Financial, HomeStreet Bank and Stonegate Mortgage Corp, all of which have limited performance histories.
Nearly half of the mortgages in the pool (48%) are concentrated in California. This geographic concentration resulted in a 10.9% increase to the ‘AAA’ expected loss for this pool, according to Kroll. All of the loans subject to Ability-to-Repay rules, 93.7% of the pool, qualify for a legal safe harbor.
In addition to the securitization shelf, Five Oaks also has a warehouse line with $375 million of capacity. The sponsor has also tapped secured funding advances from the Federal Home Loan Bank (FHLB) of Indianapolis through its insurance subsidiary, Five Oaks Insurance LLC.