The Imperial Fund Mortgage Trust is returning to raise funds from the capital markets, this time issuing $322.8 million in mortgage-backed securities secured by a diverse pool of fixed- and adjustable-rate and prime and non-prime first-lien home loans.
Called Imperial Fund Mortgage Trust 2022-NQM7, the transaction is slated to close on November 25, according to Morningstar | DBRS. FitchRatings noted that the mortgages in the pool are highly concentrated, with 48.9% of the home loans extended to borrowers in Florida, and 20.4% in New York.
Fitch notes that Nomura Securities International is lead underwriter on the transaction, which will issue notes through a modified senior-subordinate structure. The structure of Imperial Fund Mortgage Trust 2022-NQM7, distributes principal on a pro rata basis among the class A notes. Subordinate bonds will be excluded from principal payments until outstanding notes in classes A-1 through A-3 are reduced to zero, according to Fitch.
Several mortgage types are in the collateral pool, which comprises 742 mortgages, the rating agencies said. Most of the loans in the pool, 56.4%, are not subject to the Consumer Finance Protection Bureau's (CFPB) Ability to Repay Rule, while 43.4% of the loans are designated as non-qualified mortgages.
A&D Mortgage originated 94.7% of the loans in the pool, and the company's correspondent lenders originated the remaining 5.3%, according to Fitch. Nationstar Mortgage will act as the master servicer, according to the rating agencies. Almost the entire pool, 99.7%, is comprised of fixed-rate mortgages.
DBRS noted that, among the deal's strengths, including strong combined loan-to-value ratios, borrower household incomes and liquid reserves. The weighted average (WA) original combined LTV was 72.1%.
On a WA basis, the loans have a model FICO of 725, and borrowers have liquid reserves of $163,037.
Single-family homes, including planned-unit developments and townhouses, account for 72.1% of the pool, with condominiums and multifamily properties make up 27.9% of the pool.
Fitch expects to assign ratings ranging from 'AAA' to 'A-' on the classes A-1 through A-3 notes, and 'BBB-' on the M-1 notes.
DBRS plans to assign 'AAA' through 'A' on classes A-1 through A-3; 'BBB' on the $16.7 million, M-1 notes; and 'BB' and 'B' on classes B-1 and B-2, respectively.
