Prime, fixed-rate mortgages with large balances are underpinning the JP Morgan Mortgage Trust 2021-10, which will place $1 billion in mortgage debt.
While all of the loans in the portfolio are designated as safe-harbor QM loans, 92.9% are nonconforming loans, while the remaining are 7.1%, according to Fitch Ratings, which intends to rate the certificates.
Some 1,032 loans will support the certificates once issued, with balances that range from $1 million to $2.9 million. The 10 largest loans in the deal have high balances, which range from $2 million to $2.9 million, the loans also have high credit scores, large liquid reserves and low LTVs.
Various JPMorgan entities are driving the deal. J.P. Morgan Mortgage Acquisition Corp. is the sponsor and seller, while J.P. Morgan is also servicer on 77.2% of the mortgages in the pool, while a litany of originators and aggregators contributed loans to the deal, including Guaranteed Rate, which had the largest portion of loans in the deal, 18%. Quicken Loans, and United Wholesale Mortgage also contributed mortgages to the deal, according to Fitch Ratings.
The shifting-interest capital structure includes subordinate classes of notes receive only scheduled principal, with no meaningful changes from prior prime transactions. They are also locked out from receiving any unscheduled principal or prepayments for five years, according to Fitch.
California accounts for 50% of the mortgages in the pool, and is the largest concentration among states. Among MSAs, San Francisco is the largest with 16.2%, Fitch said.
Fitch expects to assign the $499 million A-6-A notes, as well as the classes through A-X-4 a ‘AAA’ rating.
