JP Morgan is marketing $379 million of securities backed by a pool of mostly 30-year, fixed rate residential mortgages, according to Kroll Bond Ratings Agency.

In total the transaction, called J.P. Morgan Mortgage Trust 2015-3, pools 519 loans, of which only 0.2% are 20-year loans and 0.1% are 25-year loans.

The pool is made up of loans to strong borrowers with substantial equity, but not quite as strong as those backing previous RMBS rated by Kroll. The pool has a weighted average FICO of 766. By comparison, Redwood’s latest deal, Sequoia Mortgage Trust 2015-2, had a weighted average FICO of 771 and Agate Bay’s third transaction of the year, ABMT 2015-3 had a weighted average FICO of 775.

Leverage is also slightly increased in J.P. Morgan’s pool, which has an average loan-to-value ratio of 69%, compared with 67.5% LTV for Redwood and 62.8% for Agate Bay. 

JP Morgan's deal includes 161 loans (30.1% of the pool) with a an LTV equal to 80%, along with 15 loans (2.2% of the pool) possessing LTVs greater than 80%, some as high as 90.0%. None of the previous four transactions rated by Kroll included loans with LTVs above 80%. Kroll stated in the report that “the aggregate pool’s generally low LTV ratios exhibit significant borrower equity and provide a margin of safety against potential home price declines (HPDs).”

Approximately 88.5% of mortgages are fully-amortizing; however 11.5% of the loans pay only interest for a 10-year term. According to the Kroll presale, none of the most recent transactions it has rated include interest-only loans in their pools. 

All of the loans that fall under the scope of ability-to-repay rules (77.8%) are designated as qualified mortgages and so benefit from a legal safe harbor.

Kroll has assigned ‘AAA’ ratings to  six class of senior note on offer, ‘AA’ ratings to class B-1 notes, ‘A’ ratings to the class B-2 notes, ‘BBB’ ratings to the class B-3 notes and ‘BB’ ratings the class B-4 notes.

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