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loanDepot joins ranks of private-label RMBS issuers

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A pair of nonbank mortgage lenders have primed the residential mortgage backed securities market with nearly $630 million in new asset-backed bonds.

Irvine, Calif.-based loanDepot is launching its first ever deal, $299.8 million securitization of prime, high-balance mortgages, while affiliates of Angel Oak Capital Partners are marketing notes supported by prime and non-prime loan originations totaling $238.8 million.

Mello Mortgage Capital Acceptance 2018-MTG1 features loanDepot’s pool of 453 fixed-rate, residential loans split between self-originated prime jumbo loans (226, or 59.3% of the pool by loan balance and high-balance GSE-eligible loans (227, or 40.7% by loan balance) with loanDepot overlays, according to a presale report published from Moody’s Investors Service.

The deep capital stack includes 20 Class A term-note tranches totaling more than $281 million, all but two Aaa rated by Moody’s.

While loanDepot is unrated, the borrowers in the pool have strong credit profiles with high FICOs (weighted pool average of 772) and a large percentage of equity in homes (72.2%), both of which are comparable to recent prime jumbo trust issuances from Flagstar Mortgage, JPMorgan and Sequoia Mortgage. All of the loans in the pool are amortizing, and are qualified mortgages under the QM safe harbor guidelines.

More than 78% of the properties are in California, Massachusetts, Washington, Colorado and New Jersey. Nearly 36% of the loans are refis.

The company has originated $134 billion in mortgages since 2009, including $35 billion in 2017. IIn January it launched a new service (mello Home) bringing local real estate agents nationwide on to its origination platform.

Although it is the first mortgage securitization for loanDepot, the lender last November tapped the securitization market for funding a loan warehouse facility. That bond sale was backed by GSE-eligible mortgages that loanDepot would agree to repurchase for a potential resecuritization.

The Angel Oak Mortgage Trust 1 (AMOT) securitization is backed by 905 both prime and non-prime residential mortgages (nearly 85% as primary residence loans). The loans are both fixed-rate and adjustable and more than 80% are non-qualified under ability to repay rules.

The pool contain a diverse mix of loans to a variety of prime jumbo borrowers, investors or homebuyers with credit blemishes, which distinguishes the deal from Angel Oak’s prior securitization of mostly non-QM loans last November.

That deal lacked loans originated through Angel Oak’s Platinum program for prime/near-prime borrowers and its prime jumbo mortgage loan program, accounting for 12.% and 9.4% of the pool, respectively.

The pool has fewer loans with prior credit events (28.6% of the pool) such as bankruptcies and late pays compared to Angel Oak’s November 2017 non-QM securitization (which had 35.2%). It also has a higher percentage of 750+FICO borrowers (16.7% of the pool) compared to November’s transaction (12%).

Fitch has a lower expected loss scenario of 29.75% under its highest-stress scenario from the 34.75% for AMOT 2017-3.

The notes being issued include three senior-note tranches, led by a $211.9 million Class A-1 tranche is rated triple-A by Fitch Ratings and DBRS, and is supported by 35.6% credit enhancement.

All of the loans were originated by Angel Oak affiliates Angel Oak Home Loans, Angel Oak Mortgage Solutions and Angel Oak Prime Bridge.

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