Mortgage Guaranty Insurance Corp. is sponsoring the first securitization transaction of the year that transfers the credit risk of private mortgage-insurance policies to the capital markets.
According to a presale report from Moody’s Investors Service, Home Re 2021-1 is the fourth deal by the issuer that will sell floating-rate notes (pegged to one-month Libor) that are backed by a reference pool of mostly prime mortgages.
The notes providing the reinsurance coverage for a portion of the reference-pool balance carry the risk of principal and interest losses from potential claims payments made by Mortgage Guaranty.
The 195,208 loans in the reference pool involve a mix of prime, fixed- and adjustable-rate terms on mortgages for predominantly conforming mortgage loans, with a total insured loan balance of about $55 billion. The borrowers in the pool have a weighted average FICO of 751, debt-to-income ratios of 35% and mortgage rates of 3%.
All of the policies were written between August and December 2020.
