The non-qualified mortgage sector got an infusion of capital with $493.7 million as the New Residential Mortgage Loan Trust 2025-NQM7 approached the market with its latest batch of residential mortgage-backed securities (RMBS).
Slated to close on December 18, the deal will sell the notes through about 10 tranches of classes A, M and B notes, according to Fitch Ratings and Kroll Bond Rating Agency. All the notes have a final scheduled maturity of October 2065, the rating agencies said.
Almost all the five senior tranches, except the A1A tranche, benefit from 23.65% in credit enhancements. The A1A piece benefits from 33.65% in credit enhancements, the rating agencies said.
Those layers of protection include a hybrid pro-rata and sequential repayment structure. The class A notes will receive principal before any principal allocation to the class M1 or class B notes. Because of that structure, subordination will decline for the more subordinate A notes over the term of the securitization, unless a trigger breach occurs.
As with other non-prime transactions, the terms of NRMLT 2025-NQM7 will not allow it to advance principal and interest on loans that are delinquent by 180 days or more, according to KBRA.
The 915 mortgages in the pool have an average balance of $539,576, according to KBRA. Fitch says Newrez originate 48.7% of the loans in the pool, accounting for the largest percentage, followed by Champions Funding 16.15.Other originators together accounted for 29.1% of the pool, Fitch said.
The pool is primarily composed of fixed-rate mortgages, Fitch said. Most of those loans, 63.4%, will be used to purchase properties, and the property types are almost evenly split between with primary residences, which making up a slight majority of the homes financed, at 52.9%, the rating agency said.
Newrez will service the underlying mortgage loans, Fitch said, while Nationstar is on tap as the master servicer.
Fitch assigns ratings of AAA to the A1 notes; AA to the A2 notes and A to the A3 notes; then BBB-, BB- and B- to the M1, B1 and B2 notes.
KBRA assigns AAA to the A1 tranches; and AA+, A, BBB, BB+ and B+ to the A2, A3, BBB, BB+ and B2 notes, respectively.
