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Onslow Bay pools Quicken investor loans in $384M RMBS

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Prime mortgage aggregator Onslow Bay Financial is launching its third securitization this year of agency-eligible investor-property loans, according to presale reports.

OBX 2019-INV2 is a private-label RMBS pool of 1,087 mortgage loans with a balance of $383.76 million, according to Moody’s Investors Service and DBRS.

More than 75% of the loans, all fixed-rate conventional originations, were acquired from Quicken Loans Inc. Quicken will remain the servicer on the loans sold to the Onslow trust. The remaining loans acquired from other originators will be serviced by Select Portfolio Servicing and Specialized Loan Servicing.

Onslow Bay is a subsidiary of real estate investment trust Annaly Capital Management.

Since the loans were made to investors for business purposes, none are subject to the Consumer Financial Protection Bureau’s qualified mortgage or ability-to-repay rules.

Most of the investors, making up nearly 84% of the pool by balance, have more than one mortgaged property. The agencies report 33 of the borrowers in the pool have multiple mortgages in the OBX 2019-INV2 portfolio, making up 6.6% of the deal’s collateral balance.

DBRS notes the transaction “exhibits high-quality credit attributes such as low LTV ratios, strong borrower credit and full documentation on all loans.” All of the loans are current, and none include interest-only features.

The average balance is $353,045, with a weighted average coupon of 5.147% on 30-year terms. The WA seasoning of the loans is six months.

Approximately 63.4% of the portfolio balance is for single-family residences, while 28.8% is for multifamily dwellings of two to four rooms and 7.8% is for condominiums. Nearly 59% of the homes are concentrated in California.

The borrowers, with current average FICOs of 761, have an average annual income of $215,412, with liquid reserves averaging $240,867.

OBX 2018-1 utilizes a senior-subordinate, shifting-interest structure similar to most recently issued Fitch-rated prime transactions. The extensive capital stack has 31 classes of senior and super senior exchangeable notes paying principal and interest, on coupons ranging from 3.5%-4%.

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RMBS REITs Quicken Loans