Another portfolio of prime mortgages, which primarily finance second homes and investment properties, will secure $517.7 million in residential mortgage-backed securities (RMBS), from sponsor Onslow Bay Funding.
Kroll Bond Rating Agencies says 1,322 fixed-rate mortgages are in the collateral pool, with second homes and investment properties accounting for 25.8% and 74.2% of the pool, respectively. Virtually the entire pool, 93.1%, is agency eligible, KBRA said.
The transaction will issue the debt through a series of class A and B notes, according to KBRA. Most of the notes are initial exchangeable, except for the subordinate B3 through B6 tranches, the rating agency said.
Classes A9, A12, A15, A21, B1 and B2 are expected to pay coupons of 5.00%, KBRA said.
OBX 2026-INV4 is slated to close on May 28, with
Computershare Trust is the master servicer on the deal, the rating agency said.
Among the deal's strong credit characteristics are strong prime collateral and borrower quality, the rating agency said. The entire pool received third party due diligence.
The deal also includes a 120-day stop advance provision, which prevents it from forwarding any interest and principal on loans that are past 120 days delinquent, KBRA said. OBX's entire pool is made up of first-lien loans overwhelmingly financing single-family homes and planned unit developments (PUDs),
On average, the loans in the collateral pool have a balance of $391,623. The loans have moderate leverage, with a loan-to-value (LTV) ratio of 72.3%, and a weighted average (WA) debt-to-income ratio of 36.5%.
Borrowers overall have an annual income of $342,250 and liquid reserves of $373,786, and those that are self-employed account for 24.6% of the pool, KBRA said.
Kroll Bond Rating Agency applies AAA to the A9 through AX11 tranches; AA+ AX14 and AX15; AA- to the B1; BBB to the B3 tranche; BB+ to the B4 tranche and B+ to the B5 notes.
