The GS Mortgage-Backed Securities Trust, 2025-NQM3, will sell the notes through seven tranches of class A, M and B notes, according to Morningstar DBRS. The collateral pool is composed of a mix of 939 first-lien loans, lent to highly qualified borrowers, and under tightened underwriting standards.
The deal, which is expected to close on August 29, will repay investors sequentially, and-- if it avoids specific performance triggers related to cumulative loss or excessive delinquencies—pro-rates principal payments to the senior tranches, according to ratings analysts at Morningstar | DBRS.
All the notes have an expected final maturity date of November 2065, DBRS said.
The loans are a mix of fixed-and adjustable-rate and prime and non-prime, that have a total principal balance of $390.2 million, DBRS said.
On average, the underlying mortgages have eight months of seasoning, with original ages ranging from six to 31 months. United Wholesale Mortgage the largest portion of loans, 32.5%, while all other originators each contributed less than 10% to the overall pool, DBRS said.
NewRez will service almost the entire pool, 97.5%, with Select Portfolio Servicing overseeing the rest, the rating agency said.
DBRS says the pool has several credit strengths, including the borrowers' robust credit attributes. On a weighted average (WA) basis, the borrowers have a FICO score of 738, and they have an original, combined loan-to-value (CLTV) ratio of 70.0%, which suggests borrowers have accumulated a lot of equity in their homes, the rating agency said.
As of the August 1 cut-off date, 99.3% of the loans in the collateral pool are current, DBRS said.
Yet the pool has several credit weaknesses, DBRS said.
"Compared to post-crisis prime transactions, the portfolio contains mortgage loans to borrowers with weaker credit and prior derogatory credit events," the analysts wrote.
DBRS assigns ratings of AAA to the A1 notes; AA to the 2 notes; A to the A3 notes; BBB to the class M1 notes; BB to the B1 notes and B to the B2 notes.
