A pool of residential mortgages, a substantial amount of which are not subject to ability-to-repay rules or had been modified several years ago, will provide collateral for $263.9 million in residential mortgage-backed securities (RMBS) from the PRPM 2025-RCF4 deal.
Some 16.2% of the loans in the collateral pool have been modified. In the case of 66.7% of them, the modification happened more than two years ago, according to ratings analysts at Morningstar | DBRS. Meanwhile, about 35.6% of the loans in the pool are not subject to ability to repay rules, or they are exempt from them.
PRPM 2025-RCF4 will issue notes through seven tranches of class A, M and B notes. Asset Securitization Report's deal database expects a coupon of 4.5% on the A1 through M2 tranches, compared with a 5.25% coupon on the most previous deal, the PRPM 2025-RCF3.
Nomura Securities International is the manager, according to ASR's database, while J.P. Morgan Securities, Barclays Capital, and Goldman Sachs are also on the deal as initial purchasers.
Meanwhile, SN Servicing, Fay Servicing and Rushmore Servicing are the servicers, according to DBRS, which added that the deal has a final maturity date of August 2055.
The deal is expected to close on August 29, according to ASR's database.
In this so-called "scratch and dent" mortgage securitization, just 3.5% of home loans in the collateral pool are new originations. Otherwise, 33.4% are reperforming loans (RPL) or nonperforming loans (NPL), while scratch and dent account for 48.6%. Non-QM mortgages account for 14.5% of the pool, DBRS said.
DBRS assigns AAA ratings to the class A1 notes; AA to the A2 notes; A to the A3 notes; BBB to both the M-1A and M-1B and BB to the class M2 notes.
