Chimera Investment Corp. (NYSE: CIM) is sponsoring its second prime jumbo mortgage securitization of 2020, with a majority of the pool made up of refinance loans taken out by deep-pocketed homeowners.
CIM Trust 2020-J2 includes a collection of 359 high-balance fixed-rate, first-lien mortgages with a principal balance of $327.6 million. More than 61% of that balance are refinance loans, including 15.5% serving as cash-out refis, according to presale reports.
Nearly half of the loans were originated for California residences.
Chimera, an $18.1 billion real estate investment trust based in New York, is sponsoring the note sale secured by the mortgage portfolio that a Chimera affiliate acquired from Bank of America, which had previously collected the loans from a number of originators.
The transaction includes 24 classes of senior and senior-support notes paying between 1.5%-2.5% interest, with 15% credit enhancement for the first 18 classes. All of the senior notes have preliminary Aaa ratings from Moody’s Investors Service; Fitch Ratings and DBRS Morningstar each assigned early AAA ratings to four classes of the senior notes.
The capital stack includes several tranches paying interest only to investors.
Nearly all of the loans in the pool are designated as qualified mortgages under the Consumer Financial Protection Bureau’s ability-to-repay standards, with a handful considered QM via the GSEs' temporary exemption to ATR rules.
The borrowers of the mortgages have a weighted average FICO of 786 and more than 24 months of liquid cash reserves, the presale reports note. About 25.6% of the pool loan balance are to self-employed home owners, and 36.4% own two homes.
The average loan size is $911,871, an increase from Chimera’s first prime-jumbo deal this year with an average size of $732,320, with an average interest rate of 3.09%.
Chimera has also sponsored
