RWT Holdings is teeing up a $663.4 million in residential mortgage-backed securities (RMBS) to be sold to investors through Sequoia Mortgage Trust 2025-12, which will fund a pool of prime, jumbo mortgages.
The 525 mortgage assets in the collateral pool are fully amortizing, 30-year fixed home loans that are generally underwritten under the qualified mortgage (QM) designation, according to Kroll Bond Rating Agency.
Sequoia Mortgage 2025-1 will issue class A and B notes, most of which are initially exchangeable, and which are also a mix of fixed and variable notes, the rating agency said. All the notes have a scheduled final maturity date of November 2055, according to analysts at Fitch Ratings.
The rating agency sets a loss expectation of 3.62%, which is 30 basis points higher than the previous transaction, the SEMT 2025-11, Fitch said.
Three of the super senior tranches, rated AAA, have credit enhancement levels that equal 15.02% of the pool balance, according to KBRA. The subordinate, B1A tranche, rated AA, has an enhancement level of 3.55% of the outstanding pool balance, KBRA said.
Fitch notes that SEMT 2025-12's collateral profile is slightly weaker compared with the prior transaction, the rating agency said. The percentage of single-family home loans dropped by 1.3%, and the FICO score on the loans dropped slightly, by two points. The proportion of purchase and retail loans dropped by 6.7% and 3.7%, respectively, Fitch said.
Rocket Mortgage originated the majority of the underlying mortgage assets (51.4%), which have an average balance of $1.2 million, and a weighted average (WA) current coupon of 6.5%, Fitch said. Also, on a WA basis, borrowers have reserves of $620,915, and net zero annual income was $531,191.
The assets also have a FICO score of 773, and an original loan-to-value (LTV) ratio of 73.0%, according to Fitch.
