VMC Asset Pooler's latest securitization of mortgage payments is expected to raise $733.9 million in residential mortgage-backed securities (RMBS) from a portfolio of 1,670 mortgages, through the Verus Securitization Trust, 2026-5.
Verus' capital structure includes first cash flow and last cash flow notes among the senior classes, according to Morningstar DBRS. Expected coupons include 5.64% on the A1A, A1B, A1FCF, A1LCF and A1 notes, DBRS said.
Notes A2, A3 and M1 include coupons of 5.89%, 6.04% and 6.47%, respectively, the rating agency said.
The deal is expected to close on June 12, according to Asset Securitization Report's deal database, which also noted a group of managers that includes Atlas SP Securities, Bank of America Merrill Lynch, Barclays and Citigroup Global Markets.
Verus 2026-5 is expected to repay noteholders on the 25th day of each month—or the next business day—with a final payment date of May 2071, according to DBRS.
The deal will repay noteholders through a combination of pro rata on the senior notes and sequentially on the mezzanine and subordinate notes, the rating agency said.
For the class A tranches, Notes benefit from credit enhancement ratios of 34.40% on the A1A notes; 24.40% on the A1B through A1F notes, the rating agency said.
NewRez and Cornerstone Servicing will service the mortgage pool, while Rocket Mortgage is the master servicer, DBRS finds.
Verus 2026-5 has a number of representation and warranty providers, composed of IOF IV Pooler, the Invictus Phoenician, Rex and Gladiator Pooler entities and Verus Season, the rating agency said.
Also, DBRS noted that 25.5% of the underlying loans by balance are designated as non-QM, aligning with the 25.8% of the pool that was underwritten using bank statement documentation. About 44.7% of the mortgages were extended to investors for business purposes and are exempt from the Consumer Financial Protection Bureau's (CFPB) Ability-to-Repay rules, the rating agency said. Also, a slight majority of the borrowers, 51.4%, are self-employed.
Borrowers in the pool had an average loan balance of $537,216, and a coupon of 7.09%; a FICO score of 737; an original cumulative loan-to-value ratio of 69.8%; and a debt-to-income ratio of 35.4%.
Ratings on the notes range from (P) AAA (sf) on the A1 tranches to (P) B (sf) on the B2 notes.
