Figure Lending is preparing to float $321.1 million in residential mortgage-backed notes, secured by first- and junior-lien revolving home equity lines of credit (HELOCs), in its first deal of the year.
FIGRE Trust 2026-EXP1 will sell the debt through seven levels of class A through G notes, slated to close around July 9, according to ratings analysts at Morningstar DBRS. Notes are expected to make monthly payments until their final maturity in June 2056, the rating agency said.
The deal will repay noteholders on a pro rata basis. The cash flow structure also is subject to a credit event, based on certain triggers involving cumulative losses and delinquencies, DBRS said.
The 4,905 contracts securing the debt are open HELOCs with draw down periods of three, four or five years, DBRS said. On average, the portfolio has three months of seasoning, though actual seasoning ranges from one to eight months.
Figure Lending, which originated the largest portion of the loans in the asset pool (44.2%), originated the HELOCs using the FICO 9 scoring model, instead of the classic FICO scheme that most mortgage originators use now.
Under the FICO Score 9 model, medical debt is less impactful on a final credit score than other unpaid debt, accounts that have been repaid after being sent to third-party collections is ignored, and rental history can also be factored into a credit score if the renter's landlord reports to at least one of the major credit bureaus.
West Capital Lending originated 29.1% of the HELOC contracts, while other originators accounted for the remaining contracts in the pool, each accounting for no more than 10% of the pool, DBRS said.
Figure Lending, however, services all the contracts and Northpointe Bank is on the deal as a backup servicer, the rating agency said.
DBRS assigns ratings ranging from (P) AAA (sf) on the class A notes, which will issue the bulk of notes, $209.5 million, to (P) B (low) (sf) on the class F notes.
