RMBS

The RMBS notes benefit from geographic diversity and credit enhancement.

The RMBS transaction is backed by first-lien, fixed- and adjustable-rate, fully amortizing residential mortgage loans, some with interest-only periods, to prime and non-prime borrowers.

The prime jumbo RMBS transaction is collateralized by 402 residential mortgage loans.

The deal includes a step-up rate to the coupon for the A1A, A1B, A2 and A3 notes beginning in July 2029, and the increased rate will be equal to the original class coupon rate, plus 1%.

There is also a significant portion of mortgages secured by investment properties, 44%, and overall 47.5% of the collateral pool is composed of non-qualified mortgages.

The industry's biggest opportunities involve the evolving cost of capital, which will shift funding sources from the private, local lending markets to institutional sources.

The deal includes a replenishment mechanism that allows subsequent drawdowns on existing mortgages.

The deal is secured by a portfolio dominated by mortgage loans considered non-qualified or exempt from ability to repay rules.

TPG Angelo Gordon estimates there's a $2 trillion market for home equity products. Thanks to tighter lending standards, the debt also appears safer than in the 2008 financial crisis.