RMBS

Esoteric transactions' premiums and longer durations are especially attractive, as other consumer assets are put to the test.

DBRS says 98.2% of the loans have been performing since origination, while just 1.8% of the pool is 30 to 59 days delinquent in payments.

The deal has a 35% cap of potential substitution and repurchase ratio, which is considered high. This runs the risk of a court recharacterizing the loan sales to depositors as a form of financing.

One loan is secured by 1,376 single-family rental properties. It's a potential credit strength, because the trust could benefit from lower cash volatility.

Loan modifications and active forbearances were higher among bank servicers, but lower among non-bank providers, while bankruptcy caseloads dropped for both.

Closed-end second lien mortgages make up the collateral for the security offering.

The pool contains 59% non-qualifying mortgages and 41% investment properties.

Income from single-family rental properties, distributed across more than a dozen states and 34 areas, back the notes. The deal should close later this month.

For large banks, the agencies wanted to go above the global standards for residential mortgages, as well as some business loans, to avoid giving those lenders a competitive advantage over smaller peers, according to another person familiar with the proposal.

Among the nonperforming assets 44.01% are either in foreclosure or referred for foreclosure; 19.32% are in default; 7.17% are liquidated and 1.75% are in bankruptcy.