Some collateral attributes, such as non-full documentation and a high percentage of non-QM and HPQM loans, fall slightly outside the credit box seen in other recent prime transactions, according to Fitch.
Fannie Mae and Freddie Mac enjoy considerable advantages because of their lower cost of capital and significant government subsidies. But with some conforming loans, the private market is finding a way to compete.
The $446 million Pearl Street Mortgage Company 2018-1 Trust is backed by 30-year, fixed-rate loans with credit characteristics in line with recent private-label prime jumbo transactions rated by Fitch Ratings.
That’s an about-face from the bank’s previous transaction, completed in October, which was backed by fixed-rate mortgages, nearly half of which were underwritten to standards for purchase by Fannie Mae or Freddie Mac.