Non-QM

Underwriting relied heavily on alternative documentation, led by debt-service coverage ratios (35.7%) and bank statements ranging from 12-23 months (28.2%) and longer than 24 months (4.6%).

DRMT 2026-INV1, is backed by a pool of 1,153 non-prime investment property mortgages, which have a moderate leverage levels of an original, combined loan-to-value (CLTV) ratio of 69.9%.

The moderate leverage reflects the quality of RMBS pools from recent issuance years. Borrowers have a non-zero WA annual income of $1 million, with liquid reserves of $594,348.

Despite RCKT Mortgage's second-lien composition, the loans display several positive credit characteristics, including a WA credit score of 745.

Canyon Partners sees opportunities in corners of the mortgage, with tightened due diligence, and the auto ABS markets.

The notes are expected to pay coupons of 4.94% on notes in the A1FCF tranche, rated AAA from KBRA and Fitch Ratings, to 6.78% on the B1 notes.

The deal comes to market as President Trump suggested barring institutional buyers from snatching up single-family homes, the type of properties secure the bulk of SEMT 2026-INV1.

Analysts at RBC Capital Markets said the plan is bad news for Invitation Homes and American Homes 4 Rent, but the companies "are long past the time of significant growth in home count

A significant portion of the loans in the pool by balance, 44.5%, are designated at non-QM, according to DBRS, adding that about 50% of the loans in the pool were made to investors for business purposes.

The terms of NRMLT 2025-NQM7 will not allow it to advance principal and interest on loans that are delinquent by 180 days or more.

If cumulative loss or a delinquency trigger event is in effect, then the deal will distribute principal among the class A notes before any principal allocation the class M1 or class B certificates.