RMBS is the company's second non-QM transaction in 2023
Angel Oak Mortgage Trust (AOMT) has started preparing its second non-QM RMBS this year – a $495.5 million transaction secured by loans originated by Angel Oak Mortgage Solutions and Angel Oak Home Loans.
The group is set to issue a securitization backed by a pool of 877 loans, 72.2% of which are non-qualified mortgages, while the remaining 27.9% are considered investor loans. Priced at $495.5 million, the loans have seasoned for an average of 15.5 months, according to Fitch.
"Due to Fitch's updated view on sustainable home prices, Fitch views the home price values of this pool as 8.5% above a long-term sustainable level (versus 10.5% on a national level as of January 2023), down 1.7% quarter over quarter," the rating agency said in its presale report.
"Underlying fundamentals are not keeping pace with the growth in prices, resulting from a supply/demand imbalance driven by low inventory, favorable mortgage rates and new buyers entering the market. These trends have led to significant home price increases over the past year, with home prices rising 9.2% yoy nationally as of October 2022."
The borrowers have a strong credit profile, with an average FICO score of 741 and a 39.8% debt-to-income (DTI) ratio. The pool consists of 127 loans over $1 million, with the largest amounting to $3.4 million. Most of the loans are current, according to Fitch.
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