The loan pool consists of over 62% of non-qualified mortgages
Barclays Mortgage Loan Trust is prepping a $352.2 million expanded-credit MBS backed by a pool of non-prime loans.
The securitization is supported by 699 non-prime loans that have seasoned for an average of nine months, according to a pre-sale report from Fitch Ratings. The loans were primarily originated by Angel Oak Mortgage Solutions, NewFi Lending, and Impac Mortgage, with Select Portfolio Servicing acting as the servicer on the deal.
The borrowers have an average FICO score of 739 and a 42.4% model debt-to-income [DTI] ratio. The borrowers also have moderate leverage with a 75.7% sustainable loan-to-value (sLTV) ratio and 72.6% original combined LTV (cLTV).
The pool comprises 58.4% of loans where the borrower maintains a primary residence, while 37.5% comprise an investor property. Additionally, 0.1% are safe-harbor-qualified mortgages (SHQMs), and 62.5% are non-qualified mortgages (non-QMs).
"There are 299 DSCR products in the pool (42.8% by loan count)," Fitch said in the report. "These business-purpose loans are available to real estate investors that are qualified on a cash flow basis, rather than DTI, and borrower income and employment are not verified.
“Compared to standard investment properties, for DSCR loans, Fitch converts the DSCR values to a DTI and treats them as low documentation. Fitch's expected loss for these loans is 27.4% in the 'AAAsf' stress, which is driving the higher pool expected losses due to the 29.4% weighted average concentration."
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