Morningstar DBRS created rating criteria for securitizations of home equity investments in mid-2023. Since then, issuance has blossomed, and the sky’s the limit, according to industry participants.
John Beacham, CEO of Toorak Capital Partners, said ratings on fix-and-flip securitizations are attracting more investor interest and prompting better pricing for issuers.
Rithm Capital closed a $500.0 million MBS backed by rated residential transition loans through its Genesis Capital shelf. The deal is the second RTL securitization to receive a rating from Morningstar DBRS.
A variety of non-QM mortgage-backed securities hit the market in the first two weeks of April, including a $404.3 million jumbo deal from Redwood Trust.
Falling interest rates are fueling optimism over growth in the fix-and-flip lending space this year, but competition from new homebuilders may dampen market expectations.
New expanded-credit mortgage-backed securities from Angel Oak Mortgage, A&D Mortgage, CrossCountry Mortgage and Invictus Capital Partners started marketing in the last two weeks.
PIMCO, Invictus Capital Partners, Angel Oak and Angelo Gordon are expected to issue securitizations backed by investment-property mortgages underwritten using debt-to-service coverage ratio.
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