Oceanview Trust Hosts $ 351 Million Giant Mortgages



As the U.S. economy gradually moves into isolation from the pandemic, some aspects of residential mortgage borrowers are also returning to pre-COVID-19 levels, including self-employed borrower levels in Oceanview Mortgage Trust 2021-3 or OCMT 2021-3, which plans to issue 351 million bills. dollars.

Self-employed borrowers accounted for 18.7% of borrowers in the pool supporting the transaction. According to the rating agency Kroll Bond, in 2020 and 2021, the average cumulative percentage of self-employed borrowers was 19.5%.

Self-employed professionals showed slightly weaker credit fundamentals as they were more severely affected by the business closure pandemic, according to KBRA. For example, the original FICO score for self-employed workers was 773, while full-time workers had a FICO score of 779. The Initial Total Cost of Credit (CLTV) for self-employed workers on basic loans was 61.6%. compared to 69.3% for full-time workers.

In the total pool and on a weighted average basis, OCMT 2021-3 borrowers had significant documented liquid reserves of USD 553,483 for large large loans. Borrowers also had high residual earnings compared to recent deals.

All of the loans in the pool were qualified mortgages, which KBRA sees as a positive credit factor.

Consistent with the fact that large mortgages often come from reported high house prices, the pool has a significant proportion of its assets located in California. This state accounted for 22.6% of the pool balance, while Virginia, Texas, Florida and Maryland account for 10.3%, 9.8%, 7.2% and 4.7%, respectively.

Another aspect of large loans is that their clients are often high-net-worth borrowers. Even though the underwriting terms for these loans are conservative, they pose a risk to the RMBS giant loan pools because a single loan can constitute a significant portion of the pool’s balance sheet.

On the other hand, the five major statistical areas (CBSA) were Washington, DC (11%); Los Angeles (6.5%); San Francisco (5.4%), Dallas, Texas (4.0%) and Philadelphia (3.4%).


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