KBRA Assigns Preliminary Ratings to Verus Securitization Trust 2025-2 (VERUS 2025-2)
3 Mar 2025 | New York
KBRA assigns preliminary ratings to six classes of mortgage pass-through notes from Verus Securitization Trust 2025-2 (VERUS 2025-2), a $638.4 million non-prime RMBS transaction. The underlying collateral, comprised of 1,280 residential mortgages, is characterized by a significant concentration of loans underwritten using alternative income documentation. Borrowers in the subject pool possess a non-zero WA original credit score of 741 and exhibit moderate equity in each mortgaged property, with an original combined LTV (CLTV) ratio of 69.2%. Most of the loans are classified as exempt (40.1%) from the Ability-to-Repay/Qualified Mortgage (ATR/QM) rule due to being originated for non-consumer loan purposes. The remaining loans are classified as Non-QM (28.5%), QM: Safe Harbor (APOR) (27.1%), or QM: Rebuttable Presumption (APOR) (4.2%).
KBRA’s rating approach incorporated loan-level analysis of the mortgage pool through its Residential Asset Loss Model (REALM), an examination of the results from third-party loan file due diligence, cash flow modeling analysis of the transaction’s payment structure, reviews of key transaction parties and an assessment of the transaction’s legal structure and documentation. This analysis is further described in our U.S. RMBS Rating Methodology.
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