Press Release|RMBS
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KBRA Assigns Preliminary Ratings to Sequoia Mortgage Trust 2026-MED3 (SEMT 2026-MED3)

4 Nov 2026   |   New York

Contacts

KBRA assigns preliminary ratings to 16 classes of mortgage pass-through certificates from Sequoia Mortgage Trust 2026-MED3 (SEMT 2026-MED3), a $554.6 million prime RMBS transaction backed by 583 loans originated under Physician or Doctor Loan underwriting programs. These loans, generally referred to by KBRA as Medical Professional Mortgages (MPM), are typically originated through specialized prime mortgage programs designed for healthcare professionals with high earnings potential and income stability, but potentially elevated student loan debt, lower early-career earnings, and limited savings for down payments. The pool comprises 29.6% fixed-rate mortgages (FRMs) and 70.4% hybrid adjustable-rate mortgages (ARMs). A majority of the loans (97.6%) are designated as QM Safe Harbor (APOR).

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.

To access ratings and relevant documents, click here.

Click here to view the report.

Related Publications

Methodologies

Disclosures

Further information on key credit considerations, sensitivity analyses that consider what factors can affect these credit ratings and how they could lead to an upgrade or a downgrade, and ESG factors (where they are a key driver behind the change to the credit rating or rating outlook) can be found in the full rating report referenced above.

A description of all substantially material sources that were used to prepare the credit rating and information on the methodology(ies) (inclusive of any material models and sensitivity analyses of the relevant key rating assumptions, as applicable) used in determining the credit rating is available in the Information Disclosure Form(s) located here.

Information on the meaning of each rating category can be located here.

Information on certain affiliations between directors of KBRA Ratings and rated entities or related third parties can be located here.

Further disclosures relating to this rating action are available in the Information Disclosure Form(s) referenced above. Additional information regarding KBRA policies, methodologies, rating scales and disclosures are available at www.kbra.com.

About KBRA

Kroll Bond Rating Agency, LLC (KBRA), one of the major credit rating agencies (CRA), is a full-service CRA registered with the US Securities and Exchange Commission as an NRSRO. Kroll Bond Rating Agency Europe Limited is registered as a CRA with the European Securities and Markets Authority. Kroll Bond Rating Agency UK Limited is registered as a CRA with the UK Financial Conduct Authority. Kroll Bond Rating Agency Japan K.K. is registered as a CRA with the Japan Financial Services Agency. In addition, KBRA is designated as a Designated Rating Organization (DRO) by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized as a Qualified Rating Agency by Taiwan’s Financial Supervisory Commission and is recognized by the National Association of Insurance Commissioners as a Credit Rating Provider (CRP) in the U.S.

Doc ID: 1017881