Press Release|RMBS

KBRA Affirms Ratings on 18 Finance of America Reverse Mortgage Transactions

7 Jun 2024   |   New York


KBRA has reviewed the ratings assigned to 18 Finance of America proprietary reverse mortgage transactions, resulting in 28 rating affirmations. The related transactions are listed below with links to their transaction pages which show the applicable rating actions. The affirmations reflect generally stable collateral and structure performance, as evidenced by increased credit support for rated classes and minimal losses since issuance. In performing these rating actions, KBRA considered underlying collateral performance, changes to the age and gender composition of the pools, changes to the values of the properties as a result of home price index movements, changes to the loan balances as interest accruals are added to the loan principal balances over time, deal structure and credit enhancement levels. The rating actions, along with related deal and tranche performance information, are available in spreadsheet form in the accompanying KBRA Supplemental Ratings Data file.

KBRA performed its analysis in accordance with its Reverse Mortgage Securitisation Global Rating Methodology. KBRA has analyzed the transactions through its KBRA Reverse Mortgage Analytical Tool and KBRA generally utilized the same set of asset analysis stress assumptions and cash flow scenarios described within our new issue rating report – specifically relating to home price decline stresses and timing, age setbacks, and liquidation assumptions. With respect to assumptions relating to interest rate stresses and prepayment assumptions, KBRA’s analysis may incorporate updated assumptions depending on observed rates. For transactions with floating rate collateral or notes, KBRA’s cash flow analysis incorporated interest rate stress scenarios for each rating level which test rating sensitivity to rates remaining flat, increasing, or decreasing.

KBRA has observed lifetime all-in prepayment rates for the related transactions ranging between approximately 4% and 23%. Recently, average prepayment rates have been somewhat slower, with 3 Month CPRs ranging between approximately 1% and 23%. Based on the originator’s loan originations and historical performance, KBRA evaluated each transaction utilizing two scenarios of flat lifetime non-mortality repayment rates at 2% and at 7%. In addition, for certain transactions which have experienced elevated prepayments historically, KBRA also considered cash flow sensitivity scenarios where we applied additional elevated repayment rates that increase to peak rates of 40% in our ‘AA’ stress scenarios and higher than 40% in our ‘AAA’ stress scenarios. After these peak rates, both stress scenario curves return to a flat rate of 15%. The notes were able to withstand their applicable rating stress within acceptable tolerances.

For additional information regarding a specific transaction, see the list below to access ratings, reports, and disclosures:

Related Publication



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.

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

About KBRA

Kroll Bond Rating Agency, LLC (KBRA) is a full-service credit rating agency registered with the U.S. 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. In addition, KBRA is designated as a designated rating organization by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized by the National Association of Insurance Commissioners as a Credit Rating Provider.

Doc ID: 1004666

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