KBRA Assigns Ratings to HOMES 2025-NQM1 Trust
14 Feb 2025 | New York
KBRA assigns ratings to nine classes of mortgage pass-through certificates from HOMES 2025-NQM1 Trust, an RMBS transaction sponsored by APF II Resi O4B, LLC an investment fund of Ares Alternative Credit Management LLC. The $332.4 million RMBS transaction is collateralized by a pool of 717 residential mortgages, with fixed-rate mortgages (FRMs) and hybrid adjustable-rate mortgages (ARMs) making up 97.4% and 2.6% of the pool, respectively. The deal includes a meaningful concentration of collateral that KBRA considers to be “non-prime” (92.5%), where most loans are either classified as non-qualified mortgages (Non-QM) (51.5%) or exempt (47.4%) from the Ability-to-Repay/Qualified Mortgage (ATR/QM) rule due to being originated for non-consumer loan purposes. OCMBC, Inc., dba LoanStream Mortgage (LoanStream; 41.2%), Angel Oak Mortgage Solutions LLC (Angel Oak; 37.1%), and Hometown Equity Mortgage, LLC (Hometown; 15.1%) were the three originators each comprising over 10% of the pool.
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.
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