KBRA Assigns Preliminary Ratings to Verus Securitization Trust 2025-4 (VERUS 2025-4)
5 May 2025 | New York
KBRA assigns preliminary ratings to six classes of mortgage pass-through notes from Verus Securitization Trust 2025-4 (VERUS 2025-4), a $518.0 million non-prime RMBS transaction. The underlying collateral comprises 1,014 residential mortgages and 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 70.0%. Approximately 42.9% of the loans were exempt from the ATR/QM rule due to being originated for business purposes or underwritten by a CDFI. The remaining portions of the pool were categorized as QM: Safe Harbor (32.6%), non-qualified mortgages (Non-QM) under the Ability-to-Repay/Qualified Mortgage (ATR/QM) rule (20.6%) or categorized as QM: Rebuttable Presumption (3.9%).
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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