A Look into a Non-Prime, Private Label MBS

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The market has been mostly void of private label securities; securities that are not backed by Fannie, Freddie or Ginnie.

There are some of these securities being created like the one recently done by Angel Oak of Atlanta.

Angel Oak, having previously issued non-rated, mortgage-backed securities, is issuing its first rated transaction. A pool comprised of 529 non-QM loans valued at $147.47 million.

Here are the stats:

• Weighted average credit score – 698
• Weighted average LTV – 76.9%
• With bruised credit – 29%
• Foreign nationals – 6%
• Second liens – 4%
• Self-employed borrowers (qualified using Anel Oak’s statement program) – 22%
• Investment property (qualified using cash flow analysis) – 16%

Taking all factors into consideration, it is expected that Fitch will provide an AAA pool rating to the senior notes. DBRS is expected to do the same.

This is good news for lenders as it indicates that there is definitely potential for Non-QM lending. Lending that is needed to help expand the credit box and qualify more home buyers, as well as those looking to tap into some equity that increased over the past few years.

Jamie Billingham, Angel Oak’s Eastern Regional Sale Manager, will be speaking on my Alternative Lending panel at the Regional Conference of MBAs in Atlantic City on March 22^nd.

He, along with John Castiello of Radian and Steve Marshall of HomeBridge will provide much more information on products that can help expand your lending base to bring in more business and income.

Make it a point to be there. Your competition will.

About the Author

Michael Vitali

Michael L. Vitali – Independent Consultant to the Mortgage Industry Mike Vitali is an independent consultant to the mortgage industry on matters concerning compliance and mortgage lending. He most recently served as the Senior Vice President and Chief Compliance Officer for LoanLogics, monitoring regulatory developments and their practical implications for the mortgage lending industry. His duties included research, interpretation, and analysis of existing and proposed legislation related to the industry in support of recommendations for policy and/or procedure changes to maintain continued quality and compliance with all applicable laws, rules and regulations, investor requirements, and standard mortgage practices. In his more than 40 years in the mortgage industry, in senior level management, he has gained experience in all areas of mortgage lending, risk management, and compliance. Mike is a past President of the MBA of Greater Philadelphia, is a charter member and was the second Chairman of the MBA of Pennsylvania, and a past board member and Legislative Chair of both associations. He is a recipient of the 1998 Mortgage Banker of the Year Award from the MBA of Greater Philadelphia, and the 2003 Chairman's Award from the MBA of PA, and currently serves on several compliance related task forces for MBA.