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Investments

EverBank dives into jumbo RMBS

EverBank Financial Corp debuted on the private-label residential mortgage-backed securitization scene Wednesday, becoming only one of a handful of issuers in that segment of the market. 

Jacksonville-based EverBank (EVER) is bringing EverBank Mortgage Loan Trust 2013-1 with reported a total balance of $309.5 million.

DBRS pre-rated the deal, giving the majority of the tranches AAA ratings.

Fitch Ratings also pre-rated EverBank Mortgage Loan Trust 2013-1, with the expected outlook slated as 'stable' with al lthe tranches also receiving AAA ratings.

The bank has sold loans to private-label RMBS dominator real estate investment trust Redwood Trust (RWT), which recently issued its fourth deal of the year. 

The platform will contain 384 loans in the deal and the weighted average borrower credit score is 767. 

EverBank will be the servicer for all the loans. Additionally, Wells Fargo (WFC) will act as the master servicer, securities administrator and custodian for the deal.

Additionally, all of the mortgage loans were originated by EverBank and acquired by Bank of America (BAC) and Barclays (BCS)

With EverBank attempting to stake its claim in the RMBS sector, various challenges are expected to rise since the bank does not have a track record.

Primarily a whole loan seller, the bank is a new securitizer of prime jumbo loans, and as a result, has limited performance history on these mortgages.

Another concern for the deal is the entity providing representations and warranties.

"The originator may potentially experience financial stress that could result in the inability to fulfill repurchase obligations as a result of breaches of representations and warranties," the credit rating agency said. 

Meanwhile, Fitch noted its concern with the platform's geographic concentration. 

The mortgage pool's primary concentration risk is in California, where 49% of the properties are located.

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cmlynski@housingwire.com

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