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ShellPoint brings latest RMBS deal to market

Strong collateral and borrowers position issuer for AAA ratings

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Mortgage-bond guru Lewis Ranieri’s Shellpoint Partners is set to issue its second private-label residential mortgage-backed securities deal, reporting strong borrower credit attributes to beef up its collateral quality.

The platform Shellpoint Asset Funding Trust 2013-2 holds strong borrower credit quality, as evidenced by the average FICO score of 773.

Additionally, a significant amount of the borrowers exhibit high levels of verified assets while most loans indicate prudent debt-to-income ratios — especially given relative high borrower incomes, according to Kroll Bond Rating.

“Borrower income and assets are generally well documented for all mortgages,” stated Kroll analysts.

While the credit rating agency considers New Penn Financial’s lack of performance history a negative for the forthcoming deal, this is merely related to the firm's recent entry into the space, sources tell HousingWire. Either way, New Penn is staying competitive in the ever-evolving market, recently launching its own mini-correspondent channel—an emerging program, unrelated to jumbo production, that will add to the firm's growth in other ways.

New Penn told HousingWire in its October magazine that the program will support the process of adequately funding loans by providing a certain framework.

The move will provide investors with additional services such as prior approval underwriting, doc prep and compliance reviews to assist the secondary market and return of private capital.

Although the company does not have a significant jumbo loan performance history yet, the introduction of a mini-correspondent lending program will help the issuer bulk up its experience.

The transaction is expected to report a total unpaid principal balance of $250.8 million, and will contain 345 first-lien loans.

The pool will be comprised of almost entirely 30-year, fixed-rate mortgages, attributing to Kroll’s expected ‘AAA’ rating.

Wells Fargo (WFC) will be the master servicer, securities administrator and custodian, while Selene Finance will be the servicer.

Shellpoint offered its first RMBS deal in June after talks around the watering cooler began the Federal Reserve would begin to alter the pace of its bond-buying program by year-end — indicating a need for additional private players in the mortgage market.


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