Are record-low interest rates masking high-cost mortgage lending?

Are record-low interest rates masking high-cost mortgage lending?

Five leading economists weigh in and the answer may surprise you

Auction.com partners with Google to predict housing trends

Nowcast will predict in real time

The New York Times rambles, and mangles mortgages along the way

Mortgage finance and mortgage regulation aren’t the paper’s strong suits
W S
The Ticker

Moody’s rates 2014-SFR2 securitization at $322.6M in Class A

ratings tool
/ Print / Reprints /
| Share More
/ Text Size+

Moody's Investors Service has assigned provisional ratings to four classes of certificates backed by one floating rate loan secured by mortgages on 3,750 single-family rental properties owned by the Invitation Homes 2014-SFR2 securitization.

The complete rating action is as follows:

  • $322.6 million of Class A certificates, Assigned (P) Aaa (sf)
  • $78.8 million of Class B certificates, Assigned (P) Aa2 (sf)
  • $69.4 million of Class C certificates, Assigned (P) A2 (sf)
  • $58.6 million of Class D certificates, Assigned (P) Baa2 (sf) 

Moody's evaluation of the issuer's ultimate ability to repay interest and principal was based on a recovery analysis of the portfolio of single-family rental properties backing this securitization.

Moody's also evaluated the portfolio cash flow of Invitation Homes 2014-SFR2 to assess the probability of default during the term of the loan. However, the current limited availability of historical information surrounding vacancy rates, expenses and cash flow associated with single-family rental properties through a stressed environment prevented us from relying significantly on the transaction's cash flow to meet its long-term obligations.

Moody's concerns related to equity foreclosure, as expressed in their special comment "Single Family Rental Securitization Structures Without Mortgages Would Increase Risk" was mitigated for this transaction because both mortgages and pledges of the borrower's equity secure the loan that backs the transaction.

Moody's was therefore able to assign high investment grade ratings to the senior certificates.

Moody's assessment of THR Property Management, the property manager, is that it has a strong ability to effectively handle the day-to-day business of managing a national single-family rental platform.

Recent Articles by Trey Garrison

Comments powered by Disqus