Citi then securitized those loans, with Nationstar doing most of the servicing.
Credit rating agency DBRS expects most of the tranches of the deal, Citigroup Mortgage Loan Trust 2014-J1, will carry a triple-A rating.
For DBRS, a credit enhancement of 6.35% is necessary to garner a triple-A.
The Citi certificates are backed by 285 loans with a total principal balance of $217,985,825.
The loans will be serviced mainly by Nationstar (71.1%). But Fay Servicing, LLC (23.0%), Fifth Third Mortgage Company (Fifth Third, 3.2%) and PennyMac Corp. [PMT] (2.8%) are also involved.
"The transaction employs a senior-subordinate shifting-interest cash flow structure that is enhanced from a pre-crisis structure," DBRS said in its pre-sale report.
"Compared with other recently issued prime jumbo transactions, this portfolio contains a very strong FICO score, and combined loan-to-value and debt-to-income ratios with much less barbelled distributions," DBRS added. "In addition, the pool contains 5.1% 15-year mortgages, and no interest only loans."