Private capital interest in mortgages growing? Angel Oak closes its largest securitization

More than 80% of loans are non-QM

Earlier this year, Angel Oak Capital Advisors, an investment management firm that specializes in mortgage credit, raised $291 million to invest in mortgages that don’t fit inside the Qualified Mortgage box.

Apparently Angel Oak’s investors aren’t the only ones interested in non-QM loans.

Angel Oak announced this week that it closed its largest securitization to date, a $328.78 million offering comprised largely of non-QM mortgages.

The securitization, AOMT 2018-1, is backed by loans originated by Angel Oak’s three affiliated lenders: Angel Oak Mortgage Solutions, Angel Oak Home Loans, and Angel Oak Prime Bridge.

According to Angel Oak, the deal is comprised of 905 loans that carry an average loan amount of $363,287. Approximately 81% of the underlying loans are non-QM loans, while the rest of the loans are qualified mortgages and mortgages for non-owner occupied properties and foreign nationals not residing in the United States.

The senior tranche of AOMT 2018-1 received a AAA rating from both Fitch Ratings and DBRS, Angel Oak said.

According to Angel Oak, this is its largest securitization to date, outsizing each of its six previous offerings.

In total, Angel Oak’s mortgage securitizations total approximately $1.3 billion. All seven securitizations have been backed by mortgages originated through Angel Oak’s affiliated lenders, the company said.

“We have developed a large investor following of our securitizations over the past several years based on the strength of our execution and the consistent quality of our deals. Our leadership in the non-QM origination and securitization markets continues to be recognized throughout the industry,” Sreeni Prabhu, Angel Oak co-CEO and chief investment officer, said.

“Our vertically integrated model is unique in that our loans for securitization are sourced directly from our affiliate lending businesses, giving investors additional comfort in the transparency of Angel Oak’s origination and underwriting capabilities,” Prabhu added. “Our success on all levels from origination to securitization is proof our model works.”

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