Redwood Trust’s new residential mortgage-backed security may have failed to get top ratings from Standard & Poor’s, based on characteristics of underlying loans, according to an investor and a statement released by S&P on Wednesday. The Redwood loans deviated from an “archetypical” pool that S&P uses to benchmark its RMBS ratings. Variations on the archetypical pool include that the loans have adjustable rates and that just 26% are fully amortizing. Credit enhancement for bonds that meet S&P’s archetypical pool begin at 7.5%, the rating company said. The Redwood deal, rated triple-A by Moody’s Investors Service, had credit enhancement of 6.5%.
Redwood mortgage bond may have failed S&P triple-A test
Most Popular Articles
Latest Articles
Kristen Sieffert leads the reverse mortgage presence at The Gathering
FOA’s president spoke about bringing reverse mortgages into the mainstream at the event in Scottsdale, Arizona.