KBRA Assigns Preliminary Ratings to FWD Securitization Trust 2019-INV1 (FWD 2019-INV1)

NEW YORK–(BUSINESS WIRE)–Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to six classes of mortgage pass-through certificates from FWD Securitization Trust 2019-INV1 (FWD 2019-INV1), a $264.5 million residential mortgage-backed securities (RMBS) transaction collateralized by agency eligible and non-agency loans on investment properties.

FWD 2019-INV1 is the first forward-mortgage RMBS 2.0 transaction issued by the Sponsor, Blackstone Residential Operating Partnership LP. The underlying pool consists of 1,724 fixed-rate mortgages (FRMs) with an aggregate principal balance of $264.5 million as of the May 31, 2019 cut-off date. The $264.5 million transaction is collateralized by agency-eligible investment-purpose mortgages (33.5%) that were underwritten to the borrower’s DTI and investor cash flow loans (66.5%), which were underwritten using the property’s rental income based on a debt service coverage ratio (DSCR) instead of the borrower’s DTI. Since all of the loans are considered to be made for business-purpose, they are considered exempt from consumer-purpose regulations such as Ability-to-Repay/QM and TRID.

The underlying FWD 2019-INV1 collateral consists of fixed rate, fully amortizing mortgages most of which have 30-year terms (98.0%). Loans in the pool exhibit substantial borrower equity, as evidenced by the WA original LTV and CLTV of 65.8%. The pool has a WA original credit score of 736, and a WA loan age of 14 months. More than 95% of the collateral was originated by affiliated of Finance of America Holdings LLC.

KBRA’s rating approach incorporated loan-level analysis of the mortgage pool through its Residential Mortgage Default and Loss Model, an examination of the results from third-party loan file due diligence, cash flow modeling, analysis of the transaction’s payment structure, reviews of key transaction parties and an assessment of the transaction’s legal structure and documentation. This analysis is further described in our U.S. RMBS Rating Methodology.

To access ratings, reports and disclosures, click here.

Related Publications: (available at www.kbra.com)

FWD 2019-INV1 Pre-Sale Report

FWD 2019-INV1 Tear Sheet

U.S. RMBS Rating Methodology

Residential Mortgage Default and Loss Model

U.S. RMBS Rating Methodology for Assessing Non-QM Risk

Global Structured Finance Counterparty Methodology

Credit Evolution – Non-Prime Isn’t Yesterday’s Subprime

KBRA RMBS KCAT

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About KBRA and KBRA Europe

KBRA is a full-service credit rating agency registered with the U.S. Securities and Exchange Commission as an NRSRO. In addition, KBRA is designated as a designated rating organization by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized by the National Association of Insurance Commissioners as a Credit Rating Provider, and is a certified Credit Rating Agency (CRA) by the European Securities and Markets Authority (ESMA). Kroll Bond Rating Agency Europe Limited is registered with ESMA as a CRA.

Contacts

Analytical:
Gary Narvaez, Director
(646) 731-2478
gnarvaez@kbra.com

Sharif Mahdavian, Senior Director
(646) 731-2301
smahdavian@kbra.com

Jack Kahan, Senior Managing Director
(646) 731-2486
jkahan@kbra.com

Fei Han, Analyst
(646) 731-2342
fhan@kbra.com