Fitch Expects To Rate BRAVO Non-QM Offering
Summary
The notes are supported by 573 loans with a total interest-bearing balance of approximately $270 million as of the cutoff date. There is also roughly $860,000 of non-interest-bearing deferred amounts whose payments or losses will be used solely to pay down or write off the class FB notes, Fitch said. Fitch assigned the expected ratings as follows: Fitch noted that due its updated view on sustainable home prices, it views the home price values of this pool as 8.6% below a long-term sustainable level (versus 9.2% on a national level). Approximately 88.8% of the pool were underwritten to less than full documentation, and 44.4% were underwritten to a 12-month or 24-month bank statement program for verifying income, which is not consistent with Appendix Q standards and Fitchs view of a full documentation program, Fitch said. A key distinction between this pool and legacy Alt-A loans, Fitch said, is that these loans adhere to underwriting and documentation standards required under the Consumer Financial Protections Bureaus ATR, which reduces the risk of borrower default arising from lack of affordability, misrepresentation or other operational quality risks due to rigors of the ATR mandates regarding the underwriting and documentation of the borrowers ability to repay.