KBRA Assigns Preliminary Ratings To RCKT 2021-5
Summary
RCKT 2021-5 comprises 1,146 residential mortgages with an aggregate principal balance of approximately $1.8 billion as of the Nov. 1, 2021, cut-off date. All loans in the subject pool were originated after the World Health Organization declaration of a worldwide pandemic on March 11, 2020, which was followed by global lockdown orders. KBRA expects loans underwritten post-pandemic to benefit from positive selection and tightened employment verification standards. This expectation is somewhat tempered, however, for loans originated to self-employed borrowers, who were more adversely affected by the pandemic due to business closures and other COVID-related restriction measures. RCKT 2021-5 has a self-employment percentage of 33.2%, which is larger than the approximate 20% average rate seen in prime RMBS 2020 and 2021 (year to date).