KBRA Assigns Preliminary Ratings to JPMMT 2022-INV3
Summary
The underlying collateral includes both conforming (36.5%) and non-conforming (63.5%) loans and is secured entirely by investment properties. The pool is characterized by substantial borrower equity in each mortgaged property, as evidenced by the weighted average original combined loan-to-value ratio of 67.2%. The weighted average original credit score is 768, which is well within the prime mortgage range. KBRA’s rating approach incorporated loan-level analysis of the mortgage pool through its KBRA RMBS Credit 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. Investor properties have typically exhibited a higher propensity for default relative to owner-occupied homes and are generally more susceptible to speculation and potentially uncertain income sources, it said.