KBRA Assigns Preliminary Ratings To RCKT 2021-4
Summary
RCKT 2021-4 is a prime residential mortgage-backed security (RMBS) transaction issued by Woodward Capital Management LLC. All loans in the pool were originated after the World Health Organization declared a worldwide pandemic on March 11, 2020, which was followed by global lockdown orders. KBRA said it expects loans underwritten post-pandemic to benefit from positive selection and tightened employment verification standards. However, it said, this expectation is somewhat tempered for loans originated to self-employed borrowers, who were more adversely affected by the pandemic due to business closures and other COVID-related restrictions. RCKT 2021-4 has a self-employment percentage of 35.7%, which is larger than the approximate 20% average rate seen in prime RMBS 2020 and 2021 (YTD).