Barclays Mortgage Loan Trust raises $329.4 million from MBS investors

A portfolio made up entirely of investor loans on a variety of residential properties, funded by mortgages exempt from repayment capacity rules (ATR), is behind the Barclays Mortgage Loan Trust, 2022-INV1. The transaction is expected to issue approximately $329.4 million of mortgage-backed securities (MBS).

Sutton Funding, a New York-based finance company, is sponsoring the transaction, which is expected to close on May 17, according to S&P Global Ratings. Barclays Capital is expected to act as the initial purchaser of the notes, with Fay Servicing and Shellpoint Mortgage acting as servicer on the deal. Nationstar Mortgage is the primary servicer.

The Barclays Mortgage 2022-INV1, will issue notes through a senior subordinated structure which will benefit from excess cash flow, the rating agency said. It plans to award ratings ranging from “AAA” on the $189.9 million A-1 class to “B-” on the $16.8 million B-2 class.

Although all loans are exempt from the ATR rules, almost the entire portfolio, or 92.2% of the pool, was underwritten using alternative documents, such as personal and business bank statements or profit accounts. and losses. Another 1,020 real estate-focused investor loans, and 18 of the loans, or 3.3% of the pool, were originated using rental income and debt service coverage ratio (DSCR). Additionally, four home loans, or 2.7% of the deal, relied heavily on FICO scores and loan-to-value (LTV) ratios for underwriting, according to S&P.

On average, pool loans have a balance of $314,038, typically granted to borrowers financing properties such as detached single-family homes, unit developments and townhouses. These represent 63.8% of the guarantee pool. Two to four-family houses represent 28.7% of the stock.

On a weighted average (WA) basis, the loans have an initial cumulative LTV ratio of 70.5%, a FICO score of 736, a seasoning of four months and a debt-to-income ratio of 28.0%.

According to S&P, around 45.2% of the loans were used to purchase properties, while 43.6% were used for disbursement financing. Only 5.8% of loans went to foreign borrowers, the rating agency said.

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