Freddie Mac's STACR 2025-HQA1 Receives Initial Ratings from KBRA

Freddie Mac's STACR 2025-HQA1: An Overview of Preliminary Ratings

In a recent development, KBRA has assigned preliminary ratings to multiple classes associated with the Structured Agency Credit Risk (STACR) 2025-HQA1 Notes from Freddie Mac. This credit risk sharing transaction, called Freddie Mac STACR REMIC Trust 2025-HQA1, boasts a total note offering of $620 million. The notes are tied to loans featuring loan-to-value (LTV) ratios above 80% but not exceeding 97%, showcasing the trust's commitment to facilitating home financing solutions.

Understanding the STACR 2025-HQA1 Reference Pool

The STACR 2025-HQA1 Reference Pool is composed of an impressive 57,179 residential mortgage loans, with a collective outstanding principal balance of approximately $19.2 billion. These loans are well-documented, fully amortizing, and mainly consist of prime quality, 30-year fixed-rate mortgages. The borrowers within this reference pool have a weighted average (WA) original credit score of 749, along with a non-zero WA debt-to-income (DTI) ratio of 40.2%. The LTV and combined LTV ratios stand at 92.7% and 93.0%, respectively, reflecting responsible lending practices.

KBRA's Methodological Approach for Ratings

KBRA employs a rigorous loan-level analysis to assess the mortgage pool through its KBRA RMBS Credit Model. The agency utilizes its Residential Asset Loss Model (REALM) in addition to a comprehensive examination of results obtained from third-party loan file due diligence. Cash flow modeling is also a critical element of the rating process, allowing for an in-depth review of the transaction's payment structure. This holistic analysis encompasses evaluations of key transaction parties and a thorough assessment of the transaction’s legal structure and documentation.

Preliminary Ratings: What to Expect

As investors look toward obtaining vital information regarding ratings and related documents, they can find these details through KBRA’s official resources. The agency emphasizes transparency in its rating process, providing comprehensive disclosures for stakeholders in the financial markets. This clarity not only enhances investor confidence but also contributes to the overall robustness of the mortgage market.

About KBRA and Its Role in the Market

Kroll Bond Rating Agency, LLC (KBRA), is recognized as one of the prominent credit rating agencies, operating as a full-service agency and registered with the U.S. SEC as a Nationally Recognized Statistical Rating Organization (NRSRO). Additionally, KBRA is recognized in several international markets, enhancing its credibility as a trusted credit rating provider. The agency plays a crucial role in evaluating and assigning ratings to various financial instruments, helping investors navigate the complexities of the credit landscape.

By leveraging its extensive analytical resources and maintaining transparent practices, KBRA aims to uphold the integrity of the credit rating process. As the mortgage landscape evolves, KBRA's insights remain a valuable resource for market participants.

Frequently Asked Questions

What is STACR 2025-HQA1?

STACR 2025-HQA1 refers to a credit risk sharing transaction involving Freddie Mac's Structured Agency Credit Risk Notes, aimed at enhancing home financing options.

What are the preliminary ratings assigned by KBRA?

KBRA has assigned preliminary ratings to multiple classes associated with STACR 2025-HQA1, reflecting the agency's thorough analytical process.

How many loans are in the STACR 2025-HQA1 Reference Pool?

The reference pool includes 57,179 residential mortgage loans with a total principal balance of approximately $19.2 billion.

What is the weighted average credit score of borrowers?

The borrowers in the STACR 2025-HQA1 Reference Pool have a weighted average original credit score of 749.

How does KBRA evaluate credit risk?

KBRA uses a combination of loan-level analysis, cash flow modeling, and an extensive review of documentation to evaluate credit risk effectively.

About The Author

My name is Dylan Bailey, and I am 28 years old. I am an author and an expert on the stock market who specializes in publicly traded companies. Early fascination with the stock market inspired me to seek a finance degree and then delve deeply into the world of stocks. I have developed over the years my abilities to spot investment prospects, assess business performance, and analyze market trends.

My books and articles try to help regular investors understand the nuances of the stock market. Anyone can, in my opinion, make wise investment choices and succeed financially if they have the correct information and resources. In my writing, I combine in-depth research with practical insights and advice that can be put into action. This is done with the intention of assisting readers in navigating the constantly shifting landscape of publicly traded companies.

In addition to writing, I also host webinars and workshops, where I give presentations and share my knowledge with a wider audience. I also write for top financial journals and show up as a guest analyst on financial news shows. I like to travel, spend time with my family, and keep active by playing different sports when I'm not buried in market research.

My goal is to enable people to choose wisely and consciously in their investments, so taking charge of their financial futures. By my work, I hope to create a community of informed and self-assured investors prepared to take advantage of the chances presented by the stock market.

Contact Dylan Bailey privately here. Or send an email with ATTN: Dylan Bailey as the subject to contact@investorshangout.com.

About Investors Hangout

Investors Hangout is a leading online stock forum for financial discussion and learning, offering a wide range of free tools and resources. It draws in traders of all levels, who exchange market knowledge, investigate trading tactics, and keep an eye on industry developments in real time. Featuring financial articles, stock message boards, quotes, charts, company profiles, and live news updates. Through cooperative learning and a wealth of informational resources, it helps users from novices creating their first portfolios to experts honing their techniques. Join Investors Hangout today: https://investorshangout.com/

The content of this article is based on factual, publicly available information and does not represent legal, financial, or investment advice. Investors Hangout does not offer financial advice, and the author is not a licensed financial advisor. Consult a qualified advisor before making any financial or investment decisions based on this article. This article should not be considered advice to purchase, sell, or hold any securities or other investments. If any of the material provided here is inaccurate, please contact us for corrections.