Preliminary Ratings Assigned to MSRM 2025-NQM1 Certificates
Preliminary Ratings of Morgan Stanley Residential Mortgage Loan Trust
KBRA has assigned preliminary ratings to 10 classes of mortgage-backed certificates originating from the Morgan Stanley Residential Mortgage Loan Trust 2025-NQM1, commonly referred to as MSRM 2025-NQM1. This non-prime residential mortgage-backed securities (RMBS) transaction amounts to approximately $376.7 million. Notably, the underlying collateral within this transaction features a substantial concentration of alternative income documentation, which represents around 72.6% of the total loan pool.
Understanding the Mortgage Pool
The collection of loans involved in this transaction primarily consists of residential mortgages. A significant portion of these loans, 32.9% to be precise, falls under the category of non-qualified mortgages (Non-QM). Additionally, a considerable 58.8% of the loans are exempt from the Ability-to-Repay/Qualified Mortgage (ATR/QM) regulations since they are facilitated for non-consumer loan purposes. This highlights a characteristic feature of the mortgage pool that serves as collateral for the certificates.
KBRA’s Rating Methodology
KBRA’s comprehensive approach to rating these mortgage-backed certificates involved a detailed loan-level analysis of the mortgage pool utilizing its specialized Residential Asset Loss Model (REALM). This process included a detailed examination of third-party loan file due diligence and cash flow modeling to analyze the intricacies of the transaction’s payment structure. Furthermore, KBRA conducted thorough reviews of the key parties involved in the transaction and an assessment of the legal structure and documentation governing it. This methodical evaluation aligns with the structure outlined in KBRA's U.S. RMBS Rating Methodology.
Accessing Ratings and Reports
For those interested in further exploring the ratings and various related documents, additional resources can be found on KBRA’s official website. These documents provide in-depth insights into the mechanics of the ratings assigned as well as important disclosures related to the transaction.
Related Publications and Additional Resources
A variety of related publications are available to provide further context on the Morgan Stanley Residential Mortgage Loan Trust 2025-NQM1. This includes not just the tear sheet detailing key metrics and performance characteristics, but also additional materials focused on structured finance methodologies and ESG (Environmental, Social, and Governance) considerations that are increasingly influencing credit assessments.
The Role of KBRA
Kroll Bond Rating Agency, LLC (KBRA) has positioned itself as a significant player within the credit rating agency landscape. As a full-service credit rating agency registered with the U.S. Securities and Exchange Commission as an NRSRO, KBRA serves not just American markets but has extended its reach globally, with various registrations across major jurisdictions. Their designations allow them to provide vital support to the asset-backed securities market, ensuring transparency and trust in the ratings process.
Frequently Asked Questions
What are the preliminary ratings assigned by KBRA?
KBRA has assigned preliminary ratings to 10 classes of securities under the Morgan Stanley Residential Mortgage Loan Trust 2025-NQM1.
What is the total value of the MSRM 2025-NQM1 transaction?
The transaction involves approximately $376.7 million in residential mortgage-backed securities.
What percentage of the underlying loans represent Non-QM mortgages?
About 32.9% of the mortgages within the pool are classified as non-qualified mortgages (Non-QM).
How does KBRA evaluate mortgage-backed transactions?
KBRA employs a detailed review process using its Residential Asset Loss Model (REALM) along with cash flow modeling and legal documentation assessments.
What is KBRA's significance in the credit rating industry?
KBRA is a major credit rating agency recognized for its full-service offerings and regulatory registrations, ensuring credibility in its ratings processes.
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