KBRA Assigns Preliminary Ratings to Homeward Opportunities Fund I Trust 2018-2 (HOF I 2018-2)

Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to six classes of mortgage pass-through certificates from Homeward Opportunities Fund I Trust 2018-2 (HOF I 2018-2), a $320.1 million non-prime RMBS transaction issued by Homeward Opportunities Fund I LP as sponsor.

HOF I 2018-2 represents the second non-prime RMBS transaction from Homeward Opportunities Fund I LP, an affiliate of Neuberger Berman Investment Advisers LLC. The transaction consists primarily of non-prime collateral, with most of the loans underwritten using non-traditional income documentation sources, including bank statements (48.3%) and investment property cash flow (18.8%). Approximately 71.6% of the loans have been designated as non-qualified mortgages (Non-QM), while the remainder of the pool was either exempt from the ability-to-repay (ATR) rule as a business purpose investor property loan (27.4%), or categorized as a higher-priced/rebuttable presumption qualified mortgage (HPQM or QMRP, 1.1%).

The underlying collateral, with 692 loans, consists of a mix of hybrid adjustable-rate mortgages (74.7%) and fixed-rate mortgages (25.3%), with 28.0% of the pool possessing an interest-only period. Loans in the pool exhibit substantial borrower equity in each mortgaged property, as evidenced by the WA original LTV and CLTV of 68.8% and 68.8%, respectively. The non-zero weighted average original credit score is 724.

KBRAs rating approach incorporated loan-level analysis of the mortgage pool through its Residential Mortgage Default and Loss Model, an examination of the results from third-party loan file due diligence, cash flow modeling, analysis of the transactions payment structure, reviews of key transaction parties and an assessment of the transactions legal structure and documentation. This analysis is further described in our U.S. RMBS Rating Methodology.

To access ratings, reports and disclosures, click here.

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About KBRA and KBRA Europe

KBRA is a full service credit rating agency registered with the U.S. Securities and Exchange Commission as an NRSRO. In addition, KBRA is designated as a designated rating organization by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus, is recognized by the National Association of Insurance Commissioners as a Credit Rating Provider, and is a certified Credit Rating Agency (CRA) by the European Securities and Markets Authority (ESMA). Kroll Bond Rating Agency Europe Limited is registered with ESMA as a CRA.

Analytical:

Patrick Gervais, Senior Director
(646) 731-2426
[email protected]

Kristymarie Cariello, Director
(646) 731-2494
[email protected]

Gary Narvaez, Director
(646) 731-2478
[email protected]

Edward DeVito, Senior Director
(646) 731-2319
[email protected]

Ryon Aguirre, Associate Director
(646) 731-2382
[email protected]

Jack Kahan, Managing Director
(646) 731-2486
[email protected]