Structured Finance Ratings
KBRA Evaluates Five Major Structured-Finance Securitizations Spanning Mortgages and Consumer Loans
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Key Points
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HS Issuer’s collateral extends beyond service contracts to include existing and future equity interests in the master issuer and asset entities, plus agreements and other assets supporting HomeServe North America’s business.
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PowerPay’s $350.2 million issuance is expected to be collateralized by $357.4 million in consumer loans, and is the company’s third 144A ABS transaction. PowerPay says it has funded more than $2.6 billion across about 150,000 transactions since 2018.
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Sequoia Mortgage Trust 2026-12 has a weighted-average original borrower credit score of 774 and weighted-average original loan-to-value and combined loan-to-value ratios of 71.7% and 71.8%, respectively.
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In CROSS 2026-NQM11, 77.5% of the mortgage pool is non-prime; 59.1% of the loans are non-qualified mortgages and another 39.6% are exempt from Ability-to-Repay and Qualified Mortgage rules because they were originated for non-consumer purposes.
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Rocket Mortgage originated 30.7% of the GCAT 2026-CES1 collateral, while AmeriSave Mortgage originated 27.0%. Shellpoint services 69.3% of the pool, with Rocket Mortgage servicing the remaining 30.7%.
KBRA has assigned preliminary ratings to five securitization deals spanning home services, consumer lending, and residential mortgages. The transactions total over $2 billion in value and showcase a broad recovery in structured-finance markets as lenders package loans and contracts into investment-grade securities KBRA Morningstar.
The deals include HS Issuer's first securitization backed by home repair contracts, PowerPay's $350.2 million consumer-loan ABS, and three residential mortgage securitizations. Each transaction underwent detailed loan-level analysis and cash-flow modeling to ensure investor protections KBRA Markets Financial Content.
Home-Service Securitization Enters Market for First Time
HS Issuer launched its inaugural securitization using a master trust structure. The deal is collateralized by home repair and infrastructure service agreements from HomeServe North America, plus equity interests and other supporting assets KBRA. The proceeds repay debt, fund reserve accounts, and support general corporate operations. The master trust setup allows HS Issuer to issue future securities under pre-approved conditions.
PowerPay Funds $350 Million in Home and Wellness Loans
PowerPay's 2026-1 securitization will be collateralized by $357.4 million in consumer loans. This is PowerPay's third 144A ABS transaction KBRA Markets Financial Content. The loans finance home improvements and health and wellness procedures. Since 2018, PowerPay says it has funded more than $2.6 billion across roughly 150,000 transactions nationwide.
Prime Mortgage Deals Show Strong Borrower Credit Profiles
Sequoia Mortgage Trust 2026-12, a $535.3 million prime RMBS, is backed by 428 mortgages. Borrowers have a weighted-average credit score of 774 KBRA. The typical loan-to-value ratio is 71.7%, and combined loan-to-value is 71.8%. Most mortgages are 30-year fixed-rate loans, indicating conservative underwriting standards.
Non-Prime and Second-Lien Mortgages Round Out Issuance
CROSS 2026-NQM11, valued at $735.3 million, carries substantial non-prime exposure. About 77.5% of the pool is non-prime KBRA. Another 59.1% of loans are non-qualified mortgages, while 39.6% are exempt from Ability-to-Repay rules because they were originated for non-consumer purposes.
GCAT 2026-CES1, a $346.6 million deal, is backed entirely by closed-end second-lien mortgages. Rocket Mortgage originated 30.7% of the pool and AmeriSave Mortgage originated 27.0% KBRA. Shellpoint services 69.3% of the mortgages, with Rocket Mortgage servicing the remaining 30.7%.
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