Aggregator preps first MBS backed by non-qualified mortgage loans
Long Run Partners is preparing to enter the non-QM market with a mortgage-backed securities (MBS) deal secured by a pool made up of non-QM loans.
The non-QM investor aims to raise $331.5 million from the transaction, which has garnered preliminary AAA ratings from Fitch. The deal is collateralized by 525 non-prime residential loans and is expected to close at the end of March.
The mortgages have an average loan balance of $631,410, an original loan-to-value (LTV) ratio of 73.3%, and a model FICO score of 738. Geographically, the mortgages are highly concentrated in California – representing 47.1% of the loans. The mortgages have seasoned for an average of five months.
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Long Run aggregated the mortgages, which were acquired from multiple lenders. Oaktree originated 65% of the loans, and other companies accounted for the remaining 35%. According to Fitch, Marathon Asset Management provided Long Run with start-up capital and has a preferred equity stake in the non-QM investment company. Select Portfolio Servicing handled the servicing.
Founded in 2020, Long Run Partners started buying non-QM loans in June 2021. Marathon then acquired the loans from Long Run to securitize them, according to Fitch.
