The securitization trust is backed by a single, $775.1 million loan secured by mortgages on 4,048 single-family residences with a total value, based on broker price opinions, of $981.8 million, according to a presale report published by Kroll Bond Rating Agency.
Risky mortgage lending may have triggered the financial crisis, but final risk retention rules go much easier on mortgages than securitizations of other kinds of assets.
The deal with a higher average loan-to-value ratio had two tranches price 25 basis points wider.
Some 71.7% of the loan pool behind Citigroup Mortgage Loan Trust 2014-J2 consists of qualified mortgages (QM). The other 28.3% are not subject to QM.
Loans backing the $263.34 million JP Morgan Mortgage Trust 2014-5 were also made to borrowers with very strong credit, resulting in low credit enhancement for the triple-A tranche.
Regulation AB governs registration, reporting and disclosure requirements for all things asset-backed. The Securities and Exchange Commission appears to be ready to update it significantly, but, nearly four years after changes were originally proposed, its not clear exactly what the Commission will do.
Concern is mounting among investors and analysts that Nationstar, Ocwen Financial and Walter Investment are getting so big so quickly that they are becoming too difficult to manage.
The proposal would introduce dissemination of trade prices for securities ranging from highly liquid credit card and auto ABS to smaller and more esoteric deals in asset classes such as time shares, to commercial mortgage-backed securities (CMBS) and highly structured CDOs and collateralized loan obligations.
Overall issuance growth will moderate in 2014, Fitch Ratings' managing director for asset backed securities says in the firm's outlook.
The servicer has a reputation for aggressively writing down principal, often multiple times.
Vice President of Regulatory Compliance
Firm: Clayton Holdings
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