KBRA Assigns Preliminary Ratings to Galton Funding Mortgage Trust 2019-1 (GFMT 2019-1)

NEW YORK–(BUSINESS WIRE)–Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to 50
classes of mortgage pass-through certificates from Galton Funding
Mortgage Trust 2019-1 (GFMT 2019-1).

Galton Funding Mortgage Trust 2019-1 is issued by the Sponsor (Galton
Mortgage Acquisition Platform IV Sponsor LLC) that contains both
qualified mortgages (QM) and Non-qualified (Non-QM) mortgages as well as
loans secured by investor properties. The collateral pool also contains
a significant concentration of collateral that KBRA considers to be
“expanded prime” as such loans (i) are not applicable for or do not meet
the definition of QM and/or (ii) possess one or more collateral
attributes that represent an expansion of the credit parameters used to
originate ‘super-prime’ loans. The expanded credit factors can include
loans with credit scores as low as 660, DTI ratios as high as 50 or
more, LTVs above 80-85%, and non-traditional income qualification such
as asset depletion. Furthermore, this transaction also contains a
smaller subset of loans which KBRA generally considers to be non-prime
due to certain loan or borrower characteristics which include borrowers
with blemished credit history and the use of bank statements to document
income.

The GFMT 2019-1 mortgage pool comprises 342 first-lien mortgage loans
with an aggregate principal balance of $247,033,632, as of the cut-off
date. The underlying collateral consists primarily of fixed-rate
mortgages (84.9%), with the remainder of loans possessing adjustable
rate terms (15.1%). Most of the fixed-rate mortgages are fully
amortizing (52.3%), while the collateral contains loans that possess a
10-year interest-only term, with the majority containing a 30-year
amortization upon recast (30.2%). Additionally, 33.2% of the pool was
originated as investment properties and a small percentage of loans were
underwritten using non-traditional documentation, such as asset
qualification (2.5%), or alternative documentation such as the use of 12
(0.2%) or 24 (1.8%) months of bank statements.

KBRA’s 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 transaction’s payment structure,
reviews of key transaction parties and an assessment of the
transaction’s legal structure and documentation. This analysis is
further described in our U.S. RMBS Rating Methodology.

To access ratings, reports and disclosures, click here.

Related Publications: (available at www.kbra.com)

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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.

Contacts

Analytical Contacts:

Gary Narvaez, Director
(646) 731-2478
gnarvaez@kbra.com

Kristymarie Cariello, Director
(646) 731-2494
kcariello@kbra.com

Prabhjot Singh, Analyst
(646) 731-3337
psingh@kbra.com

Jack Kahan, Managing Director
(646) 731-2486
jkahan@kbra.com

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