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Private Placement Securitization of Reverse Mortgages Receives AA Rating

NewImage.jpgHousingWire is reporting the private placement offering of reverse mortgage loans lead by Bank of America Merrill Lynch received a AA rating from Standard and Poor’s on the $92 million of senior notes.

The deal was the first private label reverse mortgage securitization seen in the market since the downturn.  The sale also is important because the collateral behind the transaction.  According to HW:

The collateral pool includes 716 loans that are in technical default because of delinquent taxes and insurance, repair or maintenance issues, or occupancy problems, according to Standard & Poor’s.

Analysts also said the remaining 40 mortgages are document deficient. Borrowers don’t repay HECMs until the loan matures, but often run afoul when property taxes and insurance premiums are not paid.

To read more about the due diligence results, check out the link below.

BofA HECM securitization notes merit double-A from Standard & Poor’s