Fitch Rates Sequoia Mortgage Trust 2012-5, Mortgage Pass-Through Certificates, Series 2012-5
Fitch Ratings assigns the following ratings to Sequoia Mortgage Trust 2012-5, mortgage pass-through certificates, series 2012-5 (SEMT 2012-5):
--$296,954,000 class A certificates 'AAAsf'; Outlook Stable;
--$296,954,000 notional class A-IO certificates 'AAAsf'; Outlook Stable;
--$8,488,000 class B-1 certificates 'AAsf'; Outlook Stable;
--$5,286,000 class B-2 certificates 'Asf'; Outlook Stable;
--$3,684,000 class B-3 certificates 'BBBsf'; Outlook Stable;
--$2,563,000 class B-4 certificates 'BBsf'; Outlook Stable.
The 'AAAsf' rating on the senior certificates reflects the 7.30% subordination provided by the 2.65% class B-1, 1.65% class B-2, 1.15% class B-3, 0.80% non-offered class B-4 and 1.05% non-offered class B-5. The class B-5 is not rated by Fitch.
Fitch's ratings reflect the high quality of the underlying collateral, the strong historical performance of the highest contributing originator to the aggregate pool (First Republic Bank, 24.46%), the clear capital structure and the high percentage of loans reviewed by third party underwriters. In addition, Wells Fargo Bank, N.A. will act as the master servicer and Christiana Trust will act as the Trustee for the transaction. For federal income tax purposes, elections will be made to treat the trust as one or more real estate mortgage investment conduits (REMICs).
SEMT 2012-5 will be Redwood Residential Acquisition Corporation's fifth transaction of prime residential mortgages in 2012. The certificates are supported by a pool of prime mortgage loans, with 100% fixed rate mortgages (FRMs). The loans are predominantly fully amortizing; however, 4.9% have a 10-year interest-only (IO) period. The aggregate pool included loans originated by First Republic Bank (24.5%), PrimeLending (17%), Flagstar Bank, F.S.B. (9.3%), and Cornerstone Mortgage (6.1%). The remainder of the mortgage loans (43.1%) was originated by various mortgage lending institutions, each of which contributed less than 5% to the transaction.
As of the cut-off date, the aggregate pool consisted of 390 loans with a total balance of $320,339,050, an average balance of $821,382, a weighted average original combined loan-to-value ratio (CLTV) of 68.4%, and a weighted average coupon (WAC) of 4.2%. Rate/term and cash out refinances account for 45.7% and 8.4% of the loans, respectively. The weighted average original FICO credit score of the pool is 770. Owner-occupied properties comprise 94.3% of the loans. The states that represent the largest geographic concentration are California (44%), Texas (13.4%) and Washington (5.8%).
Additional detail on the transaction is described in the new issue report 'Sequoia Mortgage Trust 2012-5'.
Additional information is available at 'www.fitchratings.com'. The ratings above were solicited by, or on behalf of, the issuer, and therefore, Fitch has been compensated for the provision of the ratings.
In addition to the information sources identified in Fitch's criteria listed below, Fitch's analysis incorporated data tapes, due diligence results, deal structure and legal documents from the 17g5 website available on 'www.structuredfn.com'.
Applicable Criteria and Related Research:
--'Global Structured Finance Rating Criteria', June 6, 2012;
--'Counterparty Criteria for Structured Finance Transactions', May 30, 2012;
--'Criteria for Special-Purpose Vehicles in Structured Finance Transactions', May 30, 2012;
--'U.S. RMBS Rating Criteria', July 20, 2012;
--'U.S. RMBS Loan Loss Model Criteria', Aug. 10, 2012;
--'U.S. RMBS Cash Flow Analysis Criteria', April 19, 2012;
--'U.S. RMBS Representations and Warranties Criteria', June 29, 2012;
--'U.S. RMBS Originator Review and Third-Party Due Diligence Criteria', April 27, 2012;
--'U.S. Residential and Small Balance Commercial Mortgage Servicer Rating Criteria', Jan. 31, 2011;
--'U.S. RMBS Surveillance Criteria', Aug. 10, 2012.
Applicable Criteria and Related Research:
U.S. RMBS Representations and Warranties Criteria
U.S. RMBS Originator Review and Third-Party Due Diligence Criteria
U.S. Residential and Small Balance Commercial Mortgage Servicer Rating Criteria
U.S. RMBS Surveillance Criteria
Global Structured Finance Rating Criteria
Counterparty Criteria for Structured Finance Transactions
Criteria for Special-Purpose Vehicles in Structured Finance Transactions
U.S. RMBS Rating Criteria
U.S. RMBS Loan Loss Model Criteria
U.S. RMBS Cash Flow Analysis Criteria
One State Street Plaza
New York, NY 10004
Sandro Scenga, +1-212-908-0278 (New York)