Market Overview

KBRA Assigns Preliminary Ratings to Flagstar Mortgage Trust 2018-5 (FSMT 2018-5)

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Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to 17
classes of mortgage pass-through certificates from Flagstar Mortgage
Trust 2018-5 (FSMT 2018-5), a prime RMBS transaction with both
non-agency jumbo (66.8%) and high-balance conforming (33.2%) mortgage
loans.

The FSMT 2018-5 pool comprises 726 first-lien, prime residential
mortgage loans with an aggregate principal balance of $ $476,060,785 as
of the cut-off date. The collateral consists entirely of
fully-amortizing, fixed rate mortgages (FRMs), most of which possess a
30-year (99.9%) maturity term. The pool is characterized by significant
borrower equity in each mortgaged property, as evidenced by the WA
original LTV of 68.4% and WA original CLTV of 69.6%. The weighted
average original credit score is 763, which is well within the prime
mortgage range.

Notably, the FSMT 2018-5 transaction employed due diligence sampling on
a portion of the underlying collateral, with full-scope due diligence
(credit, compliance, valuation and data verification) on 30.0% of the
pool (by loan count), while the remaining 70.0% of the loans did not
receive any third-party review.

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.

For complete details on the analysis, please see our pre-sale report, Flagstar
Mortgage Trust 2018-
5, which
was published on August 30, 2018 on www.kbra.com.

Representations & Warranties Disclosure

All Nationally Recognized Statistical Rating Organizations are required,
pursuant to SEC Rule 17g-7, to provide a description of a transaction's
representations, warranties and enforcement mechanisms that are
available to investors when issuing credit ratings. KBRA's disclosure
for this transaction can be found in the report available 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.

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