KBRA Assigns Preliminary Ratings to New Residential Mortgage Loan Trust 2026-NQM1 (NRMLT 2026-NQM1)
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Key Terms
rmbsfinancial
Residential mortgage-backed securities (RMBS) are investments made by pooling many home loans and selling slices of the resulting stream of mortgage payments to investors. They matter because they convert homeowners’ monthly payments into tradable income: the cash you receive and the price you pay depend on borrowers’ ability to pay, interest rates and housing market health—think of buying a share in a neighborhood’s mortgage cash flow, with corresponding income and risk.
reitfinancial
A real estate investment trust (REIT) is a company that owns, operates, or finances income-producing real estate, like shopping centers, apartments, or office buildings. For investors, REITs offer a way to invest in real estate without having to buy property directly, often providing regular income through dividends. They function like a mutual fund for real estate, making it easier for people to add property investments to their portfolio.
weighted averagefinancial
A weighted average is a way of calculating an overall number when some items matter more than others by giving each item a different level of importance, or weight. Investors use weighted averages to combine figures like prices, returns or earnings so the result reflects the size or significance of each part — like grading a class where a final exam counts more than a quiz, producing a score that better represents true performance.
loan-to-value (ltv)financial
Loan-to-value (LTV) is the ratio of a loan amount to the value of the asset used as collateral, expressed as a percentage; for example, a $80,000 loan on a $100,000 property has an LTV of 80%. It matters to investors because higher LTVs mean greater risk of loss if the asset falls in value—like borrowing most of the price of a car, leaving little buffer—so lenders charge higher rates or restrict lending, affecting credit availability and borrower default risk.
cltvfinancial
CLTV (Customer Lifetime Value) estimates the total money a typical customer is expected to spend with a company over the entire relationship, like valuing a fruit tree by the fruit it will produce over years. For investors it shows how valuable each customer is relative to the cost of finding and keeping them, helping judge a business’s growth potential, pricing power and long-term profitability.
securitizedfinancial
Securitized describes the process where loans or other assets are bundled and turned into tradable financial instruments that investors can buy and sell. Think of it like slicing a loaf of bread into individual pieces you can hand out: securitization can make illiquid assets easier to trade and spread risk among many buyers, but investors must watch the quality of the underlying assets and the structure, since those determine potential returns and losses.
residential asset loss model (realm)technical
A residential asset loss model (REALM) is a computerized tool that estimates how much value homes and other residential properties could lose after events like storms, floods, fires or long-term hazards. For investors, it works like a weather forecast for money: it translates physical damage and repair costs into likely financial losses, helping to price risk, set insurance reserves, and stress-test real estate portfolios or mortgage-backed securities.
mortgage-backed notesfinancial
Mortgage-backed notes are investment instruments created by pooling many home loans and selling pieces of the resulting payment stream to investors; buyers receive portions of the homeowners’ principal and interest payments. They matter because they let investors earn income tied to the housing market without owning houses directly, but their value and payouts depend on borrowers’ payments, interest rates and the chance homeowners refinance or default—like collecting rent from many tenants rather than one property.
NEW YORK--(BUSINESS WIRE)--
KBRA assigns preliminary ratings to 10 classes of mortgage-backed notes from New Residential Mortgage Loan Trust 2026-NQM1 (NRMLT 2026-NQM1), a $502.1 million non-prime RMBS transaction sponsored by Rithm Capital Corp. (formerly New Residential Investment Corp.), a publicly traded (NYSE: RITM) real estate investment trust (REIT). The underlying mortgages in the subject pool were primarily originated by NewRez LLC (52.6%) and Caliber Home Loans Inc, LLC (27.4%). In addition, all loans will be serviced by NewRez LLC.
NRMLT 2026-NQM1 is collateralized by a pool of 1,014 residential mortgages, of which 31.7% were originally securitized in NRMLT 2022-NQM5 which has been called. Borrowers in NRMLT 2026-NQM1 possess a non-zero WA original credit score of 758 and exhibit a weighted average (WA) original loan-to-value (LTV) of 72.2% and a WA combined LTV (CLTV) of 72.2%. The loans are seasoned approximately 15 months, 31.7% of the pool is seasoned over 2 years.
KBRA’s rating approach incorporated loan-level analysis of the mortgage pool through its Residential Asset Loss Model (REALM), 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 and relevant documents, click here.
Further information on key credit considerations, sensitivity analyses that consider what factors can affect these credit ratings and how they could lead to an upgrade or a downgrade, and ESG factors (where they are a key driver behind the change to the credit rating or rating outlook) can be found in the full rating report referenced above.
A description of all substantially material sources that were used to prepare the credit rating and information on the methodology(ies) (inclusive of any material models and sensitivity analyses of the relevant key rating assumptions, as applicable) used in determining the credit rating is available in the Information Disclosure Form(s) located here.
Information on the meaning of each rating category can be located here.
Further disclosures relating to this rating action are available in the Information Disclosure Form(s) referenced above. Additional information regarding KBRA policies, methodologies, rating scales and disclosures are available at www.kbra.com.
About KBRA
Kroll Bond Rating Agency, LLC (KBRA), one of the major credit rating agencies (CRA), is a full-service CRA registered with the U.S. Securities and Exchange Commission as an NRSRO. Kroll Bond Rating Agency Europe Limited is registered as a CRA with the European Securities and Markets Authority. Kroll Bond Rating Agency UK Limited is registered as a CRA with the UK Financial Conduct Authority. In addition, KBRA is designated as a Designated Rating Organization (DRO) by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized as a Qualified Rating Agency by Taiwan’s Financial Supervisory Commission and is recognized by the National Association of Insurance Commissioners as a Credit Rating Provider (CRP) in the U.S.
