NEW YORK, April 09, 2026–(BUSINESS WIRE)–KBRA assigns preliminary ratings to 10 classes of mortgage-backed notes from BRAVO Residential Funding Trust 2026-NQM4 (BRAVO 2026-NQM4). The $492.3 million RMBS transaction is collateralized by a pool of 1,040 residential mortgages, with fixed-rate mortgages (FRMs) and hybrid adjustable-rate mortgages (ARMs) making up 99.3% and 0.7% of the pool, respectively. A notable portion of the loans are classified as exempt (53.6%) from the Ability-to-Repay/Qualified Mortgage (ATR/QM) rule due to being originated for non-consumer loan purposes, with the remaining loans classified as either non-qualified mortgages (Non-QM) (34.1%), safe-harbor QM (10.3%) or rebuttable-presumption (2.0%). KBRA considers the loans in the subject pool to be non-prime due to certain loan or borrower characteristics, which include borrowers with blemished credit history and the use of bank statements and other forms of alternative documentation to document income.
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.
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