Quicken Loans Inc. is poised to join several other large U.S. originators in sponsoring its own nonagency residential mortgage-backed securitization.
An asset-backed securitizer report filed Sept. 30 by an entity called WCM1 LLC references RCKT Mortgage Trust 2019-1 and includes documentation for a third-party due diligence report on 465 Quicken-originated loans with an aggregate original principal balance of approximately $353.2 million.
John Essad, director of securitization at Woodward Capital Management LLC, signed the SEC filing. Delaware Division of Corporations records show that Woodward Capital Management was incorporated July 12. Quicken Loans is based on Woodward Avenue in Detroit. The proposed securitization's name appears to relate to Rocket Mortgage, the brand used by Quicken Loans in connection with its digital initiatives.
The due diligence provider cautioned that it does not know if its review covered all the loans to be included in the forthcoming securitization, and the broader filing did not contain additional transaction-level information.
A Quicken Loans spokesman confirmed that select investors had received preliminary details on Oct. 1 about a securitization program that fully consists of prime jumbo loans originated and serviced by the company.
"While this offering represents the company's first jumbo securitization, Quicken Loans plans to be a consistent issuer of securities," the spokesman said.
The program may be new to the securitization market, but investors in private-label RMBS should be well-acquainted with Quicken Loans production.
Data compiled by Kroll Bond Rating Agency for 381 post-financial crisis nonagency RMBS deals show that Quicken Loans ranked among the top three originators in 106 of those transactions. That is well above the three other entities that most commonly ranked among the top three originators in the Kroll Bond Rating Agency data: Wells Fargo & Co. in 90 deals, JPMorgan Chase & Co. in 79 deals and First Republic Bank in 56 deals.
JPMorgan ranks among the most seasoned post-crisis RMBS sponsors, and its transactions over the years have included loans from a range of affiliated and unaffiliated originators. Quicken Loans ranks as the third-largest originator in J.P. Morgan Mortgage Trust 2019-7, which closed Sept. 27.
Wells Fargo completed its first post-crisis securitization of loans entirely produced by Wells Fargo Bank NA in the fourth quarter of 2018. Since then, it closed three additional transactions consisting solely of Wells Fargo production. The most recent deal, Wells Fargo Mortgage Backed Securities 2019-3 Trust, closed Sept. 25, according to DBRS. It was backed by 750 loans with aggregate principal balance of $542.4 million, the rating agency said.
First Republic's production has frequently been featured in securitizations sponsored by JPMorgan and the Sequoia Mortgage Trust program of mortgage REIT Redwood Trust Inc., another highly active post-crisis sponsor. The bank originates loans to hold on its balance sheet and to sell through both flow and bulk transactions.
Another leading mortgage originator, Flagstar Bancorp Inc., has also sold its production into third-party securitizations and conducted securitizations of its own originations. Flagstar last conducted a RMBS deal in October 2018.
Loans originated by Wells Fargo and Quicken Loans have most regularly been featured as part of Fannie Mae's Connecticut Avenue Securities program and Freddie Mac's Structured Agency Credit Risk, or STACR, programs. The government-sponsored enterprises seek to transfer portions of the mortgage risk in their portfolios to the private market through those platforms.
Like First Republic, Quicken Loans has ranked among the top three originators in multiple J.P. Morgan Mortgage Trust and Sequoia Mortgage Trust securitizations. It has had the same status in multiple transactions sponsored by DLJ Mortgage Capital Inc.
Wells Fargo, Quicken Loans and JPMorgan ranked as the top three U.S. mortgage originators in 2018. Various sources indicate that Quicken Loans ranks as the No. 1 U.S. mortgage lender through the retail channel.
