KBRA Assigns Ratings to Rithm's RMBS
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Jun 25 2020
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Should l Buy RITM?
Source: Newsfilter
KBRA has assigned preliminary ratings to 10 classes of mortgage-backed notes from the New Residential Mortgage Loan Trust 2025-NQM6, a $494.4 million non-prime RMBS transaction sponsored by Rithm Capital Corp.
The transaction is backed by a pool of 985 residential mortgages, primarily originated by Champions Funding, LLC and NewRez LLC, with a weighted average original credit score of 753 and a loan-to-value ratio of 70.8%.
KBRA's rating process involved a detailed loan-level analysis using its Residential Asset Loss Model (REALM), along with cash flow modeling and assessments of key transaction parties and legal structures.
Kroll Bond Rating Agency (KBRA) is a registered credit rating agency recognized in multiple jurisdictions, providing comprehensive ratings and methodologies for various financial instruments, including asset-backed securities.
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Analyst Views on RITM
Wall Street analysts forecast RITM stock price to rise
6 Analyst Rating
6 Buy
0 Hold
0 Sell
Strong Buy
Current: 9.030
Low
14.00
Averages
14.92
High
16.00
Current: 9.030
Low
14.00
Averages
14.92
High
16.00
About RITM
Rithm Capital Corp. is a global asset manager focused on real estate, credit and financial services. The Company makes direct investments and operates several wholly-owned operating businesses. Its segments include Origination and Servicing, Investment Portfolio, Residential Transitional Lending and Asset Management. The Company's businesses include Sculptor Capital Management, Inc., an alternative asset manager, as well as Newrez LLC and Genesis Capital LLC, mortgage origination and servicing platforms. Sculptor Capital Management, Inc. provides asset management services and investment products across credit, real estate and multi-strategy platforms through commingled funds, separate accounts and other alternative investment vehicles. Genesis Capital LLC specializes in originating and managing a portfolio of primarily short-term business purpose mortgage loans to fund single-family and multi-family real estate developers with construction, renovation and bridge loans.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Rithm Capital Declines for Seven Consecutive Days
- Declining Trend: Rithm Capital's stock closed down 0.39% at $9.03 on Thursday, marking its seventh consecutive trading day of losses, with an overall decline of 8.76%, significantly underperforming the S&P 500 Index's 2.31% drop.
- Poor Annual Performance: Since the beginning of 2025, RITM's stock has fallen 16.97%, compared to a mere 3.22% decline in the S&P 500 Index, indicating a weak market position that could undermine investor confidence.
- Successful Transition: Despite the downward pressure, Rithm Capital is successfully transitioning from a mortgage REIT to a diversified global alternative asset manager, with an expected 19% return on equity in FY25 and normalized EPS of $0.74, exceeding consensus estimates by over 23%.
- Analyst Optimism: Wall Street analysts have rated RITM stock as a Buy, while Seeking Alpha analysts issued a bullish Buy rating of 4 out of 5, reflecting confidence in the company's future growth prospects.
See More
KBRA Assigns Preliminary Ratings to New Residential Mortgage Loan Trust
- Rating Assignment: KBRA has assigned preliminary ratings to 10 classes of the $496.3 million non-prime RMBS transaction New Residential Mortgage Loan Trust 2026-NQM4, sponsored by Rithm Capital Corp., indicating market confidence in this transaction.
- Loan Characteristics: The transaction is backed by a pool of 916 residential mortgages, with borrowers exhibiting an average credit score of 757 and both loan-to-value (LTV) and combined LTV (CLTV) at 71.4%, reflecting strong credit quality and moderate leverage among borrowers.
- Analytical Approach: KBRA's rating methodology incorporates loan-level analysis through its Residential Asset Loss Model (REALM) and cash flow modeling, ensuring the accuracy and reliability of the ratings assigned to the mortgage pool.
- Market Impact: This rating provides transparency for investors regarding the New Residential Mortgage Loan Trust, potentially attracting more participants to the non-prime RMBS market and further driving growth in this sector.
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- Strategic AI Investments: The company's strategic investments in artificial intelligence, particularly with its industry-leading ReziChat, enhance the seamless and intuitive nature of customer experiences, reflecting Newrez's ongoing commitment to servicing excellence aimed at improving customer satisfaction.
- Team Contribution Acknowledgment: Executives at Newrez emphasize that the company's success is attributed to the focus and execution of its employees, whose accountability in both digital and human servicing experiences is crucial for setting industry standards, thereby enhancing team cohesion and morale.
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- Oversold Indicator Analysis: Rithm Capital's stock price fell to $10.04 per share on Monday, with an RSI of 29.0, indicating it has entered oversold territory below the 30 threshold, suggesting potential buying opportunities for investors.
- Increased Dividend Yield: With a current share price of $10.45, RITM's annualized dividend of $1 per share translates to a 9.57% yield, attracting dividend investors looking for higher returns amid falling prices.
- Market Comparison Analysis: RITM's oversold status, compared to the average RSI of 51.9 for covered dividend stocks, may indicate that recent selling pressure is easing, prompting investors to consider entry points for potential gains.
- Dividend History Consideration: While dividends are often unpredictable, examining RITM's dividend history can help investors assess the likelihood of continued payouts, enabling more informed investment decisions.
See More
Rithm Capital Declines for Seven Consecutive Days
- Declining Trend: Rithm Capital's stock closed down 0.39% at $9.03 on Thursday, marking its seventh consecutive trading day of losses, with an overall decline of 8.76%, significantly underperforming the S&P 500 Index's 2.31% drop.
- Poor Annual Performance: Since the beginning of 2025, RITM's stock has fallen 16.97%, compared to a mere 3.22% decline in the S&P 500 Index, indicating a weak market position that could undermine investor confidence.
- Successful Transition: Despite the downward pressure, Rithm Capital is successfully transitioning from a mortgage REIT to a diversified global alternative asset manager, with an expected 19% return on equity in FY25 and normalized EPS of $0.74, exceeding consensus estimates by over 23%.
- Analyst Optimism: Wall Street analysts have rated RITM stock as a Buy, while Seeking Alpha analysts issued a bullish Buy rating of 4 out of 5, reflecting confidence in the company's future growth prospects.
See More
KBRA Assigns Preliminary Ratings to New Residential Mortgage Loan Trust
- Rating Assignment: KBRA has assigned preliminary ratings to 10 classes of the $496.3 million non-prime RMBS transaction New Residential Mortgage Loan Trust 2026-NQM4, sponsored by Rithm Capital Corp., indicating market confidence in this transaction.
- Loan Characteristics: The transaction is backed by a pool of 916 residential mortgages, with borrowers exhibiting an average credit score of 757 and both loan-to-value (LTV) and combined LTV (CLTV) at 71.4%, reflecting strong credit quality and moderate leverage among borrowers.
- Analytical Approach: KBRA's rating methodology incorporates loan-level analysis through its Residential Asset Loss Model (REALM) and cash flow modeling, ensuring the accuracy and reliability of the ratings assigned to the mortgage pool.
- Market Impact: This rating provides transparency for investors regarding the New Residential Mortgage Loan Trust, potentially attracting more participants to the non-prime RMBS market and further driving growth in this sector.
See More
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New Additions to S&P 500: Vertiv Holdings, Lumentum Holdings, Coherent, and Echosstar are set to join the S&P 500 index.
Market Impact: The inclusion of these companies may influence market dynamics and investor strategies as they become part of a major stock index.
See More
VERTIV HOLDINGS, LUMENTUM HOLDINGS, COHERENT, AND ECHOSTAR TO BE ADDED TO S&P 500; ADDITIONAL COMPANIES TO ENTER S&P 100, S&P MIDCAP 400, AND S&P SMALLCAP 600
New Additions to S&P 500: Vert Holdings, Lumentum Holdings, CohereNT, and EchoStar are set to join the S&P 500 index.
Other Index Changes: Additional companies will be added to the S&P 100, S&P MidCap 400, and S&P SmallCap 600 indices.
See More
Newrez Recognized as STAR Performer by Fannie Mae for Fourth Consecutive Year
- Outstanding Service Recognition: Newrez has been named a 2025 Fannie Mae Servicer Total Achievement and Rewards™ (STAR™) Performer for the fourth consecutive year, demonstrating exceptional performance in General Servicing, Solution Delivery, and Timeline Management, thereby solidifying its leading position in the mortgage industry.
- Strategic AI Investments: The company's strategic investments in artificial intelligence, particularly with its industry-leading ReziChat, enhance the seamless and intuitive nature of customer experiences, reflecting Newrez's ongoing commitment to servicing excellence aimed at improving customer satisfaction.
- Team Contribution Acknowledgment: Executives at Newrez emphasize that the company's success is attributed to the focus and execution of its employees, whose accountability in both digital and human servicing experiences is crucial for setting industry standards, thereby enhancing team cohesion and morale.
- Commitment to Long-term Partnerships: Newrez remains dedicated to partnering with Fannie Mae and the broader mortgage industry to improve outcomes for homeowners and support long-term homeownership solutions, underscoring its mission to promote sustainable homeownership.
See More
Rithm Capital Shares Enter Oversold Territory
- Oversold Indicator Analysis: Rithm Capital's stock price fell to $10.04 per share on Monday, with an RSI of 29.0, indicating it has entered oversold territory below the 30 threshold, suggesting potential buying opportunities for investors.
- Increased Dividend Yield: With a current share price of $10.45, RITM's annualized dividend of $1 per share translates to a 9.57% yield, attracting dividend investors looking for higher returns amid falling prices.
- Market Comparison Analysis: RITM's oversold status, compared to the average RSI of 51.9 for covered dividend stocks, may indicate that recent selling pressure is easing, prompting investors to consider entry points for potential gains.
- Dividend History Consideration: While dividends are often unpredictable, examining RITM's dividend history can help investors assess the likelihood of continued payouts, enabling more informed investment decisions.
See More
