DBRS Assigns Ratings to Towd Point Mortgage Trust 2015-1

DBRS, Inc. (DBRS) has assigned the following ratings to the Asset Backed Notes, Series 2015-1 (the Notes) issued by Towd Point Mortgage Trust 2015-1 (the Trust):

-- $133.3 million Class A1 at AAA (sf)
-- $34.6 million Class A2 at AAA (sf)
-- $23.2 million Class A3 at AA (sf)
-- $25.3 million Class A4 at A (sf)
-- $23.0 million Class A5 at BBB (sf)
-- $21.8 million Class A6 at BB (low) (sf)
-- $133.3 million Class AES at AAA (sf)
-- $133.3 million Class AESX at AAA (sf)
-- $167.9 million Class AE at AAA (sf)
-- $167.9 million Class AEX at AAA (sf)
-- $167.9 million Class AE1 at AAA (sf)
-- $191.1 million Class AE2 at AA (sf)
-- $57.8 million Class AE3 at AA (sf)
-- $216.4 million Class AE4 at A (sf)
-- $83.1 million Class AE5 at A (sf)
-- $48.5 million Class AE6 at A (sf)
-- $239.4 million Class AE7 at BBB (sf)
-- $106.1 million Class AE8 at BBB (sf)
-- $71.4 million Class AE9 at BBB (sf)
-- $48.3 million Class AE10 at BBB (sf)
-- $127.8 million Class AE11 at BB (low) (sf)
-- $93.2 million Class AE12 at BB (low) (sf)
-- $70.0 million Class AE13 at BB (low) (sf)
-- $44.7 million Class AE14 at BB (low) (sf)
-- $261.1 million Class A at BB (low) (sf)

Class AESX and Class AEX are interest-only notes. The class balances represent notional amounts.

Classes AES, AESX, AE, AEX, AE1, AE2, AE3, AE4, AE5, AE6, AE7, AE8, AE9, AE10, AE11, AE12, AE13, AE14 and Class A are exchangeable notes. These classes can be exchanged for combinations of exchange notes as specified in the offering documents.

The AAA (sf) ratings on the Notes reflect the 47.39% of credit enhancement provided by subordinated Notes in the pool. The AA (sf), A (sf), BBB (sf) and BB (low) (sf) ratings reflect 40.14%, 32.20%, 25.01% and 18.19% of credit enhancement, respectively. Other than the specified classes above, DBRS does not rate any other classes in this transaction.

This transaction is a previously issued securitization closed in January 2015, consisting of a portfolio of seasoned performing and re-performing residential mortgages.

Certain entities affiliated with Cerberus Capital Management, L.P. acquired the loans, which were originated and previously serviced by various entities through purchases in the secondary market. The loans are serviced by Select Portfolio Servicing, Inc.

There is no advancing of delinquent principal or interest on any mortgages by the servicer; however, the servicer is obligated to make advances in respect of taxes and insurance, reasonable costs and expenses incurred in the course of servicing and disposing of properties.

FirstKey Mortgage, LLC, as the Asset Manager, has the option to sell certain non-performing loans or real-estate owned (REO) properties to unaffiliated third parties. The asset sale price has to equal a minimum reserve amount to maximize liquidation proceeds of such loans or properties. The minimum reserve amount equals the product of 63.7% and the then-current principal amount of the mortgage loans or REO properties.

The transaction employs a sequential-pay cash flow structure. Principal proceeds can be used to cover interest shortfalls on the Notes, but such shortfalls on Class A3 and more subordinate bonds will not be paid until the more senior classes are retired.

The ratings reflect transactional strengths that include well-performing underlying assets, a strong servicer and Asset Manager oversight. Additionally, a satisfactory third-party due diligence review was performed on the portfolio with respect to regulatory compliance, payment history and data capture as well as title and tax review. Servicing comments were also reviewed for majority of the loans. Updated broker price opinions or exterior appraisals were provided for 100% of the pool.

The transaction employs a relatively weak representations and warranties framework that includes a 13-month sunset, an unrated representation provider, certain knowledge qualifiers and fewer mortgage loan representations relative to DBRS criteria for seasoned pools. Mitigating factors include (1) significant loan seasoning and relative clean performance history in recent years, (2) a comprehensive due diligence review and (3) a strong representations and warranties enforcement mechanism, including delinquency review trigger and breach reserve accounts.

The lack of principal and interest advances on delinquent mortgages may increase the possibility of periodic interest shortfalls to the Noteholders; however, principal proceeds can be used to pay interest to the Notes sequentially and subordination levels are greater than expected losses, which may provide for timely payment of interest to the rated Notes.

The DBRS ratings address the timely payment of interest and full payment of principal by the legal final maturity date in accordance with the terms and conditions of the related Notes.

Notes:
All figures are in U.S. dollars unless otherwise noted.

The applicable methodologies are RMBS Insight 1.2: U.S. Residential Mortgage-Backed Securities Model and Rating Methodology, Unified Interest Rate Model for Rating U.S. Structured Finance Transactions, Third-Party Due Diligence Criteria for U.S. RMBS Transactions, Representations and Warranties Criteria for U.S. RMBS Transactions, Operational Risk Assessment for U.S. RMBS Originators, Operational Risk Assessment for U.S. RMBS Servicers and Legal Criteria for U.S. Structured Finance, which can be found on our website under Methodologies.

The rated entity or its related entities did participate in the rating process. DBRS had access to the accounts and other relevant internal documents of the rated entity or its related entities.

Please see the related appendix for additional information regarding sensitivity of assumptions used in the rating process.

For more information on this credit or on this industry, visit www.dbrs.com or contact us at info@dbrs.com.