Velocity Commercial Capital Securitization Ratings Upgraded and Affirmed by Kroll Bond Rating Agency

Rhea-AI Summary

Velocity Financial, Inc. (NYSE: VEL) announced an upgrade and affirmation of ratings on its 12 securitizations by Kroll Bond Rating Agency (KBRA) following a comprehensive review. KBRA's analysis included current loss expectations and noted low cumulative loss levels between 0.05% and 0.43%, with 7 of the 12 securitizations experiencing no losses since inception. The review considered VCC’s strong collateral performance and resilience against pandemic impacts. Executive Vice President Jeff Taylor emphasized the disciplined underwriting as a key driver behind the favorable ratings.

Positive

• KBRA upgraded ratings on 16 tranches and affirmed 105 others, showcasing strong collateral performance.
• 7 of the 12 securitizations have reported no losses since issuance.
• Cumulative loss levels are notably low, ranging from 0.05% to 0.43%.

Negative

• Higher serious delinquency levels in certain VCC transactions were noted.

Velocity Financial, Inc. (NYSE: VEL), (“Velocity” or the “Company”), a leading provider of small balance investor loans, today announced that Kroll Bond Rating Agency (“KBRA”) has upgraded and affirmed the ratings on the 12 outstanding securitizations issued by its wholly-owned subsidiary, Velocity Commercial Capital, LLC (“VCC”). The rating actions occurred in conjunction with the completion of KBRA’s comprehensive surveillance review.

KBRA’s analysis included updated loss expectations which factored higher serious delinquency levels in certain VCC transactions and continued low cumulative loss levels ranging from 0.05% to 0.43%, with 7 of 12 VCC outstanding securitizations experiencing no losses since issuance. Also considered were historical performance of the collateral and the capital structure, including excess spread, servicing advances, borrower equity trends in the underlying properties, and the continually evolving impacts of the COVID-19 pandemic. The consideration of these factors and the performance of VCC’s securitizations allowed KBRA to determine that 16 of VCC’s outstanding tranches warranted rating upgrades and the ratings on the remaining 105 outstanding tranches warranted affirmations.

“KBRA’s rating actions once again confirm the strong historical performance of Velocity’s securitizations driven by our disciplined underwriting and ability to avoid losses through our deep expertise in resolving nonperforming assets,” said Executive Vice President of Capital Markets, Jeff Taylor.

About Velocity Financial, Inc.

Based in Westlake Village, California, Velocity is a vertically integrated real estate finance company that originates and manages investor loans secured by 1-4 unit residential rental and small commercial properties. Velocity originates loans nationwide across an extensive network of independent mortgage brokers it has built and refined over 16 years. For additional information, please visit the Company’s investor relations website at www.velfinance.com.

View source version on businesswire.com: https://www.businesswire.com/news/home/20210512005369/en/

FAQ

What did KBRA announce regarding Velocity Financial's securitizations on the recent date?

KBRA upgraded ratings on 16 tranches and affirmed 105 others for Velocity Financial's securitizations.

What are the cumulative loss levels reported by Velocity Financial's securitizations?

The cumulative loss levels range from 0.05% to 0.43%.

How many of Velocity Financial's securitizations have experienced no losses since issuance?

7 of the 12 outstanding securitizations have reported no losses since issuance.

What factors did KBRA consider in their ratings review of Velocity Financial?

KBRA considered loss expectations, delinquency levels, historical performance, and the impact of COVID-19.