KBRA Assigns Preliminary Ratings to Morgan Stanley Residential Mortgage Loan Trust 2026-NQM2

The $439.3 million RMBS transaction is collateralized by a pool of 953 residential mortgages

Published on Feb. 11, 2026

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KBRA has assigned preliminary ratings to ten classes of mortgage-backed certificates from the Morgan Stanley Residential Mortgage Loan Trust 2026-NQM2 (MSRM 2026-NQM2) transaction. The RMBS deal is sponsored by Morgan Stanley Mortgage Capital Holdings LLC and includes a significant concentration of 'non-prime' collateral. The $439.3 million transaction is backed by a pool of 953 residential mortgages, consisting primarily of fixed-rate mortgages (98.3%) and a small portion of hybrid adjustable-rate mortgages (1.7%).

Why it matters

This RMBS transaction highlights the continued demand for non-qualified mortgage (Non-QM) and exempt loans that fall outside the Ability-to-Repay/Qualified Mortgage (ATR/QM) rules. The deal's collateral composition and credit enhancement levels will be closely watched by investors as an indicator of market appetite for these types of mortgage products.

The details

Most of the loans in the MSRM 2026-NQM2 pool are either classified as non-qualified mortgages (40.4%) or exempt (52.0%) from the ATR/QM rule due to being originated for non-consumer loan purposes. United Wholesale Mortgage, LLC accounts for 12.0% of the pool's originations, and the majority of the loans are serviced by Shellpoint Mortgage Servicing (81.4%). KBRA's analysis incorporated loan-level review, third-party due diligence results, cash flow modeling, and assessments of the transaction's legal structure and key parties.

  • The MSRM 2026-NQM2 transaction was assigned preliminary ratings on February 11, 2026.

The players

Morgan Stanley Mortgage Capital Holdings LLC

The seller and sponsor of the MSRM 2026-NQM2 RMBS transaction.

United Wholesale Mortgage, LLC

Accounts for 12.0% of the originations in the MSRM 2026-NQM2 mortgage pool.

Shellpoint Mortgage Servicing

Services the majority (81.4%) of the loans in the MSRM 2026-NQM2 mortgage pool.

KBRA

Kroll Bond Rating Agency, LLC, the credit rating agency that assigned preliminary ratings to the MSRM 2026-NQM2 transaction.

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The takeaway

The MSRM 2026-NQM2 RMBS transaction highlights the continued investor appetite for non-qualified mortgage (Non-QM) and exempt loans that fall outside of the ATR/QM rules. The composition and credit enhancement of this deal will be closely watched as an indicator of market trends in the non-prime mortgage sector.