Ellington Financial closes $259m non-QM securitization

by Ryan Smith09 Jun 2020

Ellington Financial announced Monday that it had closed a $259.3 million securitization backed by a pool of non-QM residential mortgages. The company said that it had acquired “the vast majority” of the loans from LendSure Mortgage Corp., a mortgage company in which Ellington Financial holds a strategic equity investment.

“We are very pleased with the execution of this securitization of non-QM loans, especially given the challenges of the past few months,” said JR Herlihy, chief financial officer for Ellington Financial. “The recent market volatility has underscored the benefit of securitizations to Ellington Financial’s financing strategy, as they provide long-term, non-mark-to-market financing, and enhance our earnings. We continue to believe that the non-QM mortgage sector will be an important and growing sector of the overall mortgage market, and that Ellington Financial is well positioned to take advantage of that growth.”

The securitization was rated by both Standard & Poor’s and KBRA, with the senior tranche receiving AAA ratings, the company said. Ellington Financial retained some tranches of the securitization in order to comply with credit-risk retention rules.