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The deal increased its initial credit enhancement levels across the board, with the A-, BBB and BB- notes benefiting from levels of 21.89%, 1.89% and 5.74%, respectively.
Community banks that could reel in cheap deposits while keeping a lid on expenses were able to outperform peers in 2024.
The deal also includes a cumulative default trigger that, if in effect, will revert the GDLP 2025-2 deal to a sequential payment priority.
From the Q3 2021 to the early 2024 vintages, cumulative gross loss (CGL) levels had been trending up, likely due to consumer credit normalizing, due to inflationary pressures.
Higher mortgage rates will persist through 2026, affecting sales and refinancings. Those expectations led Fannie Mae to cut its volume outlook for the next two years.
