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Tuesday, Nov 5, 2024

Velocity Financial Closes $265 Million Securitization

Westlake Village-based small business mortgage provider Velocity Financial Inc. announced Monday that it has closed its first securitization of 2021.An aggregated $265 million of mortgage certificates are backed by a portfolio of loans originated through Velocity's operating platform.The certificates, priced with a weighted average fixed rate of 1.74 percent, were rated by Kroll Bond Rating Agency and DBRS Morningstar.Securitization is a process in which an issuer creates an investment instrument by pooling together financial assets – in this case mortgages on commercial properties and apartment buildings – into a group.“I am pleased with the strong market reception of our first securitization in 2021, which reflects Velocity’s extensive track record,” said Velocity’s Executive Vice President of Capital Markets Jeff Taylor in a statement.

"The outstanding history of Velocity’s existing securitizations has resulted in our ability to reduce funding costs and access the capital needed to grow the business successfully. … As with our other securitizations, we will continue our practice of retaining at least 5 percent of our deals, which creates a strong alignment of interests with investors."Shares of Velocity (VEL) closed Monday up 23 cents, or 2 percent, to $11.23 per share on the New York Stock Exchange on a day when the Dow fell a fraction of a percent.

Hannah Madans Welk
Hannah Madans Welk
Hannah Madans Welk is a managing editor at the Los Angeles Business Journal and the San Fernando Valley Business Journal. She previously covered real estate for the Los Angeles Business Journal. She has done work with publications including The Orange County Register, The Real Deal and doityourself.com.

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