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KBRA Assigns Preliminary Ratings to Morgan Stanley Residential Mortgage Loan Trust 2026-INV2 (MSRM 2026-INV2)

Carroll County Mirror-Democrat· June 24, 2026

Kroll Bond Rating Agency (KBRA) has assigned preliminary ratings to 28 classes of mortgage pass-through certificates issued by Morgan Stanley Residential Mortgage Loan Trust 2026-INV2. The $360.9 million transaction is backed by a pool of 906 fixed-rate mortgages primarily secured by investment properties and second homes. This rating action provides critical credit benchmarks for the residential mortgage-backed securities (RMBS) market, specifically within the non-owner-occupied collateral segment.

The Morgan Stanley Residential Mortgage Loan Trust 2026-INV2 (MSRM 2026-INV2) consists of 906 fixed-rate mortgages with an aggregate principal balance of approximately $360.9 million as of the June 1, 2026, cut-off date. The underlying collateral pool is notably concentrated in non-primary residences, with investment properties accounting for 82.8% of the loans and second homes making up the remaining 17.2%. This composition reflects a significant securitization of investor-focused residential assets within the current mortgage landscape.

KBRA assigned preliminary ratings to 28 distinct classes of certificates by employing a comprehensive analytical framework. This process included a loan-level analysis of the mortgage pool using the Residential Asset Loss Model (REALM), alongside an examination of third-party loan file due diligence results. Additionally, the agency performed cash flow modeling of the transaction's payment structure and conducted reviews of the legal documentation and key transaction parties to ensure compliance with its U.S. RMBS Rating Methodology.

The rating agency's evaluation also incorporated sensitivity analyses to determine how various factors might influence future rating upgrades or downgrades. KBRA further assessed ESG factors to see if they served as primary drivers for the credit ratings or outlooks. As a major Credit Rating Agency (CRA) and a Nationally Recognized Statistical Rating Organization (NRSRO), KBRA's preliminary ratings serve as a vital risk assessment for institutional investors participating in this Morgan Stanley-sponsored residential mortgage issuance.

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