AD Mortgage Announces Company’s Largest Non-QM Securitization To Date

AD Mortgage, a provider of non-QM and residential mortgage-backed securities (RMBS), has announced the successful launch of its largest securitization to date, AD Mortgage Trust 2026-NQM2 (ADMT 2026-NQM2).

The $602.7 million transaction marks AD’s 30th securitization issued with AD-originated collateral and is the 21st transaction to be rated by Fitch featuring collateral originated and serviced by AD under the AD Mortgage Trust. It comes just weeks after AD’s first transaction this year, a $567.42 million deal. The two deals mark a strong start to 2026 for the company and further solidifies its commitment to expanding financing solutions for borrowers with diverse income profiles.

“As the largest deal in our long history of RMBS issuance, this transaction represents a defining milestone for our firm,” said Victor Kutnetsov, Asset Manager of Imperial Fund Asset Management. “It reflects not only the continued strength of the non-QM RMBS market, but also the confidence investors place in our platform and in AD non-QM mortgages as a premier asset class. Achieving our biggest execution to date underscores the scale we’ve built and the growing demand for high-quality non-QM product in the secondary market.”

The transaction is backed by a pool of 1,793 mortgages seasoned an average of four months. Fixed-rate loans represent 99.9% of the pool, and 4.6% of the loans feature an initial interest-only period. Borrowers in the pool possess a non-zero weighted average original credit score of 748 and exhibit a weighted average combined LTV 68.6%.

The pool comprises loans generally considered non-prime due to certain loan or borrower characteristics, which include borrowers with blemished credit history and the use of bank statements and other forms of alternative methods to document income.

Approximately 84% of the loans were underwritten using alternative documentation, including bank statements, debt service coverage ratios, and P&L statements, among other alternative document types. Notably, 4.8% of the loans are second-lien loans. Approximately 22.0% of the loans were categorized as non-qualified mortgages, with the remaining loans designated as QM: Safe Harbor, QM: Rebuttable Presumption or were exempt from the rule due to being originated for business purposes.

Key Highlights of ADMT 2026-NQM2

  *   Transaction Volume:  $602.7 million
  *   Loan Count: 1,793
  *   Loan Origination: 91% of loans originated by AD Mortgage and its qualified correspondents
  *   Average Borrower Credit Score: 748
  *   Weighted Average Combined Loan-to-Value (CLTV): 68.6%
  *   Percentage of Non-QM Loans: 22.0%
  *   Percentage of Alternative Income Documentation: 84.2%
  *   Servicer: 100% AD Mortgage LLC

Initial purchasers for the transaction include J.P. Morgan Securities LLC; ATLAS SP Securities, a division of Apollo Global Securities, LLC; Barclays Capital Inc.; Mizuho Securities USA LLC; Morgan Stanley & Co. LLC; Nomura Securities International, Inc.; Academy Securities, Inc.; AmeriVet Securities, Inc.; Natixis Securities Americas LLC; and Piper Sandler & Co.