A&D Mortgage Unveils New Non-QM Securitization

A&D Mortgage, a Non-QM lender; Atlas Merchant Capital; and Imperial Fund Asset Management, have successfully priced its latest securitization, A&D Mortgage Trust 2024-NQM6 (ADMT 2024-NQM6). This $303.9 million transaction, backed by 872 newly originated non-prime residential mortgages, reflects the success of this joint venture in addressing the evolving needs of borrowers and investors.

The ADMT 2024-NQM6 securitization leverages a diverse portfolio of loans, with nearly 88% originated through alternative income documentation methods such as bank statements, profit and loss statements, and debt service coverage ratios (DSCRs). The pool reflects the evolving needs of self-employed individuals, investors, and borrowers with unique financial circumstances.

Key Highlights of ADMT 2024-NQM6:

  *   Transaction Value: $303.9 million
  *   Loan Count: 872 mortgages
  *   Loan Origination: All loans originated by A&D Mortgage or its qualified correspondents
  *   Average Borrower Credit Score: 743
  *   Weighted Average Loan-to-Value (LTV): 67.4%
  *   Percentage of Non-QM Loans: 35.3%
  *   Percentage of Investment Property Loans: 45.3%
  *   Credit Enhancements: Excess spread and subordination to protect senior certificates
  *   Servicer: A&D Mortgage (primary), Nationstar Mortgage LLC (d/b/a Mr. Cooper) as Master Servicer

The transaction is supported by robust credit enhancements, including excess spread and subordination, as well as a hybrid pro-rata/sequential payment structure designed to protect senior certificate holders. A&D Mortgage serves as the primary servicer, with Nationstar Mortgage LLC (d/b/a Mr. Cooper) acting as Master Servicer.

Bob Diamond, Founding Partner and CEO of Atlas Merchant Capital, commented:
“Securitization remains a cornerstone for expanding access to capital, especially within the Non-QM mortgage sector. The ADMT 2024-NQM6 transaction underscores our shared commitment with A&D Mortgage to delivering innovative, high-quality asset-backed securities. This deal represents a sound investment, fortified by strong credit enhancements and dynamic collateral, making it resilient against market fluctuations.”

ADMT 2024-NQM6 is the latest success in A&D Mortgage’s collaboration with Atlas Merchant Capital and Imperial Fund Asset Management, following the recently launched ADMT 2024-NQM5. Together, these securitizations illustrate the robust demand for Non-QM lending products and reinforce A&D Mortgage’s leadership in this specialized market segment.

Rated by both S&P Global Ratings and Kroll Bond Rating Agency (KBRA), the transaction’s senior classes achieved favorable preliminary ratings, including AAA (sf) from KBRA. These ratings highlight the quality of the underlying collateral and the strength of A&D Mortgage’s underwriting processes.