Partnership will leverage capital to boost A&D’s mortgage loan securitization efforts
A&D Mortgage has entered into a joint venture with investment firm Atlas Merchant Capital to expand its $7 billion mortgage securitization platform.
The partnership, which involves both internal and third-party capital, will focus on purchasing mortgage loans originated by A&D and other lenders, with the intention of securitizing these loans. The companies said the goal is to invest across a broad range of securities in sponsored transactions.
The joint venture successfully closed its first residential mortgage-backed securities (RMBS) deal last month, securing $370 million in mortgage collateral from A&D. This marked A&D’s 21st transaction overall but the first with Atlas as a partner.
Atlas Merchant’s co-founder and CEO Bob Diamond noted that the firm was keen to capitalize on the dislocation in the mortgage market caused by rising interest rates.
“The timing of this partnership could not be better as the tone in the mortgage market has been improving, which would provide a large tailwind for this asset class,” Diamond said in a Press release.
A&D, a wholesale mortgage lender, has originated more than $10 billion in mortgages since 2020 and manages a servicing portfolio of over $8 billion. The company primarily operates in the non-agency mortgage sector and sources its loans through a nationwide wholesale network. It offers conventional, government, and non-QM loan products.
“Over the past two decades, we’ve expanded our operation to become the top non-agency mortgage lender nationwide level,” said A&D Mortgage CEO Max Slyusarchuk. “Our JV partnership with Atlas will accelerate A&D’s growth and our mission of helping more Americans achieve their dream of homeownership.”
Atlas Merchant Capital will oversee the management of the JV’s mortgage investment strategy.
“Opportunities for private credit in the residential mortgage sector have continued to grow as commercial banks have increasingly divested these loans from their balance sheets. A&D is the ideal partner for us to align with to take advantage of the tremendous growth and opportunities that lie ahead,” said David Schamis, co-founder and chief investment officer at Atlas Merchant Capital.
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