The transaction targets investment properties and alternative income verification loans
A&D Mortgage is marketing a new non-QM securitization, ADMT 2024-NQM5, valued at $390.6 million.
The deal was backed by a pool of 1,171 non-prime residential mortgages. The loan pool featured loans primarily originated by A&D Mortgage or its qualified correspondents, with an average borrower credit score of 735 and a weighted average loan-to-value (LTV) ratio of 67.4%.
Around 47.4% of the loans in this securitization are secured by investment properties, reflecting a diverse collateral base for investors. The portfolio includes 35.2% non-QM loans, with 90.35% of the mortgages underwritten using alternative documentation methods such as bank statements and debt service coverage ratios (DSCRs). Bank statement loans account for 38.6% of the pool, while DSCR loans represent 34%.
This new issuance followed A&D Mortgage's recent partnership with Atlas Merchant Capital and Imperial Fund Asset Management, formed to boost A&D’s non-QM mortgage securitization platform.
“Securitization remains a crucial engine for broadening access to capital, especially within the non-QM mortgage space,” said Bob Diamond, founding partner and CEO of Atlas Merchant Capital. “With ADMT 2024-NQM5, our second securitization in the joint venture with A&D Mortgage and Imperial Fund Asset Management, we continue to support borrowers with diverse financial profiles while providing investors with high-quality opportunities.”
A&D said the securitization includes built-in credit enhancements, such as excess spread and subordination, designed to protect senior certificate holders from potential losses. A&D Mortgage will service the loans, while Nationstar Mortgage, doing business as Mr. Cooper, acts as the master servicer.
Read more: A&D Mortgage launches income calculator for conventional, non-QM loans
ADMT 2024-NQM5 has received favorable preliminary ratings from S&P Global Ratings and Kroll Bond Rating Agency (KBRA), with KBRA awarding AAA ratings to the senior classes. The company said this hybrid pro-rata/sequential payment structure ensures timely interest payments and mitigates risk during economic stress, supported by excess servicing income that bolsters the certificates' credit profile.
“This transaction represents a sound investment for capital markets due to its robust credit enhancements, diversified collateral, and resilience against economic shifts. We’re proud to strengthen our collaboration with A&D Mortgage, exemplifying our commitment to delivering financial solutions that align with today’s evolving market needs," Diamond said.
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