Transaction is backed by 872 non-QM loans
A&D Mortgage has priced its latest non-QM securitization, A&D Mortgage Trust 2024-NQM6 (ADMT 2024-NQM6). The deal, valued at $303.9 million, is backed by 872 newly originated non-prime residential mortgages.
The securitization was launched in partnership with Atlas Merchant Capital and Imperial Fund Asset Management, building on their recent securitization deal with the ADMT 2024-NQM5 transaction.
The ADMT 2024-NQM6 pool is designed to address the evolving needs of borrowers who fall outside traditional lending parameters, including self-employed individuals and property investors. According to A&D Mortgage, 88% of the loans in this securitization were originated using alternative income verification methods, such as bank statements, profit and loss statements, and debt service coverage ratios (DSCRs).
The loans reflect a weighted average loan-to-value (LTV) ratio of 67.4% and an average borrower credit score of 743. Investment property loans make up a significant portion of the pool, comprising 45.3%, while 35.3% of the mortgages fall into the non-QM category.
The transaction includes credit enhancements, such as excess spread and subordination, alongside a hybrid pro-rata/sequential payment structure designed to protect senior certificate holders. A&D Mortgage serves as the primary servicer, while Nationstar Mortgage, operating as Mr. Cooper, will act as the master servicer.
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"Securitization remains a cornerstone for expanding access to capital, especially within the non-QM mortgage sector,” Bob Diamond, founding partner and CEO of Atlas Merchant, said in a Press release. “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."
The transaction has received strong preliminary ratings from both S&P Global Ratings and Kroll Bond Rating Agency (KBRA), with the senior classes achieving ratings as high as AAA (sf). These ratings affirm the quality of the collateral and the strength of A&D Mortgage’s underwriting processes.
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