The certificates are supported with a balance of about $417.42 million
Fitch Ratings has issued its final ratings to the residential mortgage-backed certificates to be issued by A&D Mortgage Trust 2023-NQM5 (ADMT 2023-NQM5).
The certificates are supported by a balance of $417.42 million from 999 loans. They are secured by newly originated, fixed-rate mortgage loans. About 90.8% of the pool loans were originated by A&D Mortgage while 9.2% were from the mortgage lenders’ correspondent lenders.
The assigned final ratings
The home price values of the pool loans were viewed as 7.3% above a long-term sustainable level.
About 52.4% of the pool had loans where the borrower maintained a primary residence while the remaining 47.6% consisted of loans for an investor property or a second home. There were 52 loans that were over $1 million and the largest amounted to $4.2 million.
Around 40.3% of the pool loans were concentrated in Florida with the largest MSA concentration being in the Miami-Fort Lauderdale-Miami Beach FL MSA, taking up 23.5%. This was followed by the New York-Northern New Jersey-Long Island, NY-NJ-PA MSA which took up 21.3%.
Fitch found that 91.5% of the pool loans were underwritten to less than full documentation and 33.7% of the loans were underwritten to either a 12-month or 24-month bank statement program, which was not in line with Fitch’s view of a full documentation program as well as the standards of Appendix Q.
There were about 49.8% of the pool loans designated as non-qualified mortgages (NQMs), while 4.38% were safe-harbor qualified mortgages (SHQMs), 1.33% were rebuttable presumption QM (APOR), and 44.5% were not subjected to the Ability to Repay Rule by the Consumer Finance Protection Bureau (CFPB).
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