AD Mortgage closes $432.4M non-QM RMBS deal

AD Mortgage has successfully closed its fifth non-QM residential mortgage-backed securities (RMBS) transaction of 2026, totaling $432.4 million. The deal, known as AD Mortgage Trust 2026-NQM5, is backed by a pool of 1,008 residential loans with strong credit profiles, including a weighted average credit score of 754. This transaction underscores the continued investor appetite for non-QM products and highlights AD Mortgage's strategy to diversify its geographic footprint while maintaining a programmatic issuance schedule.

AD Mortgage announced the completion of the AD Mortgage Trust 2026-NQM5 transaction, a $432.4 million securitization expected to officially close on July 15. This issuance represents the company’s fifth non-QM RMBS deal of the year and is supported by a pool of 1,008 residential mortgages, 99% of which were originated by AD Mortgage or its qualified correspondent lenders. According to Fitch Ratings, which has now rated 20 transactions for the AD Mortgage Trust, the underlying loans had an aggregate balance of $432.4 million as of the cutoff date.

The collateral for the 2026-NQM5 deal features high-quality borrower profiles, characterized by a weighted average credit score of 754 and a weighted average combined loan-to-value (CLTV) ratio of 69.1%. To protect senior certificate holders, the securities incorporate credit enhancement mechanisms such as excess spread and subordination. While Florida properties represent the largest portion of the loan pool at 24.89%, the company emphasized that this transaction reflects an ongoing effort to reduce geographic concentration by expanding originations into new markets through its broker and correspondent networks.

Dmitri Batsev, managing director at Imperial Fund Asset Management, noted that the consistent demand from institutional investors validates the company's underwriting standards and its regular presence in the market. Batsev highlighted that by expanding the origination footprint, the company has broadened the credit profile of the pool, leading to heightened investor engagement. This latest deal follows the $407 million ADMT 2026-NQM4 transaction priced in May, continuing a steady issuance cadence for the firm, which will also handle the servicing for all loans within the new trust.