AD Mortgage Closes $432.4M Non-QM RMBS Deal

AD Mortgage announced on Monday that it successfully closed its fifth non-qualified mortgage (non-QM) residential mortgage-backed securities (RMBS) transaction of 2026, issuing a $432.4 million securitization. This transaction, named AD Mortgage Trust 2026-NQM5, is backed by a pool of 1,008 residential loans, with 99% of these mortgages originated by AD Mortgage or its approved correspondent lenders. The deal, which had a cutoff date for its aggregate balance of $432.4 million, is expected to close on July 15. Fitch Ratings has assigned ratings to this transaction, marking it as the 20th AD Mortgage Trust transaction and the fourth Fitch-rated ADMT transaction in 2026.

The collateral backing the securities features a weighted average borrower credit score of 754 and a weighted average combined loan-to-value (CLTV) ratio of 69.1%. The securities are structured with credit enhancement mechanisms, including excess spread and subordination, to offer additional protection to senior certificate holders. Geographically, Florida properties represent the largest portion of the loan pool at 24.89%. However, AD Mortgage stated that this transaction reflects its strategic efforts to mitigate geographic concentration by increasing loan originations in other markets through its broker and correspondent network.

Dmitri Batsev, managing director at Imperial Fund Asset Management, commented on the transaction, noting that investor participation in ADMT 2026-NQM5 highlights the established rhythm of their programmatic issuance platform. He further stated that consistent demand from a varied institutional investor base signals confidence in the underwriting standards of the underlying collateral and AD Mortgage's regular market presence. Batsev also emphasized that this transaction underscores the company's ongoing strategy to reduce portfolio geographic concentration throughout the year, which has broadened the credit profile of the loan pool and attracted heightened investor interest.