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Fitch Rates Mostly Non-QM Offering Backed By A&D Mortgage Loans

Jan 27, 2023
Fitch Ratings

Imperial Fund Mortgage Trust 2023-NQM1 is backed by 974 loans valued at $364.84 million, with 93.8% originated by A&D.

Fitch Ratings said this week it expects to rate residential mortgage-backed certificates to be issued by Imperial Fund Mortgage Trust 2023-NQM1 (IMPRL 2023-NQM1), a securitization supported by loans primarily originated by A&D Mortgage LLC, a third-party originator.

Overall, the certificates are supported by 974 loans with a balance of approximately $364.84 million as of the cutoff date. This is the trust’s 13th transaction and the eighth rated by Fitch.

The certificates are secured primarily by newly originated, fixed-rate mortgage loans. Of the loans in the pool, 93.8% were originated by A&D Mortgage LLC; the remaining 6.2% were originated by A&D Mortgage's correspondent lenders. 

The named servicer is A&D Mortgage LLC, which is assessed by Fitch as 'RPS3'/Stable. The master servicer is Nationstar Mortgage LLC (RMS2+/Stable).

Fitch said it expects to assign the rates as follows:

  • A-1: AAA (sf)
  • A-2: AA (sf)
  • A-3: A- (sf)
  • M-1: BBB1 (sf)
  • B-1, B-2, B-3, A-IO-S, X, R: Not rated.

Of the loans in the pool, 43.2% are designated non-qualified mortgages (Non-QM), 0.1% are designated as safe harbor qualified mortgages (SHQMs) and 56.8% are not subject to the Consumer Finance Protection Bureau's (CFPB) Ability to Repay Rule, Fitch said.

The collateral consists mainly of 30-year, fixed-rate, fully amortizing loans (92.6%), followed by 2.8% 30-year, fixed-rate loans with an initial interest-only (IO) term; 1.8% 40-year, fixed-rate fully amortizing loans; 0.5% 40-year, fixed-rate loans with an initial IO term; 0.4% 30-year ARMs, and 1.9% one-year, two-year, five-year and 40-year fixed-rate loans with a balloon payment.

The pool contains 47 loans over $1 million, with the largest amounting to $2.9 million. Self-employed non-DSCR borrowers make up 56.1% of the pool (this percentage includes all non-salaried borrowers), 0.8% are asset depletion loans and 39.6% are investor cash flow DSCR loans.

The pool is seasoned at approximately four months in aggregate, as determined by Fitch.

You can read the full report at www.fitchratings.com.

About the author
David Krechevsky was an editor at NMP.
Published
Jan 27, 2023
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