About two weeks ago, Fitch Ratings said it expects to rate Imperial Fund Mortgage Trust’s issued residential mortgage-backed certificates Series 2023-NQM1 (IMPRL 2023-NQM1), a securitization backed by loans primarily originated by a third-party originator — A&D Mortgage LLC.

As of the cutoff date, 974 loans were supporting the certificates with a balance of approximately $364.84 million. The trust has completed 13 transactions and is rated by Fitch for the eighth time.

Newly originated, fixed-rate mortgage loans primarily secure the certificates. A&D Mortgage LLC originated 93.8% of the loans in the pool and correspondent lenders of A&D Mortgage originated the remaining 6.2%.

A&D Mortgage LLC is the named servicer which is assessed as ‘RPS3’/Stable by Fitch. Nationstar Mortgage LLC (RMS2+/Stable) is the master servicer.

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

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

A total of 47 loans over $1 million are in the pool, with the largest loan amounting to $2.9 million. A total of 56.1% of the pool consists of self-employed non-DSCR borrowers, 0.8% of the pool consists of asset depletion borrowers, and 39.6% are investor cash flow borrowers.

As determined by Fitch, the pool has been seasoned for approximately four months.