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Hildeneโข Capital Managementโ Closes $496.3M Non-QM Securitization
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Hildene Capital Management has successfully closed its CROSS 2025-H6โ securitization, totaling $496.3 million, backed by a diversified pool of non-qualified mortgage (non-QM) loans.โ This followsโ aโ strong year for the firm, with $2.7 billion in non-QM issuance to date.
The Rise of Non-QM Securitizations
Choice asset manager Hildene Capital โฃManagement continues to demonstrateโ strength โขin the non-QM mortgageโ market. The CROSS 2025-H6 securitization,โข backed by 968 loans, highlights โขongoing investor appetite for theseโค assets. Non-QM โloans, which fall outside โthe guidelines of government-sponsored entities like Fannie Mae andโค Freddie โขMac, offerโ opportunities for lenders and investorsโ alike, but require careful risk assessment.
This latest deal builds on Hildene’s momentum, following the successful closing of CROSS 2025-H5 in June 2025, which totaledโ $416.4 million. โขBoth transactions โคwere โฃsourced through Hildene’sโ strategic partnershipโ with CrossCountry Mortgage,โ a key driver ofโ loan qualityโ and volume.
The strong performance ofโฃ these โคsecuritizations-and Hildene’s sixteen total as 2022-underscores โaโ broader trend in theโ alternative credit markets. Investors are increasingly โคseeking โopportunities beyond conventional โmortgage-backed securities, and non-QM loans, when carefully โคunderwritten, can offer attractive risk-adjustedโข returns.
Justin Gregory, Portfolio Manager at Hildene Capital Management
We are seeing continued โdemand for high-credit-qualityโค non-QM origination, as demonstratedโฃ by our consistent โฃissuance andโ the successful close of these securitizations.
The weighted average FICO score of 748 and a loan-to-value (LTV) ratio of 71.03% for the CROSS 2025-H6 pool demonstrate the โฃfirm’s focus on credit quality. โ Fitch and Kroll ratings further validate the strengthโ of the underlying assets, with 96.35% receiving investment-grade ratings.
Frequentlyโ Asked Questions About Non-QM Securitizations
| Question | Answer |
|---|---|
| what โare non-QM โloans? | Non-QM (non-qualified mortgage) loans don’t meet the strict criteria set by Fannie Maeโฃ and Freddie Mac. They often cater โฃto borrowers with unique financial situations, likeโค self-employed individuals or those with non-traditional income streams. |
| What is a securitization? | A securitization is the process of pooling together loans and then selling them as bonds to โขinvestors. This allowsโข lenders to โfree up capital and โคcontinue making loans. |
| What does LTV โขmean in the context ofโฃ mortgages? | LTV, orโ loan-to-value ratio, represents the amount of โคthe โloan compared to the appraised value ofโค the property. A lowerโ LTV generally indicates a lower risk โfor lenders. |
| Why are investors interested โคin non-QM securitizations? | Investors are drawn to non-QM securitizationsโ for potential higher yields compared to traditional mortgage-backed โsecurities, but they alsoโค require a thorough understanding of the associated risks. |
| What role does CrossCountry Mortgage play? | CrossCountry โMortgage is a key origination partner for Hildene, providing a consistent flowโ of loansโข that โmeet the firm’s โฃstringent underwriting standards. |
| Is a high FICO score โขsignificant forโ non-QM loans? | Yes, while non-QM loans are moreโค flexible, a strong โฃFICO score-like the 748โ average in this securitization-is still a crucial indicator of borrower creditworthiness. |
| Whatโ is Hildene’s overall strategy with non-QM loans? | Hildene’s strategy focuses on โคoriginating and securitizing high-quality non-QM loans, capitalizing โคon demand from โฃinvestors seeking alternative credit opportunities. |
Looking Ahead: Trends inโค the Non-QM Market
The non-QM market is expectedโ to continueโค evolving, driven by factors suchโ asโข interest rate fluctuations,โ economic growth, and regulatory changes. Demand for flexible mortgage solutions is likely to remain strong, particularly among self-employed