Prospect Mortgage of Sherman Oaks, Calif., has a message for correspondent buyers of jumbo loans: we're originating and looking to sell.
In a recent statement, the nonbank lender noted that it is willing to part with its retail-originated jumbo loans and is funding new mortgages with balances of up to $2 million.
Sources note that at least one jumbo buyer, Redwood Trust, Mill Valley, Calif., has explored the idea of buying product from Prospect.
Prospect is funding both 30-year fixed rate, and adjustable-rate jumbos but is requiring a minimum FICO score of 700. It also wants borrowers to put up a downpayment of 20% for balances of up to $1 million, and a minimum of 30% for balances of up to $2 million.
Loans with balances between $1 million and $2 million must also have two appraisals.
CEO Ron Bergum said the company is aiming to make loans to borrowers who are looking for jumbos in markets with a $417,000 conforming limit and to sell them to investment firms that are the "first movers" back into jumbo securitization.
However, Redwood Trust has been the only securitizer of recently originated jumbos, although several others firms have shown an interest in the market. (See related story on Larry Goldstone on this website.)
Prospect Mortgage is one of the largest independent residential retail mortgage lenders in the U.S. Its backers include Sterling Capital Partners, a private equity firm with $4 billion of assets under management.
