Redwood Files New Jumbo Deal Through Sequoia Trust

Redwood Trust, the only active issuer of jumbo MBS, late this week disclosed that is getting ready to come to market with yet another new deal, this one through RBS Securities.

The offering will be its fifth of the year and eighth post mortgage crisis.

The size of the bond, which will be issued by the publicly traded REIT’s Sequoia Mortgage unit, will be determined at a later date.

According to the firm’s SEC filing, the offering will include subordinate classes of securities.

Redwood is coming off a recent jumbo deal (Sequoia Mortgage Trust 2012-4) where it securitized $313 million of mortgages. In that bond, the underlying loans were mostly funded by smaller lenders “with limited nonagency performance history,” according to a report issued by Fitch.

However, that bond also included product funded by several well known residential originators including First Republic Bank, Prime Lending, Flagstar, and PHH Mortgage. (The average LTV is 67.6% with Clayton Holdings reviewing a majority of the underlying collateral.)

Although Redwood buys closed loans on a correspondent basis it does not service the underlying mortgages. 

The jumbo market has been healthy the past few quarters, thanks to rock bottom rates and refis. Mortgage bankers originated roughly $44.2 billion of jumbo loans in the second quarter, a handsome 82% increase from the same period a year ago, according to new figures compiled by National Mortgage News and the Quarterly Data Report.