Redwood Readying Second Jumbo MBS Deal

Redwood Trust Inc., which recently came to market with a jumbo MBS deal, is already working on a follow-up bond offering, according to industry officials familiar with the matter. The publicly traded REIT had no comment on its plans. One investor noted that "they already have the loans in place." And a source close to the firm noted that the Mill Valley, Calif., company "is interested in creating more credit pieces or subs to own or invest in." Last month Redwood securitized $238 million of jumbo prime residential mortgage loans through its Sequoia securitization program. It was the first non-government sponsored residential jumbo bond issued in almost two years. Many of the loans collateralizing the security came from CitiMortgage. (Citi's parent firm was one of the bond's underwriters.) Meanwhile, Redwood on Monday launched a flow purchase program where it will acquire prime residential mortgage loans from "banking companies and other selected originators." It noted that the effort "is currently operating with a small number of mortgage loan originators that have national platforms."