Redwood Trust, the only company to securitize jumbo loans during the past two years, has pushed backed its second deal to early 2011 because of a lack of available product.

The Mill Valley, Calif., real estate investment trust pinpointed the cause: "Major bank originators are reluctant to sell [jumbo] loans due to their high level of excess liquidity."

In other words, depository-based jumbo lenders are keeping the product in portfolio because the yield over their cost of funds is steep, and there's a lack of available good credits out there.

Redwood said that it continues to believe there is a major business opportunity in the secondary market, because the government-sponsored enterprises Fannie Mae and Freddie Mac are bound to "shrink."

Discussing a revival in its residential and commercial franchises, the company said in its third-quarter "Redwood Review" that "Progress is slower than any of us would like, but we are making progress nonetheless. Our residential loan conduit is up and running, and we are hopeful that we can complete our second securitization in the first quarter of 2011."

Originally the publicly traded REIT had hoped to pull off a second jumbo securitization in the fall or by the end of the year.

Last week Redwood posted a profit of $20 million for the third quarter, compared with a profit of $29 million in the previous quarter and $27 million in the year-earlier quarter.

The company also reported faster prepayments on its $238 million jumbo securitization, which came to market in April.

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