Not only has Redwood Trust purchased jumbo loans for a planned nonagency MBS, but is actively shopping the mortgages to rating agencies, according to officials familiar with the company's plans.
The publicly traded REIT has been working on reviving its "Sequoia" jumbo MBS program for several months. "A year ago there were no buyers for an AAA-rated jumbo MBS," said one mortgage official familiar with Redwood's efforts, "but the situation has reversed." Sources say Mill Valley, Calif.-based Redwood has purchased at least $100 million of jumbo loans with hopes of securitizing them.
The REIT declined to comment but in a recent company report said it is working "closely with credit rating agencies to model a safer and more straightforward securitization structure that will promote investor and public confidence in a time of higher scrutiny and uncertainty." Except for "re-securitizations" there have been no new jumbo MBS issued in about two years.