Redwood Trust, the only firm to dip its toe back into the Jumbo MBS market, earned $15 million in the fourth quarter, a 63% decline from the same period a year earlier.
However, the publicly traded REIT — which is about to close on its second Jumbo MBS deal within 10 months — earned $111 million for the full year, more than double what it earned in 2009.
For the 12-month period, the Mill Valley, Calif.-based firm saw its interest income fall to $230 million from $288 million in 2009, but at the same time its interest expense fell to $85 million, from $132 million. (It suffered market valuation adjustments of just $20 million in 2010 compared to $88 million in 2009.)
In 4Q10 Redwood bought $195 million of Jumbo mortgages while originating $30 million of commercial loans.
Its second Jumbo MBS bond, a $290 million placement, is about to close.