A California lender began selling jumbo loans this month to global asset manager BlackRock, proof that private investors are not waiting for the securitization market to fully recover before getting back into mortgages.
Prospect Mortgage, Sherman Oaks, Calif., became the first mortgage lender to originate and sell jumbo loans to BlackRock since it created a $1 billion mortgage investment fund last year with the specific purpose of securitizing prime jumbo loans.
For now, some of the loans will be held in portfolio or may be distributed to other BlackRock funds, said Jeff DerGurahian, Prospect's senior vice president of capital markets. "This is the first step," he said. "Investors will look for a securitization exit once issuers have more clarity on how the rating agencies will behave, and credit support levels will lead to more clarity on the pricing." BlackRock declined to comment.
So far, Redwood Trust, a Mill Valley, Calif., real estate investment trust, has been the only company securitizing jumbo loans since the $1.5 trillion private-label market froze up in 2008.
Though investors such as Goldman Sachs and Private National Mortgage Acceptance Co. (known as PennyMac) have signaled their intention to sell mortgage-backed securities backed by jumbo loans, none has done so yet. Most lenders are hesitant to write mortgages on high-priced homes without a reliable outlet for selling them, and more than half of all jumbo loans are being sold to Fannie Mae and Freddie Mac.
