Redwood Trust and the Federal Home Loan Bank of Chicago are revving up a program to buy and securitize jumbo loans and looking for signs that other FHLBs will participate.

"We are currently working with the Federal Home Loan Bank of Chicago to identify early participants and working through operations," said Martin Hughes, the chief executive of Redwood, in a conference call on the company's second quarter earnings. "We expect to begin acquiring loans from this [jumbo] program in the fourth quarter."

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