The latest Jumbo securitization from Redwood Trust, the only issuer that has been in the market recently has a lot of positives as usual. But among its few negatives is a slightly reduced and somewhat idiosyncratic geographic concentration risk that may be offset by the strength of the regional originator the produces it.

California concentrations in Jumbo deals are historically not unusual, said Fitch Ratings managing director Roelof Slump, who added, “In general, California was a meaningful percentage of most prime RMBS transactions, and other areas of the country where high-cost homes are common were evidenced as well.”

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