Redwood Trust is marketing its first high-balance mortgage securitization of the year, compiling a pool of loans larger than most of its recent prime jumbo deals.
Sequoia Mortgage Trust 2021-1 will sell bonds secured by a pool of 613 loans with a combined balance of $527.4 million – or about $860,359 per property. The pool balance exceeds that of Redwood’s five prior RMBS deals in 2020, which had no more than a balance above $448.1 million in any of the previous offerings.
According to a report from Kroll Bond Rating Agency, all of the loans are first-lien, fixed-rate obligations with no history of forbearance or delinquency. All were also originated after the COVID-19 outbreak in the U.S. last March.
Kroll stated the more recent vintage status of the loans provides stronger credit metrics such as more stringent underwriting, including tightened employment verification standards. Additionally, Sequoia limited the share of loans to borrowers with self-employed income verification to 17.8%, below the 20.6% average in 2020-21 RMBS deals rated by Kroll.
About 39.2% of the loans are for properties in California, and carry significant borrower equity with average loan-to-value ratios of 67.9%.
The super-senior and senior notes in the transaction (including four terms notes and nine classes of interest-only tranches) carry AAA ratings from Kroll and Fitch Ratings.
