Redwood Trust is planning to sell its sixth Jumbo prime RMBS of 2012 called Sequoia Mortgage Trust 2012-6 (SEMT 2012-6).
The mortgage pool backing SEMT 2012-6 is made up of 358 first-lien mortgage loans with an aggregate principal balance of $301.46 million, according to a Kroll Bond Rating Agency (KBRA) presale report on the transaction. The loans included in the pool are mostly 30-year fixed-rate mortgages, except for 2.02% that are 20-year loans.
KBRA also said that he pool is characterized by considerable borrower equity in each mortgaged property, as proven by the average LTV (66.6%) and CLTV (67.7%). No loan has an LTV or CTLV greater than 80%, the rating agency stated.
The pool's weighted average credit score is 771, which is marginally higher compared to the average for 2012 SEMT deals and well within the prime mortgage range, KBRA reported.
Meanwhile, in a Fitch Ratings presale report, the rating agency said that the third-party, loan-level due diligence was conducted on roughly 93.2% of the overall pool, and it believes the results of the review generally show strong underwriting controls.
According to Fitch, roughly 86% of the pool was originated by smaller lenders with limited non-agency performance history. This percentage has risen versus prior Redwood transactions. However, all of these loans were reviewed by a third-party due diligence firm with non-material findings, and Fitch believes the credit enhancement on this offering is enough to lessen the originator risk.
Overall, geographic diversity has been improving from prior SEMT offerings, Fitch said. The contribution from the top three metropolitan statistical areas making up the smallest percentage to date. A higher portion of loans are currently focused in regions with low projected sustainable home price (SHP) drops.
But, the considerable home price growth seen in the last quarter without much economic improvement has resulted in higher estimated home price dips for the aggregate pool, Fitch said.
Moody's Investors Service is also rating the 2012-6 transaction.
Redwood Trust also has a $172 million static cash flow commercial real estate CLO this week slated to price today from its wholly owned subsidiary Redwood Commercial Mortgage Corp.
The deal, called RCMC 2012-CREL 1, is backed by 30 collateral interests primarily in the form of mezzanine debt, preferred equity interests, and B-notes, according to a Moody's.
The underlying collateral pool is anticipated to be fully ramped as of the closing date with a par amount of roughly $291 million and a weighted average coupon of 10.2%, the rating agency said.