Redwood Trust is sponsoring its fourth prime-jumbo transaction of the year, this time with a slightly lower concentration of riskier self-employed borrowers.
The $723.3 million Sequoia Mortgage Trust 2021-4 has a pool of 812 high-balance mortgage loans (averaging $890,723 per account) that were recently originated among 77 different lenders, and acquired by Redwood.
The 18.3% self-employment percentage of borrowers is below the combined 2020 and year-to-date 2021 average prime RMBS level of 19.3%, according to a presale report from Kroll Bond Rating Agency.
The borrowers are high-income earners ($292,975 median annual income) with “significant” liquid reserves of $386,161 and high average FICO credit scores (777), according to the reports from KBRA and Fitch Ratings. Borrowers have median free cash flow of $10,574, and WA debt-to-income ratios of 29.5%.
The accounts are lightly leveraged with original loan-to-value ratios of 68%.
Each of the agencies are rating four super senior/senior support loans with preliminary AAA ratings; 10 classes of interest-only loans also with AAA ratings; and five classes of subordinate notes with ratings ranging from double-A to double-B.
