Redwood Trust hopes to enter the agency business, according to the REIT’s new Redwood Review report.
The firm, which in June issued a $405 million deal called Sequoia Mortgage Trust 2012-3, said that its transactions have been met with very good demand as investors hunt for yield in a low-rate environment.
Additionally, a July 26 prospectus filing with the Securities and Exchange Commission (SEC) showed that the originator is set to bring its fourth deal this year called Sequoia Mortgage Trust 2012-4 to market. According to the SEC filing, Barclays Capital will underwrite the offering.
To date, the REIT has completed six Jumbo securitizations in the post financial crisis era through its Sequoia Residential loan business – with no delinquencies, according to the REIT’s new ‘Redwood Review’ report.
Moreover, the firm says it has 37 active correspondent sellers in its network and hopes to have as many as 50 by yearend. It had originally hoped for at least 40.
At June 30, the Mill Valley, Calif.-based Redwood held $115 million of MBS from the six Sequoia deals which total $1.9 billion. It posted interest income of $25 million from its securities in 2Q12, giving it an annualized unlevered rate of 11%.
Redwood does not originate Jumbo loans itself and instead relies on a network of mortgage bankers, including depositories.
Late last week, the company reported net income of $20 million in 2Q12 compared to $30 million in 1Q12. In 2Q11 it earned $9 million.