Redwood Trust on Tuesday closed its second Jumbo MBS deal within 10 months, boasting that the economics on the transaction support private-sector financing of prime mortgages at rates within 0.5% of Fannie Mae/Freddie Mac instruments.

In a statement, Redwood's chief operating officer Brett D. Nicholas said the bond illustrates how private sector firms can finance residential mortgages without government backing — and at rates attractive to both borrowers and investors.

In an interview with ASR sister publication National Mortgage News, Nicholas noted that the publicly traded REIT is now reviewing mortgages on a daily basis with an eye toward purchase.

He declined to say how many loans the firm is looking at or identify potential sellers. (In response to a question, he said Redwood has no plans to become a direct lender and will remain as a correspondent buyer.)

He noted that the Mill Valley, Calif.-based Redwood hears reports of other firms working on jumbo MBS programs, but knows of no deals that are imminent.

On Redwood's new deal, the most senior certificates (representing 92.5% of the $290 million securitization) received an 'AAA' rating from Fitch Ratings.

The bonds were sold to institutional investors. Credit Suisse was the lead managing underwriters. JPMorgan Securities  and Jefferies & Co. assisted on the deal.

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