The overall character of the mortgage loans backing Redwood Trust's latest RMBS were consistent with "high-quality underwriting," said Standard & Poor's in an unsolicited commentary on the transaction.
Examining public loan-level data and the information filed with the SEC on Sequoia Mortage Trust 2012-I, the agency said that the weighted averages of the FICO scores, the combined LTVs and the debt-to-income (DTI) ratios all supported its view.
Given that S&P was not hired to rate the deal, it had not conducted due diligence at the loan-level nor had it evaluated the deal's originators. Nonetheless, the agency said the main lenders had a strong track record of loan performance.
Redwood's fourth RMBS, Sequoia Trust 2012-1 is also expected to be its largest ever, at $415 million. Collateral is made up of fully amortizing fixed-rate and interest-only (IO) hybrid adjustable-rate mortgage loans.