Originators are likely to be producing more jumbo mortgages as large investment groups continue to funnel funds towards purchasing this asset class.
Redwood Trust has issued at least ten jumbo-backed securitizations since the beginning of 2010, totaling approximately US$ 6bn, according to Kroll Bond Ratings.
The loans have been mostly concentrated in high-cost areas such as San Francisco, Boston, Massachusetts, and Los Angeles, according to rating agency reports. Top originators of Redwood deals include Shore Financial, Prime Lending, Cole Taylor, WJ Bradley, First Republic, Everbank and others.
Several other larger aggregators like Impac Mortgage and PennyMac Mortgage have been heavily devoted to the jumbo market as well, with several securizations issued each this year.
Wednesday, a smaller lender announced it was getting into the jumbo mortgage game, too. Stonegate Mortgage, a national mortgage lender, said raised US$ 115m to purchase jumbo mortgages.
The move is a sign that mortgage companies are slowly returning to non-agency mortgages as the government scales back its purchases of conforming agency products, a Bloomberg report said, citing Stonegate’s CEO, Jim Cutillo.