First mortgage backed securities for jumbo loans in 2 years

The first offering in 2 years for mortgage backed securities for jumbo loans is being offered through a joint venture between Redwood trust and Citigroup.  The amount of debt is slightly over $237 million of mortgage.  Redwood will hold onto some of the pool and is selling over $222 million of the debt.  This pool represents very high quality debt with an average loan to value (LTV) of 60% and the average size of each mortgage is approximately $935,000.

Analysts are positive about these securities because there appears to be very low risk from these mortgages defaulting.  The LTV is low and the credit scores of the individuals taking out these mortgages are relatively high.

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