Mill Valley, Calif.-based Redwood Trust Inc. is launching the first private-label security offering backed by newly originated mortgages since 2008. According to a term sheet, Redwood Trust is looking to sell approximately $222.38 million in RMBS consisting of jumbo prime mortgages.
Dubbed Sequoia Mortgage Trust 2010-H1, the deal includes 255 hybrid mortgages secured by first liens on one- to two-family residential properties, condos, cooperative units, planned unit developments and townhouses. Moody's has been tapped to rate the offering.
"Today's transaction signals that the private RMBS market is beginning to return, but it does not signal that RMBS has returned," says Tom Deutsch, executive director of the American Securitization Forum (ASF). "The market is extremely fragile, and we need to be very careful – especially as policy-makers consider new regulation – that we act thoughtfully to ensure vitally needed private credit starts flowing again to American consumers."
The new security appears to have been created using terms and disclosures developed under the ASF's Project RESTART, an initiative designed by investors and issuers to rebuild investor confidence in asset-backed securities, the ASF says.
"The level of detailed information required under the terms of the project is both far-reaching and specific," Deutsch adds.