Redwood’s Perfect Score Shows Jumbo Draw for Banks: Mortgages
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Redwood Trust Inc. is having a spectacular run. Its shares have returned almost 85 percent in the past year and there have been zero defaults among the $4 billion of jumbo loans it packaged and sold as bonds since 2010.
Business for the real estate investment trust is poised to pick up in 2013 as the U.S. housing rebound lifts California and East Coast cities where Redwood finds its mortgages. Nationwide, jumbo loans, those too big for government backing, may climb 15 percent to $253 billion after jumping 29 percent in 2012, “the best year for jumbo volume since the mortgage crisis,” according to Guy Cecala, publisher of Inside Mortgage Finance.