A new residential mortgage-backed securities transaction being issued is backed by jumbo loans to prime borrowers.
The transaction is Sequoia Mortgage Trust 2014-3, the third so far this year for Redwood Residential Acquisition Corp.
All of the home loans in the securitization are first lien mortgages with fixed rates and primarily 30-year terms.
Provisional ratings of Aaa were assigned to 11 classes of the deal by Moody’s Investors Service.
Borrowers on the mortgages have high FICO scores, significant liquid cash reserves and equity in their properties.
The issuance includes 462 loans for $330 million.
Among the 89 originators were First Republic Bank, which was responsible for 18.2 percent of the loans; Home Street Bank, where 12.4 percent of the loans were originated; and Prime Lending, with a 5.7 percent share of the pool.
Loan-level information was verified by third-party due-diligence firms.
“They also performed detailed credit, collateral, legal and regulatory compliance review on 100 percent of the non-First Republic Bank loans in the pool,” the New York-based ratings agency said. “Approximately 20 percent of the loans originated by First Republic Bank, the largest originator in the pool, were sampled.”
Moody’s noted that the minority of loans that deviated from Redwood’s underwriting guidelines had strong compensating factors.
