The first issuance this year of jumbo residential mortgage-backed securities is coming to market. The deal contains a significant concentration of loans from a single originator, and more than 40 percent of the loans are backed by properties in one state.
Sequoia Mortgage Trust 2013-1 is the first RMBS this year for Redwood Residential Acquisition Corp. The Mill Valley, Calif.-based company has been about the only issuer of RMBS since the private-label MBS market was virtually wiped out after the onset of the financial crisis.
The deal is backed by 511 jumbo mortgages for almost $398 million.
A report from Fitch Ratings indicates that the weighted average combined original loan-to-value ratio is less than 68 percent. The weighted average coupon is 4 percent, and the weighted average original FICO credit score of the pool is 769.
Nearly 95 percent of the loans are owner occupied.
The fixed-rate portion of the transaction is 79 percent. While most of the loans are fully amortizing, 5 percent have a 10-year interest-only period.
Almost 43 percent of the loans in the transaction are secured by California properties, 13 percent are backed by properties in Texas and 10 percent of the mortgages financed homes in Massachusetts.
“Fitch’s ratings reflect the high quality of the underlying collateral, the clear capital structure and the high percentage of loans reviewed by third party underwriters,” the ratings agency stated. “In addition, Wells Fargo Bank, N.A. will act as the master servicer and Christiana Trust will act as the Trustee for the transaction.”
The biggest share of the loans — 37 percent — was originated by EverBank.
Kroll Bond Rating Agency, which also rated the deal, said that it was the first time that a Sequoia transaction had such a concentration of loans from one lender.
Another 7 percent were originated by First Republic Bank, while 6 percent were originated each by PrimeLending, Fremont Bank and Flagstar Bank, F.S.B. Various lender including Rockland Trust Co. originated the rest.