The collateral pool of mostly jumbo loans in the latest Redwood Trust (RWT) residential mortgage-backed security were written for borrowers with “exceptionally strong credit profiles,” according to the Fitch Ratings pre-sale report on the deal. Redwood put Sequoia Mortgage Trust 2011-1 up for sale in February as the first private-label deal of the year and only the second issued since the financial crisis in 2008. The certificates are supported by $296.3 million in prime mortgages. Roughly 43% of them are adjustable-rate with an initial fixed interest of 10 years, and the rest is fixed-rate. The borrower FICO scores range from 701 to 815 with a weighted average of 775. The average monthly income for the borrowers on the 303 loans is $46,593, and the average dollar amount of the assets owned by a borrower is more than $2 million, Fitch reported. Fitch expects to rate the top two classes of the deal, containing the bulk of the principal, at triple-A. The other five classes received ranged in ratings from double-B to double-A. Fitch set the credit enhancement for the top-rated class at 7.5%. The security would have to experience more than 7.5% in losses before the credit enhancement kicks in, which in this deal will be subordinated certificates to the senior ones for distributions of principal and interest and for the allocation of losses. The Redwood deal met some controversy in February. Redwood terminated its application with Moody’s Investors Service to rate the deal when it disagreed with Moody’s preliminary assessment. Moody’s called for a 10% credit enhancement threshold for the triple-A rating because of the risk of an earthquake. A majority of these loans are written on homes located in the San Francisco area, Moody’s said, which would cause significant losses if one were to strike. Fitch noted the geographic concentration risk but pointed to the strength of the borrowers and originators in the deal, which were First Republic Bank and PHH Mortgage Corp. “Despite unprecedented regional economic stress, securitized loans originated by FRB in the San Francisco area since 2005 have incurred only one basis point of loss,” Fitch said in the report. Write to Jon Prior. Follow him on Twitter: @JonAPrior