Prospect Mortgage offering jumbos for private-label RMBS
Prospect Mortgage is offering prime jumbo loans it originates to the private-label secondary market. Prospect is actively looking for secondary investors and appears to be exploring developing opportunities as recent events in the sector hint at a possible uptick in jumbo securitization. The jumbo mortgages Prospect is offering are a mix of 30-year fixed-rate and adjustable-rate products with balances up to $2 million. All offerings have a minimum 700 credit score, the firm said, as well as a 20% down payment for mortgages up to a $1 million and a 30% down payment for mortgages between $1 million and $2 million. Jumbos with a 30% down payment received two appraisals. Prospect Mortgage is the fourth largest purchaser of Federal Housing Administration-backed loans; however, the Sherman Oaks, Calif.-based company does plan on expanding its jumbo lending efforts throughout the year. Prospect CEO Ron Bergum said the deals shows a commitment to funding mortgages outside of high-cost areas. "Although Congress has extended the GSE's upper-end conforming limit of $729,750 until September 30 of this year, that ceiling is only available for a limited number of high-cost areas," he said. "We are focused on producing fully documented prime loans through well-qualified buyers who need jumbo mortgages in markets with a $417,000 conforming limit, and then offering those loans to investment firms that are first movers back into jumbo securitization," Bergum added. The private secondary market for jumbo loans is not seeing many new deals. And for the last two years, there is only one private-label RMBS issuer. On March 1, Redwood Trust (RWT) closed a $290 million prime jumbo residential mortgage loan securitization, the only private deal of its kind this year. In April 2010, the firm, in conjunction with Citigroup's (C) CitiMortgage (C), closed a $237 million jumbo RMBS deal, the first since 2008. A full examination of the possible resurrection of the private secondary jumbo market will be published in the April edition of HousingWire magazine. Write to Christine Ricciardi. Follow her on Twitter @HWnewbieCR.