Redwood Trust, the only company to securitize jumbo loans during the past two years, has pushed backed its second deal to early 2011 because of a lack of available product. In particular, the Mill Valley, Calif-based REIT pinpoints the cause: "major bank originators are reluctant to sell [jumbo] loans due to their high level of excess liquidity." In other words, depository-based jumbo lenders are keeping the product in portfolio because the yield over their cost of funds is steep, and there's a lack of available good credits out there. Redwood continues to believe there is a major business opportunity in the secondary market because Fannie Mae and Freddie Mac are destined to "shrink."