Redwood Trust (RWT) lost $3 million, or 3 cents a share, in the fourth quarter as the as the firm took a negative hit in market valuation adjustments.

Analysts estimated Redwood would earn 17 cents a share, according to Zacks Investment Research. The real estate investment trust is the only firm issuing private-label residential mortgage backed securities. The earnings report lists plans to continue to do so, with up to six likely to come in 2012.

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"Our objective for 2012 is to acquire approximately $2 billion of residential loans from 30 to 40 originators," Redwood stated in a filing with the Securities and Exchange Commission. "We are now planning four to six securitization transactions, including one transaction that we completed in January 2012."

"Our business decision either to securitize or sell as whole loans the residential loans we accumulate remains fluid and will be based on balancing our best value execution and the potential franchise value of building out our securitization platform," the filing adds.

Market valuation adjustments were negative $10 million for the fourth quarter, versus a year earlier when they were a positive $400,000. The large swing was due to depreciation on trading securities pricing in 2011 after prices appreciated in 2010, Redwood stated.

In the year-ago period, the Mill Valley, Calif. REIT earned $15 million, or 18 cents a share. In its third quarter, the company reported income of $1 million, or 1 cent a share.

jhilley@housingwire.com