Two Harbors targets $250 million RMBS deal in 2011
Two Harbors Investment Corp. (TWO) is targeting a $250 million deal as its first residential mortgage-backed securities issuance in 2011. The real estate investment trust partnered with Barclays Capital (BCS), which will perform underwriting on the deal, in setting up a securitization issuance program. The two firms closed on a $100 million mortgage loan warehouse facility, which the companies said could increase in the future. The warehouse line will be used to gather prime jumbo residential mortgages from select loan originators. A Two Harbor spokesperson could not disclose which originators. The deal would be the second, private-label RMBS transaction of 2011. The other came from Redwood Trust (RWT), which has been the only private issuer of RMBS since credit markets froze during the crisis of 2008. Before a Senate Banking Committee hearing Wednesday, private investors and issuers said they're ready to make more deals when regulatory requirements become more transparent. "We believe we can create mortgage credit investments at attractive yields resulting from high-quality loan origination and securitization while further extending the runway for the nonagency allocation in our portfolio," said Two Harbors CEO Thomas Siering. Two Harbors also brought in Diane Wold as managing director. She was previously the managing director at GMAC Residential Capital. Wold will begin work with the new securitization program at Two Harbors. "The private mortgage securitization market is beginning to re-open and we believe there will be increasing demand for mortgage investment products that are well designed, backed by high quality collateral, and transparent in their disclosures," Wold said. "Our initial focus will be on jumbo loan securitizations, where we believe there is a significant opportunity." Write to Jon Prior. Follow him on Twitter @JonAPrior.