Two real estate investment trusts are weathering recent economic challenges and remain on track to issue three new residential mortgage-backed securities deals in the back half of 2011. Redwood Trust (RWT), the only private investor to issue an RMBS deal since credit markets locked up in 2008, said two new deals announced months ago are still on track to get to market this year. "We continue to target two additional securitizations in 2011, even as this goal seems a bit more challenging than it did a few months ago," Redwood said in its August financial statement. "We see signs things are slowly moving in the right direction for private market financing of residential mortgages. Still, we are not idly waiting for external factors to change." At the end of June, Redwood said half its $404 million pipeline of primarily jumbo mortgages was being held for securitization. By the end of July, the REIT pushed the pipeline to $500 million. Two Harbors Investment Corp. said in May it was partnering with Barclays Capital (BCS) to issue an RMBS worth $250 million. The two firms closed a $100 million mortgage warehouse facility that month to gather prime jumbo loans from select originators. Two Harbors said the facility has yet to purchase any assets or establish a program, but it was still on track. "As anticipated, the company's initiatives in the three months ended June 30, focused on establishing underwriting guidelines and originator relationships, addressing regulatory requirements and building an infrastructure to support a sustainable issuance program," Two Harbors said in its August financial statement. The MBS markets have weathered the recent Maiden Lane initiative from the Federal Reserve, continued declines in mortgage rates, an extremely volatile stock market and the downgrade of the country's debt rating by Standard & Poor's. To go with these market disturbances, Washington has yet to take up any meaningful legislation to rebuild a private mortgage finance sector. Still, Redwood said it continues to collect loans for when the private-label market does return. "We are focused on buying loans from jumbo mortgage originators, realizing that it will likely take until 2012 to start to gain real traction," Redwood said. Write to Jon Prior. Follow him on Twitter @JonAPrior