Castlelake and Redwood Trust announce joint venture to buy up to $8 billion of prime jumbo mortgage loans

Castlelake and Redwood Trust said they have formed a strategic joint venture to purchase up to $8 billion of prime jumbo mortgage loans.

The companies said the deal is intended to support Redwood’s Sequoia platform, which sources and diligences fully documented prime jumbo loans. They also said the venture may acquire seasoned loans from bank balance sheets.

The announcement was published on April 29 at 8:00 a.m. ET, and Reuters-syndicated coverage later repeated the same terms. At this stage, the companies have not said whether purchases have already begun or disclosed the initial funding split for the venture.

The transaction adds another capital partner to Redwood’s mortgage platform at a time when lenders and investors continue to look for ways to finance higher-end residential credit assets. The scale of the planned buying program suggests the venture could become a meaningful buyer in the jumbo mortgage market if it is fully deployed.