In a recent interview, Redwood CEO Chris Abate discussed the company's growth in the jumbo mortgage market following disruptions in regional banking in 2023. With major banks withdrawing from holding mortgages, Redwood has moved to capture a larger share, now estimated at 6-7%. The firm collaborates with regional banks that lack certain capabilities, positioning itself as a partner rather than a competitor. Despite volatility, there is solid demand for jumbo assets, although regulatory barriers remain a challenge for attracting international capital into the market.
"Unlike larger banks and broker-dealers often viewed as competitors, Redwood positions itself as a collaborative partner to these institutions, focusing on liquidity provision through securitizations."
"Following the regional banking turmoil in 2023, depository lenders began pulling back from holding mortgages on their balance sheets, leading Redwood to activate the previously dormant jumbo market."
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