Mortgage News: Today’s mortgage rates

Mortgage Bonds and Mortgage Rates News: 

http://www.businessweek.com/news/2010-04-21/citigroup-redwood-may-restart-mortgage-bond-market-update1-.html

http://www.reuters.com/article/idUSN2319362520100423

Article:  

NEW YORK, April 23 (Reuters) – Redwood Trust (RWT.N), a California real estate investment trust, on Friday cut yields on the first new residential mortgage bond in two years after seeing heavy demand, an investor familiar with the deal said.

The $222.4 million, Aaa rated, senior bonds priced at an interest rate of 3.75 percent, the investor said. Redwood and underwriters first marketed the “Sequoia Mortgage Trust” deal at a 4 percent rate, according to a term sheet.

Redwood’s deal is a significant development for the mortgage debt securities markets where high returns demanded by investors to compensate for defaults kept the market closed since the financial crisis deepened in 2008.

As such securities funnel cash to consumers, it is hoped they will help restore private credit to housing that is nearly entirely dependent on government enterprises like Fannie Mae and Freddie Mac, and bank balance sheets. Such bonds are especially important for large loans that cannot be funded by government entities.

Lack of “jumbo” funding has largely limited the rebound in home sales to lower priced properties.

Underwriters Citigroup and JPMorgan Chase & Co. logged more than $1 billion in orders, showing strong demand for securities with loans made under today’s tighter underwriting standards, a dealer familiar with the deal said on Thursday.

Recovery of the mortgage securitization market is also important for Redwood whose business model is based on holding the riskier and higher-yielding parts of mortgage bonds. Analysts expected few additional bonds in the near-term as current yield demands by investors and the cost of loans for collateral is still capping issuers’ profit motives.