Because additional funds from investment firms are persisting in growing the jumbo mortgage market, mortgage loan originators are in a better position to increase their loan volume.
Lenders have increased the amount of fixed rate mortgage due to the higher demand from the secondary market. The risk to lenders is decreasing when mortgage-backed securities are bought by investors. From a report by Kroll Bond Ratings, US$ 6bn has been bought by Redwood Trust dating back to 2010.
The mortgage companies who are utilizing Redwood Trusts mortgages the most are Cole Taylor, Everbank, First Republic, Prime Lending, Shore Financial, and WJ Bradley. As expected, the high-cost areas in the country which include Boston, New York, Los Angeles, San Diego and San Francisco had the most jumbo loan activity.
Additional lenders are coming into the field as well like Stonegate Mortgage which claims it has funded US$ 115M for buying jumbo mortgages. Other companies like PennyMac and Impac Mortgage have been consistent in the jumbo market have had funding in the 2013 year too.