Redwood Trust, Inc. ( RWT Quick Quote RWT - Free Report) has launched its in-house home equity investment (“HEI”) origination platform, Aspire. With this, Redwood Trust significantly expands its presence in the residential housing market, tapping one of the largest addressable markets in the United States — residential home equity.
The company will be leveraging its nationwide correspondent network of loan officers and will establish direct-to-consumer origination channels to originate HEI through Aspire.
Markedly, since 2019, RWT has been a preeminent participant in the HEI market and has purchased around $350 million in HEI to date. It co-sponsored the first-ever securitization backed entirely by HEI in 2021 and arranged a $150 million dedicated HEI financing facility in 2022.
Aspire will cater to clients seeking traditional financing options, such as closed-end second-lien mortgages or home equity lines of credit, without the monthly payment feature of HEI. The move also underlines the company’s efforts to bring innovative solutions to the non-Agency housing market.
Per Christopher Abate, the chief executive officer of Redwood Trust, “We have been fortunate to work alongside a handful of HEI originators over the last few years, helping to bring liquidity and product development expertise to this emerging asset class. As we continue to invest in HEI through our third-party partners, Aspire will represent the natural evolution of our strategy, allowing us to address the needs of consumers we have long served through our Residential correspondent network.”
He continued, “When juxtaposing near-record high costs for traditional mortgage financing with record amounts of untapped equity in housing, our HEI product provides an attractive solution for many consumers who often qualify for additional home debt but prefer the flexibility of an equity investment. As we have demonstrated through Redwood’s past innovations, our products have the ability to align the interests of homeowners and investors on a scale not previously seen in the United States.”
Over the past six months, shares of RWT have gained 3.3% against the
industry’s decline of 1.5%. Image Source: Zacks Investment Research
Currently, Redwood Trust carries a Zacks Rank #3 (Hold). You can see
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