Aspire’s first securitization includes 752 loans to borrowers with an average credit score of 754 and a weighted average combined loan-to-value (LTV) ratio of 69.79%. Select Portfolio Servicing will serve as servicer. Morgan Stanley & Co. LLC acted as sole structuring agent and sole bookrunner.
Aspire operates through a correspondent model, acquiring closed loans rather than originating them directly.
“It’s serving a growing segment of the mortgage market, which recognizes there’s a large cohort of high-quality borrowers who are not well served necessarily by traditional government programs and who also fall outside the traditional parameters of our jumbo mortgage business,” Redwood President Dash Robinson said in an interview with HousingWire.
Borrowers typically include self-employed business owners, rather than traditional W-2 employees, or real estate investors who generate rental income from properties.
Most of the volume comes from bank-statement products, where the company analyzes at least one to two years of bank statements to evaluate income. Aspire also acquires debt-service-coverage ratio (DSCR) loans, which are generally underwritten based on a property’s cash flow.
Aspire acquires loans from banks and nonbanks, totaling about 100 partners. But “about two-thirds of the production we’ve done within Aspire has come from sellers we already worked with through Sequoia,” Robinson said.
The platform has already locked about $3 billion in volume. Redwood estimates the non-QM market will reach roughly $150 billion this year.
“If you think about our volume last year, even our fourth quarter run rate, our market share is probably 4% to 5%,” Robinson added.
Redwood expects to continue using a mix of whole loan sales, securitizations and potential joint ventures — similar to the partnership CoreVest maintains with CPP Investments.
“There’s a very broad array of investors that are interested,” Robinson said. “There’s a risk premium (compared to conforming loans) that investors find attractive, particularly for non-QM and DSCR products.”
These loans also tend to match well with the asset-liability structures of many institutional buyers because they generally carry less prepayment risk than agency or jumbo mortgages, Robinson added.
More stable prepayment profiles also appeal to insurance companies, he added. For example, many DSCR loans include prepayment penalties during the first five years, requiring borrowers to pay a premium if they refinance or sell early.
