Castlelake, Redwood form $8B prime jumbo mortgage joint venture

Castlelake and Redwood Trust have formed a joint venture to purchase up to $8 billion of prime jumbo mortgages, the companies announced Wednesday.

Under the partnership, Minneapolis-based asset manager Castlelake will gain programmatic purchasing power for fully documented prime jumbo loans, while California-based Redwood’s Sequoia platform will source, aggregate and perform due diligence on loans that meet defined eligibility criteria. 

The joint venture may also acquire seasoned jumbo loans from bank balance sheets. Jumbo loans form a segment that relies heavily on private capital and securitization rather than government-backed channels. 

Lucas Jackson, head of North American residential mortgage finance at Castlelake, said the joint venture will provide the company’s investors access to “high-quality, fully documented prime jumbo assets.”

The joint venture signals continued institutional appetite for high-credit, non-agency jumbo mortgages. It could provide a more stable outlet for jumbo originators and aggregators at a time when banks are reevaluating mortgage exposure on their balance sheets.

According to Redwood, Sequoia’s loan acquisition volume more than doubled over the past year as it gained share in the jumbo market. The company framed the joint venture as part of a strategy to scale its platforms alongside institutional capital providers.

Since its founding in 1994, the Sequoia platform has purchased roughly $100 billion in loans and securitized more than $50 billion, according to the announcement.

Meanwhile, Castlelake has acquired or financed more than $10 billion in residential and commercial loans since 2024 and manages about $36 billion in assets. It is a strategic partner of Brookfield Asset Management.

This article was generated using HousingWire Automation and reviewed by a HousingWire editor before publication. The system helps convert company announcements and industry data into HousingWire-style news coverage.