Redwood Trust late last week struck a deal with the Federal Home Loan Bank of Chicago to purchase fixed-rate jumbo mortgages from FHLBank members participating in the Mortgage Partnership Finance Program. Redwood will be the sole investor in “high balance” mortgages from the new MPF Direct program for three years. The program is subject to final approval from the Federal Housing Finance Agency. Officials at Redwood said the real estate investment trust plans to start investing in MPF Direct loans during the second half of this year. The loan limit for the MPF Direct program is...