Some rating agencies fear that many of the jumbo entrants not only lack historical loan performance data, but have not yet established track records for remedying representation and warranty breaches.

It is unclear exactly when Jay Memmott left Seterus.

In other mortgage-stock news, Ellie Mae Co-founder, Chairman and CEO Sig Anderman has been exercising stock options of late, and selling shares in the company.

Jumbos for borrowers with strong credit profiles present banks with limited risks – particularly adjustable-rate mortgages – and the loans offer lucrative opportunities to cross-sell other products.

On the non-QM front, Bayview will go as high as $1.5 million, but the loan-to-value ratio is capped at 80 percent.

Every buyer has a different definition of "reperforming," but generally the loan must be current for at least 12 months.

Although the FHLB-Chicago will facilitate jumbo purchases with Redwood, any FHLB member across the nation can upstream product to the REIT.

RBS, which is effectively owned by the British government, still faces liability in private label security (PLS) matters tied to Greenwich Capital, a U.S. subsidiary that at one time was the largest nonprime issuer in the nation.

The loans in the deal were largely originated by First Republic Bank and Chase, banks that certainly have the capacity to hold jumbos in portfolio.

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...