Redwood Trust CEO Christopher Abate laid out a bold vision of growth for the real estate investment trust at an investor conference in New York City last month. Part of that vision included finding ways to tap into the nation’s multitrillion-dollar pool of home equity.
To that end, Redwood Trust has partnered with Point, a fintech firm that provides homeowners who may not otherwise qualify for a home-equity loan with a path to tapping the equity in their homes. That is done via what is called a home-equity investment contract, or an HEI.
This week, Redwood and Point, the latter founded in 2014, announced that they have completed a first-of-its-kind securitization supported by those HEI contracts.
The private-placement transaction, which closed in late September, involved issuing $146 million in securities through a conduit dubbed Point Securitization Trust 2021-1. The offering, backed by HEI contracts, was structured in two tiers — with $120 million of unrated senior class A-1 notes and about $26 million of unrated class A-2 securities.
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