Aspire’s inaugural securitization comprises 752 loans extended to borrowers with an average credit score of 754 and a weighted average combined loan-to-value (LTV) ratio of 69.79%. The servicing of these loans will be handled by Select Portfolio Servicing, with Morgan Stanley & Co. LLC serving as the sole structuring agent and sole bookrunner.
Operating under a correspondent model, Aspire acquires closed loans instead of originating them directly.
“It’s catering to a growing segment of the mortgage market that acknowledges the presence of a substantial group of high-quality borrowers who may not be adequately served by traditional government programs or fall outside the parameters of our jumbo mortgage business,” stated Redwood President Dash Robinson in an interview with HousingWire.
Typical borrowers include self-employed business owners and real estate investors who earn rental income from properties, rather than conventional W-2 employees.
The majority of Aspire’s loan volume comes from bank-statement products, where the company evaluates income based on one to two years of bank statements. Additionally, Aspire acquires debt-service-coverage ratio (DSCR) loans, typically underwritten based on a property’s cash flow.
Aspire acquires loans from a diverse range of banks and nonbank lenders, totaling approximately 100 partners. Robinson noted that “about two-thirds of the production within Aspire has originated from sellers we had previously worked with through Sequoia.”
The platform has already secured around $3 billion in loan volume, with Redwood estimating that the non-QM market will reach approximately $150 billion this year.
“Considering our volume from last year, even the fourth quarter run rate, our market share likely stands at 4% to 5%,” added Robinson.
Redwood anticipates continuing to utilize a combination of whole loan sales, securitizations, and potential joint ventures, similar to the partnership between CoreVest and CPP Investments.
“There is a wide range of investors showing interest,” Robinson explained. “There is a risk premium compared to conforming loans that investors find appealing, especially for non-QM and DSCR products.”
Moreover, these loans align well with the asset-liability structures of many institutional buyers due to their lower prepayment risk compared to agency or jumbo mortgages, Robinson emphasized.
Insurance companies are also attracted to the more stable prepayment profiles of these loans. For instance, many DSCR loans incorporate prepayment penalties during the initial five years, necessitating borrowers to pay a premium if they refinance or sell early.