Redwood Trust Inc. and alternative‑credit firm Castlelake, L.P. announced a joint venture that will acquire up to $8 billion of prime jumbo mortgage loans sourced through Redwood’s Sequoia platform. The partnership gives Castlelake programmatic purchasing power for fully documented prime jumbo assets while allowing Redwood to expand its loan sourcing and securitization capacity.
Under the structure, Sequoia will source, aggregate, and perform due diligence on loans that meet defined eligibility criteria. The joint venture also retains the flexibility to acquire seasoned loans from bank balance sheets as opportunities arise. While the exact capital contributions are not disclosed, the arrangement is designed to combine Castlelake’s institutional capital base with Redwood’s AI‑enhanced underwriting platform and deep market relationships.
The strategic rationale is clear: Redwood is scaling its mortgage‑banking model, and Castlelake is providing the capital and asset‑based expertise needed to accelerate that growth. “Castlelake is pleased to partner with Redwood and its Sequoia platform to provide our investors with access to what we expect to be high‑quality, fully documented prime jumbo assets and to establish a relationship grounded in shared principles of disciplined underwriting and strong institutional governance,” said Lucas Jackson, Head of North American Residential Mortgage Finance at Castlelake.
Brooke Carillo, Executive Vice President and Chief Financial Officer at Redwood Trust, highlighted the momentum behind Sequoia: “Sequoia has experienced significant momentum over the past year, with loan acquisition volumes more than doubling as we continue to build share in the jumbo market. We see a dynamic and expanding opportunity set ahead, and this initiative is aligned with our strategy of scaling our platforms alongside leading capital providers.”
Redwood Trust scheduled its Q1 2026 earnings release after market close on April 29, 2026, with an earnings call at 5:00 p.m. Eastern Time. The company’s Q1 2025 GAAP earnings were $14.4 million, or $0.10 per share, and non‑GAAP earnings‑adjusted debt was $19.8 million, or $0.14 per share. Revenue for the quarter was $45.9 million. Consensus estimates for Q1 2026 vary: some analysts project EPS of $0.28 and revenue of $31.58 million, while others forecast EPS of $0.2239 and revenue of $89.544 million. The discrepancy reflects differing views on Redwood’s revenue mix and the impact of its mortgage‑banking expansion.
The joint venture is expected to drive future earnings growth by expanding Redwood’s loan portfolio and improving capital efficiency. By combining Castlelake’s capital with Redwood’s technology‑driven underwriting, the partnership positions Redwood to capture a larger share of the prime jumbo market and accelerate its transition from legacy investments to a high‑yield mortgage‑banking engine. The partnership’s success will be measured in the next earnings cycle as Redwood reports the impact of the expanded loan book on revenue, margins, and cash flow.
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