Castlelake and Redwood Trust have formed a strategic joint venture to purchase up to $8 billion of prime jumbo mortgage loans, aimed at supporting the continued growth of Redwood’s Sequoia platform, the companies announced Wednesday.
The joint venture is designed to provide Castlelake with programmatic purchasing power for fully documented prime jumbo mortgage loans sourced through Sequoia, Redwood’s non-agency correspondent platform.
The companies said the venture “contemplates purchasing up to $8 billion of Sequoia-sourced prime jumbo loans,” with flexibility to scale as opportunities emerge, including the acquisition of seasoned loans from bank balance sheets.
Under the structure, Sequoia will “source, aggregate, and diligence loans that meet defined eligibility criteria,” with the goal of supporting “consistent execution and high-quality asset selection.”
“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.
“This transaction highlights Castlelake's granular, loan level approach to deploying capital into opportunities that we expect to create attractive, risk-adjusted outcomes for our investors,” Jackson added.
“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,” said Brooke Carillo, executive vice president and chief financial officer at Redwood Trust.
“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,” Carillo said. “Castlelake's large, diversified institutional capital base and experience in asset-based investing make them a strong partner as we continue to grow Sequoia.”
Platform Scale And Market Role
Redwood said its Sequoia platform is one of the longest-tenured non-agency correspondent platforms in the industry, operating since the company’s founding in 1994.
The platform has purchased roughly $100 billion of loans and securitized more than $50 billion, providing liquidity across market cycles and maintaining relationships with market-leading originators.
Castlelake, meanwhile, has acquired or financed more than $10 billion in residential and commercial loans since 2024, reflecting its focus on asset-based private credit and residential real estate investment
The joint venture follows recent moves by both companies to expand their footprint across mortgage origination and non-agency lending.
Castlelake has been moving deeper into origination through its majority stake in ResiFund Partners, while Redwood Trust has signaled a broader push in non-agency lending, including growth initiatives tied to its platforms and capital partnerships.
For LOs, the joint venture points to a potentially more consistent outlet for jumbo production, particularly as private capital continues to expand its role in non-agency lending. A programmatic buyer of this scale could help support loan salability and pricing stability for high-balance borrowers.
The joint venture establishes a programmatic channel for acquiring prime jumbo loans through Sequoia, pairing Redwood’s sourcing and aggregation platform with Castlelake’s institutional capital as both firms continue to scale their presence in the non-agency mortgage market.
