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Redwood Trust Inc. subsidiary CoreVest is gearing up to make more bridge loans to investors who rehab and flip single-family homes and multi-family properties, now that its parent company has closed a deal to acquire Portland, Oregon-based Riverbend Funding LLC and its subsidiaries.
Redwood plans to fold Riverbend’s operations and roughly 50 employees into its subsidiary, CoreVest American Finance Lender LLC, claiming to be the leading lender to residential real estate investors nationwide, with more than $16 billion in loans closed and over 100,000 units financed to date.
Riverbend co-founders Emilian Halloran and Sean Robbins will continue to lead the business following the closing as managing directors. Halloran and Robbins will oversee CoreVest’s single asset bridge loan product, which lets investors purchase new properties and fund rehab work by taking out a fixed-rate loan with a 12-month term.
“As we enter this next stage of growth, we are excited to partner with the dedicated teams at Redwood and CoreVest,” Halloran said in a statement. “The strong capital base, efficient operating platform, deep client network and extensive product set will allow us to scale our originations and financing efforts.”
In an April 28 investor presentation outlining the thinking behind the deal, Redwood Trust said the company views the market for bridge loans as “increasingly attractive,” with demand from investors at an all-time high.
“We continue to be very enthusiastic about the opportunity for this platform within our existing CoreVest business,” CoreVest CEO Beth O’Brien said in announcing the completion of the deal Tuesday.
Riverbend Funding loan originations
Source: Redwood Trust investor presentation
Riverbend’s $280 million in first-quarter loan production put the company on track to originate more than $1 billion in loans this year, which would surpass the $798 million in originations the company achieved in 2021.
While it’s active in 33 states, nearly three-quarters of Riverbend’s business had been concentrated in three Western states. California accounted for 40 percent of the company’s originations during the 12 months ending March 31, followed by Oregon (18 percent) and Washington (13 percent).
In its most recent quarterly report to investors, parent company Redwood Trust said it funded $415 million in bridge loans during the three months ending March 31 and $505 million in single-family rental loans.
Redwood Trust also funds prime jumbo mortgages, acquiring loans from third-party originators that it securitizes for sale to investors or holds in its own investment portfolio. During the first quarter, Redwood’s residential mortgage loan conduit locked $2.63 billion in loans, 65 percent of which were purchase loans.
Through its venture funding arm RWT Horizons, Redwood also invests in early-stage companies in the lending, real estate and financial technology sectors. RWT Horizons’ investments include Point, a shared equity platform and EasyKnock, which purchases homes and leases them back to sellers.
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Email Matt Carter