Loan Securitization/Sale Activities

12 Months Ended

Dec. 31, 2021

As described below, we regularly sell loans and notes under various strategies. We evaluate such sales as to whether they meet the criteria for treatment as a sale—legal isolation, ability of transferee to pledge or exchange the transferred assets without constraint and transfer of control.

Loan Securitizations

Within the Investing and Servicing Segment, we originate commercial mortgage loans with the intent to sell these mortgage loans to VIEs for the purposes of securitization. These VIEs then issue CMBS that are collateralized in part by these assets, as well as other assets transferred to the VIE by third parties. Within the Commercial and Residential Lending Segment, we acquire residential loans with the intent to sell these mortgage loans to VIEs for the purpose of securitization. These VIEs then issue RMBS that are collateralized by these assets.

In certain instances, we retain an interest in the CMBS or RMBS VIE and serve as special servicer or servicing administrator for the VIE. In these circumstances, we generally consolidate the VIE into which the loans were sold. The securitizations are subject to optional redemption after a certain period of time or when the pool balance falls below a specified threshold. During the years ended December 31, 2021 and 2020, we exercised the optional redemption on certain of our residential securitizations and acquired $524.5 million and $176.6 million of loans and redeemed $51.2 million and $10.5 million of our existing RMBS holdings, respectively. The net amount paid to a consolidated VIE to redeem the outstanding principal amount of its RMBS certificates and acquire the underlying loans pursuant to this provision are reflected as repayment of debt of consolidated VIEs in our consolidated statements of cash flows.

The following summarizes the face amount and proceeds of commercial and residential loans securitized for the years ended December 31, 2021, 2020 and 2019 (amounts in thousands):


	Commercial Loans				Residential Loans
	Face Amount		Proceeds		Face Amount		Proceeds



For the Year Ended December 31,
2021	$	1,185,251	$	1,242,974	$	2,287,733	$	2,362,798
2020	920,282		975,569		1,770,513		1,826,549
2019	1,781,981		1,845,890		1,256,481		1,305,059

The securitization of these commercial and residential loans does not result in a discrete gain or loss since they are carried under the fair value option.

Our securitizations have each been structured as bankruptcy-remote entities whose assets are not intended to be available to the creditors of any other party.

Commercial and Residential Loan Sales

Within the Commercial and Residential Lending Segment, we originate or acquire commercial mortgage loans, subsequently selling all or a portion thereof. Typically, our motivation for entering into these transactions is to effectively create leverage on the subordinated position that we will retain and hold for investment. We also may sell certain of our previously-acquired residential loans to third parties outside a securitization. The following table summarizes our loans sold by the Commercial and Residential Lending Segment, net of expenses (amounts in thousands):


	Loan Transfers Accounted for as Sales
	Commercial Loans				Residential Loans
	Face amount (1)		Proceeds (1)		Face Amount		Proceeds



For the Year Ended December 31,
2021	$	335,552	$	328,878	$	216,827	$	225,940
2020	446,132		442,833		550		604
2019	751,210		748,045		26,046		26,797

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(1)During the year ended December 31, 2021, we sold $313.0 million of senior interests in first mortgage loans and $22.6 million of whole loan interests for proceeds of $307.3 million and $21.5 million, respectively. During the year ended December 31, 2020, we sold $277.9 million of senior interests in first mortgage loans and $168.2 million of whole loan interests for proceeds of $270.8 million and $172.0 million, respectively. During the year ended December 31, 2019, all sales were of senior interests in first mortgage loans.

During the years ended December 31, 2021, 2020 and 2019, (losses)/gains recognized by the Commercial and Residential Lending Segment on sales of commercial loans were $(1.1) million, $(1.0) million and $4.6 million, respectively.

Infrastructure Loan Sales

During the year ended December 31, 2021, the Infrastructure Lending Segment sold loans held-for-sale with an aggregate face amount of $16.3 million, for proceeds of $15.3 million, recognizing gains of $0.2 million. During the year ended December 31, 2020, the Infrastructure Lending Segment sold loans held-for-sale with an aggregate face amount of $61.1 million for proceeds of $60.8 million, recognizing gains of $0.3 million. During the year ended December 31, 2019, the Infrastructure Lending Segment sold loans held-for-sale with an aggregate face amount of $404.1 million for proceeds of $393.3 million, recognizing gains of $3.1 million. In connection with these sales, we sold an interest rate swap guarantee for cash payment of $3.1 million and recognized a decrease in fair value of $2.7 million within gain (loss) on derivative financial instruments, net in our consolidated statement of operations during the year ended December 31, 2019. Refer to Note 14 for further discussion of our interest rate swap guarantees.