Loan Securitization/Sale Activities

3 Months Ended

Mar. 31, 2022

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.

The following summarizes the face amount and proceeds of commercial and residential loans securitized for the three months ended March 31, 2022 and 2021 (amounts in thousands):


	Commercial Loans				Residential Loans
	Face Amount		Proceeds		Face Amount		Proceeds
For the Three Months Ended March 31,
2022	$	347,442	$	342,067	$	1,077,958	$	1,100,284
2021	85,037		89,710		383,549		389,798

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
	Residential Loans
		Face Amount (1)		Proceeds (1)
For the Three Months Ended March 31,
2022		$	835,760	$	836,116
2021		89,418		92,419

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(1)During the three months ended March 31, 2022, includes a sale of $745.0 million of agency-eligible residential loans at face amount which is subject to a post-closing contingent sales price adjustment based on the gain or loss to the purchaser/securitization underwriter, less underwriting costs, if those loans are sold into a future securitization.

There were no sales of commercial loans within the Commercial and Residential Lending Segment during the three months ended March 31, 2022 and 2021.

Infrastructure Loan Sales

There were no sales of loans within the Infrastructure Lending Segment during the three months ended March 31, 2022 and 2021.