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Residential Loans (Tables) - Residential Loans
 12 Months Ended
Dec. 31, 2016
Mortgage Loans on Real Estate [Line Items]  
Summary of Classifications and Carrying Value of Loans
The following table summarizes the classifications and carrying values of the residential loans owned at Redwood and at consolidated Sequoia entities at December 31, 2016 and December 31, 2015.
Table 6.1 – Classifications and Carrying Values of Residential Loans
December 31, 2016
 
 
 
 
 
 
(In Thousands)
 
Redwood
 
Sequoia
 
Total
Held-for-sale
 
 
 
 
 
 
At fair value - jumbo
 
$
834,193

 
$
—

 
$
834,193

At lower of cost or fair value - jumbo
 
1,206

 
—

 
1,206

Total held-for-sale
 
835,399

 
—

 
835,399

Held-for-investment
 
 
 
 
 
 
At fair value - jumbo
 
2,261,016

 
791,636

 
3,052,652

Total Residential Loans
 
$
3,096,415

 
$
791,636

 
$
3,888,051

December 31, 2015
 
 
 
 
 
 
(In Thousands)
 
Redwood
 
Sequoia
 
Total
Held-for-sale
 
 
 
 
 
 
At fair value - conforming
 
$
129,819

 
$
—

 
$
129,819

At fair value - jumbo
 
984,486

 
—

 
984,486

At lower of cost or fair value - jumbo
 
1,433

 
—

 
1,433

Total held-for-sale
 
1,115,738

 
—

 
1,115,738

Held-for-investment
 
 
 
 
 
 
At fair value - jumbo
 
1,791,195

 
1,021,870

 
2,813,065

Total Residential Loans
 
$
2,906,933

 
$
1,021,870

 
$
3,928,803
Geographic Concentration of Loans Recorded on Consolidated Balance Sheet
The following table presents the geographic concentration of residential loans recorded on our consolidated balance sheets at December 31, 2016 and 2015.
Table 6.2 – Geographic Concentration of Residential Loans
 
 
December 31, 2016
 
December 31, 2015
Geographic Concentration
(by Principal)
 
Held-for-Sale
 
Held-for-
Investment at Sequoia
 
Held-for-
Investment at
FVO
 
Held-for-Sale
 
Held-for-
Investment at Sequoia
 
Held-for-
Investment at
FVO
California
 
40
%
 
18
%
 
42
%
 
41
%
 
18
%
 
39
%
Texas
 
9
%
 
6
%
 
10
%
 
9
%
 
6
%
 
11
%
Washington
 
8
%
 
2
%
 
4
%
 
6
%
 
2
%
 
3
%
Colorado
 
4
%
 
3
%
 
4
%
 
5
%
 
3
%
 
5
%
Florida
 
3
%
 
14
%
 
5
%
 
4
%
 
14
%
 
4
%
Virginia
 
2
%
 
3
%
 
3
%
 
3
%
 
3
%
 
4
%
Georgia
 
2
%
 
5
%
 
1
%
 
3
%
 
5
%
 
1
%
Massachusetts
 
2
%
 
2
%
 
4
%
 
2
%
 
2
%
 
4
%
New York
 
2
%
 
8
%
 
4
%
 
1
%
 
8
%
 
5
%
Other states (none greater than 5%)
 
28
%
 
39
%
 
23
%
 
26
%
 
39
%
 
24
%
Total
 
100
%
 
100
%
 
100
%
 
100
%
 
100
%
 
100
%
Loan Product Type and Accompanying Loan Characteristics of Loans
The following table displays the loan product type and accompanying loan characteristics of residential loans recorded on our consolidated balance sheets at December 31, 2016 and 2015.
Table 6.3 – Product Types and Characteristics of Residential Loans
December 31, 2016
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(In Thousands)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Loan Balance
 
 
Number of
Loans
 
Interest
 Rate(1)
 
Maturity
Date
 
Total
Principal
 
30-89
Days
DQ
 
90+
Days
DQ
Held-for-Investment at Redwood (1):
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Hybrid ARM loans
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
251

to
$500
 
 
1

 
3.63
%
to
3.63%
 
2044-07
-
2044-07
 
264

 
—

 
—

 
$
501

to
$750
 
 
4

 
2.88
%
to
4.65%
 
2040-09
-
2045-10
 
2,722

 
—

 
—

 
$
751

to
$1,000
 
 
2

 
3.50
%
to
4.00%
 
2045-09
-
2045-10
 
1,726

 
—

 
—

 
 
over
$1,000
 
 
4

 
3.00
%
to
4.20%
 
2040-10
-
2045-10
 
5,545

 
—

 
—

 
 
 
 
 
 
11

 
 
 
 
 
 
 
 
 
10,257

 
—

 
—

Fixed loans
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
—

to
$250
 
 
26

 
3.67
%
to
5.08%
 
2039-04
-
2045-10
 
4,643

 
—

 
237

 
$
251

to
$500
 
 
633

 
2.80
%
to
5.13%
 
2028-02
-
2046-12
 
278,560

 
264

 
—

 
$
501

to
$750
 
 
1,306

 
2.75
%
to
6.25%
 
2027-09
-
2046-12
 
807,714

 
2,803

 
—

 
$
751

to
$1,000
 
 
690

 
2.75
%
to
5.63%
 
2027-07
-
2046-12
 
597,002

 
—

 
—

 


over
$1,000
 
 
402

 
2.80
%
to
5.00%
 
2027-04
-
2047-01
 
535,621

 
1,232

 
—

 
 
 
 
 
 
3,057

 
 
 
 
 
 
 
 
 
2,223,540

 
4,299

 
237

Total HFI at Redwood:
 
3,068

 
 
 
 
 
 
 
 
 
$
2,233,797

 
$
4,299

 
$
237

Held-for-Investment at Sequoia:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
ARM loans:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
—

to
$250
 
 
2,623

 
0.63
%
to
5.60%
 
2019-02
-
2035-11
 
$
297,646

 
$
9,158

 
$
7,410

 
$
251

to
$500
 
 
694

 
0.25
%
to
5.75%
 
2019-12
-
2036-05
 
241,253

 
9,177

 
10,059

 
$
501

to
$750
 
 
203

 
0.88
%
to
3.89%
 
2024-05
-
2035-09
 
121,919

 
5,812

 
5,069

 
$
751

to
$1,000
 
 
100

 
0.63
%
to
3.00%
 
2022-01
-
2035-07
 
86,988

 
2,750

 
3,322

 


over
$1,000
 
 
78

 
0.25
%
to
3.75%
 
2027-03
-
2036-05
 
121,484

 
4,790

 
4,306

 
 
 
 
 
 
3,698

 
 
 
 
 
 
 
 
 
869,290

 
31,687

 
30,166

Hybrid ARM loans:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
—

to
$250
 
 
4

 
3.00
%
to
3.00%
 
2033-09
-
2034-06
 
453

 
—

 
—

 
$
251

to
$500
 
 
18

 
2.63
%
to
3.13%
 
2033-07
-
2034-12
 
6,516

 
—

 
—

 
$
501

to
$750
 
 
13

 
2.75
%
to
3.13%
 
2033-07
-
2034-12
 
8,483

 
669

 
—

 
$
751

to
$1,000
 
 
1

 
3.13
%
to
3.13%
 
2033-08
-
2033-08
 
751

 
—

 
—

 


over
$1,000
 
 
1

 
3.00
%
to
3.00%
 
2033-09
-
2033-09
 
1,488

 
—

 
—

 
 
 
 
 
 
37

 
 
 
 
 
 
 
 
 
17,691

 
669


—

Total HFI at Sequoia:
 
3,735

 
 
 
 
 
 
 
 
 
$
886,981

 
$
32,356

 
$
30,166

Held-for-Sale:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
ARM loans
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
61

to
$396
 
 
6

 
1.88
%
to
2.75%
 
2033-10
-
2032-11
 
$
882

 
$
—

 
$
300

Hybrid ARM loans
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
2

to
$1,947
 
 
173

 
2.50
%
to
6.00%
 
2037-06
-
2047-01
 
144,174

 
—

 
—

Fixed loans
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
404

to
$1,997
 
 
942

 
2.99
%
to
6.25%
 
2026-12
-
2047-01
 
688,329

 
—

 
—

Total Held-for-Sale
 
1,121

 
 
 
 
 
 
 
 
 
$
833,385

 
$
—

 
$
300

December 31, 2015
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(In Thousands)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Loan Balance
 
 
Number of
Loans
 
Interest
 Rate(1)
 
Maturity
Date
 
Total
Principal
 
30-89
Days
DQ
 
90+
Days
DQ
Held-for-Investment at Redwood (1):
 
 
 
 
 
 
 
 
 
 
 
 
 
 
ARM loans:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
251

to
$500
 
 
2

 
3.63
%
to
3.75%
 
2044-07
-
2044-07
 
$
563

 
$
—

 
$
—

 
$
501

to
$750
 
 
2

 
3.50
%
to
3.50%
 
2045-09
-
2045-10
 
1,671

 
—

 
—

 
$
751

to
$1,000
 
 
1

 
3.63
%
to
3.63%
 
2044-08
-
2044-08
 
1,267

 
—

 
—

 
 
 
5

 
 
 
 
 
 
 
 
 
3,501

 
—

 
—

Hybrid ARM loans
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
251

to
$500
 
 
7

 
2.88
%
to
3.88%
 
2044-01
-
2044-09
 
2,963

 
—

 
—

 
$
501

to
$750
 
 
28

 
2.63
%
to
4.90%
 
2040-09
-
2044-10
 
17,514

 
—

 
—

 
$
751

to
$1,000
 
 
15

 
2.75
%
to
5.05%
 
2039-05
-
2044-11
 
12,994

 
—

 
—

 


over
$1,000
 
 
6

 
2.88
%
to
5.20%
 
2039-04
-
2044-12
 
8,797

 
—

 
—

 
 
 
 
 
 
56

 
 
 
 
 
 
 
 
 
42,268

 
—

 
—

Fixed loans
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
—

to
$250
 
 
29

 
3.64
%
to
5.38%
 
2039-04
-
2045-10
 
5,295

 
242

 
—

 
$
251

to
$500
 
 
484

 
3.13
%
to
5.13%
 
2029-07
-
2045-12
 
212,732

 
913

 
—

 
$
501

to
$750
 
 
959

 
2.94
%
to
5.25%
 
2026-11
-
2045-12
 
595,863

 
3,213

 
—

 
$
751

to
$1,000
 
 
552

 
2.90
%
to
5.00%
 
2024-01
-
2045-12
 
480,557

 
989

 
—

 


over
$1,000
 
 
313

 
3.14
%
to
5.00%
 
2027-04
-
2045-12
 
418,774

 
—

 
—

 
 
 
 
 
 
2,337

 
 
 
 
 
 
 
 
 
1,713,221

 
5,357

 
—

Total HFI at Redwood:
 
2,398

 
 
 
 
 
 
 
 
 
$
1,758,990

 
$
5,357

 
$
—

Held-for-Investment at Sequoia:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
ARM loans:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
—

to
$250
 
 
3,133

 
0.38
%
to
5.16%
 
2013-02
-
2035-11
 
$
355,415

 
$
10,661

 
$
13,078

 
$
251

to
$500
 
 
858

 
—
%
to
5.63%
 
2013-12
-
2036-05
 
296,425

 
9,620

 
15,345

 
$
501

to
$750
 
 
269

 
0.63
%
to
4.66%
 
2014-05
-
2035-09
 
161,273

 
4,578

 
7,209

 
$
751

to
$1,000
 
 
135

 
0.38
%
to
2.38%
 
2019-02
-
2035-07
 
118,983

 
3,586

 
8,473

 


over
$1,000
 
 
109

 
—
%
to
2.63%
 
2022-01
-
2036-05
 
169,492

 
1,341

 
14,718

 
 
 
 
 
 
4,504

 
 
 
 
 
 
 
 
 
1,101,588

 
29,786

 
58,823

Hybrid ARM loans:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
—

to
$250
 
 
3

 
2.75
%
to
2.88%
 
2033-09
-
2034-06
 
317

 
—

 
—

 
$
251

to
$500
 
 
20

 
2.63
%
to
2.88%
 
2033-07
-
2034-12
 
7,523

 
—

 
—

 
$
501

to
$750
 
 
15

 
2.63
%
to
2.88%
 
2033-08
-
2034-12
 
9,874

 
542

 
—

 
$
751

to
$1,000
 
 
2

 
2.75
%
to
2.75%
 
2033-07
-
2033-08
 
1,547

 
—

 
—

 


over
$1,000
 
 
1

 
2.75
%
to
2.75%
 
2033-09
-
2033-09
 
1,566

 
—

 
—

 
 
 
 
 
 
41

 
 
 
 
 
 
 
 
 
20,827

 
542

 
—

Total HFI at Sequoia:
 
4,545

 
 
 
 
 
 
 
 
 
$
1,122,415

 
$
30,328

 
$
58,823

Held-for-Sale:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
ARM loans
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
64

to
$1,298
 
 
14

 
1.50
%
to
4.00%
 
2032-11
-
2045-12
 
$
5,258

 
$
—

 
$
415

Hybrid ARM loans
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
164

to
$1,989
 
 
356

 
2.50
%
to
4.25%
 
2037-06
-
2046-01
 
276,457

 
2,249

 
—

Fixed loans
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
30

to
$2,332
 
 
1,402

 
2.75
%
to
5.25%
 
2025-09
-
2046-01
 
809,803

 
2,097

 
1,437

Total Held-for-Sale
 
1,772

 
 
 
 
 
 
 
 
 
$
1,091,518

 
$
4,346

 
$
1,852

(1)
Rate is net of servicing fee for consolidated loans for which we do not own the MSR. For borrowers whose current rate is less than the applicable servicing fee, the rate shown in the table above is zero.
Summary of Activity in Allowance for Loans Losses
The following table summarizes the activity in the allowance for loan losses for the years ended December 31, 2016, 2015, and 2014.
Table 6.4 – Allowance for Loan Losses
 
Years Ended December 31,
(In Thousands)
2016
 
2015
 
2014
Balance at beginning of period
$
—

 
$
21,338

 
$
25,427

Charge-offs, net
—

 
—

 
(4,966
)
Provision for loan losses
—

 
—

 
877

Other adjustments (1)
—

 
(21,338
)
 
—

Balance at End of Period
$
—

 
$
—

 
$
21,338

(1)
Upon adoption of ASU 2014-13 on January 1, 2015, we began to record loans held-for-investment at consolidated Sequoia entities at fair value. See Note 3 for further discussion.