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Real Estate Securities (Tables)
 12 Months Ended
Dec. 31, 2020
Investments, Debt and Equity Securities [Abstract]  
Fair Values of Real Estate Securities by Collateral Type and Entity The following table presents the fair values of our real estate securities by type at December 31, 2020 and December 31, 2019.
Table 9.1 – Fair Values of Real Estate Securities by Type
(In Thousands)December 31, 2020December 31, 2019
Trading$125,667 $860,540 
Available-for-sale218,458 239,334 
Total Real Estate Securities$344,125 $1,099,874 
Trading Securities by Collateral Type The following table presents the fair value of trading securities by position and collateral type at December 31, 2020 and December 31, 2019.
Table 9.2 – Fair Value of Trading Securities by Position
(In Thousands)December 31, 2020December 31, 2019
Senior
Interest-only securities (1)
$28,464 $64,010 
RPL securities— 39,337 
Other third-party residential securities— 46,720 
Total Senior28,464 150,067 
Mezzanine
Sequoia securities3,649 39,660 
Multifamily securities— 395,256 
Other third-party residential securities— 103,573 
Total Mezzanine3,649 538,489 
Subordinate
RPL securities47,448 76,102 
Multifamily securities5,592 — 
Other third-party residential securities40,514 95,882 
Total Subordinate93,554 171,984 
Total Trading Securities$125,667 $860,540 
(1)Includes $13 million and $36 million of Sequoia certificated mortgage servicing rights as of December 31, 2020, and December 31, 2019, respectively.
The following table presents the unpaid principal balance of trading securities by position and collateral type at December 31, 2020 and December 31, 2019.
Table 9.3 – Unpaid Principal Balance of Trading Securities by Position
(In Thousands)December 31, 2020December 31, 2019
Senior (1)
$— $83,591 
Mezzanine3,577 536,831 
Subordinate242,278 301,908 
Total Trading Securities$245,855 $922,330 
(1)Our senior trading securities include interest-only securities, for which there is no principal balance.
The following table provides the activity of trading securities during the years ended December 31, 2020 and 2019.
Table 9.4 – Trading Securities Activity
Year Ended December 31,
(In Thousands)20202019
Principal balance of securities acquired$79,921 $366,848 
Principal balance of securities sold744,914 592,502 
Net market valuation gains (losses) recorded (1)
(230,731)56,046 
(1)Net market valuation gains (losses) on trading securities are recorded through Investment fair value changes, net and Mortgage banking activities, net on our consolidated statements of income (loss).
Available for Sale Securities by Collateral Type
The following table presents the fair value of our available-for-sale securities by position and collateral type at December 31, 2020 and December 31, 2019.
Table 9.5 – Fair Value of Available-for-Sale Securities by Position
(In Thousands)December 31, 2020December 31, 2019
Senior
Other third-party residential securities$— $25,792 
Total Senior— 25,792 
Mezzanine
Sequoia securities— 4,320 
Multifamily securities— 5,123 
Other third-party residential securities2,014 4,244 
Total Mezzanine2,014 13,687 
Subordinate
Sequoia securities136,475 136,330 
Multifamily securities43,663 3,749 
Other third-party residential securities36,306 59,776 
Total Subordinate216,444 199,855 
Total AFS Securities$218,458 $239,334 
The following table provides the activity of available-for-sale securities during the years ended December 31, 2020 and 2019.
Table 9.6 – Available-for-Sale Securities Activity
Year Ended December 31,
(In Thousands)20202019
Fair value of securities acquired$57,652 $26,538 
Fair value of securities sold55,192 110,070 
Net realized gains recorded 4,635 17,582 
Components of Carrying Value (Which Equals Fair Value) of Residential Available for Sale Securities
The following table presents the components of carrying value (which equals fair value) of AFS securities at December 31, 2020 and December 31, 2019.
Table 9.7 – Carrying Value of AFS Securities
December 31, 2020
(In Thousands)SeniorMezzanineSubordinateTotal
Principal balance$— $2,000 $281,284 $283,284 
Credit reserve— — (44,967)(44,967)
Unamortized discount, net— — (95,718)(95,718)
Amortized cost— 2,000 140,599 142,599 
Gross unrealized gains— 14 77,280 77,294 
Gross unrealized losses— — (1,047)(1,047)
CECL credit allowance— — (388)(388)
Carrying Value$— $2,014 $216,444 $218,458 
December 31, 2019
(In Thousands)SeniorMezzanineSubordinateTotal
Principal balance$26,331 $13,512 $264,234 $304,077 
Credit reserve(533)— (32,407)(32,940)
Unamortized discount, net(10,427)(527)(113,301)(124,255)
Amortized cost15,371 12,985 118,526 146,882 
Gross unrealized gains10,450 702 81,329 92,481 
Gross unrealized losses(29)— — (29)
Carrying Value$25,792 $13,687 $199,855 $239,334 
Changes of Unamortized Discount and Designated Credit Reserves on Residential Available for Sale Securities
The following table presents the changes for the years ended December 31, 2020 and 2019, in unamortized discount and designated credit reserves on residential AFS securities.
Table 9.8 – Changes in Unamortized Discount and Designated Credit Reserves on AFS Securities
Year Ended December 31, 2020Year Ended December 31, 2019
Credit
Reserve		Unamortized
Discount, Net		Credit
Reserve		Unamortized
Discount, Net
(In Thousands)
Beginning balance$32,940 $124,255 $41,370 $151,200 
Amortization of net discount— (6,538)— (7,921)
Realized credit losses(2,282)— (2,606)— 
Acquisitions7,248 2,634 3,712 1,910 
Sales, calls, other(731)(16,841)(9,453)(21,017)
Impairments— — — — 
Transfers to (release of) credit reserves, net7,792 (7,792)(83)83 
Ending Balance$44,967 $95,718 $32,940 $124,255 
Components of Carrying Value of Available for Sale Securities in Unrealized Loss Position
The following table presents the components comprising the total carrying value of residential AFS securities that were in a gross unrealized loss position at December 31, 2020 and December 31, 2019.
Table 9.9 – Components of Fair Value of AFS Securities by Holding Periods
Less Than 12 Consecutive Months12 Consecutive Months or Longer
Amortized
Cost		Unrealized
Losses		Fair
Value		Amortized
Cost		Unrealized
Losses		Fair
Value
(In Thousands)
December 31, 2020$9,129 $(1,047)$7,920 $— $— $— 
December 31, 2019— — — 5,830 (29)5,801 
Schedule Of Significant Valuation Assumptions For Available For Sale Securities Credit Loss
The table below summarizes the weighted average of the significant credit quality indicators we used for the credit loss allowance on our AFS securities at December 31, 2020.
Table 9.10 – Significant Credit Quality Indicators
December 31, 2020Subordinate Securities
Default rate0.5%
Loss severity23%
Debt Securities, Available-for-sale, Allowance for Credit Loss
The following table details the activity related to the allowance for credit losses for AFS securities held at December 31, 2020.
Table 9.11 – Rollforward of Allowance for Credit Losses
Year Ended
(In Thousands)December 31, 2020
Beginning balance allowance for credit losses$— 
Transition impact from adoption of ASU 2016-13, "Financial Instruments - Credit Losses"— 
Additions to allowance for credit losses on securities for which credit losses were not previously recorded1,864 
Additional increases or decreases to the allowance for credit losses on securities that had an allowance recorded in a previous period(1,476)
Allowance on purchased financial assets with credit deterioration— 
Reduction to allowance for securities sold during the period— 
Reduction to allowance for securities we intend to sell or more likely than not will be required to sell— 
Write-offs charged against allowance— 
Recoveries of amounts previously written off— 
Ending balance of allowance for credit losses$388 
Gross Realized Gains and Losses on Sales and Calls of Available for Sale Securities The following table presents the gross realized gains and losses on sales and calls of AFS securities for the years ended December 31, 2020, 2019, and 2018.
Table 9.12 – Gross Realized Gains and Losses on AFS Securities
Years Ended December 31,
(In Thousands)202020192018
Gross realized gains - sales$8,779 $17,582 $27,127 
Gross realized gains - calls5 6,239 43 
Gross realized losses - sales(4,144)— (129)
Total Realized Gains on Sales and Calls of AFS Securities, net$4,640 $23,821 $27,041