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Real Estate Securities (Tables)
 12 Months Ended
Dec. 31, 2022
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, 2022 and 2021.
Table 9.1 – Fair Values of Real Estate Securities by Type
(In Thousands)December 31, 2022December 31, 2021
Trading$108,329 $170,619 
Available-for-sale132,146 206,792 
Total Real Estate Securities$240,475 $377,411 
Trading Securities by Collateral Type The following table presents the fair value of trading securities by position and collateral type at December 31, 2022 and 2021.
Table 9.2 – Fair Value of Trading Securities by Position
(In Thousands)December 31, 2022December 31, 2021
Senior
Interest-only securities (1)
$28,867 $21,787 
Total Senior28,867 21,787 
Subordinate
RPL securities29,002 65,140 
Multifamily securities5,027 10,549 
Other third-party residential securities45,433 73,143 
Total Subordinate79,462 148,832 
Total Trading Securities$108,329 $170,619 
(1)Includes $26 million and $15 million of Sequoia certificated mortgage servicing rights at December 31, 2022 and 2021, respectively.
The following table presents the unpaid principal balance of trading securities by position and collateral type at December 31, 2022 and 2021.
Table 9.3 – Unpaid Principal Balance of Trading Securities by Position
(In Thousands)December 31, 2022December 31, 2021
Senior (1)
$— $— 
Subordinate215,592 235,306 
Total Trading Securities$215,592 $235,306 
(1)Our senior trading securities are comprised of 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, 2022 and 2021.
Table 9.4 – Trading Securities Activity
Year Ended December 31,
(In Thousands)20222021
Principal balance of securities acquired (1)
$— $50,180 
Principal balance of securities sold (1)
17,716 55,561 
Net market valuation gains (losses) recorded (2)
(34,221)23,583 
(1)For the year ended December 31, 2021, excludes $5 million of securities bought and sold during the same quarter.
(2)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 ("AFS") securities by position and collateral type at December 31, 2022 and 2021.
Table 9.5 – Fair Value of Available-for-Sale Securities by Position
(In Thousands)December 31, 2022December 31, 2021
Subordinate
Sequoia securities$74,367 $127,542 
Multifamily securities7,647 22,166 
Other third-party residential securities50,132 57,084 
Total Subordinate132,146 206,792 
Total AFS Securities$132,146 $206,792 
The following table provides the activity of available-for-sale securities during the years ended December 31, 2022 and 2021.
Table 9.6 – Available-for-Sale Securities Activity
Year Ended December 31,
(In Thousands)20222021
Fair value of securities acquired$10,000 $19,100 
Fair value of securities sold— 4,785 
Principal balance of securities called20,267 27,875 
Net unrealized (losses) gains on AFS securities (1)
(64,704)8,016 
(1)Net unrealized (losses) gains on AFS securities are recorded on our consolidated balance sheets through Accumulated other comprehensive loss.
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, 2022 and 2021.
Table 9.7 – Carrying Value of AFS Securities
(In Thousands)December 31, 2022December 31, 2021
Principal balance$221,933 $242,852 
Credit reserve(28,739)(27,555)
Unamortized discount, net(61,650)(76,023)
Amortized cost131,544 139,274 
Gross unrealized gains16,269 67,815 
Gross unrealized losses(13,127)(297)
CECL allowance(2,540)— 
Carrying Value$132,146 $206,792 
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, 2022 and 2021, 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, 2022Year Ended December 31, 2021
Credit
Reserve		Unamortized
Discount, Net		Credit
Reserve		Unamortized
Discount, Net
(In Thousands)
Beginning balance$27,555 $76,023 $44,967 $95,718 
Amortization of net discount— (11,153)— (23,254)
Realized credit recoveries (losses), net471 — (707)— 
Acquisitions— — 2,825 1,208 
Sales, calls, other(842)(1,665)(1,328)(15,851)
Transfers to (release of) credit reserves, net1,555 (1,555)(18,202)18,202 
Ending Balance$28,739 $61,650 $27,555 $76,023 
Components of Carrying Value of Available for Sale Securities in Unrealized Loss Position
The following table presents the total carrying value (fair value) and unrealized losses of residential AFS securities that were in a gross unrealized loss position at December 31, 2022 and 2021.
Table 9.9 – AFS Securities in Gross Unrealized Loss Position by Holding Periods
Less Than 12 Consecutive Months12 Consecutive Months or Longer
Fair
Value		Unrealized
Losses		Fair ValueUnrealized
Losses
(In Thousands)
December 31, 2022$72,679 $(12,940)$1,414 $(186)
December 31, 20216,827 (251)1,554 (46)
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, 2022.
Table 9.10 – Significant Credit Quality Indicators
December 31, 2022Subordinate Securities
Default rate0.7%
Loss severity20%
Activity of Allowance for Credit Losses for Available-for-sale Securities
The following table details the activity related to the allowance for credit losses for AFS securities held at December 31, 2022.

Table 9.11 – Rollforward of Allowance for Credit Losses
Year EndedYear Ended
(In Thousands)December 31, 2022December 31, 2021
Beginning balance allowance for credit losses$— $388 
Additions to allowance for credit losses on securities for which credit losses were not previously recorded1,726 — 
Additional increases or decreases to the allowance for credit losses on securities that had an allowance recorded in a previous period814 (388)
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$2,540 $— 
Gross Realized Gains and Losses on Sales and Calls of Available for Sale Securities The following table presents the gross realized gains and losses on sales and calls of AFS securities for the years ended December 31, 2022, 2021, and 2020.Table 9.12 – Gross Realized Gains and Losses on AFS Securities
Years Ended December 31,
(In Thousands)202220212020
Gross realized gains - sales$— $1,540 $8,779 
Gross realized gains - calls2,508 15,553 5 
Gross realized losses - sales— — (4,144)
Total Realized Gains on Sales and Calls of AFS Securities, net$2,508 $17,093 $4,640