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Real Estate Securities
 6 Months Ended
Jun. 30, 2025
Investments, Debt and Equity Securities [Abstract]  
Real Estate Securities Real Estate Securities
We invest in real estate securities that we create and retain from our unconsolidated jumbo loan securitizations or acquire from third parties. The following table presents the fair values of our real estate securities by type at June 30, 2025 and December 31, 2024.
Table 9.1 – Fair Value of Real Estate Securities by Type
(In Thousands)June 30, 2025December 31, 2024
Trading$150,498 $193,749 
AFS114,499 211,474 
Total Real Estate Securities$264,997 $405,223 
Our real estate securities include mortgage-backed securities, which are classified in accordance with their general position within a securitization structure based on their rights to cash flows. Senior securities are those interests in a securitization that generally have the first right to cash flows and are last in line to absorb losses. Mezzanine securities are interests that are generally subordinate to senior securities in their rights to receive cash flows, and have subordinate securities below them that are first to absorb losses. Subordinate securities are all interests below mezzanine. Exclusive of our re-performing loan securities, nearly all of our residential securities are supported by collateral that was designated as prime at the time of issuance.
Refer to Note 3 to the Consolidated Financial Statements of our Annual Report on Form 10-K for the year ended December 31, 2024 for further information and our accounting policies for our trading and AFS real estate securities.
Trading Securities
We elected the fair value option for certain securities and classify them as trading securities. Our trading securities generally include both residential and multifamily mortgage-backed interest-only and subordinate securities. Refer to Note 6 for further information on the inputs into the fair valuation of our real estate trading securities.
AFS Securities
The following tables present the detail of our AFS securities, by position and collateral type, at June 30, 2025 and December 31, 2024.
Table 9.2 – Carrying Value and Fair Value of AFS Securities by Type
June 30, 2025
(In Thousands)SeniorMezzanineSubordinateTotal
Amortized cost$— $14,969 $77,435 $92,404 
Gross unrealized gains— 33 27,216 27,249 
Gross unrealized losses— — (4,315)(4,315)
Allowance for credit losses— — (839)(839)
Total Carrying Value$— $15,002 $99,497 $114,499 
December 31, 2024
(In Thousands)SeniorMezzanineSubordinateTotal
Amortized cost$39,135 $31,250 $121,053 $191,438 
Gross unrealized gains230 668 25,733 26,631 
Gross unrealized losses— (51)(5,623)(5,674)
Allowance for credit losses— — (921)(921)
Total Carrying Value$39,365 $31,867 $140,242 $211,474 
June 30, 2025
(In Thousands)SeniorMezzanineSubordinateTotal
Other third-party securities$— $15,002 $3,895 $18,897 
Multifamily securities— — — — 
Sequoia securities— — 95,602 95,602 
Total Fair Value$— $15,002 $99,497 $114,499 
December 31, 2024
(In Thousands)SeniorMezzanineSubordinateTotal
Other third-party securities$39,365 $28,948 $40,191 $108,504 
Multifamily securities— 2,919 8,830 11,749 
Sequoia securities— — 91,221 91,221 
Total Fair Value$39,365 $31,867 $140,242 $211,474 
Gains and losses from the sale of AFS securities are recorded as Realized gains, net, in our consolidated statements of income. During the three and six months ended June 30, 2025, we recognized net gains of $0.6 million and $1 million, respectively, on sales of
AFS securities. For the three and six months ended June 30, 2024 we did not sell any AFS securities. During the three and six months ended June 30, 2025, we had $1 million and $4 million of net unrealized gains on AFS securities, respectively.
At June 30, 2025, we had $15 million of AFS securities with contractual maturities less than five years, $5 million with contractual maturities greater than five years but less than ten years, and the remainder of our AFS securities had contractual maturities greater than ten years.
AFS Securities with Unrealized Losses
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 June 30, 2025 and December 31, 2024.
Table 9.3 – AFS Securities in Gross Unrealized Loss Position by Holding Periods
Less Than 12 Consecutive Months12 Consecutive Months or Longer
Fair
Value		Unrealized
Losses		Fair
Value		Unrealized
Losses
(In Thousands)
June 30, 2025$2,073 $(4)$20,819 $(4,311)
December 31, 202430,351 (391)19,817 (5,283)
At June 30, 2025, after giving effect to purchases, sales, and extinguishment due to credit losses, our consolidated balance sheets included 64 AFS securities, of which 12 were in an unrealized loss position and 11 were in a continuous unrealized loss position for 12 consecutive months or longer. At December 31, 2024, our consolidated balance sheets included 90 AFS securities, of which 20 were in an unrealized loss position and 11 were in a continuous unrealized loss position for 12 consecutive months or longer.
Allowance for Credit Losses
Credit impairments on our AFS securities are recorded in earnings using an allowance for credit losses, with the allowance limited to the amount by which the security's fair value is less than its amortized cost basis. We evaluate all securities in an unrealized loss position to determine if the impairment is credit-related (resulting in an allowance for credit losses recorded in earnings) or non-credit-related (resulting in an unrealized loss through other comprehensive income). The allowance for credit losses is calculated using a discounted cash flow approach and is measured as the difference between the beneficial interest’s amortized cost and the estimate of cash flows expected to be collected, discounted at the effective interest rate used to accrete the beneficial interest. No allowance is recorded for beneficial interests in an unrealized gain position. At June 30, 2025, our allowance for credit losses related to our AFS securities was $0.8 million.
The following table details the activity related to the allowance for credit losses for AFS securities for the three and six months ended June 30, 2025 and 2024.
Table 9.4 – Rollforward of Allowance for Credit Losses
Three Months Ended June 30,
(In Thousands)20252024
Beginning balance allowance for credit losses$854 $1,853 
Additional decreases to the allowance for credit losses on securities that had an allowance recorded in a previous period(15)(514)
Ending balance of allowance for credit losses$839 $1,339 
Six Months Ended June 30,
(In Thousands)20252024
Beginning balance allowance for credit losses$921 $2,482 
Additional decreases to the allowance for credit losses on securities that had an allowance recorded in a previous period(82)(1,143)
Ending balance of allowance for credit losses$839 $1,339