Other Assets and Liabilities

6 Months Ended

Jun. 30, 2025

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]

Other Assets

Other assets at June 30, 2025 and December 31, 2024 are summarized in the following table.

Table 15.1 – Components of Other Assets


(In Thousands)	June 30, 2025		December 31, 2024
Accrued interest receivable	$	130,629	$	115,832
Margin receivable	81,699		28,313
Real estate owned	72,340		91,927
Investment receivable	61,259		69,793
Deferred tax asset	27,145		27,145
Intangible assets	14,645		19,049
Operating lease right-of-use assets	10,383		9,167
Fixed assets and leasehold improvements (1)	4,919		4,674




Other (2)	45,555		49,817
Total Other Assets	$	448,574	$	415,717

(1)Fixed assets and leasehold improvements had a basis of $19 million and accumulated depreciation of $14 million at June 30, 2025.

(2)Consists primarily of receivables related to escrow advances, prepaid assets and other receivables.

Real Estate Owned (REO)

The Company holds REO at the lower of the current carrying amount or fair value less estimated selling costs. The following table summarizes the activity and carrying values of REO assets held at consolidated securitization entities during the three and six months ended June 30, 2025.

Table 15.2 – REO Activity


	Three Months Ended June 30, 2025
(In Thousands)	Bridge (1)		Sequoia		Securitized Re-Performing Loans		Securitized Term		Total
Balance at beginning of period	$	67,610	$	—	$	2,356	$	8,578	$	78,544
Transfers to REO	8,327		1,984		1,242		—		11,553
Liquidations (2)	(7,565)		—		(923)		(831)		(9,319)
Changes in fair value, net	(8,534)		—		96		—		(8,438)

Balance at End of Period	$	59,838	$	1,984	$	2,771	$	7,747	$	72,340


	Six Months Ended June 30, 2025
(In Thousands)	Bridge (1)		Sequoia		Securitized Re-Performing Loans		Securitized Term		Total
Balance at beginning of period	$	77,678	$	—	$	2,987	$	11,262	$	91,927
Transfers to REO	12,071		1,984		2,088		—		16,143
Liquidations (2)	(7,790)		—		(3,033)		(3,515)		(14,338)
Changes in fair value, net	(22,121)		—		729		—		(21,392)

Balance at End of Period	$	59,838	$	1,984	$	2,771	$	7,747	$	72,340

(1)Includes REO that were previously either legacy unsecuritized bridge loans or bridge loans within consolidated securitization entities.

(2)For the three and six months ended June 30, 2025, REO market valuation adjustments and liquidations resulted in net valuation losses of $8 million and $21 million, respectively, which were recorded in Investment fair value changes, net on our consolidated statements of income.

Accrued Expenses and Other Liabilities

Accrued expenses and other liabilities at June 30, 2025 and December 31, 2024 are summarized in the following table.

Table 15.3 – Components of Accrued Expenses and Other Liabilities


(In Thousands)	June 30, 2025		December 31, 2024
Payable to non-controlling interests	$	150,958	$	123,258
Margin payable	138,685		20,340
Accrued interest payable	83,139		70,988
Accrued compensation	26,160		34,002
Operating lease liabilities	12,344		11,028
Accrued operating expenses	13,908		11,074
Accrued taxes payable	8,154		—
Current accounts payable	9,345		6,803
Unsettled trades	7,799		5,127
Guarantee obligations	2,053		2,806
Repurchase reserve	4,305		4,727
Bridge loan holdbacks (1)	2,116		2,148
Preferred stock dividends payable	1,478		1,478
Other	20,213		19,958
Total Accrued Expenses and Other Liabilities	$	480,657	$	313,737

(1)Bridge loan holdbacks represent amounts withheld from the initial loan proceeds and are subsequently disbursed to the borrower to be used in the construction, rehabilitation or purchase of the mortgaged property or to fund interest on the bridge loan.

Legal and Repurchase Reserves

See Note 19 for additional information on legal and repurchase reserves.

Payable to Non-Controlling Interests

Redwood and a third-party co-investor, through two partnership entities consolidated by Redwood, purchased servicer advances and excess MSRs related to a portfolio of residential mortgage loans serviced by the co-investor (see Note 11 and Note 16 for additional information on the partnership entities and associated investments). We account for the co-investor’s interests in the entities as liabilities, and at June 30, 2025, the carrying value of their interests was $23 million, representing their current economic interest in the entities. Earnings from the partnership entities are allocated to the co-investors on a proportional basis and during the three and six months ended June 30, 2025, we allocated $2 million and $4 million, respectively, of income to the co-investors, respectively, recorded in Other expenses on our consolidated statements of income.

Additionally, Redwood and a third-party investor co-sponsored the transfer and securitization of HEI through two HEI securitization entities. Other third-party investors contributed HEI into these securitizations through Redwood and retained subordinate beneficial interests issued by the securitization entities alongside Redwood. See Note 10 for a further discussion of the HEI securitizations. We account for the co-investors' interests in the HEI securitization entities as liabilities, and at June 30, 2025, the carrying value of their interests was $90 million, representing the fair value of their economic interests in the beneficial interests issued by the HEI entities. During the three and six months ended June 30, 2025, the third-party investors' share of earnings, net from their retained interests was $2 million and $7 million, respectively, recorded through HEI income, net on our consolidated statements of income.

In 2024, we completed a CAFL securitization of bridge loans sponsored by our joint venture. This transaction involved the transfer and securitization of bridge loans contributed from the joint venture and from Redwood through one bridge securitization entity. Each of the joint venture and Redwood retained its proportionate share of subordinate beneficial interests issued by the securitization entity. We account for the joint venture's interest in the bridge loan securitization entity as a liability and at June 30, 2025, the carrying value of their interest was $18 million, representing the fair value of their economic interest in the beneficial

interest issued. During the three and six months ended June 30, 2025, the joint venture's share of earnings from their retained interest (for which positive earnings are reflected as an expense to Redwood in our consolidated statements of income) were negative $1 million and negative $2 million, respectively, on our consolidated statements of income (loss).

During the three months ended June 30, 2025, we completed a CAFL securitization of bridge loans sponsored by our joint venture. This transaction involved the transfer and securitization of bridge loans contributed from the joint venture and from Redwood through one bridge securitization entity. Each of the joint venture and Redwood retained its proportionate share of subordinate beneficial interests issued by the securitization entity. We account for the joint venture's interest in the bridge loan securitization entity as a liability and at June 30, 2025, the carrying value of their interest was $19 million, representing the fair value of their economic interest in the beneficial interest issued. During the three months ended June 30, 2025, the joint venture's share of earnings from their retained interest (for which positive earnings are reflected as an expense to Redwood in our consolidated statements of income) were negative $7 million, net on our consolidated statements of income (loss).