Strategic Investments

12 Months Ended

Dec. 31, 2025

Investments, All Other Investments [Abstract]

Strategic Investments

Servicing Investments

Servicing Investments at December 31, 2025 and 2024 are summarized in the following table.

Table 11.1 – Components of Servicing Investments

(In Thousands)	December 31, 2025		December 31, 2024
Servicer advance investments, at fair value	$	231,227	$	233,820
Excess MSRs, at fair value	37,971		32,274
MSRs, at fair value	33,032		31,589
Total Servicing Investments	$	302,230	$	297,683

We account for our Servicer advance investments, Excess MSRs and MSRs at fair value. See Note 3 for additional information on the accounting policies on these investments. Refer to Note 6 for further information on the inputs into the fair valuation of these investments.

For the years ended December 31, 2025, 2024 and 2023 income from Servicing investments included Other interest income of $27 million, $31 million and $35 million, respectively, Investment fair value changes, net of positive $9 million, $4 million and $10 million, respectively, and Servicing income, net of $10 million, $14 million and $7 million, respectively.

Strategic Investments

Strategic Investments at December 31, 2025 and 2024 are summarized in the following table.

Table 12.1 – Components of Strategic Investments

(In Thousands)	December 31, 2025		December 31, 2024
Strategic investments, equity method	$	59,337	$	48,767
Strategic investments, measurement alternative	26,235		25,896
Strategic investments, at fair value	6,310		3,460
Other investments	10,076		—
Total Strategic Investments	$	101,958	$	78,123

Income from Strategic Investments for the years ended December 31, 2025 and 2024 are summarized in the following tables.

Table 12.2 – Components of Income From Strategic Investments, net

	Year Ended December 31,
(In Thousands)	2025		2024		2023
Other income (loss), net (1)	$	1,390	$	(1,292)	$	(3,221)
Investment fair value changes, net (2)	879		(1,586)		(2,900)
Total Strategic Investments Income, Net	$	2,269	$	(2,878)	$	(6,121)

(1)Represents net equity method earnings from our Strategic investments that are accounted for under the equity method.

(2)Includes Investment fair value changes related to our Strategic investments that are accounted for under the measurement alternative for equity securities without readily determinable fair values. For the years ended December 31, 2025, includes Investment fair value gains of $0.7 million and investment fair value losses of $1 million under the measurement alternative. For the year ended December 31, 2024, includes Investment fair value gains of $4 million and investment fair value losses of $5 million under the measurement alternative. For the year ended December 31, 2023, includes Investment fair value gains of $1 million and investment fair value losses of $3 million under the measurement alternative.

Depending on the terms of the strategic investments, we may account for these investments under the fair value option, as non-marketable equity securities under the equity method of accounting or the measurement alternative for equity securities without readily determinable fair values. Refer to Note 6 for further information on the inputs into the fair valuation of investments measured at fair value under the fair value option.

Joint Ventures

We have established joint ventures with institutional investment managers to invest in residential investor bridge loans and term loans originated by our CoreVest subsidiary. As of December 31, 2025 and 2024, the carrying values of our investments in these joint ventures were $24 million and $30 million, respectively. We account for these investments under the equity method of accounting, reflecting our approximately 25% non-controlling interests and our ability to exert significant influence over the operations of the joint ventures. The carrying values are adjusted quarterly to reflect our share of earnings or losses, dividends received, or returns of capital. For the years ended December 31, 2025 and 2024, we recognized net equity method earnings of $3 million and $1 million, respectively, for one joint venture, and net equity method earnings of $0.1 million and $0.3 million, respectively, for the other. These amounts are recorded within “Other income, net” in our consolidated statements of (loss) income.

In connection with one of these joint ventures, we also invest via a note receivable. At December 31, 2025, the outstanding balance on this note receivable was $10 million and is included in Other Investments in Table 12.1 above. For the year ended December 31, 2025, we recognized $0.4 million in interest on this note.

See Note 8 for further information on residential bridge loans sold to these joint ventures.

During 2025, we made a minority equity investment in a newly formed residential construction loan originator. In connection with our investment, we entered into an agreement to provide financing for the sale of loans this company originates to Redwood and future capital partners. At December 31, 2025, the carrying value of our 30% equity method investment was $3 million. As this company is continuing to ramp up operations, we did not recognize any net equity method earnings during the year. During 2025, we acquired $147 million of residential construction loans from this company, sold $123 million of these loans and received $24 million of principal repayments. The financing arrangements and loan purchase agreements between the parties were terminated effective December 31, 2025, and there are no ongoing obligations between the parties.