Principles of Consolidation (Tables)

12 Months Ended

Dec. 31, 2025

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Schedule of Assets and Liabilities of Consolidated VIEs

The following table presents a summary of the assets and liabilities of our consolidated VIEs at December 31, 2025 and 2024.

Table 16.1 – Assets and Liabilities of Consolidated VIEs


December 31, 2025	Sequoia(1)		CAFL(2)		Freddie Mac SLST(3)		Freddie Mac K-Series (4)		Servicing Investment		HEI (5)		Total Consolidated VIEs
(Dollars in Thousands)
Residential consumer loans, held-for-investment	$	14,843,746	$	—	$	—	$	—	$	—	$	—	$	14,843,746
Residential investor loans, held-for-investment	—		3,103,311		—		—		—		—		3,103,311
Consolidated Agency multifamily loans	—		—		—		—		—		—		—
Real estate securities	165,092		—		—		—		—		—		165,092
Home equity investments	—		—		—		—		—		191,121		191,121
Other investments	—		—		—		—		265,771		—		265,771
Cash and cash equivalents	—		—		—		—		32,408		—		32,408
Restricted cash	266		161,780		—		—		—		5,696		167,742
Accrued interest receivable	73,864		23,330		—		—		1,924		—		99,118
Other assets	1,984		54,667		—		—		1,833		301		58,785
Total Assets	$	15,084,952	$	3,343,088	$	—	$	—	$	301,936	$	197,118	$	18,927,094
Debt Obligations	$	—	$	—	$	—	$	—	$	152,293	$	—	$	152,293
Accrued interest payable	57,525		7,210		—		—		261		—		64,996
Accrued expenses and other liabilities	121		57,301		—		—		39,248		44,185		140,855
Asset-backed securities issued	14,540,397		2,824,159		—		—		—		127,475		17,492,031
Total Liabilities	$	14,598,043	$	2,888,670	$	—	$	—	$	191,802	$	171,660	$	17,850,175

Value of our investments in VIEs (1)	$	470,496	$	452,736	$	—	$	—	$	110,134	$	25,458	$	1,058,824
Number of VIEs	72		23		—		—		3		1		99


December 31, 2024	Sequoia(1)		CAFL(2)		Freddie Mac SLST(3)		Freddie Mac K-Series		Servicing Investment		HEI		Total Consolidated VIEs
(Dollars in Thousands)
Residential consumer loans, held-for-investment	$	8,819,554	$	—	$	1,244,722	$	—	$	—	$	—	$	10,064,276
Residential investor loans, held-for-investment	—		3,308,172		—		—		—		—		3,308,172
Consolidated Agency multifamily loans	—		—		—		424,597		—		—		424,597
Real estate securities	79,285		—		—		—		—		—		79,285
Home equity investments	—		—		—		—		—		332,470		332,470
Other investments	—		—		—		—		262,353		—		262,353
Cash and cash equivalents	—		—		—		—		13,243		—		13,243
Restricted cash	248		22,385		—		—		—		8,403		31,036
Accrued interest receivable	43,503		19,998		4,510		1,245		2,078		—		71,334
Other assets	7		60,859		2,987		—		3,870		453		68,176
Total Assets	$	8,942,597	$	3,411,414	$	1,252,219	$	425,842	$	281,544	$	341,326	$	14,654,942
Debt Obligations	$	—	$	—	$	—	$	—	$	159,031	$	—	$	159,031
Accrued interest payable	37,191		9,410		4,062		1,119		359		—		52,141
Accrued expenses and other liabilities	103		28,672		—		—		27,167		82,921		138,863
Asset-backed securities issued	8,585,077		2,932,749		1,151,847		389,434		—		211,097		13,270,204
Total Liabilities	$	8,622,371	$	2,970,831	$	1,155,909	$	390,553	$	186,557	$	294,018	$	13,620,239

Value of our investments in VIEs (1)	$	313,833	$	438,590	$	95,863	$	35,163	$	94,987	$	47,308	$	1,025,744
Number of VIEs	54		21		3		1		3		2		84

(1)The ABS from three and one Sequoia re-securitizations at December 31, 2025 and December 31, 2024, respectively, are not accounted for under the CFE election and are accounted for at fair value (included within the Sequoia column at December 31, 2025 and December 31, 2024). At December 31, 2025 and December 31, 2024, the fair value of our interests in consolidated Sequoia securitizations accounted for under the CFE election was $722 million and $418 million, respectively, with the difference in value of our investments in these VIEs reflected in the December 31, 2025 and December 31, 2024 table above representing $165 million and $79 million, respectively, of consolidated Sequoia securities in the Sequoia re-securitizations and $417 million and $184 million, respectively, of ABS issued at fair value.

(2)Certain entities, including two CAFL bridge loan securitizations (included within the CAFL column), our SLST re-securitization (included within the Freddie Mac SLST column at December 31, 2024), and our Servicing Investment VIEs are not accounted for under the CFE election and their associated ABS issued are accounted for at amortized historical cost. At December 31, 2025 and December 31, 2024, the fair value of our interests in the CAFL term loan securitizations accounted for under the CFE election were $330 million and $326 million, respectively. At December 31, 2025 and December 31, 2024, the fair value of our interest in the CAFL bridge loan securitizations accounted for under the CFE election was $50 million and $29 million, respectively, with the difference from the tables above generally representing ABS issued and carried at amortized historical cost and accrued interest on our economic interests.

(3)During the fourth quarter of 2025, we sold the retained securities from our consolidated Freddie Mac SLST securitization entities and deconsolidated the related securitized re‑performing loans and related ABS issued. We also exercised our call option on the Freddie Mac SLST re‑securitization and repaid the underlying ABS issued. See Note 17 for further information. At December 31, 2024, the fair value of our interests in the Freddie Mac SLST securitizations accounted for under the CFE election was $242 million, with the difference from the December 31, 2024 table above representing ABS issued and carried at amortized historical cost.

(4)During the year ended December 31, 2025, the Freddie Mac K-Series securitization was called and the securities that we had retained from this VIE were paid off at par.

(5)During the year ended December 31, 2025, we exercised our call right on one of our HEI securitizations. See additional information related to the call of this VIE in Note 10.

Schedule of Unconsolidated VIEs Sponsored by Redwood

The following table presents additional information at December 31, 2025 and 2024, related to unconsolidated VIEs sponsored by Redwood and accounted for as sales.

Table 16.2 – Unconsolidated VIEs Sponsored by Redwood


(In Thousands)	December 31, 2025		December 31, 2024
On-balance sheet assets, at fair value:
Subordinate securities, classified as AFS	$	283,768	$	91,221
Interest-only, senior and subordinate securities, classified as trading	33,743		36,811
Mortgage servicing rights	12,029		12,556
Strategic investments, equity method	10,263		—
Funding commitment (1)	35,000		—
Maximum loss exposure (2)	$	374,803	$	140,588

(1)Represents Redwood’s agreement, entered into during the year ended December 31, 2025, to provide up to $35 million of capital support to a trust holding legacy unsecuritized bridge loans. We funded $10 million at closing, with up to $25 million remaining subject to specified portfolio triggers. Refer to Notes 8, 9, and 19 for additional information.

(2)Maximum loss exposure from our involvement with unconsolidated VIEs pertains to the carrying value of our securities and MSRs retained from these VIEs and represents estimated losses that would be incurred under severe, hypothetical circumstances, such as if the value of our interests and any associated collateral declines to zero. This does not include, for example, any potential exposure to representation and warranty claims associated with our initial transfer of loans into a securitization.

- Definition

Tabular disclosure of the significant judgments and assumptions made in determining whether a variable interest (as defined) held by the entity requires the variable interest entity (VIE) (as defined) to be consolidated and (or) disclose information about its involvement with the VIE, individually or in aggregate (as applicable); the nature of restrictions, if any, on the consolidated VIE's assets and on the settlement of its liabilities reported by an entity in its statement of financial position, including the carrying amounts of such assets and liabilities; the nature of, and changes in, the risks associated with involvement in the VIE; how involvement with the VIE affects the entity's financial position, financial performance, and cash flows; the lack of recourse if creditors (or beneficial interest holders) of the consolidated VIE have no recourse to the general credit of the primary beneficiary (if applicable); the terms of arrangements, giving consideration to both explicit arrangements and implicit variable interests, if any, that could require the entity to provide financial support to the VIE, including events or circumstances that could expose the entity to a loss; the methodology used by the entity for determining whether or not it is the primary beneficiary of the variable interest entity; the significant factors considered and judgments made in determining that the power to direct the activities of a VIE that most significantly impact the VIE's economic performance are shared (as defined); the carrying amounts and classification of assets and liabilities of the VIE included in the statement of financial position; the entity's maximum exposure to loss, if any, as a result of its involvement with the VIE, including how the maximum exposure is determined and significant sources of the entity's exposure to the VIE; a comparison of the carrying amounts of the assets and liabilities and the entity's maximum exposure to loss; information about any liquidity arrangements, guarantees, and (or) other commitments by third parties that may affect the fair value or risk of the entity's variable interest in the VIE; whether or not the entity has provided financial support or other support (explicitly or implicitly) to the VIE that it was not previously contractually required to provide or whether the entity intends to provide that support, including the type and amount of the support and the primary reasons for providing the support; and supplemental information the entity determines necessary to provide.

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