Other Assets and Liabilities

6 Months Ended

Jun. 30, 2026

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

Other Assets and Liabilities

Other Assets and Liabilities

Other Assets

Other assets at June 30, 2026 and December 31, 2025 are summarized in the following table.

Table 15.1 – Components of Other Assets

(In Thousands)	June 30, 2026		December 31, 2025
Accrued interest receivable	$	151,426	$	130,955
Real estate owned	134,021		124,270
Investment receivable	41,603		38,082
Receivable from joint venture partners (1)	32,773		9,298
Margin receivable	21,458		33,439
Deferred tax asset	12,352		12,352
Operating lease right-of-use assets	11,950		8,902
Fixed assets and leasehold improvements (2)	9,465		6,354
Intangible assets	6,602		10,623
Other (3)	49,606		39,247
Total Other Assets	$	471,256	$	413,522

(1)Receivables from joint venture partners primarily represent amounts due from joint ventures related to construction draw advances initially funded by the Company, operating expenses paid on behalf of joint ventures, and distributions receivable under contractual waterfall arrangements associated with securitized loans.

(2)Fixed assets and leasehold improvements had a basis of $24 million and accumulated depreciation of $15 million at June 30, 2026.

(3)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 during the three and six months ended June 30, 2026.

Table 15.2 – REO Activity by Loan Type

	Three Months Ended June 30, 2026
(In Thousands)	Bridge Loans(1)		Sequoia Securitized Loans		Securitized Term Loans		Total
Balance at beginning of period	$	88,811	$	2,997	$	29,359	$	121,167
Transfers to REO	17,478		4,026		—		21,504
Liquidations (2)	(1,655)		—		(774)		(2,429)
Changes in fair value, net	(5,799)		(422)		—		(6,221)
Balance at End of Period	$	98,835	$	6,601	$	28,585	$	134,021

	Six Months Ended June 30, 2026
(In Thousands)	Bridge Loans(1)		Sequoia Securitized Loans		Securitized Term Loans		Total
Balance at beginning of period	$	102,383	$	1,984	$	19,903	$	124,270
Transfers to REO	33,385		5,039		9,456		47,880
Liquidations (2)	(23,303)		—		(774)		(24,077)
Changes in fair value, net	(13,630)		(422)		—		(14,052)
Balance at End of Period	$	98,835	$	6,601	$	28,585	$	134,021

Footnotes to Table 15.2

(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, 2026, REO market valuation adjustments and liquidations resulted in net valuation losses of $6 million and $14 million, which were recorded in Investment fair value changes, net on our consolidated statements of (loss) income.

Accrued Expenses and Other Liabilities

Accrued expenses and other liabilities at June 30, 2026 and December 31, 2025 are summarized in the following table.

Table 15.3 – Components of Accrued Expenses and Other Liabilities

(In Thousands)	June 30, 2026		December 31, 2025
Payable to non-controlling interests	$	119,020	$	120,177
Accrued interest payable	105,110		81,851
Margin payable	48,251		47,264
Accrued compensation	20,769		39,964
Current accounts payable	17,474		9,698
Unsettled trades	16,068		32,046
Accrued operating expenses	13,468		11,617
Operating lease liabilities	13,449		10,666
Guarantee obligations	3,689		1,267
Repurchase reserve	2,507		7,466
Preferred stock dividends payable	1,478		1,478
Bridge loan holdbacks (1)	487		2,253
Accrued taxes payable	—		1,437
Other	39,129		31,751
Total Accrued Expenses and Other Liabilities	$	400,899	$	398,935

(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 certain 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, 2026, the carrying value of their interests was $26 million, representing their current economic interest in the entities. Earnings from the partnership entities are allocated to the co-investor on a proportional basis and during the three and six months ended June 30, 2026, we allocated $0.1 million and $3 million, respectively, of income to the co-investor, respectively, recorded in Other expenses on our consolidated statements of income.

In 2023, Redwood and a third-party co-sponsored the transfer and securitization of HEI through a HEI securitization entity. Other third-party investors contributed HEI into this securitization through Redwood and retained subordinate beneficial interests issued by the securitization entity alongside Redwood. See Note 10 for a further discussion of the HEI securitization. We account for the co-investor's interest in the HEI securitization entity as a liability, and at June 30, 2026, the carrying value of their interest was $47 million, representing the fair value of their economic interest in the beneficial interest issued by the HEI entity. During the three and six months ended June 30, 2026, the investors' share of earnings from their retained interests (for which positive earnings are reflected as an expense to Redwood in our consolidated statements of (loss) income) were negative $1 million and positive $2 million, respectively and were recorded through HEI Income, net on our consolidated statements of (loss) income.

In 2025, we completed two CAFL bridge loan securitizations sponsored by one of our joint ventures. These transactions involved the transfer and securitization of bridge loans contributed from the joint venture and from Redwood through two bridge securitization entities. Each of the joint venture and Redwood retained its proportionate share of subordinate beneficial interests issued by the securitization entities. We account for the joint venture's interest in the bridge loan securitization entities as a liability and at June 30, 2026, the carrying value of their interests was $31 million, representing the fair value of their economic interest in the beneficial interest issued. During the three months ended June 30, 2026, the joint venture's share of recognized income was $1 million related to its retained interests in these two securitizations, resulting in a $1 million net expense to Redwood in our consolidated statements of (loss) income. During the six months ended June 30, 2026, the joint venture's share of recognized income was $2 million related to its retained interests in these two securitizations, resulting in a $2 million net expense to Redwood in our consolidated statements of (loss) income.

In 2024, we completed a CAFL securitization of bridge loans sponsored by one of our joint ventures. 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, 2026, the carrying value of their interest was $15 million, representing the fair value of their economic interest in the beneficial interest issued. During the three months ended June 30, 2026, the joint venture recognized an expense of $1 million related to its retained interest in this securitization, resulting in a $1 million net income to Redwood in our consolidated statements of (loss) income. During the six months ended June 30, 2026, the joint venture recognized an expense of $1 million related to its retained interest in this securitization, resulting in a $1 million net income to Redwood in our consolidated statements of (loss) income.