In the normal course of business, we enter into certain types of transactions with entities that are considered to be VIEs. The Company's primary involvement with VIEs has been related to its securitization transactions in which it transfers assets to securitization vehicles. We primarily securitize our acquired and originated loans, which provides a source of funding and has enabled us to transfer a certain portion of economic risk on loans or related debt securities to third parties. The entity that has a controlling financial interest in a VIE is referred to as the primary beneficiary and is required to consolidate the VIE. See Note 2 for further information on our accounting policies regarding our Principles of consolidation.

The GAAP principles we apply require us to reassess our requirement to consolidate VIEs each quarter and therefore our determination may change based upon new facts and circumstances pertaining to each VIE. This could result in a material impact to our consolidated financial statements during subsequent reporting periods.

For certain of our consolidated VIEs, we have elected to account for the assets and liabilities of these entities pursuant to the measurement alternative available to CFEs. A CFE is a VIE that holds financial assets and issues beneficial interests in those assets, and these beneficial interests have contractual recourse only to the related assets of the CFE. GAAP allows companies to elect to measure both the financial assets and financial liabilities of a CFE using the more observable of the fair value of the financial assets or fair value of the financial liabilities. Most of our VIEs are accounted for under the CFE election, under which net equity generally represents the fair value of our retained interests and related accrued interest receivable.

In addition to our consolidated VIEs for which we made the CFE election, we consolidate certain VIEs for which we did not make the CFE election and elected to account for the ABS issued by these entities at fair value or amortized cost. These include three Sequoia re-securitizations for which the ABS are accounted at fair value at June 30, 2026. See Note 17 for additional information regarding the Sequoia re-securitizations.


June 30, 2026	Sequoia(1)		CAFL(2)		Servicing Investment(2)		HEI		Total Consolidated VIEs
(Dollars in Thousands)
Residential consumer loans, held-for-investment	$	20,702,101	$	—	$	—	$	—	$	20,702,101
Residential investor loans, held-for-investment	—		2,724,424		—		—		2,724,424
Real estate securities	164,670		—		—		—		164,670
Home equity investments	—		—		—		194,261		194,261
Other investments	—		—		244,187		—		244,187
Cash and cash equivalents	—		—		20,723		—		20,723
Restricted cash	312		87,128		—		5,058		92,498
Accrued interest receivable	95,836		25,524		1,836		—		123,196
Other assets	6,655		98,008		1,276		362		106,301
Total Assets	$	20,969,574	$	2,935,084	$	268,022	$	199,681	$	24,372,361
Debt Obligations	$	—	$	—	$	128,025	$	—	$	128,025
Accrued interest payable	76,159		8,451		195		—		84,805
Accrued expenses and other liabilities	162		68,238		34,246		46,519		149,165
Asset-backed securities issued	19,926,622		2,462,927		—		126,358		22,515,907
Total Liabilities	$	20,002,943	$	2,539,616	$	162,466	$	172,877	$	22,877,902

Value of our investments in VIEs (1)	$	946,822	$	393,935	$	105,556	$	26,804	$	1,473,117
Number of VIEs	86		21		3		1		111


December 31, 2025	Sequoia(1)		CAFL(2)		Servicing Investment(2)		HEI		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
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

(1)The ABS from three Sequoia re-securitizations at June 30, 2026 and December 31, 2025, respectively, are not accounted for under the CFE election and are accounted for at fair value (included within the Sequoia column at June 30, 2026 and December 31, 2025). At June 30, 2026 and December 31, 2025, the fair value of our interests in consolidated Sequoia securitizations accounted for under the CFE election was $1.23 billion and $722 million, respectively, with the difference in value of our investments in these VIEs reflected in the June 30, 2026 and December 31, 2025 table above representing $165 million and $165 million, respectively, of consolidated Sequoia securities in the Sequoia re-securitizations and $445 million and $417 million, respectively, of ABS issued at fair value.

(2)At both June 30, 2026 and December 31, 2025, 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, two CAFL bridge loan securitization VIEs (included within the CAFL column) were not accounted for under the CFE election and their associated ABS issued were accounted for at amortized historical cost. These two CAFL bridge loan securitization VIEs were called during the six months ended June 30, 2026 and the associated ABS were paid off.

The fair value of our interests in the CAFL term loan securitizations accounted for under the CFE election was $314 million and $330 million at June 30, 2026 and December 31, 2025, respectively. At June 30, 2026 and December 31, 2025, the fair value of our interest in the CAFL bridge loan securitizations accounted for under the CFE election was $70 million and $50 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.

We do not consolidate certain VIEs where we have continuing involvement. We determined we are not the primary beneficiary of these VIEs as we lacked the power to direct the activities that will have the most significant economic impact on the entities. Our continuing involvement in these securitizations is limited to customary servicing obligations associated with retaining servicing rights (which are performed by third-party sub-servicers) and the receipt of interest income associated with the securities we retained.

For certain of the transferred loans where we held the servicing rights prior to the transfer and continued to hold the servicing rights following the transfer, we recorded mortgage servicing rights ("MSRs") on our consolidated balance sheets and classified those MSRs as Level 3 assets. We also retained IO, senior and subordinate securities in these transfers that we classified as Level 3 assets.

During the three and six months ended June 30, 2026, we completed two and three Aspire securitizations through our SPIRE securitization program, respectively, that are not consolidated. Pursuant to these securitizations, $920 million and $1.31 billion in UPB of non-QM loans were sold to securitization trusts during the three and six months ending June 30, 2026, respectively. We did not retain the subordinate and residual interests in these transactions, which were retained by our securitization co-sponsor together with the related controlling rights. Our retained interests were limited to IO securities, which are classified as Level 3 assets. At June 30, 2026, the value of the IO securities retained from these securitizations was $10 million.

During the three months ended June 30, 2026, one of our joint ventures completed a securitization of term loans with a UPB of $268 million that we did not consolidate. Our continuing involvement in this securitization is limited to a retained IO security, which is classified as a Level 3 asset. At June 30, 2026, the value of the IO security retained from this securitization was $1 million.

Table 16.2 – Unconsolidated VIEs Sponsored by Redwood


(In Thousands)	June 30, 2026		December 31, 2025
On-balance sheet assets, at fair value:
Subordinate securities, classified as AFS	$	293,520	$	283,768
Interest-only, senior and subordinate securities, classified as trading	47,935		33,743
Mortgage servicing rights	12,620		12,029
Strategic investments, equity method	10,263		10,263
Funding commitment (1)	14,815		35,000
Maximum loss exposure (2)	$	379,153	$	374,803

(1)Represents Redwood’s agreement, entered into during 2025, to provide up to $35 million of capital support to a trust holding legacy unsecuritized bridge loans. As of June 30, 2026, we funded $20 million, with up to $15 million remaining subject to specified portfolio triggers. Refer to Notes 8, 9, and 19 for additional information.