Company: RWT-PA
Filing Date: 2025-05-09
Form Type: 10-Q
Source: 0000930236-25-000020
Chunk: 69

Company: REDWOOD TRUST INC
Filing Date: 2025-05-09
Form: 10-Q
Item: Part I, Item 1
Chunk 69
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(Unaudited) 

Note 5. Mortgage Banking Activities, Net

The following table presents the components of Mortgage banking activities, net, recorded in our consolidated statements of income for the three months ended March 31, 2025 and 2024.Table 5.1 – Mortgage Banking ActivitiesThree Months Ended March 31,(In Thousands)20252024Sequoia Mortgage Banking Activities, Net:Changes in fair value of:Residential consumer loans, at fair value (1)$30,599 $(3,854)Trading securities (2)(29,327)8,511 Risk management derivatives (3)20,787 3,089 Other income, net (4)92 81 Total Sequoia mortgage banking activities, net22,151 7,827 CoreVest Mortgage Banking Activities, Net:Changes in fair value of:Residential investor term loans, at fair value (1)6,930 (296)Residential investor bridge loans, at fair value1,032 946 Risk management derivatives (3)(2,945)2,509 Other income, net (4) (5)5,885 3,570 Total CoreVest mortgage banking activities, net10,902 6,729 Mortgage Banking Activities, Net$33,053 $14,556 (1)Includes changes in fair value for associated loan purchase commitments for residential consumer loans and associated interest rate lock commitments for residential investor term loans. (2)Represents fair value changes on trading securities that are being used as hedges to manage the mark-to-market risks associated with our Sequoia mortgage banking operations.(3)Represents market valuation changes of derivatives that were used to manage risks associated with our mortgage banking operations and other derivative financial instruments such as loan purchase commitments and interest rate locks. (4)Amounts in this line item include other fee income from loan acquisitions, and provisions for repurchases, presented net.(5)Amounts in this line item include other fee income from loan originations.

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REDWOOD TRUST, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS March 31, 2025(Unaudited) 

Note 6. Fair Value of Financial Instruments

For financial reporting purposes, we follow a fair value hierarchy established under GAAP that is used to determine the fair value of financial instruments. This hierarchy prioritizes relevant market inputs in order to determine an exit price at the measurement