Company: RWT-PA
Filing Date: 2025-08-08
Form Type: 10-Q
Source: 0000930236-25-000029
Chunk: 101

Company: REDWOOD TRUST INC
Filing Date: 2025-08-08
Form: 10-Q
Item: Part I, Item 1
Chunk 101
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, collateral sale, or alternative resolutions, such as discounted payoffs or loan sales—may differ significantly from our estimates and could materially affect future earnings. In exchange for a modification, we may receive a partial repayment of principal, a short-term accrual of capitalized interest for a portion of interest due, a capital infusion to replenish interest or capital improvement reserves, and/or termination of all or a portion of the remaining unfunded loan commitment.For the three months ended June 30, 2025 and December 31, 2024, we made modifications to our legacy unsecuritized bridge and term loan portfolios. These modifications included adjustments to the contractual interest rates. In certain cases, these adjustments involve deferrals of interest. Some modifications are limited to extensions of loan maturities and/or covenant terms.We may also offer maturity extensions, subject to mandatory partial repayments during the loan term. In certain cases, we implement a hard cash management structure (enabling Redwood, as the lender, to control all cash flows at the property) and establish interest reserves to cover potential debt service shortfalls. Any shift in our intended exit strategy could have implications for the valuation of these loans. Additionally, we may further modify loans that were previously modified. These subsequent modifications may include changes to the contractual interest pay rate and deferred interest terms.  In the three months ended June 30, 2025, consistent with our strategic transition away from non-core legacy assets, we classified certain modified and legacy loans as held-for-sale and evaluated these assets for impairment in accordance with applicable accounting guidance. These classifications and related fair value measurements reflect updated expectations regarding the timing and manner of recovery, and incorporate observable market data, recent comparable asset sales, and other valuation inputs, as appropriate.For the three months ended June 30, 2025 and December 31, 2024, we modified or put into forbearance loans with a total aggregate unpaid principal balance of $363 million and $353 million, respectively. This balance included modifications to the contractual interest rates (including, in certain cases, deferrals of interest) on loans, modifications involving only extensions of loan maturities and/or covenant terms and further modifications on loans that had been previously modified in a prior period.For the three months ended June 30, 2025 and December 31, 2024, we modified loans primarily involving adjustments to contractual interest pay rates (including, in certain cases, deferrals of interest) with an aggregate unpaid principal balance of $60 million and $167