Company: RWT-PA
Filing Date: 2025-08-08
Form Type: 10-Q
Source: 0000930236-25-000029
Chunk: 169

Company: REDWOOD TRUST INC
Filing Date: 2025-08-08
Form: 10-Q
Item: Part I, Item 1
Chunk 169
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 which were backed by newly-originated loans and one of which was backed by seasoned loans) representing approximately 40% of all non-bank jumbo loan securitization volume year-to-date, underscoring its dominant market position.

The seller network also expanded meaningfully. Aspire, included under Sequoia Mortgage Banking, added new loan originators during the quarter, with its total seller network growing by 60% quarter over quarter to approximately 40 sellers. Notably, over 85% of Aspire’s current sellers overlap with the Sequoia network, pointing to cross-platform leverage and operational integration.

Adjustable-rate mortgage (ARM) activity remained elevated as a share of total locks, reaching approximately 10% of total Sequoia volume in the second quarter, in line with levels seen in the first quarter of 2025 and the fourth quarter of 2024, but up from just 0.3% in 2023. This trend reflects borrower demand for affordability solutions amid persistently elevated interest rates.

Aspire locked $330 million in expanded loans during the second quarter, marking a 197% increase quarter over quarter. Volume composition was split between 67% Bank Statement and 33% DSCR products, and 30% of total volume came from new sellers. Aspire also completed its first whole loan sales during the quarter, a notable milestone as it scales within the non-QM market.

For the three months ended June 30, 2025, our cost per loan was 26 basis points (calculated as operating expenses divided by loan purchase commitments), compared to 21 basis points for the quarter ended March 31, 2025, representing ongoing efficiency of our platform. We continue to evaluate monetary policy, housing trends and economic data, among other factors, in developing our interest rate hedging strategy and we expect to continue to leverage a variety of instruments as hedges, including TBAs, interest rate futures, real estate securities, options and other types of securities. 

Operating expenses for this segment increased for the second quarter of 2025, as compared to the preceding quarter, primarily due to an increase in loan acquisition costs related to the increase in loan purchases, as well as higher general and administrative expenses from variable and equity compensation due to improved segment performance for the three-months ended June 30, 2025.

Capital allocation to this segment was $475 million at June 30, 2025, compared to $425 million at March 31, 2025 due to