Company: RWT-PA
Filing Date: 2025-11-07
Form Type: 10-Q
Source: 0000930236-25-000037
Chunk: 130

Company: REDWOOD TRUST INC
Filing Date: 2025-11-07
Form: 10-Q
Item: Part I, Item 1
Chunk 130
---
. Commitments and Contingencies

Lease CommitmentsAt September 30, 2025, we were obligated under nine non-cancelable operating leases with expiration dates through 2031 for $13 million of cumulative lease payments. For the nine-months ended September 30, 2025 and 2024, our operating lease expense was $3 million and $4 million, respectively. During the nine months ended September 30, 2025, we entered into three new office leases with a lease term of greater than one year.At September 30, 2025, our operating lease liabilities were $12 million, which were a component of Accrued expenses and other liabilities, and our operating lease right-of-use assets were $10 million, which were a component of Other assets.Commitment to Fund Residential Investor Bridge LoansAs of September 30, 2025, we had commitments to fund up to $261 million of additional advances on existing residential investor bridge loans, of which $84 million related to loans currently in securitizations co-sponsored by one of our joint ventures. These commitments are generally subject to loan agreements with covenants regarding the financial performance of the borrower and other terms regarding advances that must be met before we fund the commitment. At September 30, 2025, we carried a $0.1 million contingent liability related to these commitments to fund construction advances. During the three and nine months ended September 30, 2025, we recorded net market valuation income of $0.4 million and $0.8 million, respectively, related to this liability through Investment of fair value changes, net and on our consolidated statements of income.On September 30, 2025, in connection with the sale of legacy unsecuritized bridge loans to the Legacy Trust, we entered into an agreement to provide up to $35 million of capital support if the Legacy Trust’s portfolio loan-to-value ratios exceed specified thresholds. We funded $10 million at closing, with up to $25 million in additional funding commitments if certain triggers are met. The arrangement was determined to have an initial fair value of zero and will be re-evaluated each reporting period. See Notes 8 and 9 for further discussion on this transaction.Commitment to Fund Joint VenturesIn the first quarter of 2024, we entered into a joint venture with an institutional investment manager pursuant to which we will offer to sell certain residential investor bridge and term loans we originate into joint venture entities that meet specified