Company: RWT-PA
Filing Date: 2025-03-03
Form Type: 10-K
Source: 0000930236-25-000007
Chunk: 61

Company: REDWOOD TRUST INC
Filing Date: 2025-03-03
Form: 10-K
Item: Item 16
Chunk 61
---
 and certain subordinate 

F- 14

REDWOOD TRUST, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2024Note 3. Summary of Significant Accounting Policies - (continued)

securities, and MSRs, for which we may hedge market interest rate risk. In addition, we elect the fair value option for the assets and liabilities of our consolidated securitization entities in accordance with GAAP accounting for collateralized financing entities ("CFEs").See Note 6 for further discussion on the fair value option.Real Estate Loans Residential Consumer Loans We acquire residential consumer loans from third-party originators for subsequent sale to whole loan buyers, securitization or transfer into our Redwood Investments portfolio. Residential consumer loans held-for-sale include loans that we intend to sell to third parties, or including transfers to securitization entities that we plan to sponsor. We generally elect the fair value option for residential consumer loans that we purchase and the changes in fair value for these loans are recurring which are reported through our consolidated statements of income (loss) in Mortgage banking activities, net. We record residential consumer loans held-for-investment at consolidated securitization entities at fair value. In accordance with accounting guidance for CFEs, we use the fair value of the ABS issued by these entities (which we determined to be more observable) to determine the fair value of the loans held at these entities. Changes in fair value for these loans and related ABS are recurring and are reported through our consolidated statements of income (loss) in Investment fair value changes, net. See Note 7 for further discussion on residential consumer loans. Residential Investor LoansWe originate and purchase residential investor loans, for subsequent securitization, sale, or transfer into our Redwood Investments portfolio. Residential investor loans are loans to investors in single-family and multifamily housing properties, which we classify as either "term" loans (which include loans with maturities that generally range from 3 to 30 years) or "bridge" loans (which include loans with maturities that generally range from 12 to 36 months). Single-family loans are mortgage loans secured by residential real estate (primarily 1-4 unit) that the borrower owns as an investment property. Residential investor bridge loans are mortgage loans which are generally secured by unoccupied residential investor or multifamily real estate that the borrower owns as an investment and that is being renovated, rehabilitated or constructed.We classify residential investor loans as held-for-sale