Company: RWT-PA
Filing Date: 2025-11-07
Form Type: 10-Q
Source: 0000930236-25-000037
Chunk: 246

Company: REDWOOD TRUST INC
Filing Date: 2025-11-07
Form: 10-Q
Item: Part I, Item 8
Chunk 246
---
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 September 30, 2025 and December 31, 2024, we modified or put into forbearance loans with a total aggregate UPB of $130 million and $353 million, respectively. This balance primarily included modifications involving extensions of loan maturities and/or covenant terms ("Simple Modifications"). An increase in maturity extensions would increase the expected time to repayment with a potential impact on fair values and credit losses. However, given the overall short duration nature of our bridge loans, a certain level of maturity extensions are a routine asset management outcome for these loans, irrespective of market conditions. Additionally, modifications also include changes to the contractual interest rates (including, in certain cases, deferrals of interest) on loans ("Complex Modifications"). Certain loans may represent subsequent modifications of loans that had been previously modified in a prior reporting period. These further modifications may include adjustments to pay rates, deferred interest (floating-to-fixed conversions), maturity extensions (with forbearance or partial repayments), and changes to interest reserves or project completion milestones.The following table presents information regarding loan modifications by strategy type for the three months ended September 30, 2025.Table 8.6 – Loan Modifications Characteristics by Strategy TypeSeptember 30, 2025Unpaid Principal BalanceWeighted Average Contractual Interest RateWeighted Average Deferred Interest RateAverage Month Length of Maturity Extensions(Dollars in Thousands)Simple Modifications (Extensions)$126,254 N/AN/A5Complex Modifications3,895 10.73 %4.73 %5Total Loan Modifications (1)$130,149 (1)Included in this population are loans that had been previously modified in a prior period with an aggregate unpaid principal balance of $38 million involving previous Simple modifications and $4 million involving previous Complex modifications. For the three months ended December 31, 2024, loans with an aggregate UPB of $186 million were Simple Modifications and involved the extension of maturities and/or covenant terms. Of this balance, we further modified loans that had been previously modified in a prior period with an aggregate unpaid principal balance of $103 million. For the three months