Company: RWT-PA
Filing Date: 2025-08-08
Form Type: 10-Q
Source: 0000930236-25-000029
Chunk: 352

Company: REDWOOD TRUST INC
Filing Date: 2025-08-08
Form: 10-Q
Item: Part I, Item 8
Chunk 352
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 modifications within our residential investor bridge loan portfolio could ultimately result in further decreases in net interest income and the fair value of our bridge loans held for investment, and further instances of borrower/sponsor financial stress could lead to realized credit losses. An increase in maturity extensions in the residential investor bridge portfolio 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. When we provide these types of maturity extensions, our asset management function also seeks to charge a fee. For the three months ended June 30, 2025, the average length of maturity extensions granted on residential investor bridge loans was under five months. 

The following table provides the composition of legacy unsecuritized bridge and term loans by product type as of June 30, 2025. 

Table 18 – Legacy Loans - By Product/Strategy Type at Legacy Investments(In Thousands)June 30, 2025BFR (1)$398,822 SAB (2)637 Multifamily (3)482,920 Term49,888 Other3,679 Fair Value at End of Period (4)$935,946 

(1)    Includes loans to finance acquisition and/or stabilization of existing housing stock or to finance new construction of residential properties for rent.

(2)    Includes loans for light to moderate renovation of residential and small multifamily properties (generally less than 20 units).

(3)    Includes loans for predominantly light to moderate rehabilitation projects on multifamily properties.

At June 30, 2025, the fair value of our Legacy bridge and term loans and associated REO represented 84.8% of the combined unpaid principal balance of these loans and the unpaid principal balance of the loans associated with the REO at time of foreclosure. The fair value of multifamily loans within this population ($483 million at June 30, 2025) and associated multifamily REO ($21 million at June 30, 2025), represented 84.9% of the combined unpaid principal balance of these loans and the unpaid principal balance of the loans associated with the REO at time of foreclosure. As part of our strategic shift away from non-core legacy assets, we have revised our underwriting practices to discontinue the active origination of large multifamily loans. Consequently, we expect our exposure to multifamily