Company: RWT-PA
Filing Date: 2025-08-08
Form Type: 10-Q
Source: 0000930236-25-000029
Chunk: 30

Company: REDWOOD TRUST INC
Filing Date: 2025-08-08
Form: 10-Q
Item: Part I, Item 2
Chunk 30
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 amounts represent the transfer of loans originated or acquired by our CoreVest Mortgage Banking segment at our TRS and transferred to our Redwood Investments segment at our REIT.

74

Three Months Ended June 30, 2025 Compared to Three Months Ended March 31, 2025 

The increase in segment contribution in the three months ended June 30, 2025, as compared to the three months ended March 31, 2025, was primarily due to increased funding volume and improved distribution activity. Total loan fundings for the quarter were $509 million, up 6% from the prior quarter and 11% from the same period last year. Notably, this marked the highest quarterly origination volume for CoreVest since mid-2022, and underscored continued growth in borrower demand across all product lines. Product composition remained well diversified. RTL loans accounted for 33% of originations, with production also diversified across Term loans (39%), Bridge loans (22%), and DSCR loans (6%). RTL loans, Term loans, and DSCR all experienced growth of more than 20% from the prior quarter, highlighting CoreVest’s strategic positioning across small-balance and cash-flow-based investor segments. 

The platform continues to benefit from borrower appetite for financing solutions in the single-family rental market, particularly as builders shift toward forward sales into rental communities. Management believes CoreVest has seen repeat activity with top-tier sponsors and is actively capturing market share from traditional bank lenders. 

Distribution activity was notably strong, with $583 million of loans sold or participated during the quarter — a 38% increase from the prior quarter and the most active distribution period in the segment’s history. This included the completion of CoreVest's inaugural rated bridge loan securitization, backed by $284 million of RTL and other Bridge products. These distributions were otherwise executed through a combination of whole loan sales and sales to our joint ventures. 

Net cost to originate (calculated as operating expenses, less upfront origination fees, divided by origination volumes) improved to 0.94% in the second quarter of 2025, compared to 1.22% in the first quarter of 2025. The stability in net cost to originate reflects CoreVest’s operating leverage and disciplined approach to expense management, even as volumes continue to scale.

CoreVest continues to operate in a large and expanding market, particularly for RTL and DSCR products, which together we estimate to be a $245 billion total addressable market