Company: RWT-PA
Filing Date: 2025-08-08
Form Type: 10-Q
Source: 0000930236-25-000029
Chunk: 13

Company: REDWOOD TRUST INC
Filing Date: 2025-08-08
Form: 10-Q
Item: Part I, Item 2
Chunk 13
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 $441 million of loans locked by Aspire, a mortgage banking business initiative that was newly established in 2025. Sequoia achieved gain-on-sale margins of over 100 basis points, exceeding typical historical levels, and distributed $4.9 billion of loans in the six months ended June 30, 2025. 

The increase in CoreVest Mortgage Banking activities, net of $8 million was primarily attributable to higher funding volumes, totaling $991 million in the six months ended June 30, 2025, representing a 26% increase to the same period in 2024. The increase also reflected improved margins and execution economics, supported by strong demand for residential transition (RTL) loans, Term loans, and DSCR loans, as well as active securitization, whole loan sale and joint venture activity across the platform.

A more detailed analysis of the changes in this line item is included in the “Sequoia Mortgage Banking Segment” and “CoreVest Mortgage Banking Segment” sections that follows. 

Investment Fair Value Changes, Net

Investment fair value changes, net changed by $113 million, from a $23 million gain in the six months ended June 30, 2024 to a $90 million net loss in the same period in 2025. The decline was primarily related to impairments and adverse fair value adjustments reflecting both realized and anticipated near-term resolutions on our legacy unsecuritized bridge and term loan portfolios and other non-core legacy assets, as well as changes in the underlying performance of certain Legacy bridge loans. These losses were partially offset by fair value gains, net of associated interest rate hedges, on our securities portfolio, which benefited from tighter credit spreads during the period.

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A more detailed analysis of the changes in this line item is included in the “Redwood Investments Segment” and "Legacy Investments Segment" section that follows. 

HEI Income, net 

HEI income, net decreased by $28 million, from a $25 million gain in the six months ended June 30, 2024 to a $3 million loss in the same period in 2025. This was primarily driven by driven by similar trends as described above for the three-month periods in the section above, including the anticipated sale of a substantial portion of this portfolio in the third quarter of 2025.

Additional detail on our HEI income is presented in Table 10.3 of our Notes to Consolidated Financial Statements in