Company: RWT-PA
Filing Date: 2025-05-09
Form Type: 10-Q
Source: 0000930236-25-000020
Chunk: 160

Company: REDWOOD TRUST INC
Filing Date: 2025-05-09
Form: 10-Q
Item: Part I, Item 1
Chunk 160
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 increased modestly during the first quarter of 2025.

1 Target returns are based on management's market observations, estimates, and assumptions, including our assumptions regarding the use of leverage, credit losses, prepayment speeds, and market interest rates. Actual returns may differ due to these or other factors. See "Cautionary Statement" above within this MD&A for a review of risk factors that may impact our ability to realize our target returns.

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Residential Investor Bridge Loans Held-for-Investment

The following table provides the activity of residential investor bridge loans held-for-investment during the three months ended March 31, 2025. 

Table 14 – Residential Investor Bridge Loans Held-for-Investment - ActivityThree Months Ended(In Thousands)March 31, 2025Fair value at beginning of period$1,864,797 Sales (1)(4,855)Transfers between portfolios (2)107,155 Consolidation of securitized CAFL bridge loans (3)43,383 Transfers to REO(2,103)Principal repayments(178,345)Changes in fair value, net(21,427)Fair Value at End of Period$1,808,605 

(1)Includes whole loan sales to third parties and our joint ventures.

(2)We originate residential investor bridge loans at our TRS and transfer a portion of them to our REIT that we intend to hold for investment. Origination fees and any fair value changes on these loans prior to transfer are recognized within Mortgage banking activities, net on our Consolidated statements of income (loss). Once the loans are transferred to our REIT, they are classified as held-for-investment, with subsequent fair value changes generally recorded through Investment fair value changes, net on our consolidated statements of income. 

(3)In the fourth quarter of 2024, we completed our first CAFL securitization sponsored by one of our joint ventures. During the three months ended March 31, 2025, we transferred $43 million of residential investor loans to the securitization issuer under the replenishment feature of this transaction. For additional information on our principles of consolidation, see Note 16 of the Notes to Consolidated Financial Statements, included in Part I, Item 1 of the 2025 Quarterly Report on Form 10-Q.

The fair value of residential investor bridge loans held-for-investment of $1.81 billion at March 31, 2025, were comprised of first-li