Company: RWT-PA
Filing Date: 2025-08-08
Form Type: 10-Q
Source: 0000930236-25-000029
Chunk: 336

Company: REDWOOD TRUST INC
Filing Date: 2025-08-08
Form: 10-Q
Item: Part I, Item 8
Chunk 336
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 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. Management believes CoreVest remains well-positioned to capture increased share through platform depth, distribution relationships, and consistent borrower engagement.

Capital allocated to this segment was $93 million at June 30, 2025, down from $106 million at March 31, 2025. The platform remains focused on capital-efficient growth strategies, including ongoing engagement with JV partners and non-recourse financing structures to support its scaling loan inventory. Our inventory of loans is managed with a combination of our capital and loan warehouse facilities. At June 30, 2025, total warehouse capacity was $2.18 billion, with $1.48 billion of available capacity (inclusive of capacity on non-recourse facilities). All of these facilities are non-marginable (i.e., not subject to margin calls based solely on the lender's determination, in its discretion, of the market value of the underlying collateral that is non-delinquent).

Six Months Ended June 30, 2025 Compared to Six Months Ended June 30, 2024

CoreVest segment contribution increased $14 million during the six months ended June 30, 2025, compared to the six months ended June 30, 2024. The increase is attributable to higher mortgage banking income, driven by an increase in total loan funding volumes and robust distribution via whole loan sales and joint ventures. Funded volume for the six months ended June 30, 2025 was $