Company: RWT-PA
Filing Date: 2025-05-09
Form Type: 10-Q
Source: 0000930236-25-000020
Chunk: 133

Company: REDWOOD TRUST INC
Filing Date: 2025-05-09
Form: 10-Q
Item: Part I, Item 1
Chunk 133
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 is provided in the “Net Interest Income” section that follows.

Mortgage Banking Activities, Net 

Mortgage Banking activities, net increased by $18 million in the three months ended March 31, 2025 compared to the same period ended March 31, 2024, due to higher Sequoia Mortgage Banking and CoreVest Mortgage Banking revenues. 

The increase in Sequoia Mortgage Banking activities, net of $14 million was primarily attributable to an increase in lock volumes of 125% during the three month periods, driven by increases in both flow and bulk lock volumes and the $1 billion purchase commitment from a large money-center bank to acquire a pool of primarily jumbo loans.

The increase in CoreVest Mortgage Banking activities, net of $4 million was primarily attributable to an increase in funding volume of 48% as well as higher margins and improved economics from whole loan sales and sales to joint ventures during the three month periods.

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 declined by $27 million from $22 million of net gains during the first quarter of 2024 to a $5 million net loss in the three months ended March 31, 2025, primarily related to impairments and the impact of interest rate modifications on the values of our unsecuritized residential investor bridge and term loan portfolios at fair value. This was offset by investment fair value gains, net of associated interest rate hedges, on our securities portfolio during the three months ended March 31, 2025. 

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

HEI Income, net

HEI income, net increased by $1 million in the three months ended March 31, 2025 compared to the same period ended March 31, 2024, driven by the similar quarter over quarter trends discussed in the preceding section related to home price appreciation and prepayment speeds steadily improving relative to modeled assumptions. 

Additional detail on our HEI income is presented in Table 10.3 of our Notes to Consolidated Financial Statements in Part 1, Item 1 of this Quarterly Report on Form 10-Q.

Operating Expenses 

Operating expenses increased by $8 million in the