Company: RWT-PA
Filing Date: 2025-11-07
Form Type: 10-Q
Source: 0000930236-25-000037
Chunk: 265

Company: REDWOOD TRUST INC
Filing Date: 2025-11-07
Form: 10-Q
Item: Part I, Item 8
Chunk 265
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 and Repurchase ReservesSee Note 19 for additional information on legal and repurchase reserves.Payable to Non-Controlling InterestsRedwood and a third-party co-investor, through two partnership entities consolidated by Redwood, purchased servicer advances and excess MSRs related to a portfolio of residential mortgage loans serviced by the co-investor (see Note 11 and Note 16 for additional information on the partnership entities and associated investments). We account for the co-investor’s interests in the entities as liabilities, and at September 30, 2025, the carrying value of their interests was $24 million, representing their current economic interest in the entities. Earnings from the partnership entities are allocated to the co-investors on a proportional basis and during the three and nine months ended September 30, 2025, we allocated $0.4 million and $0.8 million, respectively, of income to the co-investors, respectively, recorded in Other expenses on our consolidated statements of income.Additionally, Redwood and a third-party investor co-sponsored the transfer and securitization of HEI through two HEI securitization entities. Other third-party investors contributed HEI into these securitizations through Redwood and retained subordinate beneficial interests issued by the securitization entities alongside Redwood. During the three months ending September 30, 2025, we called one of the HEI securitization entities and paid the remaining liabilities associated with the ABS and non-controlling interest. See Note 10 for a further discussion of the HEI securitizations. We account for the co-investor's interest in our HEI securitization entity as a liability, and at September 30, 2025, the carrying value of the interest was $44 million, representing the fair value of the economic interest in the beneficial interests issued by the HEI entity. During the three and nine months ended September 30, 2025, the third-party investors' share of earnings, net from their retained interests was $0.2 million and $8 million, respectively, recorded through HEI income, net on our consolidated statements of income. During the nine months ended September 30, 2025, we completed a CAFL securitization of bridge loans sponsored by our joint venture. This transaction involved the transfer and securitization of bridge loans contributed from the joint venture and from Redwood through one bridge securitization entity.