Company: RWT-PA
Filing Date: 2025-05-09
Form Type: 10-Q
Source: 0000930236-25-000020
Chunk: 301

Company: REDWOOD TRUST INC
Filing Date: 2025-05-09
Form: 10-Q
Item: Part I, Item 8
Chunk 301
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 fair value of our total residential investor bridge loans held-for-investment and associated REO represented 95.3% of the combined unpaid principal balance of these loans and the unpaid principal balance of the loans associated with the REO at time of foreclosure. The fair value of multifamily loans within this population ($744 million at March 31, 2025) and associated multifamily REO ($24 million at March 31, 2025), represented 91.3% of the combined unpaid principal balance of these loans and the unpaid principal balance of the loans associated with the REO at time of foreclosure. As we have revised our underwriting practices to discontinue the active origination of large multi-family loans, we expect the exposure to multifamily loans and REO to decrease over time. In the second quarter of 2025, we have begun taking steps to accelerate the reduction of our legacy bridge loan portfolio in order to streamline our operations and focus our human and investment capital on strategic go-forward activities.

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Home Equity Investments

The following table provides the activity of HEI held at our Redwood Investment segment during the three months ended March 31, 2025.

Table 16 – HEI at Redwood Investments Segment - ActivityHome Equity Investments(1)Three Months Ended(In Thousands)March 31, 2025Balance at beginning of period$589,785 New/additional investments1,834 Settlements(10,348)Changes in fair value, net19,048 Other67 Balance at End of Period$600,386 

(1)Our HEI presented in this table as of March 31, 2025, include $338 million of HEI owned in our consolidated HEI securitization entities and $262 million of HEI owned directly at Redwood.

We finance a portion of our HEI through a short-term warehouse facility. At March 31, 2025, there was $92 million of debt outstanding on this warehouse facility, secured by HEI with a fair value of $208 million. 

Additional details on our HEI are included in Note 10 of our Notes to Consolidated Financial Statements, included in Part I, Item 1 of this Quarterly Report on Form 10-Q. During the three months ended March 31, 2025, positive investment fair value changes primarily reflected improvements in actual and forecasted home price appreciation, relative to previously modeled amounts. 

Income Taxes

REIT Status and Dividend Characterization