Company: RWT-PA
Filing Date: 2025-08-08
Form Type: 10-Q
Source: 0000930236-25-000029
Chunk: 331

Company: REDWOOD TRUST INC
Filing Date: 2025-08-08
Form: 10-Q
Item: Part I, Item 8
Chunk 331
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Six Months Ended June 30, 2025 Compared to Six Months Ended June 30, 2024 

Segment contribution from Sequoia Mortgage Banking increased significantly to $48 million for the six months ended June 30, 2025, up from $17 million in the prior-year period, an improvement of $31 million. This increase was driven by a substantial rise in income from mortgage banking activities from higher loan lock volumes and distribution activities, and ongoing operational efficiency.

Mortgage banking income (which includes net interest income and non-interest income from mortgage banking activities, net) totaled $80 million through June 30, 2025, representing an increase of $49 million or 157% compared to $31 million for the six months ended June 30, 2024. This growth was supported by strong performance across both flow and bulk acquisition channels, particularly from bank sellers, which saw enhanced engagement throughout the first half of 2025.

Total loan locks during the period reached $7.6 billion, up from $4.4 billion in the first half of 2024 — an increase of over 71%. This sharp growth reflects both a broadening of Sequoia's seller network, deepening of wallet share across existing relationships and an increase in bulk activity, as evidenced by a $1.0 billion seasoned pool that was locked during the first quarter of 2025.

Aspire, included in this segment's reported results, contributed $441 million in lock volume during the six months ended June 30, 2025, with the second quarter locks reaching $330 million, a 197% increase from the prior quarter. Aspire’s seller network increased by 60% during the second quarter to approximately 40 originators, and over 85% of these sellers also do business with Sequoia. Aspire also completed its first whole loan sale during the second quarter of 2025, marking a key milestone as the platform scales into an expanding non-QM market.

72

Key performance trends such as gain-on-sale margins, cost per loan, and operating efficiency followed a similar trajectory in the year-to-date comparison as observed in the quarter-over-quarter period, with both timeframes reflecting elevated margins, stable efficiency metrics (as measured primarily by cost per loan), and scaled distribution execution.

Distribution activity in the six months ended June 30, 2025 was elevated across securitization and whole loan activity with $4.9 billion distributed relative to $2.8 billion for the period ended June