Company: RWT-PA
Filing Date: 2025-08-08
Form Type: 10-Q
Source: 0000930236-25-000029
Chunk: 262

Company: REDWOOD TRUST INC
Filing Date: 2025-08-08
Form: 10-Q
Item: Part I, Item 8
Chunk 262
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) and establish interest reserves to cover potential debt service shortfalls. Any shift in our intended exit strategy could have implications for the valuation of these loans. Additionally, we may further modify loans that were previously modified. These subsequent modifications may include changes to the contractual interest pay rate and deferred interest terms.  In the three months ended June 30, 2025, consistent with our strategic transition away from non-core legacy assets, we classified certain modified and legacy loans as held-for-sale and evaluated these assets for impairment in accordance with applicable accounting guidance. These classifications and related fair value measurements reflect updated expectations regarding the timing and manner of recovery, and incorporate observable market data, recent comparable asset sales, and other valuation inputs, as appropriate.For the three months ended June 30, 2025 and December 31, 2024, we modified or put into forbearance loans with a total aggregate unpaid principal balance of $363 million and $353 million, respectively. This balance included modifications to the contractual interest rates (including, in certain cases, deferrals of interest) on loans, modifications involving only extensions of loan maturities and/or covenant terms and further modifications on loans that had been previously modified in a prior period.For the three months ended June 30, 2025 and December 31, 2024, we modified loans primarily involving adjustments to contractual interest pay rates (including, in certain cases, deferrals of interest) with an aggregate unpaid principal balance of $60 million and $167 million, respectively. Modifications on these loans maintained a contractual interest rate of approximately 8.91% and 8.64%, respectively, of which 3.72% and 5.39% represented deferred interest, respectively. Of this population, we further modified loans that had been previously modified in a prior period, with an aggregate unpaid principal balance of $25 million and $24 million, respectively. The further modifications on these loans involved one or more of: (i) additional amendments to the contractual interest pay rate and deferred interest, (ii) maturity extensions (subject to mandatory partial repayments during the loan term) and (iii) establishment of a hard cash management structure (enabling Redwood, as the lender, to control all cash flows at the property), along with funding interest reserves to cover debt service shortfalls.

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REDWOOD TRUST, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30, 2025(Unaudited) Note