Company: RWT-PA
Filing Date: 2025-08-08
Form Type: 10-Q
Source: 0000930236-25-000029
Chunk: 102

Company: REDWOOD TRUST INC
Filing Date: 2025-08-08
Form: 10-Q
Item: Part I, Item 1
Chunk 102
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 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 8. Residential Investor Loans - (continued)

For the three months ended June 30, 2025 and December 31, 2024, we modified loans by extending maturities and/or covenant terms with an aggregate unpaid principal balance of $303 million and $186 million, respectively. Of this balance, we further modified loans that had been previously modified in a prior period. The aggregate unpaid principal balance of these loans totaled $169 million and $103 million, respectively. While we continue to actively engage with certain borrowers to address the impacts of rising interest rates, elongated project timelines, or other issues, further increases in delinquencies or modifications within our residential investor bridge loan portfolio could ultimately result in further decreases in net interest income and the fair value of our bridge loans held for investment, and further instances of borrower/sponsor financial stress could lead to realized credit losses. An increase in maturity extensions in the residential investor bridge portfolio would increase the expected time to repayment with a potential impact on fair values and credit losses. However, given the overall short duration nature of our bridge loans, a certain level of maturity extensions are a routine asset management outcome for these loans, irrespective of market conditions. When we provide these types of maturity extensions, our asset management function also seeks to charge a fee. For the second quarter of 2025 and fourth quarter of 2024, the average length of maturity extensions granted on residential investor bridge loans was under five months and four months, respectively. Nonacc