Company: RWT-PA
Filing Date: 2025-08-08
Form Type: 10-Q
Source: 0000930236-25-000029
Chunk: 329

Company: REDWOOD TRUST INC
Filing Date: 2025-08-08
Form: 10-Q
Item: Part I, Item 8
Chunk 329
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 $3.3 billion in Sequoia jumbo locks and $330 million from Aspire's mortgage banking activities.

The lock activity was marked by an increase in on-the-run (or current coupon) production volume, which rose 15% quarter over quarter despite a temporary pullback in April due to tariff-related market volatility. Notably, this was the highest quarter of on-the-run lock volume since 2021, a time when the jumbo mortgage origination market was more than three times the size it is today. The strength of our lock volume is supported by ongoing inroads with our network of 214 loan sellers, a number of which includes some of the largest bank and non-bank jumbo originators in the market.

Gain on sale margins remained above historical targets, at 131 basis points, compared to 123 basis points in the prior quarter and above the long-term target range of 75 to 100 basis points. This improvement was supported by favorable execution conditions and strong institutional demand for Sequoia’s securitized and whole loan offerings.

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Distribution activity remained robust, with $2.9 billion of loans distributed during the quarter ($2.0 billion of which was through securitization and $0.9 billion of which was through whole loan sales), representing the most active distribution period since the second quarter of 2021. Sequoia continued to maintain its leadership in the jumbo loan RMBS market, completing four securitizations (three of which were backed by newly-originated loans and one of which was backed by seasoned loans) representing approximately 40% of all non-bank jumbo loan securitization volume year-to-date, underscoring its dominant market position.

The seller network also expanded meaningfully. Aspire, included under Sequoia Mortgage Banking, added new loan originators during the quarter, with its total seller network growing by 60% quarter over quarter to approximately 40 sellers. Notably, over 85% of Aspire’s current sellers overlap with the Sequoia network, pointing to cross-platform leverage and operational integration.

Adjustable-rate mortgage (ARM) activity remained elevated as a share of total locks, reaching approximately 10% of total Sequoia volume in the second quarter, in line with levels seen in the first quarter of 2025 and the fourth quarter of 2024, but up from just 0.3% in 2023. This trend reflects borrower demand for affordability solutions amid persistently elevated interest rates