Company: RWT-PA
Filing Date: 2025-05-09
Form Type: 10-Q
Source: 0000930236-25-000020
Chunk: 225

Company: REDWOOD TRUST INC
Filing Date: 2025-05-09
Form: 10-Q
Item: Part I, Item 8
Chunk 225
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 of borrower/sponsor 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 both the first quarter of 2025 and fourth quarter of 2024, the average length of maturity extensions granted on residential investor bridge loans was under seven months and five months, respectively. Nonaccrual LoansInterest income is accrued on loans in the period the coupon interest is contractually earned until such time a loan is placed on non-accrual status.A loan is generally placed on non-accrual status when it is probable that all principal and interest due under the contractual terms will not be collected and a loan is past due more than 90 days. At the time a loan is placed on non-accrual status, all previously accrued but uncollected interest is reversed against interest income and interest subsequently collected is recognized on a cash basis when it is received. A loan remains on non-accrual status until the loan balance is deemed collectible or until such time the loan qualifies to be placed back on accrual status. Generally, a loan is placed back on accrual status when the loan becomes contractually current or the collection of past due and future payments is reasonably assured either through reinstatement by the borrower, recoverability on the estimated net equity in the underlying real estate property or both.At March 31, 2025, residential investor loans with an aggregate unpaid principal balance of $342 million and an aggregate fair value of $265 million, respectively, were on non-accrual status. Of this balance, loans with $150 million aggregate unpaid principal balance were on full non-accrual of the contractual coupon interest and loans with $192 million aggregate unpaid principal balance were on non-accrual of deferred interest. Included in the balance of loans on non-accrual status that were less than 90 days past due (including loans that were contractually current) had an aggregate unpaid principal balance of $157 million as of March 31, 2025. 

At December 31, 2024,  residential investor loans with an aggregate unpaid principal balance of $343 million