XML 24 R13.htm IDEA: XBRL DOCUMENT
v3.25.3

Other Assets | 9 Months Ended
--- | ---
Sep. 30, 2025
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] |
Other Assets | Other Assets The following table presents the components of the Company’s Other assets at September 30, 2025 and December 31, 2024:
(In Thousands) |  | September 30, 2025 |  | December 31, 2024
REO |  | $ | 138,121 |  |  | $ | 130,854 |
Commercial REO |  | 18,895 |  |  | 18,373 |
Goodwill |  | 61,076 |  |  | 61,076 |
Intangibles, net (1) |  | 2,900 |  |  | 4,800 |
Capital contributions made to loan origination partners |  | 20,182 |  |  | 16,793 |
Commercial loans |  | 6,947 |  |  | 7,435 |
Interest receivable |  | 106,767 |  |  | 104,395 |
Other loan related receivables |  | 7,776 |  |  | 21,643 |
Lease right-of-use asset (2) |  | 44,646 |  |  | 35,461 |
Other |  | 79,711 |  |  | 58,725 |
Total Other Assets |  | $ | 487,021 |  |  | $ | 459,555 |
(1) Net of aggregate accumulated amortization of $25.1 million and $23.2 million as of September 30, 2025 and December 31, 2024, respectively. (2) An estimated incremental borrowing rate of 7.5% was used in connection with the Company’s primary operating lease (see Notes 2 and 9). (a) Real Estate Owned and Commercial REO The following table summarizes the aggregate carrying value of REO properties by loan source prior to foreclosure proceeding or from completion of a deed-in-lieu of foreclosure or similar legal agreement.
(Dollars In Thousands) |  | September 30, 2025 |  | December 31, 2024
Non-QM loans |  | $ | 8,280 |  |  | $ | 1,278 |
Business purpose loans |  | 84,585 |  |  | 71,090 |
Legacy RPL/NPL loans |  | 45,256 |  |  | 58,486 |
Total |  | $ | 138,121 |  |  | $ | 130,854 |
Number of properties |  | 373 |  |  | 416 |
At September 30, 2025, $138.1 million of residential real estate property was held by the Company that was acquired either through a completed foreclosure proceeding or from completion of a deed-in-lieu of foreclosure or similar legal agreement. In addition, formal foreclosure proceedings were in process with respect to $45.2 million of residential whole loans held at carrying value and $227.5 million of residential whole loans held at fair value at September 30, 2025. The following table presents the activity in the Company’s REO for the three and nine months ended September 30, 2025 and 2024:
|  | Three Months Ended September 30, |  | Nine Months Ended September 30,
(Dollars In Thousands) |  | 2025 |  | 2024 |  | 2025 |  | 2024
Balance at beginning of period |  | $ | 135,824 |  |  | $ | 108,013 |  |  | $ | 130,854 |  |  | $ | 110,174 |
Adjustments to record at lower of cost or fair value |  | (2,281) |  |  | (2,180) |  |  | (9,059) |  |  | (6,137) |
Transfer from residential whole loans (1) |  | 29,325 |  |  | 37,132 |  |  | 85,059 |  |  | 82,083 |
Purchases and capital improvements, net |  | 56 |  |  | 78 |  |  | 373 |  |  | 281 |
Disposals and other (2) |  | (24,803) |  |  | (15,946) |  |  | (69,106) |  |  | (59,304) |
Balance at end of period |  | $ | 138,121 |  |  | $ | 127,097 |  |  | $ | 138,121 |  |  | $ | 127,097 |
Number of properties |  | 373 |  |  | 411 |  |  | 373 |  |  | 411 |
(1)During the three and nine months ended September 30, 2025, the Company recognized $1.0 million and $(3.4) million of gains/(losses), respectively, on Residential whole loans in Other Income/(Loss), net associated with the transfer of loans to REO. During the three and nine months ended September 30, 2024, the Company recognized $(3.4) million and $(5.8) million of gains/(losses), respectively, on Residential whole loans in Other Income/(Loss), net associated with the transfer of loans to REO. (2)During the three and nine months ended September 30, 2025, the Company sold 84 and 285 REO properties for consideration of $27.3 million and $73.3 million, realizing net gains of approximately $2.5 million and $4.8 million, respectively. During the three and nine months ended September 30, 2024, the Company sold 58 and 194 REO properties for consideration of $18.3 million and $68.2 million, realizing net gains of approximately $2.4 million and $8.9 million, respectively. These amounts are included in Other Income/(Loss), net on the Company’s consolidated statements of operations. Commercial REO In the third quarter of 2024, the Company received 75% and 49% interests, respectively, in two VIEs through foreclosure of a multifamily property and a senior living facility underlying delinquent commercial mortgage loans. Each of these entities was determined to be a VIE but the Company was not determined to be the primary beneficiary; as a result, the investments in the entities are considered equity method investments. Each entity accounts for its respective commercial REO property (the “Commercial REO”) similarly to the manner in which the Company accounts for its residential REO. The entities generally do not own any other significant assets or carry any significant liabilities, except that the two entities contain properties encumbered by third-party financing. The properties foreclosed in 2024 were considered held-for-investment. During the nine months ended September 30, 2025, the two properties were transferred to held-for-sale status. (b) Goodwill and Intangible Assets On July 1, 2021, the Company completed the acquisition of Lima One. In connection with the acquisition of Lima One, the Company identified and recorded goodwill of $61.1 million and finite-lived intangible assets totaling $28.0 million. For the Lima One reporting unit, as of the most recent testing date (October 1, 2024), the estimated fair value of the reporting unit exceeded its carrying value. Key assumptions used in the valuation included loan origination volume, expense levels, discount rates and capitalization multiples, all of which are subject to variability in the current market. The amortization period for each of the finite lived intangible assets and the activity for the nine months ended September 30, 2025 is summarized in the table below:
(Dollars in Thousands) |  | Carrying Value at December 31, 2024 |  | Amortization Nine months ended September 30, 2025 |  | Carrying Value at September 30, 2025 |  | Amortization Period (Years) (1)
Trademarks / Trade Names |  | $ | 2,600 |  |  | $ | (300) |  |  | $ | 2,300 |  |  | 10
Customer Relationships |  | 1,000 |  |  | (1,000) |  |  | — |  |  | 4
Internally Developed Software |  | 1,200 |  |  | (600) |  |  | 600 |  |  | 5
Total Identified Intangibles |  | $ | 4,800 |  |  | $ | (1,900) |  |  | $ | 2,900 |  |  |
(1) Amortization is calculated on a straight-line basis over the amortization period, except for Customer Relationships, where amortization is calculated based on expected levels of customer attrition. (c) Capital Contributions Made to Loan Origination Partners The Company has made investments in several loan originators as part of its strategy to be a reliable source of capital to select partners from whom the Company sources residential mortgage loans through both flow arrangements and bulk purchases. At September 30, 2025, the carrying value of these investments (including adjustments for impairments or mark-to-market changes) was $20.2 million, including $5.1 million of common equity (including partnership interests) and $15.1 million of preferred equity. During the nine months ended September 30, 2025 and 2024, there were no impairment charges recorded by the Company on its investments in loan origination partners. Prior to December 31, 2024, the Company had elected to account for certain of these investments pursuant to the fair value option, where changes in estimated fair value were recorded on the statement of operations. Such changes in estimated fair value resulted in gains (losses) being recorded of $0.0 million and $3.4 million during the three and nine months ended September 30, 2025, and $(1.5) million and $(3.0) million during the three and nine months ended September 30, 2024. For certain of the Company’s investments, the interests acquired to date by the Company generally do not have a readily determinable fair value. Consequently, the Company accounts for these interests (including any acquired options and warrants) in loan originators initially at cost. The carrying value of these investments will be adjusted if it is determined that an impairment has occurred or if there has been a subsequent observable transaction in either the investee company’s equity securities or a similar security that provides evidence to support an adjustment to the carrying value. In addition, for certain partners, options or warrants have also been acquired that provide the Company the ability to increase the level of its investment if certain conditions are met. At the end of each reporting period, or earlier if circumstances warrant, the Company evaluates whether the nature of its interests and other involvement with the investee entity requires the Company to apply equity method accounting or consolidate the results of the investee entity with the Company’s financial results. (d) Commercial Mortgage Loans The Company owns two participations in commercial mortgage bridge loans, which are accounted for at fair value under the fair value option, and are classified as Level 3 fair value measurements in the fair value hierarchy. Each of the participations is 75% of the total UPB of the related loans and the remaining interest in each loan was retained by the originator of such loan. The commercial mortgage loans are collateralized by one multifamily property and one office property. The commercial mortgage loans are first liens and bear variable interest rates. The following table presents certain additional information about the Company’s commercial mortgage loans as of September 30, 2025 and December 31, 2024:
(Dollars In Thousands) |  | Fair Value / Carrying Value |  | UPB |  | Weighted Average Coupon |  | Weighted Average Term to Maturity (Months) |  | UPB 60+ Days Delinquent | Weighted Average LTV Ratio |
Commercial Loans - September 30, 2025 |  | $ | 6,947 |  |  | $ | 9,385 |  |  | 11.26 | % |  | 0 |  | $ | 9,385 |  | 142 | % |
Commercial Loans - December 31, 2024 |  | $ | 7,435 |  |  | $ | 9,385 |  |  | 11.48 | % |  | 0 |  | $ | 4,875 |  | 82 | % |
(e) Derivative Instruments Swaps The Company’s derivative instruments include both interest rate swap agreements and ERIS swap futures, which are used to economically hedge the interest rate risk associated with certain borrowings. Pursuant to these arrangements, the Company agreed to pay a fixed rate of interest and receive a variable interest rate, generally based on the Secured Overnight Financing Rate (“SOFR”), on the notional amount of the Swap. At September 30, 2025, none of the Company’s Swaps were designated as hedges for accounting purposes. Variation margin payments on the Company’s Swaps are treated as a legal settlement of the exposure under the related Swap contract, the effect of which reduces what would have otherwise been reported as the fair value of the Swap, generally to zero. The following table presents the assets pledged as collateral against the Company’s Swaps:
(In Thousands) |  | September 30, 2025 |  | December 31, 2024 |  |
Agency MBS, at fair value |  | $ | 33,032 |  |  | $ | 44,411 |  |  |
Restricted Cash |  | 20,478 |  |  | 16,567 |  |  |
As of September 30, 2025, the Company had Swaps with an aggregate notional amount of $3.8 billion and an average maturity of approximately 44 months with a maximum term of approximately 108 months. The following table presents information about the Company’s Swaps at September 30, 2025 and December 31, 2024:
|  | September 30, 2025 |  | December 31, 2024 |  |  |  |
Maturity (1) |  | Notional Amount (2) |  | Weighted Average Fixed-Pay Interest Rate |  | Weighted Average Variable Interest Rate (3) |  | Notional Amount (2) |  | Weighted Average Fixed-Pay Interest Rate |  | Weighted Average Variable Interest Rate (3) |  |  |  |
(Dollars in Thousands) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Within 30 days |  | $ | — |  |  | — | % |  | — | % |  | $ | 450,000 |  |  | 1.16 | % |  | 4.49 | % |  |  |  |
Over 30 days to 3 months |  | — |  |  | — |  |  | — |  |  | 100,000 |  |  | 1.65 |  |  | 4.49 |  |  |  |  |
Over 3 months to 6 months |  | — |  |  | — |  |  | — |  |  | 125,000 |  |  | 2.69 |  |  | 4.49 |  |  |  |  |
Over 6 months to 12 months |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  |  |  |
Over 12 months to 24 months |  | 1,591,500 |  |  | 1.74 |  |  | 4.24 |  |  | 450,000 |  |  | 1.12 |  |  | 4.49 |  |  |  |  |
Over 24 months to 36 months |  | 361,500 |  |  | 3.33 |  |  | 4.24 |  |  | 1,045,000 |  |  | 1.84 |  |  | 4.49 |  |  |  |  |
Over 36 months to 48 months |  | 332,800 |  |  | 2.96 |  |  | 4.24 |  |  | 24,600 |  |  | 4.28 |  |  | 4.49 |  |  |  |  |
Over 48 months to 60 months |  | 793,700 |  |  | 3.37 |  |  | 4.24 |  |  | 574,000 |  |  | 3.28 |  |  | 4.49 |  |  |  |  |
Over 60 months to 72 months |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  |  |  |
Over 72 months |  | 694,100 |  |  | 3.31 |  |  | 4.24 |  |  | 545,150 |  |  | 3.42 |  |  | 4.49 |  |  |  |  |
Total Swaps |  | $ | 3,773,600 |  |  | 2.63 | % |  | 4.24 | % |  | $ | 3,313,750 |  |  | 2.20 | % |  | 4.49 | % |  |  |  |
(1)Each maturity category reflects contractual amortization and/or maturity of notional amounts. (2)As of September 30, 2025, the aggregate notional amounts of Swaps include $2.1 billion of interest rate swap agreements and $1.7 billion of ERIS swap futures. As of December 31, 2024, all aggregate notional amounts of Swaps were from interest rate swap agreements. (3)Reflects the benchmark variable rate due from the counterparty at the date presented. This rate adjusts daily based on SOFR. Impact of Derivative Instruments on Earnings The following table present the components of Net gain/(loss) on derivatives used for risk management purposes, which is presented in Other Income/(Loss), net in the consolidated statements of operations:
|  | Three Months Ended September 30, |  | Nine Months Ended September 30,
(In Thousands) |  | 2025 |  | 2024 |  | 2025 |  | 2024
Income on Swaps variable receive leg |  | $ | 39,383 |  |  | $ | 45,773 |  |  | $ | 110,311 |  |  | $ | 134,082 |
Expense on Swaps fixed pay leg |  | (23,383) |  |  | (15,903) |  |  | (63,574) |  |  | (46,188) |
Unrealized mark-to-market gain/(loss) |  | (5,981) |  |  | (57,099) |  |  | (66,214) |  |  | (44,155) |
Net price alignment expense on margin collateral received |  | (974) |  |  | (2,059) |  |  | (3,609) |  |  | (6,999) |
Realized gain/(loss) on terminated Swaps |  | (8,845) |  |  | (27,530) |  |  | (26,020) |  |  | (27,530) |
Total Net gain/(loss) on derivatives used for risk management purposes |  | $ | 200 |  |  | $ | (56,818) |  |  | $ | (49,106) |  |  | $ | 9,210 |

X
- References No definition available. + Details
Name: | us-gaap_DeferredCostsCapitalizedPrepaidAndOtherAssetsDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for other assets. This disclosure includes other current assets and other noncurrent assets. + References No definition available. + Details
Name: | us-gaap_OtherAssetsDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration