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Mortgage Banking and Investment Activities, Net
 9 Months Ended
Sep. 30, 2015
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]  
Mortgage Banking and Investment Activities, Net
Mortgage Banking and Investment Activities, Net
The following table presents the components of mortgage banking and investment activities, net, recorded in our consolidated statements of income for the three and nine months ended September 30, 2015 and 2014.
Table 18.1 – Mortgage Banking and Investment Activities
 
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
(In Thousands)
 
2015
 
2014
 
2015
 
2014
Residential mortgage banking activities, net:
 
 
 
 
 
 
 
 
Changes in fair value of:
 
 
 
 
 
 
 
 
Residential loans, at fair value (1)
 
$
36,183

 
$
15,976

 
$
54,375

 
$
40,685

Real estate securities (2)
 
—

 
(1,332
)
 
(14,359
)
 
(14,419
)
Risk management derivatives (3)
 
(35,346
)
 
(4,297
)
 
(36,962
)
 
(16,433
)
Hedging allocation (2)
 
(1,683
)
 
—

 
1,120

 
—

Other income, net (4)
 
1,177

 
1,082

 
3,209

 
1,871

Total residential mortgage banking activities, net:
 
331

 
11,429

 
7,383

 
11,704

 
 
 
 
 
 
 
 
 
Commercial mortgage banking activities, net:
 
 
 
 
 
 
 
 
Changes in fair value of:
 
 
 
 
 
 
 
 
Commercial loans, at fair value
 
3,974

 
4,305

 
10,819

 
13,644

Risk management derivatives (3)
 
(3,081
)
 
1,892

 
(7,832
)
 
(1,726
)
Other fee income
 
109

 
289

 
336

 
382

Total commercial mortgage banking activities, net:
 
1,002

 
6,486

 
3,323

 
12,300

 
 

 

 

 

Investment activities, net
 
 
 
 
 
 
 
 
     Changes in fair value of:
 
 
 
 
 
 
 
 
          Residential loans held-for-investment, at Redwood
 
9,077

 
(991
)
 
5,170

 
(991
)
Real estate securities
 
(9,010
)
 
(765
)
 
(1,813
)
 
(1,218
)
Net investments in consolidated Sequoia entities
 
(500
)
 
(361
)
 
(2,277
)
 
(825
)
Risk sharing investments
 
(1,098
)
 
—

 
(1,799
)
 
—

Risk management derivatives
 
(14,321
)
 
(1,632
)
 
(15,266
)
 
(10,986
)
Hedging allocation (2)
 
1,683

 
—

 
(1,120
)
 
—

Total investment activities:
 
(14,169
)
 
(3,749
)
 
(17,105
)
 
(14,020
)
Mortgage banking and investment activities, net
 
$
(12,836
)
 
$
14,166

 
$
(6,399
)
 
$
9,984


(1)
Includes changes in fair value for associated loan purchase and forward sale commitments.
(2)
In the second quarter of 2015, we transferred securities previously utilized as hedges for our mortgage banking segment to our residential investments segment and began to record a hedging allocation between our business segments. See Note 21 for further discussion.
(3)
Represents market valuation changes of derivatives that are used to manage risks associated with our accumulation of residential and commercial loans.
(4)
Amounts in this line item include other fee income from loan acquisitions and the provision for repurchases expense, presented net.