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Mortgage Banking and Invetsment Activities, Net
 12 Months Ended
Dec. 31, 2015
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]  
Mortgage Banking and Invetsment 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 years ended December 31, 2015, 2014, and 2013.
Table 18.1 – Mortgage Banking and Investment Activities
 
 
Years Ended December 31,
(In Thousands)
 
2015
 
2014
 
2013
Residential mortgage banking activities, net:
 
 
 
 
 
 
Changes in fair value of:
 
 
 
 
 
 
Residential loans, at fair value (1)
 
$
3,712

 
$
51,311

 
$
(10,455
)
Real estate securities (2)
 
(15,261
)
 
(23,839
)
 
42,451

Risk management derivatives (3)
 
14,657

 
(9,386
)
 
47,387

Hedging allocation (2)
 
1,120

 
—

 
—

Other income, net (4)
 
4,040

 
3,468

 
48

Total residential mortgage banking activities, net:
 
8,268

 
21,554

 
79,431

 
 
 
 
 
 
 
Commercial mortgage banking activities, net:
 
 
 
 
 
 
Changes in fair value of:
 
 
 
 
 
 
Commercial loans, at fair value
 
10,265

 
20,789

 
8,694

Risk management derivatives (3)
 
(8,011
)
 
(7,890
)
 
3,376

Net gains on commercial loan sales
 
—

 
—

 
11,031

Other income
 
450

 
541

 
—

Total commercial mortgage banking activities, net:
 
2,704

 
13,440

 
23,101

 
 
 
 
 
 
 
Investment activities, net
 
 
 
 
 
 
     Changes in fair value of:
 
 
 
 
 
 
          Residential loans held-for-investment, at Redwood
 
(6,337
)
 
(697
)
 
—

Real estate securities
 
(2,265
)
 
(923
)
 
(5,357
)
Net investments in consolidated Sequoia entities
 
(1,192
)
 
(894
)
 
(613
)
Risk sharing investments
 
(1,886
)
 
104

 
—

Risk management derivatives
 
(8,557
)
 
(7,792
)
 
223

Hedging allocation (2)
 
(1,120
)
 
—

 
—

Total investment activities:
 
(21,357
)
 
(10,202
)
 
(5,747
)
Mortgage banking and investment activities, net
 
$
(10,385
)
 
$
24,792

 
$
96,785


(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 2 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.