Residential Loans (Tables) - Residential Loans

12 Months Ended

Dec. 31, 2015

Mortgage Loans on Real Estate [Line Items]

Summary of Classifications and Carrying Value of Loans

The following table summarizes the classifications and carrying values of the residential loans owned at Redwood and at consolidated Sequoia entities at December 31, 2015 and December 31, 2014.

Table 6.1 – Classifications and Carrying Values of the Residential Loans



December 31, 2015
(In Thousands)	Redwood		Sequoia ⁽¹⁾		Total
Held-for-sale
Fair value - conforming	$	129,819	$	—	$	129,819
Fair value - jumbo	984,486		—		984,486
Lower of cost or fair value - jumbo	1,433		—		1,433
Total held-for-sale	1,115,738		—		1,115,738

Held-for-investment
Fair value - jumbo	1,791,195		1,021,870		2,813,065
Total Residential Loans	$	2,906,933	$	1,021,870	$	3,928,803



December 31, 2014
(In Thousands)	Redwood		Sequoia ⁽¹⁾		Total
Held-for-sale
Fair value - conforming	$	244,714	$	—	$	244,714
Fair value - jumbo	1,096,317		—		1,096,317
Lower of cost or fair value - jumbo	1,488		—		1,488
Total held-for-sale	1,342,519		—		1,342,519

Held-for-investment
Fair value - jumbo	581,668		—		581,668
At amortized cost	—		1,474,386		1,474,386
Total Residential Loans	$	1,924,187	$	1,474,386	$	3,398,573


(1)	Upon adoption of ASU 2014-13 on January 1, 2015, we began to record loans held-for-investment at consolidated Sequoia entities at fair value. See Note 3 for further discussion.

Carrying Value for Loans Held-for-Investment

The following table details the carrying value for residential loans held-for-investment at consolidated Sequoia entities at December 31, 2015 and December 31, 2014.

Table 6.2 – Carrying Value for Held-for-Investment Residential Loans at Sequoia Entities



(In Thousands)	December 31, 2015			December 31, 2014
Principal balance	$	1,122,415		$	1,483,213
Unamortized premium, net	—			12,511
Allowance for loan losses	—			(21,338		)
Valuation adjustment	(100,545		)	—
Carrying Value	$	1,021,870		$	1,474,386

Geographic Concentration of Loans Recorded on Consolidated Balance Sheet

The following table presents the geographic concentration of residential loans recorded on our consolidated balance sheets at December 31, 2015 and 2014.

Table 6.3 – Geographic Concentration of the Residential Loans



	December 31, 2015						December 31, 2014
Geographic Concentration (by Principal)	Held-for-Sale		Held-for- Investment at Sequoia		Held-for- Investment at FVO		Held-for-Sale		Held-for- Investment at Sequoia		Held-for- Investment at FVO
California	41	%	18	%	39	%	39	%	20	%	24	%
Texas	9	%	6	%	11	%	9	%	5	%	14	%
Washington	6	%	2	%	3	%	5	%	2	%	4	%
Colorado	5	%	3	%	5	%	—	%	—	%	8	%
Florida	4	%	14	%	4	%	4	%	13	%	6	%
Virginia	3	%	3	%	4	%	5	%	3	%	7	%
Georgia	3	%	5	%	1	%	2	%	5	%	—	%
Massachusetts	2	%	2	%	4	%	6	%	2	%	5	%
New York	1	%	8	%	5	%	2	%	8	%	3	%
Other states (none greater than 5%)	26	%	39	%	24	%	28	%	42	%	29	%
Total	100	%	100	%	100	%	100	%	100	%	100	%

Loan Product Type and Accompanying Loan Characteristics of Loans

The following table displays the loan product type and accompanying loan characteristics of residential loans recorded on our consolidated balance sheets at December 31, 2015 and 2014.

Table 6.4 – Classifications and Carrying Values of Residential Loans



December 31, 2015
(In Thousands)
Loan Balance					Number of Loans	Interest Rate⁽¹⁾				Maturity Date			Total Principal		30-89 Days DQ		90+ Days DQ
Held-for-Investment at Redwood⁽²⁾:
ARM loans
	$	251	to	$500	2	3.63	%	to	3.75%	2044-07	-	2044-07	$	563	$	—	$	—
	$	501	to	$750	2	3.50	%	to	3.50%	2045-09	-	2045-10	1,671		—		—
	$	751	to	$1,000	1	3.63	%	to	3.63%	2044-08	-	2044-08	1,267		—		—
					5								3,501		—		—
Hybrid ARM loans
	$	251	to	$500	7	2.88	%	to	3.88%	2044-01	-	2044-09	2,963		—		—
	$	501	to	$750	28	2.63	%	to	4.9%	2040-09	-	2044-10	17,514		—		—
	$	751	to	$1,000	15	2.75	%	to	5.05%	2039-05	-	2044-11	12,994		—		—
			over	$1,000	6	2.88	%	to	5.2%	2039-04	-	2044-12	8,797		—		—
					56								42,268		—		—
Fixed loans
	$	—	to	$250	29	3.64	%	to	5.38%	2039-04	-	2045-10	5,295		242		—
	$	251	to	$500	484	3.13	%	to	5.13%	2029-07	-	2045-12	212,732		913		—
	$	501	to	$750	959	2.94	%	to	5.25%	2026-11	-	2045-12	595,863		3,213		—
	$	751	to	$1,000	552	2.90	%	to	5.00%	2024-01	-	2045-12	480,557		989		—
			over	$1,000	313	3.14	%	to	5.00%	2027-04	-	2045-12	418,774		—		—
					2,337								1,713,221		5,357		—
Total HFI at Redwood:					2,398								$	1,758,990	$	5,357	$	—
Held-for-Investment at Sequoia ⁽¹⁾:
ARM loans:
	$	—	to	$250	3,133	0.38	%	to	5.16%	2013-02	-	2035-11	$	355,415	$	10,661	$	13,078
	$	251	to	$500	858	—	%	to	5.63%	2013-12	-	2036-05	296,425		9,620		15,345
	$	501	to	$750	269	0.63	%	to	4.66%	2014-05	-	2035-09	161,273		4,578		7,209
	$	751	to	$1,000	135	0.38	%	to	2.38%	2019-02	-	2035-07	118,983		3,586		8,473
			over	$1,000	109	—	%	to	2.63%	2022-01	-	2036-05	169,492		1,341		14,718
					4,504								1,101,588		29,786		58,823
Hybrid ARM loans:
	$	—	to	$250	3	2.75	%	to	2.88%	2033-09	-	2034-06	317		—		—
	$	251	to	$500	20	2.63	%	to	2.88%	2033-07	-	2034-12	7,523		—		—
	$	501	to	$750	15	2.63	%	to	2.88%	2033-08	-	2034-12	9,874		542		—
	$	751	to	$1,000	2	2.75	%	to	2.75%	2033-07	-	2033-08	1,547		—		—
			over	$1,000	1	2.75	%	to	2.75%	2033-09	-	2033-09	1,566		—		—
					41								20,827		542		—
Total HFI at Sequoia:					4,545								$	1,122,415	$	30,328	$	58,823
Held-for-Sale:
ARM loans
	$	64	to	$1,298	14	1.50	%	to	4.00%	2032-11	-	2045-12	$	5,258	$	—	$	415
Hybrid ARM loans
	$	164	to	$1,989	356	2.50	%	to	4.25%	2037-06	-	2046-01	276,457		2,249		—
Fixed loans
	$	30	to	$2,332	1,402	2.75	%	to	5.25%	2025-09	-	2046-01	809,803		2,097		1,437
Total Held-for-Sale					1,772								$	1,091,518	$	4,346	$	1,852



December 31, 2014
(In Thousands)
Loan Balance					Number of Loans	Interest Rate⁽¹⁾				Maturity Date			Total Principal		30-89 Days DQ		90+ Days DQ
Held-for-Investment at Redwood⁽²⁾:
Hybrid ARM loans
	$	251	to	$500	29	2.38	%	to	3.75%	2044-01	-	2044-10	$	12,487	$	—	$	—
	$	501	to	$750	80	2.38	%	to	4.25%	2044-02	-	2044-11	49,085		619		—
	$	751	to	$1,000	51	2.38	%	to	3.75%	2043-05	-	2044-11	43,835		—		—
			over	$1,000	14	2.38	%	to	3.25%	2044-03	-	2044-11	17,720		—		—
					174								123,127		619		—
Fixed loans
	$	—	to	$250	1	4.13	%	to	4.13%	2044-07	-	2044-07	75		—		—
	$	251	to	$500	158	3.13	%	to	4.75%	2029-01	-	2044-12	72,931		894		—
	$	501	to	$750	272	3.13	%	to	5.00%	2029-04	-	2044-12	165,574		624		—
	$	751	to	$1,000	136	3.13	%	to	4.88%	2029-01	-	2044-12	116,892		—		—
			over	$1,000	63	3.25	%	to	5.00%	2024-01	-	2044-12	87,773		—		—
					630								443,245		1,518		—
Total HFI at Redwood:					804								$	566,372	$	2,137	$	—
Held-for-Investment at Sequoia ⁽¹⁾:
ARM loans:
	$	—	to	$250	3,400	0.25	%	to	5.50%	2012-12	-	2035-11	$	400,779	$	14,604	$	16,332
	$	251	to	$500	1,041	0.00	%	to	5.63%	2013-12	-	2036-05	360,848		14,536		13,955
	$	501	to	$750	328	0.50	%	to	4.66%	2013-08	-	2035-09	198,661		7,218		12,862
	$	751	to	$1,000	162	0.25	%	to	2.38%	2019-02	-	2035-07	143,687		2,396		9,262
			over	$1,000	132	0.00	%	to	2.63%	2022-01	-	2036-05	207,539		2,494		16,106
					5,063								1,311,514		41,248		68,517
Hybrid ARM loans:
	$	—	to	$250	3	2.63	%	to	2.63%	2033-09	-	2034-03	364		—		—
	$	251	to	$500	26	2.50	%	to	5.15%	2033-07	-	2039-12	10,056		—		319
	$	501	to	$750	23	2.50	%	to	4.65%	2033-07	-	2040-09	14,711		—		—
	$	751	to	$1,000	11	2.50	%	to	4.80%	2033-07	-	2040-12	9,393		—		—
			over	$1,000	7	2.50	%	to	4.95%	2033-09	-	2040-11	11,786		—		—
					70								46,310		—		319
Fixed loans:
	$	—	to	$250	7	3.70	%	to	4.90%	2039-04	-	2041-02	1,040		—		—
	$	251	to	$500	42	3.45	%	to	5.13%	2039-02	-	2041-07	17,574		—		—
	$	501	to	$750	71	3.65	%	to	5.25%	2039-02	-	2041-08	42,609		—		—
	$	751	to	$1,000	38	4.20	%	to	5.25%	2040-08	-	2041-08	32,966		—		726
			over	$1,000	24	4.30	%	to	5.38%	2040-09	-	2041-06	31,200		—		—
					182								125,389		—		726
Total HFI at Sequoia:					5,315								$	1,483,213	$	41,248	$	69,562
Held-for-Sale:
ARM loans
	$	66	to	$359	8	1.88	%	to	2.25%	2032-11	-	2033-10	$	1,286	$	170	$	471
Hybrid ARM loans
	$	252	to	$1,985	109	2.63	%	to	4.00%	2037-06	-	2045-01	84,271		—		—
Fixed loans
	$	75	to	$2,496	2,165	2.88	%	to	5.00%	2024-12	-	2045-01	1,219,936		1,178		—
Total Held-for-Sale					2,282								$	1,305,493	$	1,348	$	471

Notes to Table 6.4


(1)	Upon adoption of ASU 2014-13 on January 1, 2015, we began to record loans held-for-investment at consolidated Sequoia entities at fair value. See Note 3 for further discussion.


(2)	Rate is net of servicing fee for consolidated loans for which we do not own the MSR. For borrowers whose current rate is less than the applicable servicing fee, the rate shown in the table above is zero.

Summary of Activity in Allowance for Loans Losses

The following table summarizes the activity in the allowance for loan losses for the years ended December 31, 2015, 2014, and 2013.

Table 6.5 – Allowance for Loan Losses



	Years Ended December 31,
(In Thousands)	2015			2014			2013
Balance at beginning of period	$	21,338		$	25,427		$	28,504
Charge-offs, net	—			(4,966		)	(4,525		)
Provision for loan losses	—			877			1,448
Other adjustments ⁽¹⁾	(21,338		)	—			—
Balance at End of Period	$	—		$	21,338		$	25,427


(1)	Upon adoption of ASU 2014-13 on January 1, 2015, we began to record loans held-for-investment at consolidated Sequoia entities at fair value. See Note 3 for further discussion.