Other Assets and Liabilities

9 Months Ended

Sep. 30, 2021

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]

Other assets at September 30, 2021 and December 31, 2020 are summarized in the following table.

Table 12.1 – Components of Other Assets


(In Thousands)	September 30, 2021		December 31, 2020
Accrued interest receivable	$	41,997	$	39,445
Investment receivable	32,420		43,176
Deferred tax asset	20,153		871
REO	18,863		8,413
Margin receivable	16,503		4,758
Operating lease right-of-use assets	13,659		15,012
Fixed assets and leasehold improvements (1)	9,344		4,203



Pledged collateral	—		1,177


Other	9,254		13,533
Total Other Assets	$	162,193	$	130,588

(1)Fixed assets and leasehold improvements had a basis of $17 million and accumulated depreciation of $7 million at September 30, 2021.

Accrued expenses and other liabilities at September 30, 2021 and December 31, 2020 are summarized in the following table.

Table 12.2 – Components of Accrued Expenses and Other Liabilities


(In Thousands)	September 30, 2021		December 31, 2020
Accrued compensation	$	64,354	$	24,393
Margin payable	48,298		14,728
Accrued interest payable	34,545		34,858
Payable to non-controlling interests (1)	31,781		16,941
Operating lease liabilities	15,771		16,687



Accrued income taxes payable	11,336		5,614
Residential loan and MSR repurchase reserve	9,003		8,631
Guarantee obligations	7,902		10,039

Accrued operating expenses	4,068		5,509
Bridge loan holdbacks	3,784		5,708



Deferred consideration	—		14,579
Other	20,734		21,653
Total Accrued Expenses and Other Liabilities	$	251,576	$	179,340

(1)Includes $11 million and $17 million of payables to non-controlling interest holders in our consolidated Servicing Investment and Point HEI entities, respectively, as September 30, 2021. Includes $17 million payable to a non-controlling interest holder in our consolidated Servicing Investment entities at December 31, 2020.

Deferred Consideration

The deferred consideration presented in the table above is related to our acquisition of 5 Arches in 2019. During the first quarter of 2021, we distributed 806,068 shares of Redwood common stock and paid $1 million in cash in full settlement of the remaining deferred consideration associated with this acquisition.

REO

The following table summarizes the activity and carrying values of REO assets held at Redwood and at consolidated Legacy Sequoia, Freddie Mac SLST, and CAFL SFR entities during the nine months ended September 30, 2021.

Table 12.3 – REO Activity


	Nine Months Ended September 30, 2021
(In Thousands)	Bridge(1)		Legacy Sequoia		Freddie Mac SLST		CAFL SFR		Total
Balance at beginning of period	$	4,600	$	638	$	646	$	2,529	$	8,413
Transfers to REO	7,074		65		2,591		11,924		21,654
Liquidations (2)	(7,387)		(607)		(1,555)		(1,990)		(11,539)
Changes in fair value, net	536		178		276		(655)		335
Balance at End of Period	$	4,823	$	274	$	1,958	$	11,808	$	18,863

(1)Includes activity of bridge loans at Redwood and at consolidated CAFL bridge entity.

(2)For the nine months ended September 30, 2021, REO liquidations resulted in $0.3 million of realized losses, which were recorded in Investment fair value changes, net on our consolidated statements of income (loss).

The following table provides the detail of REO assets at Redwood and at consolidated Legacy Sequoia, Freddie Mac SLST, and CAFL SFR entities at September 30, 2021 and December 31, 2020.

Table 12.4 – REO Assets


Number of REO assets	Bridge	Legacy Sequoia	Freddie Mac SLST	CAFL SFR	Total
At September 30, 2021	5	2	20	2	29
At December 31, 2020	3	3	9	2	17

Refer to our Annual Report on Form 10-K for the year ended December 31, 2020 for additional descriptions of our other assets and liabilities.