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Other Assets and Liabilities | 12 Months Ended
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Dec. 31, 2021
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] |
Other Assets and Liabilities | Other Assets and Liabilities Other assets at December 31, 2021 and 2020 are summarized in the following table. Table 12.1 – Components of Other Assets
(In Thousands) |  | December 31, 2021 |  | December 31, 2020
Investment receivable |  | $ | 82,781 |  |  | $ | 43,176 |
Accrued interest receivable |  | 47,515 |  |  | 39,445 |
REO |  | 36,126 |  |  | 8,413 |
Deferred tax asset |  | 20,867 |  |  | 871 |
Operating lease right-of-use assets |  | 18,772 |  |  | 15,012 |
Fixed assets and leasehold improvements (1) |  | 9,019 |  |  | 4,203 |
Margin receivable |  | 7,269 |  |  | 4,758 |
Pledged collateral |  | — |  |  | 1,177 |
Other |  | 8,768 |  |  | 13,533 |
Total Other Assets |  | $ | 231,117 |  |  | $ | 130,588 |
(1)Fixed assets and leasehold improvements had a basis of $17 million and accumulated depreciation of $8 million at December 31, 2021. Accrued expenses and other liabilities at December 31, 2021 and 2020 are summarized in the following table. Table 12.2 – Components of Accrued Expenses and Other Liabilities
(In Thousands) |  | December 31, 2021 |  | December 31, 2020
Accrued compensation |  | $ | 74,636 |  |  | $ | 24,393 |
Payable to non-controlling interests |  | 42,670 |  |  | 16,941 |
Accrued interest payable |  | 39,297 |  |  | 34,858 |
Margin payable |  | 24,368 |  |  | 14,728 |
Operating lease liabilities |  | 20,960 |  |  | 16,687 |
Residential loan and MSR repurchase reserve |  | 9,306 |  |  | 8,631 |
Guarantee obligations |  | 7,459 |  |  | 10,039 |
Accrued operating expenses |  | 4,377 |  |  | 5,509 |
Bridge loan holdbacks |  | 3,109 |  |  | 5,708 |
Accrued income taxes payable |  | 726 |  |  | 5,614 |
Deferred consideration |  | — |  |  | 14,579 |
Other |  | 18,880 |  |  | 21,653 |
Total Accrued Expenses and Other Liabilities |  | $ | 245,788 |  |  | $ | 179,340 |
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. Investment Receivable Investment receivable primarily consists of amounts receivable from third-party servicers related to principal and interest receivable from business purpose loans and fees receivable from servicer advance investments. Margin Receivable and Payable Margin receivable and payable resulted from margin calls between us and our counterparties under derivatives, master repurchase agreements, and warehouse facilities, whereby we or the counterparty posted collateral. Through December 31, 2021, we had met all margin calls due. Operating Lease Right-of-Use Assets and Operating Lease Liabilities Operating lease liabilities are equal to the present value of our remaining lease payments discounted at our incremental borrowing rate and the operating lease right-of-use assets are equal to the operating lease liabilities adjusted for our deferred rent liabilities. These balances are reduced as lease payments are made. See Note 16 for additional information on leases. 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 entities during the year ended December 31, 2021 and 2020. Table 12.3 – REO Activity
|  | Year Ended December 31, 2021
(In Thousands) |  | Bridge |  | Legacy Sequoia |  | Freddie Mac SLST |  | SFR at CAFL |  | Total
Balance at beginning of period |  | $ | 4,600 |  |  | $ | 638 |  |  | $ | 646 |  |  | $ | 2,529 |  |  | $ | 8,413 |
Transfers to REO |  | 15,424 |  |  | 217 |  |  | 3,268 |  |  | 21,129 |  |  | 40,038 |
Liquidations (1) |  | (7,515) |  |  | (956) |  |  | (2,137) |  |  | (2,034) |  |  | (12,642) |
Changes in fair value, net |  | 559 |  |  | 162 |  |  | 251 |  |  | (655) |  |  | 317 |
Balance at End of Period |  | $ | 13,068 |  |  | $ | 61 |  |  | $ | 2,028 |  |  | $ | 20,969 |  |  | $ | 36,126 |
|  | Year Ended December 31, 2020
(In Thousands) |  | Bridge |  | Legacy Sequoia |  | Freddie Mac SLST |  | SFR at CAFL |  | Total
Balance at beginning of period |  | $ | 6,887 |  |  | $ | 460 |  |  | $ | 445 |  |  | $ | 1,670 |  |  | $ | 9,462 |
Transfers to REO |  | 6,111 |  |  | 532 |  |  | 1,319 |  |  | 6,157 |  |  | 14,119 |
Liquidations (1) |  | (8,830) |  |  | (243) |  |  | (1,178) |  |  | (4,371) |  |  | (14,622) |
Changes in fair value, net |  | 432 |  |  | (111) |  |  | 60 |  |  | (927) |  |  | (546) |
Balance at End of Period |  | $ | 4,600 |  |  | $ | 638 |  |  | $ | 646 |  |  | $ | 2,529 |  |  | $ | 8,413 |
(1)For the years ended December 31, 2021 and 2020, REO liquidations resulted in $0.3 million and $1 million of realized losses, respectively, 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 entities at December 31, 2021 and 2020. Table 12.4 – REO Assets
Number of REO assets |  | Redwood Bridge |  | Legacy Sequoia |  | Freddie Mac SLST |  | SFR at CAFL |  | Total
At December 31, 2021 |  | 5 |  |  | 2 |  |  | 24 |  |  | 3 |  |  | 34 |
At December 31, 2020 |  | 3 |  |  | 3 |  |  | 9 |  |  | 2 |  |  | 17 |
Legal and Repurchase Reserves See Note 16 for additional information on the legal and residential repurchase reserves. Payable to Non-Controlling Interests In 2018, Redwood and a third-party co-investor, through two partnership entities consolidated by Redwood, purchased servicer advances and excess MSRs related to a portfolio of residential mortgage loans serviced by the co-investor (see Note 4 and Note 10 for additional information on the partnership entities and associated investments). We account for the co-investor’s interests in the entities as liabilities and at December 31, 2021, the carrying value of their interests was $26 million, representing their current economic interest in the entities. Earnings from the partnership entities are allocated to the co-investors on a proportional basis and during the years ended December 31, 2021, 2020, and 2019 we allocated $2 million of income, $0.2 million of losses, and $1 million of gains, respectively, to the co-investors, which were recorded in Other expenses on our consolidated statements of income (loss). During the third quarter of 2021, Redwood and a third-party investor co-sponsored the transfer and securitization of HEIs through the Point HEI securitization entity. We account for the co-investor’s interest in the Point HEI securitization entity as a liability and at December 31, 2021, the carrying value of their interests was $17 million, representing their current economic interest in the Point HEI entity. See Note 10 for a further discussion of the Point HEI securitization.

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