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Short-Term Debt | 9 Months Ended
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Sep. 30, 2023
Debt Disclosure [Abstract] |
Short-Term Debt | Short-Term Debt We enter into repurchase agreements ("repo"), loan warehouse agreements, and other forms of collateralized (and generally uncommitted) short-term borrowings with several banks and major investment banking firms. At September 30, 2023, we had outstanding agreements with several counterparties and we were in compliance with all of the related covenants. The table below summarizes our short-term debt, including the facilities that are available to us, the outstanding balances, the weighted average interest rate, and the maturity information at September 30, 2023 and December 31, 2022. Table 14.1 – Short-Term Debt
|  | September 30, 2023
(Dollars in Thousands) |  | Number of Facilities |  | Outstanding Balance |  | Limit |  | Weighted Average Interest Rate (1) |  | Maturity (2) |  | Weighted Average Days Until Maturity
Facilities |  |  |  |  |  |  |  |  |  |  |  |
Residential loan warehouse |  | 4 |  |  | $ | 548,334 |  |  | $ | 1,050,000 |  |  | 7.28 | % |  | 10/2023-5/2024 |  | 132
Business purpose loan warehouse |  | 2 |  |  | 70,424 |  |  | 455,000 |  |  | 8.12 | % |  | 5/2024-6/2024 |  | 259
Real estate securities repo |  | 5 |  |  | 237,835 |  |  | — |  |  | 6.99 | % |  | 10/2023-1/2024 |  | 54
Residential MSR warehouse |  | 1 |  |  | 48,470 |  |  | 50,000 |  |  | 8.57 | % |  | 10/2023 |  | 30
HEI warehouse |  | 1 |  |  | 126,803 |  |  | 150,000 |  |  | 9.92 | % |  | 8/2024 |  | 306
Total Short-Term Debt Facilities |  | 13 |  |  | 1,031,866 |  |  |  |  |  |  |  |  |
Servicer advance financing |  | 1 |  |  | 154,127 |  |  | 240,000 |  |  | 7.67 | % |  | 11/2023 |  | 32
Subordinate securities financing |  | 1 |  |  | 126,506 |  |  | — |  |  | 5.71 | % |  | 9/2024 |  | 358
Promissory notes |  | N/A |  | 16,518 |  |  | — |  |  | 6.94 | % |  | N/A |  | N/A
Convertible notes, net |  | N/A |  | 147,637 |  |  | — |  |  | 5.63 | % |  | 7/2024 |  | 289
Total Short-Term Debt |  |  |  | $ | 1,476,654 |  |  |  |  |  |  |  |  |
|  | December 31, 2022
(Dollars in Thousands) |  | Number of Facilities |  | Outstanding Balance |  | Limit |  | Weighted Average Interest Rate (1) |  | Maturity |  | Weighted Average Days Until Maturity
Facilities |  |  |  |  |  |  |  |  |  |  |  |
Residential loan warehouse |  | 7 |  |  | $ | 703,406 |  |  | $ | 2,550,000 |  |  | 6.16 | % |  | 3/2023 - 12/2023 |  | 267
Business purpose loan warehouse |  | 4 |  |  | 680,100 |  |  | 1,650,000 |  |  | 6.93 | % |  | 3/2023 - 9/2023 |  | 179
Real estate securities repo |  | 7 |  |  | 124,909 |  |  | — |  |  | 5.22 | % |  | 1/2023 - 3/2023 |  | 27
HEI warehouse |  | 1 |  |  | 111,681 |  |  | 150,000 |  |  | 8.54 | % |  | 11/2023 |  | 306
Total Short-Term Debt Facilities |  | 19 |  |  | 1,620,096 |  |  |  |  |  |  |  |  |
Servicer advance financing |  | 1 |  |  | 206,510 |  |  | 290,000 |  |  | 6.67 | % |  | 11/2023 |  | 305
Promissory notes |  | N/A |  | 27,058 |  |  | — |  |  | 6.64 | % |  | N/A |  | N/A
Convertible notes, net |  | N/A |  | 176,015 |  |  | — |  |  | 4.75 | % |  | 8/2023 |  | 227
Total Short-Term Debt |  |  |  | $ | 2,029,679 |  |  |  |  |  |  |  |  |
(1)Borrowings under our facilities generally are uncommitted and charged interest based on a specified margin over SOFR. (2)Promissory notes payable on demand to lender with 90-day notice. The following table below presents the value of loans, securities, and other assets pledged as collateral under our short-term debt at September 30, 2023 and December 31, 2022. Table 14.2 – Collateral for Short-Term Debt
(In Thousands) |  | September 30, 2023 |  | December 31, 2022
Collateral Type |  |  |  |
Held-for-sale residential loans |  | $ | 608,649 |  |  | $ | 775,545 |
MSRs (1) |  | 79,809 |  |  | — |
Business purpose loans |  | 92,350 |  |  | 871,072 |
HEI |  | 229,625 |  |  | 191,278 |
Real estate securities |  |  |  |
On balance sheet |  | 4,448 |  |  | 72,133 |
Sequoia securitizations (2) |  | 51,542 |  |  | 74,170 |
Freddie Mac SLST securitizations (2) |  | 214,443 |  |  | — |
Freddie Mac K-Series securitization (2) |  | 32,904 |  |  | 31,767 |
CAFL securitizations (2) |  | 32,317 |  |  | — |
Total real estate securities owned |  | 335,654 |  |  | 178,070 |
Restricted cash and other assets |  | 4,128 |  |  | 1,097 |
Total Collateral for Short-Term Debt Facilities |  | 1,350,215 |  |  | 2,017,062 |
Cash |  | 15,162 |  |  | 12,713 |
Subordinate securities financing |  | 169,565 |  |  | — |
Servicer advances |  | 219,813 |  |  | 269,259 |
Total Collateral for Short-Term Debt |  | $ | 1,754,755 |  |  | $ | 2,299,034 |
(1)Includes certificated mortgage servicing rights classified as securities on our consolidated balance sheets. (2)Represents securities we retained from consolidated securitization entities. For GAAP purposes, we consolidate the loans and non-recourse ABS issued from these securitizations. For the three and nine months ended September 30, 2023, the average balance of our short-term debt facilities was $1.02 billion and $1.14 billion, respectively. At September 30, 2023 and December 31, 2022, accrued interest payable on our short-term debt facilities was $5 million. Servicer advance financing consists of non-recourse short-term securitization debt used to finance servicer advance investments. We consolidate the securitization entity that issued the debt, but the entity is independent of Redwood and the assets and liabilities are not owned by and are not legal obligations of Redwood. In 2019, a subsidiary of Redwood entered into a repurchase agreement providing non-marginable (i.e., not subject to margin calls based solely on the lender's determination, in its discretion, of the market value of the underlying collateral that is non-delinquent) recourse debt financing of certain Sequoia securities as well as securities retained from our consolidated Sequoia securitizations ("Subordinate securities financing" in Table 14.1 above). The financing is fully and unconditionally guaranteed by Redwood, and had an interest rate of approximately 4.21% through September 2022, which increased to 5.71% from October 2022 through September 2023, and will increase to 7.21% from October 2023 through September 2024. The financing facility has a final maturity in September 2024. During the three months ended September 30, 2023, we reclassified this facility from long-term to short-term debt as the maturity date on this facility is within one year. In connection with our acquisition of Riverbend, we assumed promissory notes that are payable on demand with a 90-day notice from the lender or which may be repaid by us with a 90-day notice. These unsecured, non-marginable, recourse notes were issued in three separate series with fixed interest rates between 6% and 8%. During the three and nine months ended September 30, 2023, we repurchased $2 million and $66 million, respectively, of convertible debt due in 2023 and 2024, and recorded a $0.02 million gain and a $0.2 million gain on extinguishment, respectively. At September 30, 2023 the outstanding principal balance of our convertible debt due in July 2024 was $148 million. Remaining Maturities of Short-Term Debt The following table presents the remaining maturities of our secured short-term debt by the type of collateral securing the debt at September 30, 2023. Table 14.3 – Short-Term Debt by Collateral Type and Remaining Maturities
|  | September 30, 2023
(In Thousands) |  | Within 30 days |  | 31 to 90 days |  | Over 90 days |  | Total
Collateral Type |  |  |  |  |  |  |  |
Held-for-sale residential loans |  | $ | 46,844 |  |  | $ | 314,269 |  |  | $ | 187,221 |  |  | $ | 548,334 |
Business purpose loans |  | — |  |  | — |  |  | 70,424 |  |  | 70,424 |
Real estate securities |  | 38,786 |  |  | 182,275 |  |  | 143,280 |  |  | 364,341 |
MSRs |  | 48,470 |  |  | — |  |  | — |  |  | 48,470 |
HEI |  | — |  |  | — |  |  | 126,803 |  |  | 126,803 |
Servicer advances |  | — |  |  | 154,127 |  |  | — |  |  | 154,127 |
Total Secured Short-Term Debt Facilities |  | 134,100 |  |  | 650,671 |  |  | 527,728 |  |  | 1,312,499 |
Promissory notes (unsecured) |  | — |  |  | 16,518 |  |  | — |  |  | 16,518 |
Convertible notes, net (unsecured) |  | — |  |  | — |  |  | 147,637 |  |  | 147,637 |
Total Short-Term Debt |  | $ | 134,100 |  |  | $ | 667,189 |  |  | $ | 675,365 |  |  | $ | 1,476,654 |

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