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Principles of Consolidation (Tables) | 6 Months Ended
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Jun. 30, 2024
Organization, Consolidation and Presentation of Financial Statements [Abstract] |
Schedule of Consolidated VIEs | The following table presents a summary of the assets and liabilities of our consolidated VIEs. Table 15.1 – Assets and Liabilities of Consolidated VIEs
June 30, 2024 |  |  |  | Sequoia |  | CAFL(1) |  | Freddie Mac SLST(1) |  | Freddie Mac K-Series |  | Servicing Investment |  | HEI |  | Total Consolidated VIEs
(Dollars in Thousands) |  |  |  |  |  |  |  |
Residential consumer loans, held-for-investment |  |  |  | $ | 6,950,586 |  |  | $ | — |  |  | $ | 1,297,022 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 8,247,608 |
Residential investor loans, held-for-investment |  |  |  | — |  |  | 3,423,094 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 3,423,094 |
Consolidated Agency multifamily loans |  |  |  | — |  |  | — |  |  | — |  |  | 421,794 |  |  | — |  |  | — |  |  | 421,794 |
Home equity investments |  |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 320,816 |  |  | 320,816 |
Other investments |  |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 257,676 |  |  | — |  |  | 257,676 |
Cash and cash equivalents |  |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 24,791 |  |  | — |  |  | 24,791 |
Restricted cash |  |  |  | 149 |  |  | 22,280 |  |  | — |  |  | — |  |  | — |  |  | 10,918 |  |  | 33,347 |
Accrued interest receivable |  |  |  | 31,821 |  |  | 18,481 |  |  | 4,678 |  |  | 1,257 |  |  | 2,383 |  |  | — |  |  | 58,620 |
Other assets |  |  |  | — |  |  | 49,640 |  |  | 2,527 |  |  | — |  |  | 4,181 |  |  | 99 |  |  | 56,447 |
Total Assets |  |  |  | $ | 6,982,556 |  |  | $ | 3,513,495 |  |  | $ | 1,304,227 |  |  | $ | 423,051 |  |  | $ | 289,031 |  |  | $ | 331,833 |  |  | $ | 12,844,193 |
Short-term debt |  |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 145,785 |  |  | $ | — |  |  | $ | 145,785 |
Accrued interest payable |  |  |  | 27,879 |  |  | 9,984 |  |  | 4,288 |  |  | 1,131 |  |  | 367 |  |  | — |  |  | 43,649 |
Accrued expenses and other liabilities |  |  |  | — |  |  | 6,650 |  |  | — |  |  | — |  |  | 43,058 |  |  | 72,269 |  |  | 121,977 |
Asset-backed securities issued |  |  |  | 6,686,531 |  |  | 3,058,191 |  |  | 1,204,835 |  |  | 387,791 |  |  | — |  |  | 218,203 |  |  | 11,555,551 |
Total Liabilities |  |  |  | $ | 6,714,410 |  |  | $ | 3,074,825 |  |  | $ | 1,209,123 |  |  | $ | 388,922 |  |  | $ | 189,210 |  |  | $ | 290,472 |  |  | $ | 11,866,962 |
Value of our investments in VIEs(1) |  |  |  | $ | 264,136 |  |  | $ | 444,932 |  |  | $ | 94,714 |  |  | $ | 34,003 |  |  | $ | 99,821 |  |  | $ | 41,361 |  |  | $ | 978,967 |
Number of VIEs |  |  |  | 48 |  |  | 21 |  |  | 3 |  |  | 1 |  |  | 3 |  |  | 2 |  |  | 78 |
December 31, 2023 |  |  |  | Sequoia |  | CAFL(1) |  | Freddie Mac SLST(1) |  | Freddie Mac K-Series |  | Servicing Investment |  | HEI |  | Total Consolidated VIEs
(Dollars in Thousands) |  |  |  |  |  |  |  |
Residential consumer loans, held-for-investment |  |  |  | $ | 4,780,203 |  |  | $ | — |  |  | $ | 1,359,242 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 6,139,445 |
Residential investor loans, held-for-investment |  |  |  | — |  |  | 3,734,321 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 3,734,321 |
Consolidated Agency multifamily loans |  |  |  | — |  |  | — |  |  | — |  |  | 425,285 |  |  | — |  |  | — |  |  | 425,285 |
Home equity investments |  |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 305,717 |  |  | 305,717 |
Other investments |  |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 257,489 |  |  | — |  |  | 257,489 |
Cash and cash equivalents |  |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 9,482 |  |  | — |  |  | 9,482 |
Restricted cash |  |  |  | 163 |  |  | 33,921 |  |  | — |  |  | — |  |  | — |  |  | 10,821 |  |  | 44,905 |
Accrued interest receivable |  |  |  | 20,029 |  |  | 20,806 |  |  | 4,821 |  |  | 1,320 |  |  | 822 |  |  | — |  |  | 47,798 |
Other assets |  |  |  | — |  |  | 14,886 |  |  | 3,158 |  |  | — |  |  | 6,337 |  |  | 62 |  |  | 24,443 |
Total Assets |  |  |  | $ | 4,800,395 |  |  | $ | 3,803,934 |  |  | $ | 1,367,221 |  |  | $ | 426,605 |  |  | $ | 274,130 |  |  | $ | 316,600 |  |  | $ | 10,988,885 |
Short-term debt |  |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 153,653 |  |  | $ | — |  |  | $ | 153,653 |
Accrued interest payable |  |  |  | 16,293 |  |  | 11,537 |  |  | 4,496 |  |  | 1,190 |  |  | 416 |  |  | — |  |  | 33,932 |
Accrued expenses and other liabilities |  |  |  | — |  |  | 2,734 |  |  | — |  |  | — |  |  | 34,357 |  |  | 59,752 |  |  | 96,843 |
Asset-backed securities issued |  |  |  | 4,568,660 |  |  | 3,362,978 |  |  | 1,265,777 |  |  | 391,977 |  |  | — |  |  | 222,488 |  |  | 9,811,880 |
Total Liabilities |  |  |  | $ | 4,584,953 |  |  | $ | 3,377,249 |  |  | $ | 1,270,273 |  |  | $ | 393,167 |  |  | $ | 188,426 |  |  | $ | 282,240 |  |  | $ | 10,096,308 |
Value of our investments in VIEs(1) |  |  |  | $ | 211,638 |  |  | $ | 424,136 |  |  | $ | 96,623 |  |  | $ | 33,308 |  |  | $ | 85,704 |  |  | $ | 34,361 |  |  | $ | 885,770 |
Number of VIEs |  |  |  | 42 |  |  | 21 |  |  | 3 |  |  | 1 |  |  | 3 |  |  | 2 |  |  | 72 |
(1)The value of our investments in VIEs, as presented in this table, generally represents the fair value of the economic interests we own in VIEs (i.e., the securities or other interests we legally own in the consolidated securitizations or other VIEs). While most of our VIEs are accounted for under the CFE election (whereby the net equity in the VIE generally represents the fair value of our retained interests and associated accrued interest receivable), certain entities, including two CAFL bridge loan securitizations (included within the CAFL column), our SLST re-securitization (included within the Freddie Mac SLST column), and our Servicing Investment VIEs are not accounted for under the CFE election and their associated ABS issued are accounted for at amortized historical cost. As of June 30, 2024 and December 31, 2023, the fair value of our interests in the CAFL term loan securitizations accounted for under the CFE election were $337 million and $323 million, respectively, and the fair value of our interest in the CAFL bridge loan securitizations accounted for under the CFE election was $25 million and $22 million, respectively, with the difference from the tables above generally representing ABS issued and carried at amortized historical cost and accrued interest on our economic interests. As of June 30, 2024 and December 31, 2023, the fair value of our interests in the Freddie Mac SLST securitizations accounted for under the CFE election were $258 million and $274 million, respectively, with the difference from the tables above representing ABS issued and carried at amortized historical cost. The following tables present income (loss) from these VIEs for the three and six months ended June 30, 2024 and 2023. Table 15.2 – Income (Loss) from Consolidated VIEs
|  |  | Three Months Ended June 30, 2024
|  |  |  | Sequoia |  | CAFL |  | Freddie Mac SLST |  | Freddie Mac K-Series |  | Servicing Investment |  | HEI |  | Total Consolidated VIEs
(Dollars in Thousands) |  |  |  |  |  |  |  |
Interest income |  |  |  | $ | 80,881 |  |  | $ | 58,881 |  |  | $ | 14,308 |  |  | $ | 4,559 |  |  | $ | 7,403 |  |  | $ | — |  |  | $ | 166,032 |
Interest expense |  |  |  | (74,373) |  |  | (41,279) |  |  | (13,610) |  |  | (4,177) |  |  | (3,142) |  |  | — |  |  | (136,581) |
Net interest income |  |  |  | 6,508 |  |  | 17,602 |  |  | 698 |  |  | 382 |  |  | 4,261 |  |  | — |  |  | 29,451 |
Non-interest income |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Investment fair value changes, net |  |  |  | 4,322 |  |  | 2,597 |  |  | (5,137) |  |  | 452 |  |  | 10,649 |  |  | — |  |  | 12,883 |
HEI income, net |  |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 4,176 |  |  | 4,176 |
Other income |  |  |  | — |  |  | 428 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 428 |
Total non-interest income, net |  |  |  | 4,322 |  |  | 3,025 |  |  | (5,137) |  |  | 452 |  |  | 10,649 |  |  | 4,176 |  |  | 17,487 |
General and administrative expenses |  |  |  | — |  |  | — |  |  | (14) |  |  | — |  |  | (39) |  |  | — |  |  | (53) |
Other expenses |  |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (2,974) |  |  | — |  |  | (2,974) |
Income (loss) from Consolidated VIEs |  |  |  | $ | 10,830 |  |  | $ | 20,627 |  |  | $ | (4,453) |  |  | $ | 834 |  |  | $ | 11,897 |  |  | $ | 4,176 |  |  | $ | 43,911 |
|  |  | Six Months Ended June 30, 2024
|  |  |  | Sequoia |  | CAFL |  | Freddie Mac SLST |  | Freddie Mac K-Series |  | Servicing Investment |  | HEI |  | Total Consolidated VIEs
(Dollars in Thousands) |  |  |  |  |  |  |  |
Interest income |  |  |  | $ | 143,859 |  |  | $ | 119,875 |  |  | $ | 28,924 |  |  | $ | 9,140 |  |  | $ | 14,954 |  |  | $ | — |  |  | $ | 316,752 |
Interest expense |  |  |  | (133,195) |  |  | (84,562) |  |  | (27,591) |  |  | (8,376) |  |  | (6,361) |  |  | — |  |  | (260,085) |
Net interest income |  |  |  | 10,664 |  |  | 35,313 |  |  | 1,333 |  |  | 764 |  |  | 8,593 |  |  | — |  |  | 56,667 |
Non-interest income |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Investment fair value changes, net |  |  |  | 9,450 |  |  | 16,100 |  |  | (1,407) |  |  | 695 |  |  | 9,146 |  |  | — |  |  | 33,984 |
HEI income, net |  |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 7,064 |  |  | 7,064 |
Other income |  |  |  | — |  |  | 733 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 733 |
Realized gains, net |  |  |  | — |  |  | 314 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 314 |
Total non-interest income, net |  |  |  | 9,450 |  |  | 17,147 |  |  | (1,407) |  |  | 695 |  |  | 9,146 |  |  | 7,064 |  |  | 42,095 |
General and administrative expenses |  |  |  | — |  |  | — |  |  | (28) |  |  | — |  |  | (90) |  |  | — |  |  | (118) |
Other expenses |  |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (3,530) |  |  | — |  |  | (3,530) |
Income (loss) from Consolidated VIEs |  |  |  | $ | 20,114 |  |  | $ | 52,460 |  |  | $ | (102) |  |  | $ | 1,459 |  |  | $ | 14,119 |  |  | $ | 7,064 |  |  | $ | 95,114 |
|  |  | Three Months Ended June 30, 2023
|  |  |  | Sequoia |  | CAFL |  | Freddie Mac SLST |  | Freddie Mac K-Series |  | Servicing Investment |  | HEI |  | Total Consolidated VIEs
(Dollars in Thousands) |  |  |  |  |  |  |  |
Interest income |  |  |  | $ | 40,218 |  |  | $ | 54,583 |  |  | $ | 15,273 |  |  | $ | 4,698 |  |  | $ | 7,911 |  |  | $ | — |  |  | $ | 122,683 |
Interest expense |  |  |  | (36,653) |  |  | (38,545) |  |  | (10,650) |  |  | (4,311) |  |  | (3,796) |  |  | — |  |  | (93,955) |
Net interest income |  |  |  | 3,565 |  |  | 16,038 |  |  | 4,623 |  |  | 387 |  |  | 4,115 |  |  | — |  |  | 28,728 |
Non-interest income |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Investment fair value changes, net |  |  |  | 918 |  |  | 11,601 |  |  | (16,563) |  |  | 385 |  |  | 5,253 |  |  | — |  |  | 1,594 |
HEI income, net |  |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 453 |  |  | 453 |
Other income |  |  |  | — |  |  | 212 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 212 |
Total non-interest income, net |  |  |  | 918 |  |  | 11,813 |  |  | (16,563) |  |  | 385 |  |  | 5,253 |  |  | 453 |  |  | 2,259 |
General and administrative expenses |  |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (3) |  |  | — |  |  | (3) |
Other expenses |  |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (1,904) |  |  | — |  |  | (1,904) |
Income (loss) from Consolidated VIEs |  |  |  | $ | 4,483 |  |  | $ | 27,851 |  |  | $ | (11,940) |  |  | $ | 772 |  |  | $ | 7,461 |  |  | $ | 453 |  |  | $ | 29,080 |
|  |  | Six Months Ended June 30, 2023
|  |  |  | Sequoia |  | CAFL |  | Freddie Mac SLST |  | Freddie Mac K-Series |  | Servicing Investment |  | HEI |  | Total Consolidated VIEs
(Dollars in Thousands) |  |  |  |  |  |  |  |
Interest income |  |  |  | $ | 77,405 |  |  | $ | 109,020 |  |  | $ | 30,766 |  |  | $ | 9,316 |  |  | $ | 15,725 |  |  | $ | — |  |  | $ | 242,232 |
Interest expense |  |  |  | (69,212) |  |  | (78,087) |  |  | (21,868) |  |  | (8,552) |  |  | (7,644) |  |  | — |  |  | (185,363) |
Net interest income |  |  |  | 8,193 |  |  | 30,933 |  |  | 8,898 |  |  | 764 |  |  | 8,081 |  |  | — |  |  | 56,869 |
Non-interest income |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Investment fair value changes, net |  |  |  | 3,266 |  |  | 1,919 |  |  | (7,629) |  |  | 748 |  |  | 4,206 |  |  | 878 |  |  | 3,388 |
Other income |  |  |  | — |  |  | 384 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 384 |
Total non-interest income, net |  |  |  | 3,266 |  |  | 2,303 |  |  | (7,629) |  |  | 748 |  |  | 4,206 |  |  | 878 |  |  | 3,772 |
General and administrative expenses |  |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 7 |  |  | — |  |  | 7 |
Other expenses |  |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (2,481) |  |  | — |  |  | (2,481) |
Income (loss) from Consolidated VIEs |  |  |  | $ | 11,459 |  |  | $ | 33,236 |  |  | $ | 1,269 |  |  | $ | 1,512 |  |  | $ | 9,813 |  |  | $ | 878 |  |  | $ | 58,167 |
Schedule of Unconsolidated Variable Interest Entity's Sponsored by Redwood | The following table presents additional information at June 30, 2024 and December 31, 2023, related to unconsolidated VIEs sponsored by Redwood and accounted for as sales since 2012. Table 15.3 – Unconsolidated VIEs Sponsored by Redwood
(In Thousands) |  | June 30, 2024 |  | December 31, 2023
On-balance sheet assets, at fair value: |  |  |  |
Interest-only, senior and subordinate securities, classified as trading |  | $ | 35,632 |  |  | $ | 31,690 |
Subordinate securities, classified as AFS |  | 88,165 |  |  | 78,942 |
Mortgage servicing rights |  | 12,301 |  |  | 10,885 |
Maximum loss exposure (1) |  | $ | 136,098 |  |  | $ | 121,517 |
Assets transferred: |  |  |  |
Principal balance of loans outstanding |  | $ | 3,627,578 |  |  | $ | 3,758,914 |
Principal balance of loans 30+ days delinquent |  | 14,278 |  |  | 22,367 |
(1)Maximum loss exposure from our involvement with unconsolidated VIEs pertains to the carrying value of our securities and MSRs retained from these VIEs and represents estimated losses that would be incurred under severe, hypothetical circumstances, such as if the value of our interests and any associated collateral declines to zero. This does not include, for example, any potential exposure to representation and warranty claims associated with our initial transfer of loans into a securitization.

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- Definition Tabular disclosure of a transferor's continuing involvement with financial assets transferred to a transferee in a securitization, asset-backed financing arrangement, or similar transfer. Such disclosure would, at a minimum, contain information allowing for an assessment of the reasons for the transferor's continuing involvement, the risks related to the transferred financial assets to which the transferor continues to be exposed, and the extent of change to the transferor's risk profile due to the transfer (including, but not limited to, credit risk, interest rate risk, other). + References Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef -Topic 860 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 4 -Publisher FASB -URI https://asc.fasb.org/1943274/2147481326/860-20-50-4 + Details
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- Definition Tabular disclosure of the significant judgments and assumptions made in determining whether a variable interest (as defined) held by the entity requires the variable interest entity (VIE) (as defined) to be consolidated and (or) disclose information about its involvement with the VIE, individually or in aggregate (as applicable); the nature of restrictions, if any, on the consolidated VIE's assets and on the settlement of its liabilities reported by an entity in its statement of financial position, including the carrying amounts of such assets and liabilities; the nature of, and changes in, the risks associated with involvement in the VIE; how involvement with the VIE affects the entity's financial position, financial performance, and cash flows; the lack of recourse if creditors (or beneficial interest holders) of the consolidated VIE have no recourse to the general credit of the primary beneficiary (if applicable); the terms of arrangements, giving consideration to both explicit arrangements and implicit variable interests, if any, that could require the entity to provide financial support to the VIE, including events or circumstances that could expose the entity to a loss; the methodology used by the entity for determining whether or not it is the primary beneficiary of the variable interest entity; the significant factors considered and judgments made in determining that the power to direct the activities of a VIE that most significantly impact the VIE's economic performance are shared (as defined); the carrying amounts and classification of assets and liabilities of the VIE included in the statement of financial position; the entity's maximum exposure to loss, if any, as a result of its involvement with the VIE, including how the maximum exposure is determined and significant sources of the entity's exposure to the VIE; a comparison of the carrying amounts of the assets and liabilities and the entity's maximum exposure to loss; information about any liquidity arrangements, guarantees, and (or) other commitments by third parties that may affect the fair value or risk of the entity's variable interest in the VIE; whether or not the entity has provided financial support or other support (explicitly or implicitly) to the VIE that it was not previously contractually required to provide or whether the entity intends to provide that support, including the type and amount of the support and the primary reasons for providing the support; and supplemental information the entity determines necessary to provide. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Name Accounting Standards Codification -Topic 810 -SubTopic 10 -Section 50 -Paragraph 3 -Publisher FASB -URI https://asc.fasb.org/1943274/2147481203/810-10-50-3 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Name Accounting Standards Codification -Topic 810 -SubTopic 10 -Section 50 -Paragraph 5A -Publisher FASB -URI https://asc.fasb.org/1943274/2147481203/810-10-50-5A Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Name Accounting Standards Codification -Topic 810 -SubTopic 10 -Section 50 -Paragraph 9 -Publisher FASB -URI https://asc.fasb.org/1943274/2147481203/810-10-50-9 Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef -Name Accounting Standards Codification -Topic 810 -SubTopic 10 -Section 50 -Paragraph 4 -Publisher FASB -URI https://asc.fasb.org/1943274/2147481203/810-10-50-4 Reference 5: http://fasb.org/us-gaap/role/ref/legacyRef -Name Accounting Standards Codification -Topic 810 -SubTopic 10 -Section 50 -Paragraph 6 -Publisher FASB -URI https://asc.fasb.org/1943274/2147481203/810-10-50-6 + Details
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