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Residential Consumer Loans (Tables) | 9 Months Ended
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Sep. 30, 2024
Receivables [Abstract] |
Schedule of Classifications and Carrying Value of Loans | The following table summarizes the classifications and carrying values of the residential consumer loans owned at Redwood and at the consolidated Sequoia and Freddie Mac SLST entities at September 30, 2024 and December 31, 2023. Table 7.1 – Classifications and Carrying Values of Residential Consumer Loans
September 30, 2024 |  |  |  |  |  | Freddie Mac |  |
(In Thousands) |  | Redwood |  | Sequoia |  | SLST |  | Total
Held-for-sale at fair value |  | $ | 1,362,349 |  |  | $ | — |  |  | $ | — |  |  | $ | 1,362,349 |
Held-for-investment at fair value |  | — |  |  | 8,476,004 |  |  | 1,318,806 |  |  | 9,794,810 |
Total Residential Consumer Loans |  | $ | 1,362,349 |  |  | $ | 8,476,004 |  |  | $ | 1,318,806 |  |  | $ | 11,157,159 |
December 31, 2023 |  |  |  |  |  | Freddie Mac |  |
(In Thousands) |  | Redwood |  | Sequoia |  | SLST |  | Total
Held-for-sale at fair value |  | $ | 911,192 |  |  | $ | — |  |  | $ | — |  |  | $ | 911,192 |
Held-for-investment at fair value |  | — |  |  | 4,780,203 |  |  | 1,359,242 |  |  | 6,139,445 |
Total Residential Consumer Loans |  | $ | 911,192 |  |  | $ | 4,780,203 |  |  | $ | 1,359,242 |  |  | $ | 7,050,637 |
The following table summarizes the classifications and carrying values of the residential investor loans owned at Redwood and at consolidated CAFL entities at September 30, 2024 and December 31, 2023. Table 8.1 – Classifications and Carrying Values of Residential Investor Loans
September 30, 2024 |  | Residential Investor Term |  | Residential Investor Bridge |  |
(In Thousands) |  | Redwood |  | CAFL |  | Redwood |  | CAFL |  | Total
Held-for-sale at fair value |  | $ | 174,485 |  |  | $ | — |  |  | $ | 91,393 |  |  | $ | — |  |  | $ | 265,878 |
Held-for-investment at fair value |  | — |  |  | 2,661,885 |  |  | 1,211,081 |  |  | 607,330 |  |  | 4,480,296 |
Total Residential Investor Loans |  | $ | 174,485 |  |  | $ | 2,661,885 |  |  | $ | 1,302,474 |  |  | $ | 607,330 |  |  | $ | 4,746,174 |
December 31, 2023 |  | Residential Investor Term |  | Residential Investor Bridge |  |
(In Thousands) |  | Redwood |  | CAFL |  | Redwood |  | CAFL |  | Total
Held-for-sale at fair value |  | $ | 144,359 |  |  | $ | — |  |  | $ | 35,891 |  |  | $ | — |  |  | $ | 180,250 |
Held-for-investment at fair value |  | — |  |  | 2,971,725 |  |  | 1,305,727 |  |  | 762,596 |  |  | 5,040,048 |
Total Residential Investor Loans |  | $ | 144,359 |  |  | $ | 2,971,725 |  |  | $ | 1,341,618 |  |  | $ | 762,596 |  |  | $ | 5,220,298 |
The following table provides the activity of residential investor loans at Redwood during the three and nine months ended September 30, 2024 and 2023. Table 8.2 – Activity of Residential Investor Loans at Redwood
|  | Three Months Ended September 30, 2024 |  | Three Months Ended September 30, 2023
(In Thousands) |  | Term at Redwood |  | Bridge at Redwood |  | Term at Redwood |  | Bridge at Redwood
Principal balance of loans originated |  | $ | 158,584 |  |  | $ | 286,833 |  |  | $ | 105,777 |  |  | $ | 303,284 |
Principal balance of loans acquired |  | 3,145 |  |  | — |  |  | — |  |  | 1,820 |
Principal balance of loans sold to third parties (1) |  | 206,380 |  |  | 67,655 |  |  | 27,436 |  |  | 34,061 |
Fair value of loans transferred (2) |  | — |  |  | (62,386) |  |  | (278,751) |  |  | (116,679) |
Mortgage banking activities income (loss) recorded (3) |  | 6,061 |  |  | 694 |  |  | 1,600 |  |  | 1,438 |
Investment fair value changes recorded |  | (1,500) |  |  | (10,293) |  |  | — |  |  | (16,899) |
|  | Nine Months Ended September 30, 2024 |  | Nine Months Ended September 30, 2023
(In Thousands) |  | Term at Redwood |  | Bridge at Redwood |  | Term at Redwood |  | Bridge at Redwood
Principal balance of loans originated |  | $ | 493,212 |  |  | $ | 714,977 |  |  | $ | 408,477 |  |  | $ | 828,149 |
Principal balance of loans acquired |  | 3,793 |  |  | 15,677 |  |  | — |  |  | 19,054 |
Principal balance of loans sold to third parties (1) |  | 464,836 |  |  | 277,170 |  |  | 425,542 |  |  | 65,868 |
Fair value of loans transferred (2) |  | — |  |  | (250,319) |  |  | (278,751) |  |  | (337,657) |
Mortgage banking activities income recorded (3) |  | 11,833 |  |  | 2,748 |  |  | 13,214 |  |  | 4,808 |
Investment fair value changes recorded |  | (2,837) |  |  | (27,503) |  |  | (14,430) |  |  | (22,867) |
(1)For the three and nine months ended September 30, 2024 the principal balance of loans sold to third parties is net of $13 million and $34 million, respectively, related to construction draws on residential investor bridge loans sold to our joint ventures. See Note 11 for additional information on these joint ventures. (2)For residential investor term at Redwood, represents the transfer of loans from held-for-sale to held-for-investment associated with CAFL term securitizations. For residential investor bridge at Redwood, represents the transfer of residential investor bridge loans from "Bridge at Redwood" to "Bridge at CAFL" resulting from their inclusion in one of our bridge loan securitizations, which generally have replenishment features for a set period of time from the closing date. (3)Represents net market valuation changes from the time a loan is originated to when it is sold, securitized or transferred to our investment portfolio. See Table 5.1 for additional detail on Mortgage banking activities income. The following table provides the activity of residential investor loans held-for-investment at CAFL during the three and nine months ended September 30, 2024 and 2023. Table 8.3 – Activity of Residential Investor Loans Held-for-Investment at CAFL
|  | Three Months Ended September 30, 2024 |  | Three Months Ended September 30, 2023
(In Thousands) |  | Term at CAFL |  | Bridge at CAFL |  | Term at CAFL |  | Bridge at CAFL
Net market valuation gains (losses) recorded (1) |  | $ | 78,275 |  |  | $ | 1,623 |  |  | $ | (1,360) |  |  | $ | (2,560) |
Fair value of loans transferred to HFI |  | — |  |  | 62,386 |  |  | 278,751 |  |  | 116,679 |
|  | Nine Months Ended September 30, 2024 |  | Nine Months Ended September 30, 2023
(In Thousands) |  | Term at CAFL |  | Bridge at CAFL |  | Term at CAFL |  | Bridge at CAFL
Net market valuation gains (losses) recorded (1) |  | $ | 89,388 |  |  | $ | 443 |  |  | $ | (1,961) |  |  | $ | (1,960) |
Fair value of loans transferred to HFI |  | — |  |  | 250,319 |  |  | 278,751 |  |  | 337,657 |
(1)Net market valuation gains (losses) on residential investor loans held-for-investment at CAFL are recorded through Investment fair value changes, net on our consolidated statements of income. For loans held at our consolidated CAFL Term entities and one CAFL Bridge entity, market value changes are based on the estimated fair value of the associated ABS issued, including securities we own, pursuant to CFE guidelines. We did not elect to account for two of our CAFL Bridge securitizations under the CFE guidelines but have elected to account for the loans in these securitizations at fair value, and changes in fair value for these loans are recorded through Investment fair value changes, net on our consolidated statements of income. The following tables summarize the characteristics of the residential investor loans owned at Redwood and at consolidated CAFL entities at September 30, 2024 and December 31, 2023. Table 8.4 – Characteristics of Residential Investor Loans
September 30, 2024 |  | Term at Redwood |  | Term at CAFL(1) |  | Bridge at Redwood |  | Bridge at CAFL
(Dollars in Thousands) |  |  |  |
Unpaid principal balance |  | $ | 183,358 |  |  | $ | 2,790,755 |  |  | $ | 1,336,767 |  |  | $ | 600,267 |
Average UPB of loans |  | $ | 2,108 |  |  | $ | 3,037 |  |  | $ | 5,161 |  |  | $ | 2,035 |
Fair value of loans |  | $ | 174,485 |  |  | $ | 2,661,885 |  |  | $ | 1,302,474 |  |  | $ | 607,330 |
Weighted average coupon |  | 6.88 | % |  | 5.36 | % |  | 9.14 | % |  | 10.16 | %
Weighted average remaining loan term (years) |  | 7 |  | 4 |  | 1 |  | 1
Market value of loans pledged as collateral under debt facilities |  | $ | 133,022 |  |  | N/A |  | $ | 1,250,392 |  |  | N/A
Delinquency information |  |  |  |  |  |  |  |
Unpaid principal balance of loans with 90+ day delinquencies (2) |  | $ | 34,083 |  |  | $ | 161,874 |  |  | $ | 132,286 |  |  | $ | 24,993 |
Average UPB of 90+ days delinquent loans (2) |  | $ | 11,361 |  |  | $ | 3,948 |  |  | $ | 7,782 |  |  | $ | 1,785 |
Fair value of loans with 90+ day delinquencies (2) |  | $ | 19,320 |  |  | N/A |  | $ | 113,904 |  |  | N/A
Unpaid principal balance of loans in foreclosure (3) |  | $ | 27,529 |  |  | $ | 18,646 |  |  | $ | 86,019 |  |  | $ | 13,426 |
Average UPB of loans in foreclosure (3) |  | $ | 27,529 |  |  | $ | 2,936 |  |  | $ | 7,820 |  |  | $ | 1,918 |
Fair value of loans in foreclosure (3) |  | $ | 13,250 |  |  | N/A |  | $ | 72,212 |  |  | N/A
December 31, 2023 |  | Term at Redwood |  | Term at CAFL(1) |  | Bridge at Redwood |  | Bridge at CAFL
(Dollars in Thousands) |  |  |  |
Unpaid principal balance |  | $ | 152,213 |  |  | $ | 3,194,131 |  |  | $ | 1,360,957 |  |  | $ | 756,574 |
Average UPB of loans |  | $ | 4,006 |  |  | $ | 3,028 |  |  | $ | 8,453 |  |  | $ | 2,162 |
Fair value of loans |  | $ | 144,359 |  |  | $ | 2,971,725 |  |  | $ | 1,341,618 |  |  | $ | 762,596 |
Weighted average coupon |  | 6.92 | % |  | 5.34 | % |  | 10.41 | % |  | 10.82 | %
Weighted average remaining loan term (years) |  | 7 |  | 5 |  | 1 |  | 1
Market value of loans pledged as collateral under debt facilities |  | $ | 124,934 |  |  | N/A |  | $ | 1,298,198 |  |  | N/A
Delinquency information |  |  |  |  |  |  |  |
Unpaid principal balance of loans with 90+ day delinquencies (2) |  | $ | 28,263 |  |  | $ | 143,623 |  |  | $ | 96,934 |  |  | $ | 10,646 |
Average UPB of 90+ days delinquent loans (2) |  | $ | 14,132 |  |  | $ | 3,192 |  |  | $ | 5,702 |  |  | $ | 1,774 |
Fair value of loans with 90+ day delinquencies (2) |  | $ | 16,822 |  |  | N/A |  | $ | 86,137 |  |  | N/A
Unpaid principal balance of loans in foreclosure (3) |  | $ | 28,263 |  |  | $ | 15,708 |  |  | $ | 79,841 |  |  | $ | 3,931 |
Average UPB of loans in foreclosure (3) |  | $ | 14,132 |  |  | $ | 2,244 |  |  | $ | 5,323 |  |  | $ | 1,310 |
Fair value of loans in foreclosure (3) |  | $ | 16,822 |  |  | N/A |  | $ | 69,046 |  |  | N/A
(1)The fair value of the loans held by consolidated CAFL Term entities and one CAFL Bridge entity were based on the fair value of the ABS issued by these entities, including securities we own, which we determined were more readily observable in accordance with the accounting guidance for CFEs. (2)The number of loans 90+ days delinquent includes loans in foreclosure. (3)May include loans that are less than 90 days delinquent. The following table presents the unpaid principal balance of business purpose loans recorded on our consolidated balance sheets at September 30, 2024 by collateral/strategy type. Table 8.5 – Residential Investor Loans Collateral/Strategy Type
September 30, 2024 |  | Term at Redwood |  | Term at CAFL(1) |  | Bridge at Redwood |  | Bridge at CAFL(1)
(Dollars in Thousands) |  |  |  |
Term |  |  |  |  |  |  |  |
Single family rental |  | $ | 85,307 |  |  | $ | 2,163,862 |  |  | $ | — |  |  | $ | — |
Multifamily |  | 98,051 |  |  | 626,893 |  |  | — |  |  | — |
Bridge |  |  |  |  |  |  |  |
Renovate / Build for Rent ("BFR")(2) |  | — |  |  | — |  |  | 575,782 |  |  | 279,820 |
Single Asset Bridge ("SAB")(3) |  | — |  |  | — |  |  | 90,678 |  |  | 171,489 |
Multifamily(4) |  | — |  |  | — |  |  | 664,060 |  |  | 147,903 |
Third-Party Originated |  | — |  |  | — |  |  | 6,247 |  |  | 1,055 |
Total Residential Investor Loans |  | $ | 183,358 |  |  | $ | 2,790,755 |  |  | $ | 1,336,767 |  |  | $ | 600,267 |
(1)The fair value of the loans held by consolidated CAFL Term entities and one CAFL Bridge entity were based on the fair value of the ABS issued by these entities, including securities we own, which we determined were more readily observable in accordance with the accounting guidance for CFEs. (2)Includes loans to finance acquisition and/or stabilization of existing housing stock or to finance new construction of residential properties for rent. (3)Includes loans for light to moderate renovation of residential and small multifamily properties (generally less than 20 units). (4)Includes loans for predominantly light to moderate rehabilitation projects on multifamily properties.
Schedule of Characteristics of Residential Consumer Loans Held-For-Sale | The following table summarizes the characteristics of residential consumer loans held-for-sale at September 30, 2024 and December 31, 2023. Table 7.2 – Characteristics of Residential Consumer Loans Held-for-Sale
(Dollars in Thousands) |  | September 30, 2024 |  | December 31, 2023
Unpaid principal balance |  | $ | 1,348,819 |  |  | $ | 916,877 |
Fair value of loans |  | $ | 1,362,349 |  |  | $ | 911,192 |
Market value of loans pledged as collateral under short-term borrowing agreements |  | $ | 1,350,551 |  |  | $ | 907,742 |
Weighted average coupon |  | 6.63 | % |  | 6.25 | %
Schedule of Quarterly Activity of Residential Consumer Loans Held-for-Sale | The following table provides the activity of residential consumer loans held-for-sale during the three and nine months ended September 30, 2024 and 2023. Table 7.3 – Activity of Residential Consumer Loans Held-for-Sale
|  | Three Months Ended September 30, |  | Nine Months Ended September 30,
(In Thousands) |  | 2024 |  | 2023 |  | 2024 |  | 2023
Principal balance of loans acquired |  | $ | 1,999,621 |  |  | $ | 857,974 |  |  | $ | 4,873,608 |  |  | $ | 1,092,992 |
Principal balance of loans sold |  | 39,497 |  |  | 53,743 |  |  | 246,641 |  |  | 235,821 |
Principal balance of loans transferred from HFS to HFI |  | 1,528,163 |  |  | 337,752 |  |  | 4,140,150 |  |  | 995,047 |
Net market valuation gains (losses) recorded (1) |  | 11,047 |  |  | (8,683) |  |  | 20,079 |  |  | (2,590) |
(1)Net market valuation gains (losses) on residential consumer loans held-for-sale are recorded primarily through Mortgage banking activities, net on our consolidated statements of income.
Schedule of Characteristics of Residential Consumer Loans Held-for-Investment | The following tables summarize the characteristics of the residential consumer loans owned at consolidated Sequoia and Freddie Mac SLST entities at September 30, 2024 and December 31, 2023. Table 7.4 – Characteristics of Residential Consumer Loans Held-for-Investment
September 30, 2024 |  |  |  |  |  |  |  | Freddie Mac
(Dollars in Thousands) |  |  |  |  |  | Sequoia |  | SLST
Unpaid principal balance |  |  |  |  |  | $ | 8,880,569 |  |  | $ | 1,538,972 |
Average loan balance (UPB) |  |  |  |  |  | $ | 868 |  |  | $ | 156 |
Fair value of loans (1) |  |  |  |  |  | $ | 8,476,004 |  |  | $ | 1,318,806 |
Weighted average coupon |  |  |  |  |  | 4.95 | % |  | 4.50 | %
Delinquency information |  |  |  |  |  |  |  |
Unpaid principal balance of loans with 90+ day delinquencies (2) |  |  |  |  |  | $ | 16,802 |  |  | $ | 103,379 |
Average 90+ days delinquent balance (UPB) |  |  |  |  |  | $ | 525 |  |  | $ | 171 |
Unpaid principal balance of loans in foreclosure |  |  |  |  |  | $ | 7,079 |  |  | $ | 39,790 |
Average foreclosure balance (UPB) |  |  |  |  |  | $ | 442 |  |  | $ | 181 |
December 31, 2023 |  |  |  |  |  |  |  | Freddie Mac
(Dollars in Thousands) |  |  |  |  |  | Sequoia |  | SLST
Unpaid principal balance |  |  |  |  |  | $ | 5,398,913 |  |  | $ | 1,614,974 |
Average loan balance (UPB) |  |  |  |  |  | $ | 757 |  |  | $ | 157 |
Fair value of loans (1) |  |  |  |  |  | $ | 4,780,203 |  |  | $ | 1,359,242 |
Weighted average coupon |  |  |  |  |  | 4.15 | % |  | 4.50 | %
Delinquency information |  |  |  |  |  |  |  |
Unpaid principal balance of loans with 90+ day delinquencies (2) |  |  |  |  |  | $ | 13,023 |  |  | $ | 132,307 |
Average 90+ days delinquent balance (UPB) |  |  |  |  |  | $ | 482 |  |  | $ | 166 |
Unpaid principal balance of loans in foreclosure |  |  |  |  |  | $ | 5,234 |  |  | $ | 47,654 |
Average foreclosure balance (UPB) |  |  |  |  |  | $ | 436 |  |  | $ | 163 |
Footnotes to Table 7.4 (1)The fair value of the loans held by consolidated entities was based on the fair value of the ABS issued by these entities, including securities we own, which we determined were more readily observable, in accordance with the accounting guidance for collateralized financing entities. (2)For loans held at consolidated entities, the number and unpaid principal balance of loans 90+ days delinquent includes loans in foreclosure.
Schedule of Quarterly Activity of Residential Consumer Loans Held-for-Investment | The following table provides the activity of residential consumer loans held-for-investment at consolidated entities during the three and nine months ended September 30, 2024 and 2023. Table 7.5 – Activity of Residential Consumer Loans Held-for-Investment at Consolidated Entities
|  |  |  | Three Months Ended September 30, 2024 |  |  | Three Months Ended September 30, 2023
|  |  |  |  |  | Freddie Mac |  |  |  |  | Freddie Mac
(In Thousands) |  |  |  | Sequoia |  | SLST |  |  | Sequoia |  | SLST
Principal value of loans transferred from HFS to HFI (1) |  |  |  | $ | 1,528,163 |  |  | N/A |  |  | $ | 337,752 |  |  | N/A
Net market valuation gains (losses) recorded |  |  |  | 256,034 |  |  | 53,555 |  |  |  | (177,253) |  |  | (51,046) |
|  |  |  | Nine Months Ended September 30, 2024 |  |  | Nine Months Ended September 30, 2023
|  |  |  |  |  | Freddie Mac |  |  |  |  | Freddie Mac
(In Thousands) |  |  |  | Sequoia |  | SLST |  |  | Sequoia |  | SLST
Principal value of loans transferred from HFS to HFI (1) |  |  |  | $ | 4,140,150 |  |  | N/A |  |  | $ | 995,047 |  |  | N/A
Net market valuation gains (losses) recorded |  |  |  | 152,635 |  |  | 38,154 |  |  |  | (162,895) |  |  | (62,756) |
(1)Represents the transfer of loans from held-for-sale to held-for-investment associated with Sequoia securitizations.

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