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Debt Obligations, Net | 9 Months Ended
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Sep. 30, 2025
Debt Disclosure [Abstract] |
Debt Obligations, Net | Debt Obligations, Net We enter into loan warehouse facilities, repurchase agreements ("repo"), recourse subordinate securities financings, and other forms of collateralized (and generally uncommitted) borrowings with several banks and major investment banking firms. We use debt to finance the acquisition and/or origination of residential consumer and residential investor mortgage loans (including those we acquire or originate in anticipation of sale or securitization), and to finance investments in securities and other investments. Additionally, we use corporate debt obligations to fund other aspects of our business and operations, including the repurchase of shares of our capital stock. At September 30, 2025, we had outstanding agreements on debt obligations with several counterparties and we were in compliance with all of the related covenants. Refer to Note 3 to the Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2024 for additional information regarding these investments. Refer to Note 17 to the Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2024 for additional information regarding our debt obligations. The following tables summarize our debt obligations at September 30, 2025 and December 31, 2024. Table 18.1 – Debt Obligations, Net
|  |  |  | September 30, 2025
(Dollars in Thousands) |  |  |  | Number of Facilities or Issuances |  | Principal Amount |  | Carrying Value (1) |  | Facility Capacity |  | Weighted Average Interest Rate (2) |  | Final Stated Maturity |  | Carrying Value of Collateral
Short-Term Facilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Residential consumer loan warehouse facilities |  |  |  | 8 |  | $ | 2,264,410 |  |  | $ | 2,264,409 |  |  | $ | 3,369,258 |  |  | 5.94 | % |  | 10/2025-7/2026 |  | $ | 2,437,510 |
Residential investor loan warehouse facilities |  |  |  | 4 |  | 206,304 |  | 206,207 |  | 1,150,000 |  |  | 6.69 | % |  | 5/2026-8/2026 |  | 281,491
Real estate securities repurchase facilities |  |  |  | 5 |  | 27,585 |  | 27,585 |  | — |  |  | 5.75 | % |  | 10/2025 |  | 35,481
Real estate securities repurchase facilities IO |  |  |  | 1 |  | — |  |  | — |  |  | 75,000 |  |  | 7.45 | % |  | 6/2026 |  | — |
Residential MSR warehouse facility |  |  |  | 1 |  | 89,403 |  | 89,403 |  | 125,000 |  |  | 7.38 | % |  | 10/2025 |  | 183,907
HEI warehouse facility |  |  |  | 1 |  | 27,848 |  | 27,848 |  | 150,000 |  |  | 8.67 | % |  | 12/2025 |  | 55,486
Recourse Subordinate Securities Financing: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
CAFL securities (3) |  |  |  | 1 |  | 263,664 |  | 262,873 |  | (6) |  | 7.11 | % |  | 9/2028 |  | 333,457
Sequoia and other third-party securities (3) |  |  |  | 1 |  | 90,141 |  | 90,141 |  | (6) |  | 7.27 | % |  | 6/2027 |  | 114,768
Long-Term Facilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Residential investor loan warehouse facilities |  |  |  | 3 |  | 199,404 |  | 198,173 |  | 1,030,000 |  |  | 7.52 | % |  | 10/2026-4/2027 |  | 290,414
Servicer advance financing |  |  |  | 1 |  | 151,491 |  | 151,024 |  | 200,000 |  |  | 6.09 | % |  | 12/2026 |  | 214,641
Secured revolving financing facility (4) |  |  |  | 1 |  | 250,000 |  | 248,094 |  | 250,000 |  |  | 7.27 | % |  | 3/2026 |  | 500,786
Corporate Debt: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Promissory notes (3) (5) |  |  |  | 3 |  | 10,900 |  | 10,900 |  | (6) |  | 7.05 | % |  | N/A |  | (7)
5.75% exchangeable senior notes (3) |  |  |  | 1 |  | 123,574 |  | 123,574 |  | (6) |  | 5.75 | % |  | 10/2025 |  | (7)
7.75% convertible senior notes (3) |  |  |  | 1 |  | 297,170 |  | 292,425 |  | (6) |  | 7.75 | % |  | 6/2027 |  | (7)
Trust preferred securities and subordinated notes |  |  |  | 2 |  | 139,500 |  | 138,894 |  | (6) |  | 6.82 | % |  | 1/2037, 7/2037 |  | (7)
9.125% Senior Notes (3) |  |  |  | 1 |  | 59,127 |  | 57,350 |  | (6) |  | 9.13 | % |  | 3/2029 |  | (7)
9.0% Senior Notes (3) |  |  |  | 1 |  | 84,015 |  | 81,536 |  | (6) |  | 9.00 | % |  | 9/2029 |  | (7)
9.125% Senior Notes (3) |  |  |  | 1 |  | 89,232 |  | 86,225 |  | (6) |  | 9.13 | % |  | 3/2030 |  | (7)
Total Debt Obligations |  |  |  |  |  | $ | 4,373,768 |  |  | $ | 4,356,661 |  |  |  |  |  |  |  |  | $ | 4,447,941 |
|  |  |  | December 31, 2024 |  |
(Dollars in Thousands) |  |  |  | Number of Facilities or Issuances |  | Principal Amount |  | Carrying Value (1) |  | Facility Capacity |  | Weighted Average Interest Rate (2) |  | Final Stated Maturity |  | Carrying Value of Collateral |  |
Short-Term Facilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Residential consumer loan warehouse facilities |  |  |  | 7 |  | $ | 956,010 |  |  | $ | 956,010 |  |  | $ | 2,175,000 |  |  | 6.24 | % |  | 3/2025-10/2025 |  | $ | 1,005,926 |  |  |
Residential investor loan warehouse facilities |  |  |  | 2 |  | 223,975 |  | 223,876 |  | 800,000 |  | 7.31 | % |  | 6/2025-7/2025 |  | 300,843 |  |
Real estate securities repurchase facilities |  |  |  | 6 |  | 210,352 |  | 210,352 |  | — |  |  | 5.81 | % |  | 1/2025-3/2025 |  | 281,997 |  |
Residential MSR warehouse facility |  |  |  | 1 |  | 58,164 |  | 58,164 |  | 75,000 |  | 7.65 | % |  | 10/2025 |  | 91,506 |  |
HEI warehouse facility |  |  |  | 1 |  | 97,497 |  | 97,497 |  | 150,000 |  | 9.00 | % |  | 12/2025 |  | 207,097 |  |
Recourse Subordinate Securities Financings: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
CAFL securities (3) |  |  |  | 1 |  | 268,240 |  | 267,140 |  | (6) |  | 7.54 | % |  | 9/2028 |  | 318,106 |  |
Long Term Facilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Residential investor loan warehouse facilities |  |  |  | 5 |  | 615,036 |  |  | 613,129 |  |  | 1,530,000 |  |  | 7.83 | % |  | 5/2026-4/2027 |  | 889,901 |  |  |
Servicer advance financing |  |  |  | 1 |  | 159,798 |  | 159,031 |  | 200,000 |  | 6.32 | % |  | 12/2026 |  | 233,820 |  |
Secured revolving financing facility (4) |  |  |  | 1 |  | 225,000 |  | 220,234 |  | 250,000 |  |  | 9.50 | % |  | 3/2026 |  | 372,396 |  |  |
Corporate Debt: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Promissory notes (3) (5) |  |  |  | 3 |  | 12,859 |  | 12,859 |  | (6) |  | 7.06 | % |  | N/A |  | (7) |  |
5.75% exchangeable senior notes (3) |  |  |  | 1 |  | 123,574 |  | 123,087 |  | (6) |  | 5.75 | % |  | 10/2025 |  | (7) |  |
7.75% convertible senior notes (3) |  |  |  | 1 |  | 247,170 |  | 242,652 |  | (6) |  | 7.75 | % |  | 6/2027 |  | (7) |  |
Trust preferred securities and subordinated notes |  |  |  | 2 |  | 139,500 |  | 138,860 |  | (6) |  | 7.10 | % |  | 1/2037, 7/2037 |  | (7) |  |
9.125% Senior Notes (3) |  |  |  | 1 |  | 60,000 |  | 57,877 |  | (6) |  | 9.13 | % |  | 3/2029 |  | (7) |  |
9.0% Senior Notes (3) |  |  |  | 1 |  | 85,000 |  | 82,112 |  | (6) |  | 9.00 | % |  | 9/2029 |  | (7) |  |
Total Debt Obligations |  |  |  |  |  | $ | 3,482,175 |  |  | $ | 3,462,880 |  |  |  |  |  |  |  |  | $ | 3,701,592 |  |  |
(1)Carrying value presented net of total deferred issuance costs of $17 million and $20 million at September 30, 2025 and December 31, 2024, respectively. (2)Variable rate borrowings are based on 1- or 3-month SOFR, plus an applicable spread. (3)Borrowing has a fixed interest rate at period end. (4)Facility may be extended for one year at our option. (5)Promissory notes payable on demand to lender with 90-day notice. (6)Outstanding principal balance represents facility capacity at period end. (7)Unsecured corporate debt; no related collateral at period end. In January 2025, Redwood issued $90 million of 9.125% Senior Notes due in 2030. The Senior Notes are senior unsecured obligations of Redwood and bear interest at a rate equal to 9.125% per year, payable quarterly in arrears on March 1, June 1, September 1 and December 1 of each year, beginning on June 1, 2025. The Senior Notes mature on March 1, 2030. We may redeem the Senior Notes, in whole or in part, at any time on or after March 1, 2027 at a redemption price equal to 100% of the principal amount redeemed plus accrued and unpaid interest. In June 2025, we entered into a new recourse subordinate securities financing facility providing non-marginable debt financing of certain securities retained from our consolidated Sequoia securitizations and other third-party issued interest-only securities. This financing is fully and unconditionally guaranteed by Redwood, with an interest rate of approximately 7.27% through June 2027, increasing to 10.27% from June 2027 through July 2028. This financing facility may be terminated at our option, beginning in June 2026, and has a final stated maturity in June 2027. In August 2025, we issued an additional $50 million of these 7.75% senior notes due in 2027, resulting in net proceeds of approximately $48 million. We may elect to settle conversions either entirely in cash or in a combination of cash and shares of common stock. Upon conversion, the conversion value will be paid in cash up to at least the principal amount of the notes being converted. At September 30, 2025, the conversion rate of the notes was 95.6823 common shares per $1,000 principal amount of notes (equivalent to a conversion price of $10.45 per common share).

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