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Segment Information
 9 Months Ended
Sep. 30, 2025
Segment Reporting [Abstract]  
Segment Information Segment Information
Redwood operates in four segments: Sequoia Mortgage Banking, CoreVest Mortgage Banking, Redwood Investments and Legacy Investments. This segmentation aligns with the results of operations presented to our CODM in reviewing the Company for performance assessment and resource allocation. We identify our CODM to be a group consisting of the Company's Chief Executive Officer, President and Chief Financial Officer.
Our CODM evaluates performance and allocates resources on each respective segment primarily based on segment net income (loss), also referred to as segment contribution, which is also used to assess the annual budget and forecasting process and to consider budget-to-actual variances when allocating capital and personnel to the segments throughout the year.
In the second quarter of 2025, we identified and began reporting Legacy Investments as a new reportable segment, based on how the CODM evaluates performance and allocates resources. Previously included within Redwood Investments, this segment now consists of assets that are no longer strategically aligned with our core business strategies or with how we evaluate operational performance, allocate capital, and measure the success of our investment initiatives, and are primarily associated with our legacy unsecuritized bridge and term loan portfolios, certain securities within our third-party securities portfolio, and other non-core legacy assets. These assets are generally in runoff or other forms of disposition, and the CODM reviews financial results for this segment separately from other investments to inform strategic decisions regarding capital deployment and portfolio realignment. This change in segment presentation aligns with how management assesses performance under ASC 280, Segment Reporting, and has been applied retrospectively to all prior periods presented in this Quarterly Report on Form 10-Q. All prior period disclosures have been conformed accordingly. This change had no impact on the consolidated financial statements. See Note 8 for further discussion on our legacy unsecuritized bridge and term loan portfolios.
On September 30, 2025, as part of our plans to accelerate the wind-down of the Legacy Investments portfolio, we transferred a total $484 million in fair value of legacy unsecuritized bridge loans and REO assets to a newly formed partnership structure (the “Legacy Trust”). As part of the transaction, we retained a $182 million subordinate beneficial interest in the Legacy Trust, which is recorded as an available-for-sale ("AFS") real estate security on our consolidated balance sheet and is included in the Legacy Investments segment. See Notes 8 and 9 for further discussion on this transaction.
The accounting policies applied to the segments are the same as those described in Note 3 to the Consolidated Financial Statements of our Annual Report on Form 10-K for the year ended December 31, 2024, with the exception of allocations of certain corporate expenses not directly assigned or allocated to one of our four segments. These unallocated corporate expenses are included in the Corporate/Other column as reconciling items to our consolidated financial statements and primarily include interest expense for our senior notes, convertible and exchangeable senior notes, and trust preferred securities, indirect general and administrative expenses and other expenses. In the normal course of business, loans are originated and acquired at our mortgage banking segments and may subsequently be transferred to our Redwood Investments segment either as whole loans or through the retention of securities from securitizations we sponsor and consolidate under GAAP. Our loans are accounted for under the fair value option or at the lower of cost or market value for which the carrying value approximates the fair value. Amounts transferred between segments are accounted for at fair value at the time of transfer. For a full description of our segments, see Part I, Item 1—Business in our Annual Report on Form 10-K for the year ended December 31, 2024.
The following tables present financial information by segment for the three and nine months ended September 30, 2025 and 2024.
Table 4.1 – Business Segment Financial Information
Three Months Ended September 30, 2025
(In Thousands)Sequoia Mortgage BankingCoreVest Mortgage BankingRedwood InvestmentsLegacy InvestmentsCorporate/
Other		Total
Interest income$47,890 $4,052 $225,521 $21,476 $592 $299,531 
Interest expense(26,657)(2,554)(207,939)(30,528)(16,859)(284,537)
Net interest income (expense)21,233 1,498 17,582 (9,052)(16,267)14,994 
Non-interest income
Mortgage banking activities, net, excluding risk management derivatives31,145 11,395 — — — 42,540 
Risk management derivatives (losses) gains, net (1)
(2,426)18 — — — (2,408)
Total Mortgage banking activities, net28,719 11,413 — — — 40,132 
Investment fair value changes, net, excluding risk management derivatives— — (1,682)(4,891)1,512 (5,061)
Risk management derivatives (losses) gains, net (1)
— — (60)(1,850)— (1,910)
Total Investment fair value changes, net— — (1,742)(6,741)1,512 (6,971)
HEI income (loss), net— — 745 (291)— 454 
Servicing income, net— — 1,416 — — 1,416 
Fee income (loss), net— 5,247 270 (938)— 4,579 
Other income (loss), net— (928)392 (532)885 (183)
Realized gains, net— — — — (48)(48)
Total non-interest income (loss), net28,719 15,732 1,081 (8,502)2,349 39,379 
General and administrative expenses(7,774)(9,971)(1,599)(23)(19,340)(38,707)
Portfolio management costs— — (3,524)(3,426)(31)(6,981)
Loan acquisition costs(2,395)(1,804)— (156)— (4,355)
Other expenses— (2,011)(3,170)(500)— (5,681)
(Provision for) benefit from income taxes(5,464)48 (30)(571)(336)(6,353)
Net Income (Loss) (2)
$34,319 $3,492 $10,340 $(22,230)$(33,625)$(7,704)
Total Assets$2,659,250 $393,790 $16,906,766 $2,305,179 $335,781 $22,600,766 
(1)Represents market valuation changes of derivatives that were used to manage risks associated with our mortgage banking operations, Redwood Investments and Legacy Investments. Mortgage banking activities, net, also includes other derivative financial instruments such as loan purchase commitments and interest rate locks.
(2)Net Income (Loss) by segment is also referred to as Segment Contribution (Loss).
Nine Months Ended September 30, 2025
(In Thousands)Sequoia Mortgage BankingCoreVest Mortgage BankingRedwood InvestmentsLegacy InvestmentsCorporate/
Other		Total
Interest income$116,594 $12,182 $646,834 $79,077 $1,274 $855,961 
Interest expense(61,498)(6,846)(585,540)(95,741)(49,566)(799,191)
Net interest income (expense)55,096 5,336 61,294 (16,664)(48,292)56,770 
Non-interest income
Mortgage banking activities, net, excluding risk management derivatives9,877 40,596 — — — 50,473 
Risk management derivatives gains (losses), net (1)
65,389 (1,820)— — — 63,569 
Total Mortgage banking activities, net75,266 38,776 — — — 114,042 
Investment fair value changes, net, excluding risk management derivatives— — (51,307)(82,567)1,300 (132,574)
Risk management derivatives gains (losses), net (1)
— — 44,190 (8,479)— 35,711 
Total Investment fair value changes, net— — (7,117)(91,046)1,300 (96,863)
HEI income (loss), net— — 926 (3,205)— (2,279)
Servicing income, net— — 6,431 — — 6,431 
Fee income (loss), net— 11,109 823 (2,793)— 9,139 
Other income (loss), net— 1,468 1,156 (532)(373)1,719 
Realized gains, net— — 1,207 — (48)1,159 
Total non-interest income (loss), net75,266 51,353 3,426 (97,576)879 33,348 
General and administrative expenses(21,325)(30,786)(4,477)(95)(56,478)(113,161)
Portfolio management costs— — (8,178)(15,291)(31)(23,500)
Loan acquisition costs(4,733)(7,816)— (155)— (12,704)
Other expenses— (6,416)(6,709)(500)— (13,625)
(Provision for) benefit from income taxes(22,015)975 1,841 1,964 58 (17,177)
Net Income (Loss) (2)
$82,289 $12,646 $47,197 $(128,317)$(103,864)$(90,049)
Total Assets$2,659,250 $393,790 $16,906,766 $2,305,179 $335,781 $22,600,766 
(1)Represents market valuation changes of derivatives that were used to manage risks associated with our mortgage banking operations, Redwood Investments and Legacy Investments. Mortgage banking activities, net, also includes other derivative financial instruments such as loan purchase commitments and interest rate locks.
(2)Net Income (Loss) by segment is also referred to as Segment Contribution.
Three Months Ended September 30, 2024
(In Thousands)Sequoia Mortgage BankingCoreVest Mortgage BankingRedwood InvestmentsLegacy InvestmentsCorporate/
Other		Total
Interest income$26,318 $4,868 $177,136 $39,921 $400 $248,643 
Interest expense(16,770)(3,099)(150,238)(38,445)(14,593)(223,145)
Net interest income (expense)9,548 1,769 26,898 1,476 (14,193)25,498 
Non-interest income (loss)
Mortgage banking activities, net, excluding risk management derivatives(7,336)12,303 — — — 4,967 
Risk management derivatives gains, net (1)
34,051 551 — — — 34,602 
Total Mortgage banking activities, net26,715 12,854 — — — 39,569 
Investment fair value changes, net, excluding risk management derivatives— — (9,127)6,312 (236)(3,051)
Risk management derivatives (losses), net (1)
— — — (9,151)— (9,151)
Total Investment fair value changes, net— — (9,127)(2,839)(236)(12,202)
HEI income, net— — 32 10,695 — 10,727 
Servicing income, net— — 251 — — 251 
Fee income, net— 5,434 64 (865)155 4,788 
Other income (loss), net— — 932 — (52)880 
Realized gains, net— — 211 — — 211 
Total non-interest income (loss), net26,715 18,288 (7,637)6,991 (133)44,224 
General and administrative expenses(5,240)(9,306)(1,861)— (19,601)(36,008)
Portfolio management costs— — (1,550)(4,791)(15)(6,356)
Loan acquisition costs(1,291)(1,885)— — — (3,176)
Other expenses— (2,202)(26)— — (2,228)
(Provision for) Benefit from income taxes(6,977)(981)606 — 224 (7,128)
Net Income (Loss) (2)
$22,755 $5,683 $16,430 $3,676 $(33,718)$14,826 
Total Assets$1,543,380 $357,432 $12,815,147 $3,337,646 $373,821 $18,427,426 
(1)Represents market valuation changes of derivatives that were used to manage risks associated with our mortgage banking operations and Legacy Investments. Mortgage banking activities, net, also includes other derivative financial instruments such as loan purchase commitments and interest rate locks.
(2)Net Income (Loss) by segment is also referred to as Segment Contribution.
Nine Months Ended September 30, 2024
(In Thousands)Sequoia Mortgage BankingCoreVest Mortgage BankingRedwood InvestmentsLegacy InvestmentsCorporate/
Other		Total
Interest income$61,728 $15,647 $471,952 $126,744 $2,729 $678,800 
Interest expense(34,958)(11,480)(397,286)(117,131)(42,944)(603,799)
Net interest income (expense)26,770 4,167 74,666 9,613 (40,215)75,001 
Non-interest income (loss)
Mortgage banking activities, net, excluding risk management derivatives15,666 29,569 — — — 45,235 
Risk management derivatives gains, net (1)
25,121 2,693 — — — 27,814 
Total Mortgage banking activities, net40,787 32,262 — — — 73,049 
Investment fair value changes, net, excluding risk management derivatives— — 33,478 (21,967)(1,037)10,474 
Risk management derivatives (losses) gains, net (1)
— — (1,967)2,226 — 259 
Total Investment fair value changes, net— — 31,511 (19,741)(1,037)10,733 
HEI income, net— — 32 35,664 — 35,696 
Servicing income, net— — 8,025 — — 8,025 
Fee income, net— 7,233 797 (733)155 7,452 
Other income (loss), net— — 2,139 — (997)1,142 
Realized gains, net— — 525 — 95 620 
Total non-interest income (loss), net40,787 39,495 43,029 15,190 (1,784)136,717 
General and administrative expenses(14,986)(30,407)(6,024)(53)(52,391)(103,861)
Portfolio management costs— — (3,760)(11,017)(40)(14,817)
Loan acquisition costs(2,843)(5,982)(14)(238)— (9,077)
Other expenses— (7,210)(3,556)— — (10,766)
(Provision for) Benefit from income taxes(10,031)706 (3,454)— 204 (12,575)
Net Income (Loss) (2)
$39,697 $769 $100,887 $13,495 $(94,226)$60,622 
Total Assets$1,543,380 $357,432 $12,815,147 $3,337,646 $373,821 $18,427,426 
(1)Represents market valuation changes of derivatives that were used to manage risks associated with our mortgage banking operations and Legacy Investments. Mortgage banking activities, net, also includes other derivative financial instruments such as loan purchase commitments and interest rate locks.
(2)Net Income (Loss) by segment is also referred to as Segment Contribution.