v3.25.2
Residential Whole Loans
 6 Months Ended
Jun. 30, 2025
Receivables [Abstract]  
Residential Whole Loans Residential Whole Loans
Included on the Company’s consolidated balance sheets at June 30, 2025 and December 31, 2024 are approximately $8.8 billion and $8.8 billion, respectively, of residential whole loans generally arising from the Company’s interests in certain trusts established to acquire the loans and certain entities established in connection with its loan securitization transactions. The Company has assessed that these entities are required to be consolidated for financial reporting purposes. Starting in the second quarter of 2021, the Company elected the fair value option for all loan acquisitions, including loans originated by Lima One subsequent to its acquisition by the Company. Prior to the second quarter of 2021, the fair value option was typically elected only for loans that were 60 or more days delinquent at purchase.

The following table presents the components of the Company’s Residential whole loans, and the accounting model designated at June 30, 2025 and December 31, 2024:
Held at Carrying ValueHeld at Fair ValueTotal
(Dollars in Thousands)June 30,
2025		December 31, 2024June 30,
2025		December 31, 2024June 30,
2025		December 31, 2024
Non-QM loans$657,760 $722,392 $4,187,992 $3,568,694 $4,845,752 $4,291,086 
Business purpose loans:
Single-family rental loans (1)
$98,341 $108,203 $1,194,243 $1,248,197 $1,292,584 $1,356,400 
Single-family transitional loans (2) (3)
8,468 22,430 866,733 1,078,425 875,201 1,100,855 
Multifamily transitional loans
— — 730,774 938,926 730,774 938,926 
Total Business purpose loans$106,809 $130,633 $2,791,750 $3,265,548 $2,898,559 $3,396,181 
Legacy RPL/NPL loans436,270 457,654 597,435 624,895 1,033,705 1,082,549 
Other loans— — 51,458 52,073 51,458 52,073 
Allowance for Credit Losses(9,949)(10,665)— — (9,949)(10,665)
Total Residential whole loans$1,190,890 $1,300,014 $7,628,635 $7,511,210 $8,819,525 $8,811,224 
Number of loans5,250 5,582 18,676 18,588 23,926 24,170 
(1)No loans were held-for-sale as of June 30, 2025 and December 31, 2024. There were no gains/(losses) on held-for-sale loans for the six months ended June 30, 2025. For the three months ended March 31, 2024, the Company recorded a $0.5 million gain on loans resulting from their sale, which were held-for-sale as of December 31, 2023. There were no gains/(losses) on held-for-sale loans for the three months ended June 30, 2024.
(2)Includes $349.1 million and $442.4 million of loans collateralized by new construction projects at origination as of June 30, 2025 and December 31, 2024, respectively.
(3)No loans were held-for-sale as of June 30, 2025 and December 31, 2024. For the three months ended March 31, 2025, the Company recorded a $0.5 million loss on these loans resulting from the adjustment of their carrying value to the lower of cost of market. For the three months ended June 30, 2025, the Company recorded a $0.3 million loss on these loans resulting from their sale. There were no gains/(losses) on held-for-sale loans for the six months ended June 30, 2024.
The following tables present additional information regarding the Company’s Residential whole loans:

June 30, 2025
Asset AmountFair ValueUnpaid Principal Balance (“UPB”)
Weighted Average Coupon (1) (2)
Weighted Average Term to Maturity (Months)
Weighted Average LTV Ratio (3)
Weighted Average Original FICO (4)
Aging by UPB
60+ Days Past Due %
(Dollars In Thousands)Past Due Days
Current30-5960-8990+
Non-QM loans$4,843,737 $4,823,546 $4,879,953 6.68 %33964 %737$4,559,049 $125,528 $57,255 $138,121 4.0 %
Business purpose loans:
Single-family rental$1,291,647 $1,294,127 $1,324,122 6.36 %31667 %739$1,259,020 $14,987 $4,809 $45,306 3.8 %
Single-family transitional (5)
874,689 874,602 885,983 10.42 %568 %750723,842 46,467 31,854 83,820 13.1 %
Multifamily transitional (5)
730,774 730,774 764,810 9.66 %364 %751664,332 37,181 802 62,495 8.3 %
Total business purpose loans$2,897,110 $2,899,503 $2,974,915 8.42 %67 %$2,647,194 $98,635 $37,465 $191,621 7.7 %
Legacy RPL/NPL loans1,027,220 1,046,834 1,163,226 5.12 %24855 %647806,990 116,800 44,648 194,788 20.6 %
Other loans51,458 51,458 61,351 3.43 %31464 %75761,351 — — — — %
Residential whole loans, total or weighted average$8,819,525 $8,821,341 $9,079,445 7.05 %64 %$8,074,584 $340,963 $139,368 $524,530 7.3 %

December 31, 2024
Asset AmountFair ValueUnpaid Principal Balance (“UPB”)
Weighted Average Coupon (1) (2)
Weighted Average Term to Maturity (Months)
Weighted Average LTV Ratio (3)
Weighted Average Original FICO (4)
Aging by UPB
60+ Days Past Due %
(Dollars In Thousands)Past Due Days
Current30-5960-8990+
Non-QM loans$4,288,961 $4,258,298 $4,408,660 6.50 %33964 %735$4,114,436 $124,765 $50,619 $118,840 3.8 %
Business purpose loans:
Single-family rental$1,356,034 $1,355,965 $1,416,705 6.36 %32168 %739$1,346,312 $15,661 $5,445 $49,287 3.9 %
Single-family transitional (5)
1,099,466 1,099,700 1,106,631 10.44 %567 %750957,266 33,393 15,964 100,008 10.5 %
Multifamily transitional (5)
938,926 938,926 976,964 9.17 %664 %751870,525 20,815 — 85,624 8.8 %
Total Business purpose loans$3,394,426 $3,394,591 $3,500,300 8.43 %67 %$3,174,103 $69,869 $21,409 $234,919 7.3 %
Legacy RPL/NPL loans1,075,764 1,090,991 1,222,258 5.15 %25355 %647831,844 129,081 45,074 216,259 21.4 %
Other loans52,073 52,073 63,614 3.44 %32065 %75862,998 616 — — — %
Residential whole loans, total or weighted average$8,811,224 $8,795,953 $9,194,832 7.06 %64 %$8,183,381 $324,331 $117,102 $570,018 7.5 %
(1)Weighted average is calculated based on the interest bearing principal balance of each loan within the related category. For loans acquired with servicing rights released by the seller, interest rates included in the calculation do not reflect loan servicing fees. For loans acquired with servicing rights retained by the seller, interest rates included in the calculation are net of servicing fees.
(2)For the quarter ended June 30, 2025, the gross coupon was 10.43% for Single-family transitional loans, 9.67% for Multifamily transitional loans, 6.39% for Single-family rental loans, 6.82% for Non-QM loans, and 5.13% for Legacy RPL/NPL loans. For the quarter ended December 31, 2024, the gross coupon was 10.45% for Single-family transitional loans, 9.18% for Multifamily transitional loans, 6.39% for Single-family rental loans, 6.65% for Non-QM loans, and 5.16% for Legacy RPL/NPL loans.
(3)LTV represents the ratio of the total unpaid principal balance of the loan to the estimated value of the collateral securing the related loan as of the most recent date available, which may be the origination date. Excluded from the calculation of weighted average are certain low value loans secured by vacant lots, for which the LTV ratio is not meaningful.
(4)Excludes loans for which no Fair Isaac Corporation (“FICO”) score is available.
(5)For Single-family and Multifamily transitional loans, the LTV presented is the ratio of the maximum unpaid principal balance of the loan, including unfunded commitments, to the estimated “after repaired” value of the collateral securing the related loan, where available. For certain Single-family transitional loans, totaling $380.2 million and $445.6 million at June 30, 2025 and December 31, 2024, respectively, and certain Multifamily transitional loans, totaling $199.6 million and $252.1 million at June 30, 2025 and December 31, 2024, respectively, an after repaired valuation was not available. For these loans, the weighted average LTV is calculated based on the current unpaid principal balance and the as-is value of the collateral securing the related loan.
Sales of Residential Whole Loans
During the first quarter of 2025, Single-family rental loans with an unpaid principal balance of $67.6 million were sold, realizing gains, before the impact of economic hedging gains/losses and the reversal of previously recognized unrealized gains, of $1.9 million. Upon sale, the Company reversed $1.2 million of previously recognized unrealized gains, resulting in a net gain of $0.7 million during the first quarter of 2025. During the second quarter of 2025, Single-family rental loans with an unpaid principal balance of $37.4 million were sold, realizing gains, before the impact of economic hedging gains/losses and the reversal of previously recognized unrealized gains, of $1.1 million. Upon sale, the Company reversed $1.2 million of previously recognized unrealized gains, resulting in a net loss of $0.1 million during the second quarter of 2025. Additionally, during the second quarter of 2025, Transitional loans with an unpaid principal balance of $31.3 million were sold, realizing losses, before the impact of economic hedging gains/losses and the reversal of previously recognized unrealized losses, of $8.5 million. Upon sale, the Company reversed $8.0 million of previously recognized unrealized losses, resulting in a net loss of $0.5 million during the second quarter of 2025.
During the first quarter of 2024, Non-QM and Single-family rental loans with an unpaid principal balance of $171.0 million were sold, realizing losses, before the impact of economic hedging gains and the reversal of previously recognized unrealized losses, of $21.7 million. Upon sale, the Company reversed $23.7 million of previously recognized unrealized losses, resulting in a net gain of $2.0 million during the first quarter of 2024. During the second quarter of 2024, Residential whole loans with an unpaid principal balance of $12.4 million were sold, realizing gains, before the impact of economic hedging and the reversal of previously recognized unrealized gains, of $0.4 million. Upon sale, the Company reversed $0.2 million of previously recognized unrealized gains, resulting in a net gain of $0.2 million during the second quarter of 2024.

Allowance for Credit Losses

The following table presents a roll-forward of the allowance for credit losses on the Company’s Residential whole loans, at carrying value:
Six Months Ended June 30, 2025
(In Thousands)
Non-QM loansSingle-family rental loans
Single-family transitional loans (1)
Legacy RPL/NPL loans (2)
Totals
Allowance for credit losses at December 31, 2024$2,125 $366 $1,389 $6,785 $10,665 
Current provision/(reversal)(197)614 (88)(184)145 
Write-offs— — (436)(180)(616)
Allowance for credit losses at March 31, 2025$1,928 $980 $865 $6,421 $10,194 
Current provision/(reversal)87 (43)669 78 791 
Write-offs— — (1,022)(14)(1,036)
Allowance for credit losses at June 30, 2025$2,015 $937 $512 $6,485 $9,949 
Six Months Ended June 30, 2024
(In Thousands)
Non-QM loans
Single-family rental loans
Single-family transitional loans (1)
Legacy RPL/NPL loans (2)
Totals
Allowance for credit losses at December 31, 2023$1,871 $4,355 $2,587 $11,638 $20,451 
Current provision/(reversal)(190)228 (472)(26)(460)
Write-offs— 59 (416)(22)(379)
Allowance for credit losses at March 31, 2024$1,681 $4,642 $1,699 $11,590 $19,612 
Current provision/(reversal)(326)978 (317)(1,414)(1,079)
Write-offs— (5,011)(81)(170)(5,262)
Allowance for credit losses at June 30, 2024$1,355 $609 $1,301 $10,006 $13,271 
(1)Includes $5.2 million and $20.4 million of loans that were assessed for credit losses based on a collateral dependent methodology as of June 30, 2025 and 2024, respectively.
(2)Includes $31.8 million and $44.4 million of loans that were assessed for credit losses based on a collateral dependent methodology as of June 30, 2025 and 2024, respectively.

Estimates of credit losses under credit losses on financial instruments (“CECL”) are highly sensitive to changes in assumptions and current economic conditions have increased the difficulty of accurately forecasting future conditions.
The carrying value of Residential whole loans on nonaccrual status as of June 30, 2025 and December 31, 2024 was $593.5 million and $638.3 million, respectively. During the three and six months ended June 30, 2025, the Company recognized $4.5 million and $7.3 million, respectively, of interest income on loans on nonaccrual status, including $2.0 million and $3.8 million, respectively, on its portfolio of loans which were non-performing at acquisition. At June 30, 2025 and December 31, 2024, there were approximately $29.0 million and $38.7 million, respectively, of loans held at carrying value on nonaccrual status that did not have an associated allowance for credit losses because they were determined to be collateral dependent and the estimated fair value of the related collateral exceeded the carrying value of each loan, respectively.
During the second quarter of 2025, the Company did not grant any loan modifications in its carrying value loan portfolio which gave a borrower a term extension or interest rate reduction.
During the past 12 months, the Company has granted four loan modifications in its carrying value loan portfolio which gave borrowers term extensions, with one of them including an interest rate reduction. The average increase in weighted average life was 132 months, and the interest rate reduction was 1.25%. As of June 30, 2025, the carrying value of these loans was approximately $0.26 million. As of June 30, 2025, these loans were not greater than 60 days delinquent.

The following table presents certain additional credit-related information regarding our Residential whole loans, at carrying value:
Amortized Cost Basis by Origination Year and LTV Bands
(In Thousands)
2025 - 20222021PriorTotal
Non-QM loans
LTV <= 80% (1)
$— $35,000 $612,654 $647,654 
LTV > 80% (1)
— 1,906 8,200 10,106 
Total Non-QM loans$— $36,906 $620,854 $657,760 
Six Months Ended June 30, 2025 Gross write-offs$— $— $— $— 
Business purpose loans
LTV <= 80% (1)
$— $5,832 $96,098 $101,930 
LTV > 80% (1)
— 98 4,781 4,879 
Total Business purpose loans$— $5,930 $100,879 $106,809 
Six Months Ended June 30, 2025 Gross write-offs$— $— $1,458 $1,458 
Legacy RPL/NPL loans
LTV <= 80% (1)
$— $— $387,679 $387,679 
LTV > 80% (1)
— — 48,591 48,591 
Total Legacy RPL/NPL loans$— $— $436,270 $436,270 
Six Months Ended June 30, 2025 Gross write-offs$— $— $194 $194 
Total LTV <= 80% (1)
$— $40,832 $1,096,431 $1,137,263 
Total LTV > 80% (1)
— 2,004 61,572 63,576 
Total Residential whole loans, at carrying value$— $42,836 $1,158,003 $1,200,839 
Six Months Ended June 30, 2025 Total Gross write-offs$— $— $1,652 $1,652 
(1)LTV represents the ratio of the total unpaid principal balance of the loan to the estimated value of the collateral securing the related loan as of the most recent date available, which may be the origination date. For Single-family and Multifamily transitional loans, the LTV presented is the ratio of the maximum unpaid principal balance of the loan, including unfunded commitments, to the estimated “after repaired” value of the collateral securing the related loan, where available. For certain Single-family transitional loans, an after repaired valuation was not obtained and the loan was underwritten based on an “as is” valuation. Excluded from the calculation of weighted average LTV are certain low value loans secured by vacant lots, for which the LTV is not meaningful.
The following table presents vintage information regarding our Residential whole loans, at fair value:

Fair Value by Origination Year
(In Thousands)
20252024202320222021PriorTotal
Non-QM loans$795,199 $1,076,775 $588,523 $548,284 $1,148,144 $31,067 $4,187,992 
Single-family rental loans49,378 41,913 228,508 516,186 350,826 7,432 1,194,243 
Single-family transitional loans192,087 413,003 200,914 55,679 5,013 37 866,733 
Multifamily transitional loans— 73,776 341,576 222,948 92,474 — 730,774 
Legacy RPL/NPL loans— — — — — 597,435 597,435 
Other loans— — — — 51,458 — 51,458 
Total Residential whole loans, at fair value$1,036,664 $1,605,467 $1,359,521 $1,343,097 $1,647,915 $635,971 $7,628,635 

The following table presents realized credit losses, net of recoveries, on liquidated residential whole loans or residential whole loans that were transferred to REO, recognized in Other, net:
Three Months Ended
June 30,		Six Months Ended
June 30,
 (In Thousands)2025202420252024
Non-QM loans$(649)$87 $(785)$88 
Single-family rental loans(3,148)(567)(4,344)(1,454)
Single-family transitional loans(1,351)(271)(3,524)381 
Multifamily transitional loans(4,080)(80)(4,249)(107)
Legacy RPL/NPL loans(584)(518)(640)(899)
Other loans— — — — 
Total Residential whole loans$(9,812)$(1,349)$(13,542)$(1,991)
The following tables present certain information regarding the LTVs of the Company’s Residential whole loans that are 60 days or more delinquent:

June 30, 2025
(Dollars In Thousands)Carrying Value / Fair ValueUPB
LTV (1)
Non-QM loans$192,830 $195,376 64 %
Business purpose loans:
Single-family rental loans$41,862 $50,115 92 %
Single-family transitional loans104,741 115,674 77 %
Multifamily transitional loans32,184 63,297 73 %
Total Business purpose loans$178,787 $229,086 
Legacy RPL/NPL loans218,073 239,436 63 %
Other loans— — — %
Total Residential whole loans$589,690 $663,898 
December 31, 2024
(Dollars In Thousands)Carrying Value / Fair ValueUPB
LTV (1)
Non-QM loans$166,299 $169,459 66 %
Business purpose loans:
Single-family rental loans$42,995 $54,732 99 %
Single-family transitional loans109,221 115,972 79 %
Multifamily transitional loans56,970 85,624 79 %
Total Business purpose loans$209,186 $256,328 
Legacy RPL/NPL loans240,356 261,333 63 %
Other loans— — — %
Total Residential whole loans$615,841 $687,120 
(1)LTV represents the ratio of the total unpaid principal balance of the loan to the estimated value of the collateral securing the related loan as of the most recent date available, which may be the origination date. For Single-family and Multifamily transitional loans, the LTV presented is the ratio of the maximum unpaid principal balance of the loan, including unfunded commitments, to the estimated “after repaired” value of the collateral securing the related loan, where available. For certain Single-family transitional loans, an after repaired valuation was not obtained and the loan was underwritten based on an “as is” valuation. Excluded from the calculation of weighted average LTV are certain low value loans secured by vacant lots, for which the LTV ratio is not meaningful.
The following tables present the components of interest income on the Company’s Residential whole loans:
Held at Carrying ValueHeld at Fair ValueTotal
Three Months Ended
June 30,		Three Months Ended
June 30,		Three Months Ended
June 30,
 (In Thousands)202520242025202420252024
Non-QM loans$9,334 $11,530 $60,933 $47,219 $70,267 $58,749 
Business purpose loans:
Single-family rental loans$1,794 $2,277 $19,953 $25,287 $21,747 $27,564 
Single-family transitional loans2,114 152 21,612 30,090 23,726 30,242 
Multifamily transitional loans— — 17,308 25,291 17,308 25,291 
Total Business purpose loans$3,908 $2,429 $58,873 $80,668 $62,781 $83,097 
Legacy RPL/NPL loans7,256 8,453 13,820 14,893 21,076 23,346 
Other loans— — 444 525 444 525 
Total Residential whole loans$20,498 $22,412 $134,070 $143,305 $154,568 $165,717 
Held at Carrying ValueHeld at Fair ValueTotal
Six Months Ended
June 30,		Six Months Ended
June 30,		Six Months Ended
June 30,
 (In Thousands)202520242025202420252024
Non-QM loans$19,420 $22,949 $116,111 $91,660 $135,531 $114,609 
Business purpose loans:
Single-family rental loans$3,693 $4,838 $40,451 $49,828 $44,144 $54,666 
Single-family transitional loans3,828 393 45,716 57,867 49,544 58,260 
Multifamily transitional loans— — 37,262 50,489 37,262 50,489 
Total Business purpose loans$7,521 $5,231 $123,429 $158,184 $130,950 $163,415 
Legacy RPL/NPL loans14,297 15,933 24,158 28,383 38,455 44,316 
Other loans— — 942 1,042 942 1,042 
Total Residential whole loans$41,238 $44,113 $264,640 $279,269 $305,878 $323,382 
The following table presents the components of Net gain/(loss) on residential whole loans measured at fair value through earnings:
Three Months Ended
June 30,		Six Months Ended
June 30,
 (In Thousands)2025202420252024
Non-QM loans$28,122 $32,107 $73,318 $29,569 
Business purpose loans:
Single-family rental loans$11,178 $18,442 $29,010 $17,607 
Single-family transitional loans(5,568)(5,413)(14,717)(4,121)
Multifamily transitional loans460 (24,503)(1,475)(27,073)
Total Business purpose loans$6,070 $(11,474)$12,818 $(13,587)
Legacy RPL/NPL loans(834)(3,621)114 (9,921)
Other loans253 (582)1,741 (1,144)
Total Residential whole loans$33,611 $16,430 $87,991 $4,917