Variable Interest Entities and Securitization Activities

In the normal course of business, the Company enters into certain types of transactions with entities that are considered

to be VIEs. The Company’s primary involvement with VIEs has been related to its securitization transactions in which it

transfers assets to securitization vehicles, most notably trusts. The Company primarily securitizes its acquired and

originated loans, which provides a source of funding and has enabled it to transfer a certain portion of economic risk on

loans or related debt securities to third parties. The Company also transfers originated loans to securitization trusts

sponsored by third parties. Third-party securitizations are securitization entities in which it maintains an economic

interest but does not sponsor. The entity that has a controlling financial interest in a VIE is referred to as the primary

beneficiary and is required to consolidate the VIE. The majority of the VIE activity in which the Company is involved in

are consolidated within its financial statements. Refer to Note 3 – Summary of Significant Accounting Policies for a

discussion of accounting policies applied to the consolidation of the VIE and transfer of the loans in connection with the

The Company consolidates variable interests held in an acquired joint venture investment for which it is the primary

beneficiary. The equity held by the remaining owners and their portions of net income (loss) are reflected in

stockholders’ equity on the consolidated balance sheets as Non-controlling interests and in the consolidated statements of

operations as Net income attributable to noncontrolling interests, respectively. As of March 31, 2026 and December 31,

2025, income and expenses on joint venture investments identified as consolidated VIEs were not material.

The table below presents assets and liabilities of consolidated VIEs.


(in thousands)	March 31, 2026	December 31, 2025
Assets:
Cash and cash equivalents	$803	$3
Restricted cash	1,064	1,944
Loans, net	817,315	1,694,079
Loans, held for sale	—	125,107
Preferred equity investment (1)	72,651	79,887
Receivable from third parties (1)	2,240	8,346
Accrued interest (1)	51,514	54,030
Real estate owned	15,288	15,288
Total assets	$960,875	$1,978,684
Liabilities:
Securitized debt obligations of consolidated VIEs, net	526,535	1,174,785
Due to third parties (2)	3,313	2,517
Accounts payable and other accrued liabilities	4	—
Total liabilities	$529,852	$1,177,302

(1)Assets are included in Assets of consolidated VIEs on the consolidated balance sheets.

(2)Due to third parties held through consolidated VIEs are included in Accounts payable and other accrued liabilities on the consolidated balance sheets.

Securitization-related VIEs

Company sponsored securitizations. In a securitization transaction, assets are transferred to a trust, which generally

meets the definition of a VIE. The Company’s primary securitization activity is in the form of LMM and SBL loan

securitizations, conducted through securitization trusts, which are typically consolidated, as the company is the primary

beneficiary.

As a result of the consolidation, the securitization is viewed as a loan financing to enable the creation of the senior

security and ultimately, sale to a third-party investor. As such, the senior security is presented in the consolidated balance

sheets as securitized debt obligations of consolidated VIEs. The third-party beneficial interest holders in the VIE have no

recourse against the Company, with the exception of an obligation to repurchase assets from the VIE in the event that

certain representations and warranties in relation to the loans sold to the VIE are breached. In the absence of such a

breach, the Company has no obligation to provide any other explicit or implicit support to any VIE.

The securitization trust receives principal and interest on the underlying loans and distributes those payments to the

certificate holders. The assets and other instruments held by the securitization trust are restricted in that they can only be

used to fulfill the obligations of the securitization trust. The risks associated with the Company’s involvement with the

VIE is limited to the risks and rights as a certificate holder of the securities retained by the Company.

The consolidation of securitization transactions includes the senior securities issued to third parties which are shown as

securitized debt obligations of consolidated VIEs in the consolidated balance sheets.

The table below presents additional information on the Company’s securitized debt obligations.


	March 31, 2026			December 31, 2025
(in thousands)	Current Principal Balance	Carrying Value	Weighted Average Interest Rate	Current Principal Balance	Carrying Value	Weighted Average Interest Rate
ReadyCap Lending Small Business Trust 2019-2	$6,446	$5,368	6.8%	$6,446	$6,446	6.9%
ReadyCap Lending Small Business Trust 2023-3	63,505	60,196	7.4	63,505	62,534	7.4
Sutherland Commercial Mortgage Trust 2019-SBC8	69,145	68,201	2.9	73,286	72,280	2.9
Sutherland Commercial Mortgage Trust 2021-SBC10	43,753	43,207	1.7	45,769	45,157	1.7
ReadyCap Commercial Mortgage Trust 2018-4	41,081	40,407	4.8	42,907	42,112	4.8
ReadyCap Commercial Mortgage Trust 2019-5	41,223	38,573	5.2	42,233	39,341	5.1
ReadyCap Commercial Mortgage Trust 2019-6	112,145	110,066	3.8	133,104	130,847	3.6
ReadyCap Commercial Mortgage Trust 2022-7	164,285	160,517	4.0	165,203	161,139	4.1
Ready Capital Mortgage Financing 2021-FL7	—	—	—	270,204	270,204	6.3
Ready Capital Mortgage Financing 2023-FL11	—	—	—	136,698	136,698	7.6
Ready Capital Mortgage Financing 2023-FL12	—	—	—	208,060	208,027	7.9
Total	$541,583	$526,535	4.2%	$1,187,415	$1,174,785	5.7%

Repayment of securitized debt will be dependent upon the cash flows generated by the loans in the securitization trust

that collateralize such debt. The actual cash flows from the securitized loans are comprised of coupon interest, scheduled

principal payments, prepayments and liquidations of the underlying loans. The actual term of the securitized debt may

differ significantly from the Company’s estimate given that actual interest collections, mortgage prepayments and/or

losses on liquidation of mortgages may differ significantly from those expected.

Third-party sponsored securitizations. For most third-party sponsored securitizations, the Company determined that it is

not the primary beneficiary because it does not have the power to direct the activities that most significantly impact the

economic performance of these entities. Specifically, the Company does not manage these entities or otherwise solely

hold decision making powers that are significant, which include special servicing decisions. As a result of this

assessment, the Company does not consolidate any of the underlying assets and liabilities of these trusts and only

accounts for its specific interests in them.

The Company does not consolidate variable interests held in an acquired joint venture investment accounted for as an

equity method investment as it does not have the power to direct the activities that most significantly impact their

economic performance and therefore, the Company only accounts for its specific interest in them.

The table below reflects variable interests in identified VIEs for which the Company is not the primary beneficiary.


	Carrying Amount		Maximum Exposure to Loss (1)
(in thousands)	March 31, 2026	December 31, 2025	March 31, 2026	December 31, 2025
MBS (2)	$31,649	$31,161	$31,649	$31,161
Investment in unconsolidated joint ventures	167,251	161,424	167,251	161,424
Total assets in unconsolidated VIEs	$198,900	$192,585	$198,900	$192,585

(1)Maximum exposure to loss is limited to the greater of the fair value or carrying value of the assets as of the consolidated balance sheet date.

(2)Retained interest in other third party sponsored securitizations.