Principles of Consolidation (Tables)

6 Months Ended

Jun. 30, 2026

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Schedule of Assets and Liabilities of Consolidated VIEs

The following table presents a summary of the assets and liabilities of our consolidated VIEs at June 30, 2026 and December 31, 2025.

Table 16.1 – Assets and Liabilities of Consolidated VIEs


June 30, 2026	Sequoia(1)		CAFL(2)		Servicing Investment(2)		HEI		Total Consolidated VIEs
(Dollars in Thousands)
Residential consumer loans, held-for-investment	$	20,702,101	$	—	$	—	$	—	$	20,702,101
Residential investor loans, held-for-investment	—		2,724,424		—		—		2,724,424
Real estate securities	164,670		—		—		—		164,670
Home equity investments	—		—		—		194,261		194,261
Other investments	—		—		244,187		—		244,187
Cash and cash equivalents	—		—		20,723		—		20,723
Restricted cash	312		87,128		—		5,058		92,498
Accrued interest receivable	95,836		25,524		1,836		—		123,196
Other assets	6,655		98,008		1,276		362		106,301
Total Assets	$	20,969,574	$	2,935,084	$	268,022	$	199,681	$	24,372,361
Debt Obligations	$	—	$	—	$	128,025	$	—	$	128,025
Accrued interest payable	76,159		8,451		195		—		84,805
Accrued expenses and other liabilities	162		68,238		34,246		46,519		149,165
Asset-backed securities issued	19,926,622		2,462,927		—		126,358		22,515,907
Total Liabilities	$	20,002,943	$	2,539,616	$	162,466	$	172,877	$	22,877,902

Value of our investments in VIEs (1)	$	946,822	$	393,935	$	105,556	$	26,804	$	1,473,117
Number of VIEs	86		21		3		1		111


December 31, 2025	Sequoia(1)		CAFL(2)		Servicing Investment(2)		HEI		Total Consolidated VIEs
(Dollars in Thousands)
Residential consumer loans, held-for-investment	$	14,843,746	$	—	$	—	$	—	$	14,843,746
Residential investor loans, held-for-investment	—		3,103,311		—		—		3,103,311
Real estate securities	165,092		—		—		—		165,092
Home equity investments	—		—		—		191,121		191,121
Other investments	—		—		265,771		—		265,771
Cash and cash equivalents	—		—		32,408		—		32,408
Restricted cash	266		161,780		—		5,696		167,742
Accrued interest receivable	73,864		23,330		1,924		—		99,118
Other assets	1,984		54,667		1,833		301		58,785
Total Assets	$	15,084,952	$	3,343,088	$	301,936	$	197,118	$	18,927,094
Debt Obligations	$	—	$	—	$	152,293	$	—	$	152,293
Accrued interest payable	57,525		7,210		261		—		64,996
Accrued expenses and other liabilities	121		57,301		39,248		44,185		140,855
Asset-backed securities issued	14,540,397		2,824,159		—		127,475		17,492,031
Total Liabilities	$	14,598,043	$	2,888,670	$	191,802	$	171,660	$	17,850,175

Value of our investments in VIEs (1)	$	470,496	$	452,736	$	110,134	$	25,458	$	1,058,824
Number of VIEs	72		23		3		1		99

Footnotes to table 16.1

(1)The ABS from three Sequoia re-securitizations at June 30, 2026 and December 31, 2025, respectively, are not accounted for under the CFE election and are accounted for at fair value (included within the Sequoia column at June 30, 2026 and December 31, 2025). At June 30, 2026 and December 31, 2025, the fair value of our interests in consolidated Sequoia securitizations accounted for under the CFE election was $1.23 billion and $722 million, respectively, with the difference in value of our investments in these VIEs reflected in the June 30, 2026 and December 31, 2025 table above representing $165 million and $165 million, respectively, of consolidated Sequoia securities in the Sequoia re-securitizations and $445 million and $417 million, respectively, of ABS issued at fair value.

(2)At both June 30, 2026 and December 31, 2025, our Servicing Investment VIEs are not accounted for under the CFE election and their associated ABS issued are accounted for at amortized historical cost. At December 31, 2025, two CAFL bridge loan securitization VIEs (included within the CAFL column) were not accounted for under the CFE election and their associated ABS issued were accounted for at amortized historical cost. These two CAFL bridge loan securitization VIEs were called during the six months ended June 30, 2026 and the associated ABS were paid off.

The fair value of our interests in the CAFL term loan securitizations accounted for under the CFE election was $314 million and $330 million at June 30, 2026 and December 31, 2025, respectively. At June 30, 2026 and December 31, 2025, the fair value of our interest in the CAFL bridge loan securitizations accounted for under the CFE election was $70 million and $50 million, respectively, with the difference from the tables above generally representing ABS issued and carried at amortized historical cost and accrued interest on our economic interests.

Schedule of Unconsolidated VIEs Sponsored by Redwood

The following table presents additional information at June 30, 2026 and December 31, 2025, related to unconsolidated VIEs sponsored by Redwood and accounted for as sales.

Table 16.2 – Unconsolidated VIEs Sponsored by Redwood


(In Thousands)	June 30, 2026		December 31, 2025
On-balance sheet assets, at fair value:
Subordinate securities, classified as AFS	$	293,520	$	283,768
Interest-only, senior and subordinate securities, classified as trading	47,935		33,743
Mortgage servicing rights	12,620		12,029
Strategic investments, equity method	10,263		10,263
Funding commitment (1)	14,815		35,000
Maximum loss exposure (2)	$	379,153	$	374,803

Footnotes to table 16.2

(1)Represents Redwood’s agreement, entered into during 2025, to provide up to $35 million of capital support to a trust holding legacy unsecuritized bridge loans. As of June 30, 2026, we funded $20 million, with up to $15 million remaining subject to specified portfolio triggers. Refer to Notes 8, 9, and 19 for additional information.

(2)Maximum loss exposure from our involvement with unconsolidated VIEs pertains to the carrying value of our securities and MSRs retained from these VIEs and represents estimated losses that would be incurred under severe, hypothetical circumstances, such as if the value of our interests and any associated collateral declines to zero. This does not include, for example, any potential exposure to representation and warranty claims associated with our initial transfer of loans into a securitization.

- Definition

Tabular disclosure of the significant judgments and assumptions made in determining whether a variable interest (as defined) held by the entity requires the variable interest entity (VIE) (as defined) to be consolidated and (or) disclose information about its involvement with the VIE, individually or in aggregate (as applicable); the nature of restrictions, if any, on the consolidated VIE's assets and on the settlement of its liabilities reported by an entity in its statement of financial position, including the carrying amounts of such assets and liabilities; the nature of, and changes in, the risks associated with involvement in the VIE; how involvement with the VIE affects the entity's financial position, financial performance, and cash flows; the lack of recourse if creditors (or beneficial interest holders) of the consolidated VIE have no recourse to the general credit of the primary beneficiary (if applicable); the terms of arrangements, giving consideration to both explicit arrangements and implicit variable interests, if any, that could require the entity to provide financial support to the VIE, including events or circumstances that could expose the entity to a loss; the methodology used by the entity for determining whether or not it is the primary beneficiary of the variable interest entity; the significant factors considered and judgments made in determining that the power to direct the activities of a VIE that most significantly impact the VIE's economic performance are shared (as defined); the carrying amounts and classification of assets and liabilities of the VIE included in the statement of financial position; the entity's maximum exposure to loss, if any, as a result of its involvement with the VIE, including how the maximum exposure is determined and significant sources of the entity's exposure to the VIE; a comparison of the carrying amounts of the assets and liabilities and the entity's maximum exposure to loss; information about any liquidity arrangements, guarantees, and (or) other commitments by third parties that may affect the fair value or risk of the entity's variable interest in the VIE; whether or not the entity has provided financial support or other support (explicitly or implicitly) to the VIE that it was not previously contractually required to provide or whether the entity intends to provide that support, including the type and amount of the support and the primary reasons for providing the support; and supplemental information the entity determines necessary to provide.

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