Redwood Trust (RWT) 10-Q 8 Nov 18 2018 Q3 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2018	Nov. 05, 2018
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2018
Document Fiscal Year Focus	2,018
Document Fiscal Period Focus	Q3
Trading Symbol	RWT
Entity Registrant Name	REDWOOD TRUST INC
Entity Central Index Key	930,236
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		82,965,298
Entity Emerging Growth Company	false
Entity Small Business	false

CONSOLIDATED BALANCE SHEETS

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands		Sep. 30, 2018	Dec. 31, 2017
ASSETS
Real estate securities, at fair value	[1]	$ 1,470,084	$ 1,476,510
Cash and cash equivalents	[1]	173,516	144,663
Restricted cash	[1]	27,253	2,144
Accrued interest receivable	[1]	35,644	27,013
Derivative assets	[1]	87,219	15,718
Other assets	[1]	365,875	258,564
Total Assets	[1]	9,139,635	7,039,822
Liabilities
Short-term debt	[1],[2]	1,424,275	1,938,682
Accrued interest payable	[1]	31,076	18,435
Derivative liabilities	[1]	42,724	63,081
Accrued expenses and other liabilities	[1]	102,278	67,729
Asset-backed securities issued, at fair value	[1]	3,406,985	1,164,585
Long-term debt, net	[1]	2,770,970	2,575,023
Total liabilities	[1]	7,778,308	5,827,535
Equity
Common stock, par value $0.01 per share, 180,000,000 shares authorized; 82,930,281 and 76,599,972 issued and outstanding	[1]	829	766
Additional paid-in capital	[1]	1,785,957	1,673,845
Accumulated other comprehensive income	[1]	72,327	85,248
Cumulative earnings	[1]	1,410,854	1,290,341
Cumulative distributions to stockholders	[1]	(1,908,640)	(1,837,913)
Total equity	[1]	1,361,327	1,212,287
Total Liabilities and Equity	[1]	9,139,635	7,039,822
Residential loans, held-for-sale, at fair value
ASSETS
Loans, at fair value	[1]	866,444	1,427,945
Residential loans, held-for-investment, at fair value
ASSETS
Loans, at fair value	[1]	5,055,815	3,687,265
Business purpose loans, at fair value
ASSETS
Loans, at fair value	[1]	115,620	0
Multifamily loans, held-for-investment, at fair value
ASSETS
Loans, at fair value	[1]	$ 942,165	$ 0
[1]	Our consolidated balance sheets include assets of consolidated variable interest entities (“VIEs”) that can only be used to settle obligations of these VIEs and liabilities of consolidated VIEs for which creditors do not have recourse to Redwood Trust, Inc. or its affiliates. At September 30, 2018 and December 31, 2017, assets of consolidated VIEs totaled $3,693,140 and $1,259,774, respectively. At September 30, 2018 and December 31, 2017, liabilities of consolidated VIEs totaled $3,417,835 and $1,167,157, respectively. See Note 4 for further discussion.
[2]	At December 31, 2017, balance includes $250 million of convertible notes, which matured in April 2018. See Note 12 for further discussion.

CONSOLIDATED BALANCE SHEETS (Pa

CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
Statement of Financial Position [Abstract]
Common stock, par value (usd per share)	$ 0.01	$ 0.01
Common stock, shares authorized (shares)	180,000,000	180,000,000
Common stock, issued (shares)	82,930,281	76,599,972
Common stock, outstanding (shares)	82,930,281	76,599,972
Variable interest held by entity, assets	$ 3,693,140	$ 1,259,774
Variable interest held by entity, liabilities	$ 3,417,835	1,167,157
Convertible notes		$ 250,000

CONSOLIDATED STATEMENTS OF INCO

CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Interest Income
Residential loans	$ 63,265	$ 38,541	$ 169,010	$ 109,538
Business purpose loans	1,445	0	1,445	0
Multifamily loans	5,578	0	5,578	0
Real estate securities	27,063	23,425	79,054	65,068
Other interest income	2,046	771	3,905	1,983
Total interest income	99,397	62,737	258,992	176,589
Interest Expense
Short-term debt	(14,146)	(10,182)	(40,756)	(23,985)
Asset-backed securities issued	(27,421)	(3,956)	(55,171)	(11,191)
Long-term debt	(22,784)	(13,305)	(58,151)	(37,532)
Total Interest Expense	(64,351)	(27,443)	(154,078)	(72,708)
Net Interest Income	35,046	35,294	104,914	103,881
Non-interest Income
Mortgage banking activities, net	11,224	21,200	48,396	50,850
Investment fair value changes, net	10,332	324	12,830	9,990
Other income, net	3,453	2,812	8,893	9,473
Realized gains, net	7,275	1,734	21,352	8,809
Total non-interest income, net	32,284	26,070	91,471	79,122
Operating expenses	(21,490)	(19,922)	(63,529)	(56,789)
Net Income before Provision for Income Taxes	45,840	41,442	132,856	126,214
Provision for income taxes	(4,919)	(5,262)	(12,343)	(16,741)
Net Income	$ 40,921	$ 36,180	$ 120,513	$ 109,473
Basic earnings per common share (in dollars per share)	$ 0.49	$ 0.46	$ 1.51	$ 1.39
Diluted earnings per common share (in dollars per share)	0.42	0.41	1.30	1.26
Regular dividends declared per common share (in dollars per share)	$ 0.30	$ 0.28	$ 0.88	$ 0.84
Basic weighted average shares outstanding (in shares)	80,796,856	76,850,830	77,211,188	76,803,324
Diluted weighted average shares outstanding (in shares)	114,682,688	102,703,108	107,792,029	99,397,866

CONSOLIDATED STATEMENTS OF COMP

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Statement of Comprehensive Income [Abstract]
Net Income	$ 40,921	$ 36,180	$ 120,513	$ 109,473
Other comprehensive (loss) income:
Net unrealized (loss) gain on available-for-sale securities	(2,408)	13,158	(9,749)	17,899
Reclassification of unrealized gain on available-for-sale securities to net income	(5,686)	(853)	(19,821)	(7,103)
Net unrealized gain (loss) on interest rate agreements	4,801	321	16,649	(375)
Reclassification of unrealized loss on interest rate agreements to net income	0	14	0	42
Total other comprehensive (loss) income	(3,293)	12,640	(12,921)	10,463
Total Comprehensive Income	$ 37,628	$ 48,820	$ 107,592	$ 119,936

CONSOLIDATED STATEMENTS OF CHAN

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($) $ in Thousands	Total	Common Stock	Additional Paid-In Capital	Accumulated Other Comprehensive Income	Cumulative Earnings	Cumulative Distributions to Stockholders
Beginning balance at Dec. 31, 2016	$ 1,149,428	$ 768	$ 1,676,486	$ 71,853	$ 1,149,935	$ (1,749,614)
Beginning balance (in shares) at Dec. 31, 2016		76,834,663
Increase (Decrease) in Stockholders' Equity
Net Income	109,473				109,473
Other comprehensive income (loss)	10,463			10,463
Employee stock purchase and incentive plans	(2,312)	$ 3	(2,315)
Employee stock purchase and incentive plans (in shares)		288,024
Non-cash equity award compensation	7,797		7,797
Common dividends declared	(66,209)					(66,209)
Ending balance at Sep. 30, 2017	1,208,640	$ 771	1,681,968	82,316	1,259,408	(1,815,823)
Ending balance (in shares) at Sep. 30, 2017		77,122,687
Beginning balance at Dec. 31, 2016	1,149,428	$ 768	1,676,486	71,853	1,149,935	(1,749,614)
Beginning balance (in shares) at Dec. 31, 2016		76,834,663
Ending balance at Dec. 31, 2017	1,212,287	$ 766	1,673,845	85,248	1,290,341	(1,837,913)
Ending balance (in shares) at Dec. 31, 2017		76,599,972
Increase (Decrease) in Stockholders' Equity
Net Income	36,180
Other comprehensive income (loss)	12,640
Ending balance at Sep. 30, 2017	1,208,640	$ 771	1,681,968	82,316	1,259,408	(1,815,823)
Ending balance (in shares) at Sep. 30, 2017		77,122,687
Beginning balance at Dec. 31, 2017	1,212,287	$ 766	1,673,845	85,248	1,290,341	(1,837,913)
Beginning balance (in shares) at Dec. 31, 2017		76,599,972
Increase (Decrease) in Stockholders' Equity
Net Income	120,513				120,513
Other comprehensive income (loss)	(12,921)			(12,921)
Issuance of common stock	117,036	$ 72	116,964
Issuance of common stock (in shares)		7,187,500
Employee stock purchase and incentive plans	(100)	$ 1	(101)
Employee stock purchase and incentive plans (in shares)		183,638
Non-cash equity award compensation	10,783		10,783
Share repurchases	(15,544)	$ (10)	(15,534)
Share repurchases (in shares)		(1,040,829)
Common dividends declared	(70,727)					(70,727)
Ending balance at Sep. 30, 2018	1,361,327	$ 829	1,785,957	72,327	1,410,854	(1,908,640)
Ending balance (in shares) at Sep. 30, 2018		82,930,281
Increase (Decrease) in Stockholders' Equity
Net Income	40,921
Other comprehensive income (loss)	(3,293)
Ending balance at Sep. 30, 2018	$ 1,361,327	$ 829	$ 1,785,957	$ 72,327	$ 1,410,854	$ (1,908,640)
Ending balance (in shares) at Sep. 30, 2018		82,930,281

CONSOLIDATED STATEMENTS OF CASH

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands		9 Months Ended
		Sep. 30, 2018	Sep. 30, 2017
Cash Flows From Operating Activities:
Net Income		$ 120,513	$ 109,473
Adjustments to reconcile net income to net cash used in operating activities:
Amortization of premiums, discounts, and securities issuance costs, net		(11,091)	(14,246)
Depreciation and amortization of non-financial assets		922	909
Purchases of held-for-sale loans		(5,596,326)	(3,760,110)
Proceeds from sales of held-for-sale loans		4,097,211	3,079,877
Principal payments on held-for-sale loans		51,853	38,500
Net settlements of derivatives		36,721	(10,570)
Non-cash equity award compensation expense		10,783	7,797
Market valuation adjustments		(53,666)	(50,352)
Realized gains, net		(21,352)	(8,809)
Net change in:
Accrued interest receivable and other assets		(32,722)	(19,868)
Accrued interest payable and accrued expenses and other liabilities		34,137	(1,677)
Net cash used in operating activities		(1,363,017)	(629,076)
Cash Flows From Investing Activities:
Purchases of loans held-for-investment		(111,231)	0
Principal payments on loans held-for-investment		550,973	370,595
Purchases of real estate securities		(482,150)	(396,721)
Purchases of multifamily securities held in consolidated securitization trusts		(54,957)	0
Proceeds from sales of real estate securities		432,199	142,931
Principal payments on real estate securities		61,278	55,544
Sales of mortgage servicing rights, net		6,344	50,705
Net investment in participation in loan warehouse facility		(37,814)	0
Other investing activities, net		(10,075)	0
Net cash provided by investing activities		354,567	223,054
Cash Flows From Financing Activities:
Proceeds from borrowings on short-term debt		4,760,083	3,126,949
Repayments on short-term debt		(5,274,664)	(2,968,050)
Proceeds from issuance of asset-backed securities		1,658,848	286,898
Repayments on asset-backed securities issued		(305,528)	(146,357)
Proceeds from issuance of long-term debt		199,000	245,000
Deferred long-term debt issuance costs paid		(4,977)	(7,380)
Net settlements of derivatives		(244)	(115)
Net proceeds from issuance of common stock		117,311	224
Net payments on repurchase of common stock		(16,315)	0
Taxes paid on equity award distributions		(375)	(2,536)
Dividends paid		(70,727)	(66,209)
Net cash provided by financing activities		1,062,412	468,424
Net increase in cash, cash equivalents and restricted cash		53,962	62,402
Cash, cash equivalents and restricted cash at beginning of period	[1]	146,807	221,467
Cash, cash equivalents, and restricted cash at end of period	[1]	200,769	283,869
Cash paid during the period for:
Interest		139,003	67,339
Taxes		6,372	1,476
Supplemental Noncash Information:
Real estate securities retained from loan securitizations		46,872	67,083
Retention of mortgage servicing rights from loan securitizations and sales		0	7,387
Consolidation of multifamily loans held in securitization trusts		946,650	0
Consolidation of multifamily ABS		880,602	0
Transfers from loans held-for-sale to loans held-for-investment		1,981,170	643,876
Transfers from loans held-for-investment to loans held-for-sale		15,717	98,853
Transfers from residential loans to real estate owned		$ 2,139	$ 3,177
[1]	OOD TRUST, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWS(In Thousands)(Unaudited) Nine Months Ended September 30, 2018 2017Cash Flows From Operating Activities: Net income $120,513 $109,473Adjustments to reconcile net income to net cash used in operating activities: Amortization of premiums, discounts, and securities issuance costs, net (11,091) (14,246)Depreciation and amortization of non-financial assets 922 909Purchases of held-for-sale loans (5,596,326) (3,760,110)Proceeds from sales of held-for-sale loans 4,097,211 3,079,877Principal payments on held-for-sale loans 51,853 38,500Net settlements of derivatives 36,721 (10,570)Non-cash equity award compensation expense 10,783 7,797Market valuation adjustments (53,666) (50,352)Realized gains, net (21,352) (8,809)Net change in: Accrued interest receivable and other assets (32,722) (19,868)Accrued interest payable and accrued expenses and other liabilities 34,137 (1,677)Net cash used in operating activities (1,363,017) (629,076)Cash Flows From Investing Activities: Purchases of loans held-for-investment (111,231) —Principal payments on loans held-for-investment 550,973 370,595Purchases of real estate securities (482,150) (396,721)Purchases of multifamily securities held in consolidated securitization trusts (54,957) —Proceeds from sales of real estate securities 432,199 142,931Principal payments on real estate securities 61,278 55,544Sales (purchases) of mortgage servicing rights, net 6,344 50,705Net investment in participation in loan warehouse facility (37,814) —Other investing activities, net (10,075) —Net cash provided by investing activities 354,567 223,054Cash Flows From Financing Activities: Proceeds from borrowings on short-term debt 4,760,083 3,126,949Repayments on short-term debt (5,274,664) (2,968,050)Proceeds from issuance of asset-backed securities 1,658,848 286,898Repayments on asset-backed securities issued (305,528) (146,357)Proceeds from issuance of long-term debt 199,000 245,000Deferred long-term debt issuance costs paid (4,977) (7,380)Net settlements of derivatives (244) (115)Net proceeds from issuance of common stock 117,311 224Net payments on repurchase of common stock (16,315) —Taxes paid on equity award distributions (375) (2,536)Dividends paid (70,727) (66,209)Net cash provided by financing activities 1,062,412 468,424Net increase in cash, cash equivalents and restricted cash 53,962 62,402Cash, cash equivalents and restricted cash at beginning of period (1) 146,807 221,467Cash, cash equivalents, and restricted cash at end of period (1) $200,769 $283,869Supplemental Cash Flow Information: Cash paid during the period for: Interest $139,003 $67,339 Taxes 6,372 1,476Supplemental Noncash Information: Real estate securities retained from loan securitizations $46,872 $67,083Retention of mortgage servicing rights from loan securitizations and sales — 7,387Consolidation of multifamily loans held in securitization trusts 946,650 —Consolidation of multifamily ABS 880,602 —Transfers from loans held-for-sale to loans held-for-investment 1,981,170 643,876Transfers from loans held-for-investment to loans held-for-sale 15,717 98,853Transfers from residential loans to real estate owned 2,139 3,177(1)Cash, cash equivalents, and restricted cash at September 30, 2018 includes cash and cash equivalents of $174 million and restricted cash of $27 million, and at December

CONSOLIDATED STATEMENTS OF CA_2

CONSOLIDATED STATEMENTS OF CASH FLOWS (PARENTHETICAL) - USD ($) $ in Thousands		Sep. 30, 2018	Dec. 31, 2017
Statement of Cash Flows [Abstract]
Cash and cash equivalents	[1]	$ 173,516	$ 144,663
Restricted cash	[1]	$ 27,253	$ 2,144
[1]	Our consolidated balance sheets include assets of consolidated variable interest entities (“VIEs”) that can only be used to settle obligations of these VIEs and liabilities of consolidated VIEs for which creditors do not have recourse to Redwood Trust, Inc. or its affiliates. At September 30, 2018 and December 31, 2017, assets of consolidated VIEs totaled $3,693,140 and $1,259,774, respectively. At September 30, 2018 and December 31, 2017, liabilities of consolidated VIEs totaled $3,417,835 and $1,167,157, respectively. See Note 4 for further discussion.

Organization

Organization	9 Months Ended
	Sep. 30, 2018
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Organization	Organization Redwood Trust, Inc., together with its subsidiaries, is a specialty finance company focused on making credit-sensitive investments in residential mortgages and related assets and engaging in mortgage banking activities. Our goal is to provide attractive returns to shareholders through a stable and growing stream of earnings and dividends, as well as through capital appreciation. We operate our business in two segments: Investment Portfolio and Mortgage Banking. Our primary sources of income are net interest income from our investment portfolios and non-interest income from our mortgage banking activities. Net interest income consists of the interest income we earn on investments less the interest expense we incur on borrowed funds and other liabilities. Income from mortgage banking activities is generated through the acquisition of loans and their subsequent sale or securitization. Redwood Trust, Inc. has elected to be taxed as a real estate investment trust (“REIT”) under the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”), beginning with its taxable year ended December 31, 1994. We generally refer, collectively, to Redwood Trust, Inc. and those of its subsidiaries that are not subject to subsidiary-level corporate income tax as “the REIT” or “our REIT.” We generally refer to subsidiaries of Redwood Trust, Inc. that are subject to subsidiary-level corporate income tax as “our operating subsidiaries” or “our taxable REIT subsidiaries” or “TRS.” Redwood was incorporated in the State of Maryland on April 11, 1994, and commenced operations on August 19, 1994. References herein to “Redwood,” the “company,” “we,” “us,” and “our” include Redwood Trust, Inc. and its consolidated subsidiaries, unless the context otherwise requires.

Basis of Presentation

Basis of Presentation	9 Months Ended
	Sep. 30, 2018
Accounting Policies [Abstract]
Basis of Presentation	Basis of Presentation The consolidated financial statements presented herein are at September 30, 2018 and December 31, 2017 , and for the three and nine months ended September 30, 2018 and 2017 . These interim unaudited consolidated financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission ("SEC"). Certain information and note disclosures normally included in our annual financial statements prepared in accordance with U.S. generally accepted accounting principles ("GAAP") — as prescribed by the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) — have been condensed or omitted in these interim financial statements according to these SEC rules and regulations. Management believes that the disclosures included in these interim financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the company's Annual Report on Form 10-K for the year ended December 31, 2017 . In the opinion of management, all normal and recurring adjustments to present fairly the financial condition of the company at September 30, 2018 and results of operations for all periods presented have been made. The results of operations for the three and nine months ended September 30, 2018 should not be construed as indicative of the results to be expected for the full year. Principles of Consolidation In accordance with GAAP, we determine whether we must consolidate transferred financial assets and variable interest entities (“VIEs”) for financial reporting purposes. We currently consolidate the assets and liabilities of certain Sequoia securitization entities issued prior to 2012 where we maintain an ongoing involvement ("Legacy Sequoia"), as well as entities formed in connection with the securitization of Redwood Choice expanded-prime loans beginning in the third quarter of 2017 ("Sequoia Choice"). In addition, we consolidated the assets and liabilities of certain third-party Freddie Mac K-Series securitization trusts beginning in the third quarter of 2018. Each securitization entity is independent of Redwood and of each other and the assets and liabilities are not owned by and are not legal obligations of Redwood Trust, Inc. Our exposure to these entities is primarily through the financial interests we have retained, although we are exposed to certain financial risks associated with our role as a sponsor, servicing administrator, or depositor of these entities or as a result of our having sold assets directly or indirectly to these entities. For financial reporting purposes, the underlying loans owned at the consolidated Sequoia entities are shown under Residential loans, held-for-investment, at fair value, and the underlying loans owned at the consolidated Freddie Mac K-Series are shown under Multifamily loans held-for-investment, at fair value, on our consolidated balance sheets. The asset-backed securities (“ABS”) issued to third parties by these entities are shown under ABS issued. In our consolidated statements of income, we recorded interest income on the loans owned at these entities and interest expense on the ABS issued by these entities as well as other income and expenses associated with these entities' activities. See Note 13 for further discussion on ABS issued. See Note 4 for further discussion on principles of consolidation. Use of Estimates The preparation of financial statements requires us to make a number of significant estimates. These include estimates of fair value of certain assets and liabilities, amounts and timing of credit losses, prepayment rates, and other estimates that affect the reported amounts of certain assets and liabilities as of the date of the consolidated financial statements and the reported amounts of certain revenues and expenses during the reported periods. It is likely that changes in these estimates (e.g., valuation changes due to supply and demand, credit performance, prepayments, interest rates, or other reasons) will occur in the near term. Our estimates are inherently subjective in nature and actual results could differ from our estimates and the differences could be material.

Summary of Significant Accounti

Summary of Significant Accounting Policies	9 Months Ended
	Sep. 30, 2018
Accounting Policies [Abstract]
Summary of Significant Accounting Policies	Summary of Significant Accounting Policies Significant Accounting Policies Included in Note 3 to the Consolidated Financial Statements of our 2017 Annual Report on Form 10-K is a summary of our significant accounting policies. Provided below is a summary of additional accounting policies that are significant to the company’s consolidated financial position and results of operations for the three and nine months ended September 30, 2018 . Business Purpose Loans at Fair Value Business purpose loans include loans to investors in single-family rental properties ("Single-family rental loans") and loans to investors rehabilitating and reselling residential properties ("Fix-and-flip loans"). Our single-family rental loans are held-for-sale at fair value, as we have purchased these loans with the intent to sell to third parties or transfer to securitization entities. Fix-and-flip loans are primarily interest-only fixed-rate loans with a term of less than two years which are carried as held-for-investment at fair value. Coupon interest for these loans is recognized as revenue when earned and deemed collectible or, for single-family rental loans, until a loan becomes more than 90 days past due, at which point the loan is placed on nonaccrual status. When a seriously delinquent loan previously placed on nonaccrual status has cured, meaning all delinquent principal and interest have been remitted by the borrower, the loan is placed back on accrual status. Changes in fair value are recurring and reported through our consolidated statements of income in Mortgage banking activities, net and Investment fair value changes, net for single-family rental loans and fix-and-flip loans, respectively. Multifamily Loans, Held-for-Investment at Fair Value Multifamily loans are multifamily mortgage loans held in Freddie Mac-sponsored K-series securitization trusts that we consolidate. In accordance with accounting guidance for collateralized financing entities ("CFEs"), we use the fair value of the ABS issued by the Freddie Mac K-Series entities (which we determined to be more observable) to determine the fair value of the loans held at these entities. Coupon interest for these loans is recognized as revenue when earned and deemed collectible or, until a loan becomes more than 90 days past due, at which point the loan is placed on nonaccrual status. When a seriously delinquent loan previously placed on nonaccrual status has cured, meaning all delinquent principal and interest have been remitted by the borrower, the loan is placed back on accrual status. Changes in fair value for the assets and liabilities of these trusts are recurring and are reported through our consolidated statements of income in Investment fair value changes, net. Recent Accounting Pronouncements Newly Adopted Accounting Standards Updates ("ASUs") In May 2017, the FASB issued ASU 2017-09, "Compensation - Stock Compensation (Topic 718)." This new guidance provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718. This new guidance is effective for fiscal years beginning after December 15, 2017, and should be applied prospectively to an award modified on or after the adoption date. We adopted this guidance, as required, in the first quarter of 2018, which did not have a material impact on our consolidated financial statements. In November 2016, the FASB issued ASU 2016-18, "Statement of Cash Flows (Topic 230): Restricted Cash." This new guidance amends previous guidance on how to classify and present changes in restricted cash on the statement of cash flows. This new guidance is effective for fiscal years beginning after December 15, 2017. We adopted this guidance, as required, in the first quarter of 2018, which did not have a material impact on our results of operations but impacted the presentation of the statements of cash flows and related footnote disclosures. In October 2016, the FASB issued ASU 2016-16, "Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory." This new guidance allows an entity to recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. It also eliminates the exceptions for an intra-entity transfer of assets other than inventory. This new guidance is effective for fiscal years beginning after December 15, 2017. We adopted this guidance, as required, in the first quarter of 2018, which did not have a material impact on our consolidated financial statements. In August 2016, the FASB issued ASU 2016-15, "Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments." This new guidance provides guidance on how to present and classify certain cash receipts and cash payments in the statement of cash flows. This new guidance is effective for fiscal years beginning after December 15, 2017. We adopted this guidance, as required, in the first quarter of 2018, which did not have a material impact on our consolidated financial statements. In January 2016, the FASB issued ASU 2016-01, "Recognition and Measurement of Financial Assets and Financial Liabilities." This new guidance amends accounting related to the classification and measurement of investments in equity securities and the presentation of certain fair value changes for financial liabilities measured at fair value. This new guidance also amends certain disclosure requirements associated with the fair value of financial instruments and it is effective for fiscal years beginning after December 15, 2017. In February 2018, the FASB issued ASU 2018-03, "Technical Corrections and Improvements to Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities," which clarified certain aspects of the guidance issued in ASU 2016-01. We adopted this guidance, as required, in the first quarter of 2018. This did not have a material impact on our consolidated financial statements as our investments in debt securities and loans were not subject to the amendments in this ASU. In accordance with this guidance, we amended certain fair value disclosures related to financial instruments that are carried at amortized cost on the consolidated balance sheets. In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers.” The update modifies the guidance companies use to recognize revenue from contracts with customers for transfers of goods or services and transfers of nonfinancial assets, unless those contracts are within the scope of other standards. The guidance also requires new qualitative and quantitative disclosures, including information about contract balances and performance obligations. In July 2015, the FASB approved a one-year deferral of the effective date. Accordingly, the update is effective for us in the first quarter of 2018 with retrospective application to prior periods presented or as a cumulative effect adjustment in the period of adoption. In March 2016, the FASB issued ASU 2016-08, "Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net)." This new guidance provides additional implementation guidance on how an entity should identify the unit of accounting for the principal versus agent evaluations. In May 2016, the FASB issued ASU 2016-12, "Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients," and in December 2016, the FASB issued ASU 2016-20, "Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers." These new ASUs provide more specific guidance on certain aspects of Topic 606. In September 2017, the FASB issued ASU 2017-13, "Revenue Recognition (Topic 605), Revenue from Contracts with Customers (Topic 606), Leases (Topic 840), and Leases (Topic 842): Amendments to SEC Paragraphs Pursuant to the Staff Announcement at the July 20, 2017 EITF Meeting and Rescission of Prior SEC Staff Announcements and Observer Comments (SEC Update)." This new ASU allows certain public business entities to use the nonpublic business entity effective dates for adoption of the new revenue standard. In November 2017, the FASB issued ASU 2017-14, "Income Statement - Reporting Comprehensive Income (Topic 220), Revenue Recognition (Topic 605), and Revenue from Contracts with Customers (Topic 606): Amendments to SEC Paragraphs Pursuant to Staff Accounting Bulletin No. 116 and SEC Release No. 33-10403." This new ASU amends various paragraphs that contain SEC guidance. We adopted this guidance, as required, in the first quarter of 2018. This did not have a material impact on our consolidated financial statements as nearly all of our income is generated from financial instruments, which are explicitly scoped out of these standards. Other Recent Accounting Pronouncements In August 2018, the FASB issued ASU 2018-13, "Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement." This new guidance amends previous guidance by removing and modifying certain existing fair value disclosure requirements, while adding other new disclosure requirements. This new guidance is effective for fiscal years beginning after December 15, 2019. Early adoption is permitted and entities may elect to early adopt the removal or modification of disclosures immediately and delay adoption of the new disclosure requirements until their effective date. We plan to adopt this new guidance by the required date and do not anticipate that this update will have a material impact on our consolidated financial statements. In July 2018, the FASB issued ASU 2018-09, "Codification Improvements." This new guidance is intended to clarify, correct, and make minor improvements to the FASB Accounting Standards Codification. The transition and effective dates are based on the facts and circumstances of each amendment, with some amendments becoming effective upon issuance of this ASU and others becoming effective for annual periods beginning after December 15, 2018. We plan to adopt this new guidance by the required date and do not anticipate that this update will have a material impact on our consolidated financial statements. In February 2018, the FASB issued ASU 2018-02, "Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income." This new guidance allows a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act of 2017 (the "Tax Act"). This new guidance is effective for fiscal years beginning after December 15, 2018. Early adoption is permitted. We plan to adopt this new guidance by the required date and do not anticipate that this update will have a material impact on our consolidated financial statements. In August 2017, the FASB issued ASU 2017-12, "Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities." This new guidance amends previous guidance to better align an entity's risk management activities and financial reporting for hedging relationships through changes to both the designation and measurement guidance for qualifying hedging relationships and the presentation of hedge results. This new guidance is effective for fiscal years beginning after December 15, 2018. Early adoption is permitted. We plan to adopt this new guidance by the required date and do not anticipate that this update will have a material impact on our consolidated financial statements. In July 2017, the FASB issued ASU 2017-11, "Earnings Per Share (Topic 260); Distinguishing Liabilities from Equity (Topic 480); Derivatives and Hedging (Topic 815): (Part I) Accounting for Certain Financial Instruments with Down Round Features, (Part II) Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception." This new guidance changes the classification analysis of certain equity-linked financial instruments (or embedded conversion options) with down round features. This new guidance is effective for fiscal years beginning after December 15, 2018. Early adoption is permitted. We plan to adopt this new guidance by the required date and do not anticipate that this update will have a material impact on our consolidated financial statements. In March 2017, the FASB issued ASU 2017-08, "Receivables - Nonrefundable Fees and Other Costs (Subtopic 310-20)." This new guidance shortens the amortization period for certain callable debt securities purchased at a premium by requiring the premium to be amortized to the earliest call date. This new guidance is effective for fiscal years beginning after December 15, 2018. Early adoption is permitted. We plan to adopt this new guidance by the required date and do not anticipate that this update will have a material impact on our consolidated financial statements. In June 2016, the FASB issued ASU 2016-13, "Financial Instruments - Credit Losses." This new guidance provides a new impairment model that is based on expected losses rather than incurred losses to determine the allowance for credit losses. This new guidance is effective for fiscal years beginning after December 15, 2019. Early adoption is permitted for fiscal years beginning after December 15, 2018. We currently have only a small balance of loans receivable that are not carried at fair value and would be subject to this new guidance for allowance for credit losses. Separately, we account for our available-for-sale securities under the other-than-temporary impairment ("OTTI") model for debt securities. This new guidance requires that credit impairments on our available-for-sale securities be recorded in earnings using an allowance for credit losses, with the allowance limited to the amount by which the security's fair value is less than its amortized cost basis. Subsequent reversals in credit loss estimates are recognized in income. We plan to adopt this new guidance by the required date and continue to evaluate the impact that this update will have on our consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, "Leases." This new guidance requires lessees to recognize most leases on their balance sheet as a right-of-use asset and a lease liability. This new guidance retains a dual lease accounting model, which requires leases to be classified as either operating or capital leases for lessees, for purposes of income statement recognition. This new guidance is effective for fiscal years beginning after December 15, 2018. Early adoption is permitted. In July 2018, the FASB issued ASU 2018-10, "Codification Improvements to Topic 842, Leases," which provides more specific guidance on certain aspects of Topic 842. Additionally, in July 2018, the FASB issued ASU 2018-11, "Leases (Topic 842): Targeted Improvements." This new ASU introduces an additional transition method which allows entities to apply the new standard at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. As discussed in Note 15 , our only material leases are those related to our leased office space, for which future payments under these leases totaled $16 million at September 30, 2018 . Upon adoption of this standard in the first quarter of 2019, we will record a right-of-use asset and lease liability equal to the present value of these future lease payments discounted at our incremental borrowing rate. Based on our initial evaluation of this new guidance, and taking into consideration our current in-place leases, we do not expect that its adoption will have a material impact on our consolidated financial statements. We will continue evaluating this new standard and caution that any changes in our business or additional leases we may enter into could change our initial assessment. Balance Sheet Netting Certain of our derivatives and short-term debt are subject to master netting arrangements or similar agreements. Under GAAP, in certain circumstances we may elect to present certain financial assets, liabilities and related collateral subject to master netting arrangements in a net position on our consolidated balance sheets. However, we do not report any of these financial assets or liabilities on a net basis, and instead present them on a gross basis on our consolidated balance sheets. The table below presents financial assets and liabilities that are subject to master netting arrangements or similar agreements categorized by financial instrument, together with corresponding financial instruments and corresponding collateral received or pledged at September 30, 2018 and December 31, 2017 . Table 3.1 – Offsetting of Financial Assets, Liabilities, and Collateral Gross Amounts of Recognized Assets (Liabilities) Gross Amounts Offset in Consolidated Balance Sheet Net Amounts of Assets (Liabilities) Presented in Consolidated Balance Sheet Gross Amounts Not Offset in Consolidated (1) Net Amount September 30, 2018 Financial Instruments Cash Collateral (Received) Pledged Assets (2) Interest rate agreements $ 78,006 $ — $ 78,006 $ (10,429 ) $ (28,159 ) $ 39,418 TBAs 6,987 — 6,987 (919 ) (5,234 ) 834 Futures 44 — 44 — — 44 Total Assets $ 85,037 $ — $ 85,037 $ (11,348 ) $ (33,393 ) $ 40,296 Liabilities (2) Interest rate agreements $ (38,581 ) $ — $ (38,581 ) $ 10,429 $ 28,152 $ — TBAs (1,744 ) — (1,744 ) 919 762 (63 ) Loan warehouse debt (578,157 ) — (578,157 ) 578,157 — — Security repurchase agreements (780,818 ) — (780,818 ) 780,818 — — Total Liabilities $ (1,399,300 ) $ — $ (1,399,300 ) $ 1,370,323 $ 28,914 $ (63 ) Gross Amounts of Recognized Assets (Liabilities) Gross Amounts Offset in Consolidated Balance Sheet Net Amounts of Assets (Liabilities) Presented in Consolidated Balance Sheet Gross Amounts Not Offset in Consolidated (1) Net Amount December 31, 2017 Financial Instruments Cash Collateral (Received) Pledged Assets (2) Interest rate agreements $ 10,164 $ — $ 10,164 $ (6,196 ) $ (42 ) $ 3,926 TBAs 133 — 133 (133 ) — — Futures 1 — 1 — — 1 Total Assets $ 10,298 $ — $ 10,298 $ (6,329 ) $ (42 ) $ 3,927 Liabilities (2) Interest rate agreements $ (55,567 ) $ — $ (55,567 ) $ 6,196 $ 49,371 $ — TBAs (3,808 ) — (3,808 ) 133 1,376 (2,299 ) Loan warehouse debt (1,039,666 ) — (1,039,666 ) 1,039,666 — — Security repurchase agreements (648,746 ) — (648,746 ) 648,746 — — Total Liabilities $ (1,747,787 ) $ — $ (1,747,787 ) $ 1,694,741 $ 50,747 $ (2,299 ) (1) Amounts presented in these columns are limited in total to the net amount of assets or liabilities presented in the prior column by instrument. In certain cases, there is excess cash collateral or financial assets we have pledged to a counterparty (which may, in certain circumstances, be a clearinghouse) that exceed the financial liabilities subject to a master netting arrangement or similar agreement. Additionally, in certain cases, counterparties may have pledged excess cash collateral to us that exceeds our corresponding financial assets. In each case, any of these excess amounts are excluded from the table although they are separately reported in our consolidated balance sheets as assets or liabilities, respectively. (2) Interest rate agreements, TBAs, and futures are components of derivatives instruments on our consolidated balance sheets. Loan warehouse debt, which is secured by residential mortgage loans, and security repurchase agreements are components of Short-term debt on our consolidated balance sheets. For each category of financial instrument set forth in the table above, the assets and liabilities resulting from individual transactions within that category between us and a counterparty are subject to a master netting arrangement or similar agreement with that counterparty that provides for individual transactions to be aggregated and treated as a single transaction. For certain categories of these instruments, some of our transactions are cleared and settled through one or more clearinghouses that are substituted as our counterparty. References herein to master netting arrangements or similar agreements include the arrangements and agreements governing the clearing and settlement of these transactions through the clearinghouses. In the event of the termination and close-out of any of those transactions, the corresponding master netting agreement or similar agreement provides for settlement on a net basis. Any such settlement would include the proceeds of the liquidation of any corresponding collateral, subject to certain limitations on termination, settlement, and liquidation of collateral that may apply in the event of the bankruptcy or insolvency of a party. Such limitations should not inhibit the eventual practical realization of the principal benefits of those transactions or the corresponding master netting arrangement or similar agreement and any corresponding collateral.

Principles of Consolidation

Principles of Consolidation	9 Months Ended
	Sep. 30, 2018
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Principles of Consolidation	Principles of Consolidation GAAP requires us to consider whether securitizations we sponsor and other transfers of financial assets should be treated as sales or financings, as well as whether any VIEs that we hold variable interests in – for example, certain legal entities often used in securitization and other structured finance transactions – should be included in our consolidated financial statements. The GAAP principles we apply require us to reassess our requirement to consolidate VIEs each quarter and therefore our determination may change based upon new facts and circumstances pertaining to each VIE. This could result in a material impact to our consolidated financial statements during subsequent reporting periods. Analysis of Consolidated VIEs At September 30, 2018 , we consolidated our Legacy Sequoia and Sequoia Choice securitization entities that we determined were VIEs and for which we determined we were the primary beneficiary. Additionally, in the third quarter of 2018 we consolidated certain third-party Freddie Mac K-Series securitization entities that we determined were VIEs and for which we determined we were the primary beneficiary. Each of these entities is independent of Redwood and of each other and the assets and liabilities of these entities are not owned by and are not legal obligations of ours. Our exposure to these entities is primarily through the financial interests we have retained, although for the consolidated Sequoia entities we are exposed to certain financial risks associated with our role as a sponsor, servicing administrator, or depositor of these entities or as a result of our having sold assets directly or indirectly to these entities. At September 30, 2018 , the estimated fair value of our investments in the consolidated Legacy Sequoia, Sequoia Choice, and Freddie Mac K-Series entities was $12 million , $196 million , and $67 million , respectively. The following table presents a summary of the assets and liabilities of these VIEs. Table 4.1 – Assets and Liabilities of Consolidated VIEs September 30, 2018 Legacy Sequoia Sequoia Choice Freddie Mac K-Series Total Consolidated VIEs (Dollars in Thousands) Residential loans, held-for-investment $ 553,958 $ 2,181,195 $ — $ 2,735,153 Multifamily loans, held-for-investment — — 942,165 942,165 Restricted cash 147 11 — 158 Accrued interest receivable 860 9,046 2,843 12,749 REO 2,915 — — 2,915 Total Assets $ 557,880 $ 2,190,252 $ 945,008 $ 3,693,140 Accrued interest payable $ 590 $ 7,643 $ 2,606 $ 10,839 Accrued expenses and other liabilities — 11 — 11 Asset-backed securities issued 544,923 1,986,456 875,606 3,406,985 Total Liabilities $ 545,513 $ 1,994,110 $ 878,212 $ 3,417,835 Number of VIEs 20 6 2 28 December 31, 2017 Legacy Sequoia Sequoia Freddie Mac K-Series Total Consolidated VIEs (Dollars in Thousands) Residential loans, held-for-investment $ 632,817 $ 620,062 $ — $ 1,252,879 Restricted cash 147 4 — 151 Accrued interest receivable 867 2,524 — 3,391 REO 3,353 — — 3,353 Total Assets $ 637,184 $ 622,590 $ — $ 1,259,774 Accrued interest payable $ 537 $ 2,031 $ — $ 2,568 Accrued expenses and other liabilities — 4 — 4 Asset-backed securities issued 622,445 542,140 — 1,164,585 Total Liabilities $ 622,982 $ 544,175 $ — $ 1,167,157 Number of VIEs 20 2 — 22 We consolidate the assets and liabilities of certain Sequoia securitization entities, as we did not meet the GAAP sale criteria at the time we transferred financial assets to these entities. Our involvement in consolidated Sequoia entities continues in the following ways: (i) we continue to hold subordinate investments in each entity, and for certain entities, more senior investments; (ii) we maintain certain discretionary rights associated with our sponsorship of, or our subordinate investments in, each entity; and (iii) we continue to hold a right to call the assets of certain entities (once they have been paid down below a specified threshold) at a price equal to, or in excess of, the current outstanding principal amount of the entity’s asset-backed securities issued. These factors have resulted in our continuing to consolidate the assets and liabilities of these Sequoia entities in accordance with GAAP. Beginning in the third quarter of 2018, we consolidated the assets and liabilities of two Freddie Mac K-Series securitization trusts as we invested in multifamily subordinate securities issued by these trusts and maintain certain discretionary rights associated with the ownership of these investments. We determined that our involvement with these VIEs reflected a controlling financial interest, and that we have both the power to direct the activities that most significantly impact the economic performance of the VIEs and the right to receive benefits of and the obligation to absorb losses from the VIE that could potentially be significant to the VIEs. Analysis of Unconsolidated VIEs with Continuing Involvement Since 2012, we have transferred residential loans to 43 Sequoia securitization entities sponsored by us and accounted for these transfers as sales for financial reporting purposes, in accordance with ASC 860. We also determined we were not the primary beneficiary of these VIEs as we lacked the power to direct the activities that will have the most significant economic impact on the entities. For certain of these transfers to securitization entities, for the transferred loans where we held the servicing rights prior to the transfer and continued to hold the servicing rights following the transfer, we recorded mortgage servicing rights ("MSRs") on our consolidated balance sheets, and classified those MSRs as Level 3 assets. We also retained senior and subordinate securities in these securitizations that we classified as Level 3 assets. Our continuing involvement in these securitizations is limited to customary servicing obligations associated with retaining servicing rights (which we retain a third-party sub-servicer to perform) and the receipt of interest income associated with the securities we retained. The following table presents information related to securitization transactions that occurred during the three and nine months ended September 30, 2018 and 2017 . Table 4.2 – Securitization Activity Related to Unconsolidated VIEs Sponsored by Redwood Three Months Ended September 30, Nine Months Ended September 30, (In Thousands) 2018 2017 2018 2017 Principal balance of loans transferred $ 327,511 $ 839,264 $ 2,735,644 $ 2,223,387 Trading securities retained, at fair value 2,583 24,617 48,831 55,607 AFS securities retained, at fair value 776 4,416 6,728 11,476 MSRs recognized — — — 7,123 The following table summarizes the cash flows during the three and nine months ended September 30, 2018 and 2017 between us and the unconsolidated VIEs sponsored by us and accounted for as sales since 2012. Table 4.3 – Cash Flows Related to Unconsolidated VIEs Sponsored by Redwood Three Months Ended September 30, Nine Months Ended September 30, (In Thousands) 2018 2017 2018 2017 Proceeds from new transfers $ 329,231 $ 839,642 $ 2,723,012 $ 2,213,151 MSR fees received 3,405 3,631 10,216 10,804 Funding of compensating interest, net (46 ) (35 ) (102 ) (114 ) Cash flows received on retained securities 7,267 6,882 21,720 19,843 The following table presents the key weighted-average assumptions used to measure MSRs and securities retained at the date of securitization for securitizations completed during the three and nine months ended September 30, 2018 and 2017 . Table 4.4 – Assumptions Related to Assets Retained from Unconsolidated VIEs Sponsored by Redwood Three Months Ended September 30, 2018 Three Months Ended September 30, 2017 At Date of Securitization MSRs Senior IO Securities Subordinate Securities MSRs Senior IO Securities Subordinate Securities Prepayment rates N/A 9 % 9 % N/A 11 % 10 % Discount rates N/A 14 % 7 % N/A 14 % 5 % Credit loss assumptions N/A 0.20 % 0.20 % N/A 0.25 % 0.25 % Nine Months Ended September 30, 2018 Nine Months Ended September 30, 2017 At Date of Securitization MSRs Senior IO Securities Subordinate Securities MSRs Senior IO Securities Subordinate Securities Prepayment rates N/A 9 % 10 % 9 % 10 % 10 % Discount rates N/A 14 % 5 % 11 % 13 % 5 % Credit loss assumptions N/A 0.20 % 0.20 % N/A 0.25 % 0.25 % The following table presents additional information at September 30, 2018 and December 31, 2017 , related to unconsolidated VIEs sponsored by Redwood and accounted for as sales since 2012. Table 4.5 – Unconsolidated VIEs Sponsored by Redwood (In Thousands) September 30, 2018 December 31, 2017 On-balance sheet assets, at fair value: Interest-only, senior and subordinate securities, classified as trading $ 130,598 $ 101,426 Subordinate securities, classified as AFS 163,870 219,255 Mortgage servicing rights 62,325 60,980 Maximum loss exposure (1) $ 356,793 $ 381,661 Assets transferred: Principal balance of loans outstanding $ 10,349,405 $ 8,364,148 Principal balance of loans 30+ days delinquent 19,625 27,926 (1) 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. The following table presents key economic assumptions for assets retained from unconsolidated VIEs and the sensitivity of their fair values to immediate adverse changes in those assumptions at September 30, 2018 and December 31, 2017 . Table 4.6 – Key Assumptions and Sensitivity Analysis for Assets Retained from Unconsolidated VIEs Sponsored by Redwood September 30, 2018 MSRs Senior Securities (1) Subordinate Securities (Dollars in Thousands) Fair value at September 30, 2018 $ 62,325 $ 62,996 $ 231,472 Expected life (in years) (2) 9 8 15 Prepayment speed assumption (annual CPR) (2) 7 % 9 % 9 % Decrease in fair value from: 10% adverse change $ 1,631 $ 2,156 $ 547 25% adverse change 3,974 5,145 1,361 Discount rate assumption (2) 11 % 11 % 6 % Decrease in fair value from: 100 basis point increase $ 2,469 $ 2,383 $ 22,243 200 basis point increase 4,812 4,592 41,116 Credit loss assumption (2) N/A 0.20 % 0.20 % Decrease in fair value from: 10% higher losses N/A $ — $ 559 25% higher losses N/A — 4,220 December 31, 2017 MSRs Senior Securities (1) Subordinate Securities (Dollars in Thousands) Fair value at December 31, 2017 $ 60,980 $ 33,773 $ 286,908 Expected life (in years) (2) 8 6 13 Prepayment speed assumption (annual CPR) (2) 9 % 10 % 11 % Decrease in fair value from: 10% adverse change $ 2,022 $ 1,371 $ 611 25% adverse change 4,839 3,289 1,506 Discount rate assumption (2) 11 % 11 % 5 % Decrease in fair value from: 100 basis point increase $ 2,386 $ 1,158 $ 25,827 200 basis point increase 4,597 2,265 47,885 Credit loss assumption (2) N/A 0.25 % 0.25 % Decrease in fair value from: 10% higher losses N/A $ — $ 1,551 25% higher losses N/A — 3,873 (1) Senior securities included $63 million and $34 million of interest-only securities at September 30, 2018 and December 31, 2017 , respectively. (2) Expected life, prepayment speed assumption, discount rate assumption, and credit loss assumption presented in the tables above represent weighted averages. Analysis of Unconsolidated Third-Party VIEs Third-party VIEs are securitization entities in which we maintain an economic interest, but do not sponsor. Our economic interest may include several securities from the same third-party VIE, and in those cases, the analysis is performed in consideration of all of our interests. The following table presents a summary of our interests in third-party VIEs at September 30, 2018 , grouped by security type. Table 4.7 – Third-Party Sponsored VIE Summary (Dollars in Thousands) September 30, 2018 December 31, 2017 Mortgage-Backed Securities Senior $ 214,655 $ 216,066 Mezzanine 538,847 508,010 Subordinate 422,114 431,753 Total Investments in Third-Party Sponsored VIEs $ 1,175,616 $ 1,155,829 We determined that we are not the primary beneficiary of any third-party VIEs, as we do not have the required power to direct the activities that most significantly impact the economic performance of these entities. Specifically, we do not service or manage these entities or otherwise solely hold decision making powers that are significant. As a result of this assessment, we do not consolidate any of the underlying assets and liabilities of these third-party VIEs – we only account for our specific interests in them. Our assessments of whether we are required to consolidate a VIE may change in subsequent reporting periods based upon changing facts and circumstances pertaining to each VIE. Any related accounting changes could result in a material impact to our financial statements.

Fair Value of Financial Instrum

Fair Value of Financial Instruments	9 Months Ended
	Sep. 30, 2018
Fair Value Disclosures [Abstract]
Fair Value of Financial Instruments	Fair Value of Financial Instruments For financial reporting purposes, we follow a fair value hierarchy established under GAAP that is used to determine the fair value of financial instruments. This hierarchy prioritizes relevant market inputs in order to determine an “exit price” at the measurement date, or the price at which an asset could be sold or a liability could be transferred in an orderly process that is not a forced liquidation or distressed sale. Level 1 inputs are observable inputs that reflect quoted prices for identical assets or liabilities in active markets. Level 2 inputs are observable inputs other than quoted prices for an asset or liability that are obtained through corroboration with observable market data. Level 3 inputs are unobservable inputs (e.g., our own data or assumptions) that are used when there is little, if any, relevant market activity for the asset or liability required to be measured at fair value. In certain cases, inputs used to measure fair value fall into different levels of the fair value hierarchy. In such cases, the level at which the fair value measurement falls is determined based on the lowest level input that is significant to the fair value measurement. Our assessment of the significance of a particular input requires judgment and considers factors specific to the asset or liability being measured. The following table presents the carrying values and estimated fair values of assets and liabilities that are required to be recorded or disclosed at fair value at September 30, 2018 and December 31, 2017 . Table 5.1 – Carrying Values and Fair Values of Assets and Liabilities September 30, 2018 December 31, 2017 Carrying Value Fair Value Carrying Value Fair Value (In Thousands) Assets Residential loans, held-for-sale At fair value $ 866,331 $ 866,331 $ 1,427,052 $ 1,427,052 At lower of cost or fair value 113 133 893 993 Residential loans, held-for-investment At fair value 5,055,815 5,055,815 3,687,265 3,687,265 Business purpose loans 115,620 115,620 — — Multifamily loans 942,165 942,165 — — Trading securities 1,108,243 1,108,243 968,844 968,844 Available-for-sale securities 361,841 361,841 507,666 507,666 Cash and cash equivalents 173,516 173,516 144,663 144,663 Restricted cash 27,253 27,253 2,144 2,144 Accrued interest receivable 35,644 35,644 27,013 27,013 Derivative assets 87,219 87,219 15,718 15,718 MSRs (1) 63,785 63,785 63,598 63,598 REO (1) 2,915 3,490 3,354 3,806 Margin receivable (1) 48,655 48,655 85,044 85,044 FHLBC stock (1) 43,393 43,393 43,393 43,393 Guarantee asset (1) 2,885 2,885 2,869 2,869 Pledged collateral (1) 42,127 42,127 42,615 42,615 Participation in loan warehouse facility (1) 39,219 39,219 — — Liabilities Short-term debt $ 1,424,275 $ 1,424,275 $ 1,688,412 $ 1,688,412 Accrued interest payable 31,076 31,076 18,435 18,435 Margin payable (2) 33,950 33,950 390 390 Guarantee obligation (2) 17,423 17,409 19,487 18,878 Derivative liabilities 42,724 42,724 63,081 63,081 ABS issued at fair value, net 3,406,985 3,406,985 1,164,585 1,164,585 FHLBC long-term borrowings 1,999,999 1,999,999 1,999,999 1,999,999 Convertible notes, net 632,401 639,684 686,759 692,369 Trust preferred securities and subordinated notes, net 138,570 108,113 138,535 103,230 (1) These assets are included in Other assets on our consolidated balance sheets. (2) These liabilities are included in Accrued expenses and other liabilities on our consolidated balance sheets. During the three and nine months ended September 30, 2018 , we elected the fair value option for $32 million and $105 million of residential senior securities, $128 million and $417 million of subordinate securities, and $1.79 billion and $5.52 billion of residential loans (principal balance), respectively. Additionally, during the three months ended September 30, 2018, we elected the fair value option for $126 million of business purpose loans (principal balance) and $963 million of multifamily loans (principal balance). We anticipate electing the fair value option for all future purchases of residential loans that we intend to sell to third parties or transfer to securitizations, as well as for business purpose loans and for certain securities we purchase, including IO securities and fixed-rate securities rated investment grade or higher. The following table presents the assets and liabilities that are reported at fair value on our consolidated balance sheets on a recurring basis at September 30, 2018 and December 31, 2017 , as well as the fair value hierarchy of the valuation inputs used to measure fair value. Table 5.2 – Assets and Liabilities Measured at Fair Value on a Recurring Basis September 30, 2018 Carrying Value Fair Value Measurements Using (In Thousands) Level 1 Level 2 Level 3 Assets Residential loans $ 5,922,146 $ — $ — $ 5,922,146 Business purpose loans 115,620 — — 115,620 Multifamily loans 942,165 — — 942,165 Trading securities 1,108,243 — — 1,108,243 Available-for-sale securities 361,841 — — 361,841 Derivative assets 87,219 7,031 78,006 2,182 MSRs 63,785 — — 63,785 Pledged collateral 42,127 42,127 — — FHLBC stock 43,393 — 43,393 — Guarantee asset 2,885 — — 2,885 Liabilities Derivative liabilities $ 42,724 $ 1,744 $ 38,581 $ 2,399 ABS issued 3,406,985 — — 3,406,985 December 31, 2017 Carrying Value Fair Value Measurements Using (In Thousands) Level 1 Level 2 Level 3 Assets Residential loans $ 5,114,317 $ — $ — $ 5,114,317 Trading securities 968,844 — — 968,844 Available-for-sale securities 507,666 — — 507,666 Derivative assets 15,718 134 10,164 5,420 MSRs 63,598 — — 63,598 Pledged collateral 42,615 42,615 — — FHLBC stock 43,393 — 43,393 — Guarantee asset 2,869 — — 2,869 Liabilities Derivative liabilities $ 63,081 $ 3,808 $ 55,567 $ 3,706 ABS issued 1,164,585 — — 1,164,585 The following table presents additional information about Level 3 assets and liabilities measured at fair value on a recurring basis for the nine months ended September 30, 2018 . Table 5.3 – Changes in Level 3 Assets and Liabilities Measured at Fair Value on a Recurring Basis Assets Liabilities Residential Loans Business Purpose Loans Multifamily Loans Trading Securities AFS Securities MSRs Guarantee Asset Derivatives (1) ABS Issued (In Thousands) Beginning balance - December 31, 2017 $ 5,114,317 $ — $ — $ 968,844 $ 507,666 $ 63,598 $ 2,869 $ 1,714 $ 1,164,585 Acquisitions 5,570,683 126,214 946,650 522,293 6,728 — — — 2,539,451 Sales (4,135,911 ) — — (348,054 ) (118,423 ) (1,077 ) — — — Principal paydowns (587,162 ) (10,912 ) (286 ) (25,847 ) (35,431 ) — — — (305,529 ) Gains (losses) in net income, net (37,641 ) 318 (4,199 ) 2,098 32,494 1,264 16 (8,093 ) 8,478 Unrealized losses in OCI, net — — — — (31,193 ) — — — — Other settlements, net (2) (2,140 ) — — (11,091 ) — — — 6,162 — Ending Balance - September 30, 2018 $ 5,922,146 $ 115,620 $ 942,165 $ 1,108,243 $ 361,841 $ 63,785 $ 2,885 $ (217 ) $ 3,406,985 (1) For the purpose of this presentation, derivative assets and liabilities, which consist of loan purchase and forward sale commitments, are presented on a net basis. (2) Other settlements, net for residential loans represents the transfer of loans to REO, and for derivatives, the settlement of forward sale commitments and the transfer of the fair value of loan purchase commitments at the time loans are acquired to the basis of residential loans. Other settlements, net for our trading securities relates to the consolidation of the Freddie Mac K-Series entities during the three months ended September 30, 2018. The following table presents the portion of gains or losses included in our consolidated statements of income that were attributable to Level 3 assets and liabilities recorded at fair value on a recurring basis and held at September 30, 2018 and 2017 . Gains or losses incurred on assets or liabilities sold, matured, called, or fully written down during the three and nine months ended September 30, 2018 and 2017 are not included in this presentation. Table 5.4 – Portion of Net Gains (Losses) Attributable to Level 3 Assets and Liabilities Still Held at September 30, 2018 and 2017 Included in Net Income Included in Net Income Three Months Ended September 30, Nine Months Ended September 30, (In Thousands) 2018 2017 2018 2017 Assets Residential loans at Redwood $ (18,100 ) $ 14,359 $ (70,316 ) $ 24,227 Residential loans at consolidated Sequoia entities (8,978 ) 3,497 11,936 22,949 Business purpose loans (20 ) — (20 ) — Multifamily loans at consolidated Freddie Mac K-Series entities (4,199 ) — (4,199 ) — Trading securities 3,821 (36 ) (1,956 ) 24,452 Available-for-sale securities (33 ) (3 ) (90 ) (248 ) MSRs 337 317 4,861 (1,005 ) Loan purchase commitments 2,168 2,117 2,157 2,121 Other assets - Guarantee asset (51 ) (239 ) 15 (1,043 ) Liabilities Loan purchase commitments $ (2,314 ) $ — $ (2,388 ) $ — ABS issued 12,536 (7,771 ) (8,478 ) (30,286 ) The following table presents information on assets recorded at fair value on a non-recurring basis at September 30, 2018 . This table does not include the carrying value and gains or losses associated with the asset types below that were not recorded at fair value on our consolidated balance sheets at September 30, 2018 . Table 5.5 – Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis at September 30, 2018 Gain (Loss) for September 30, 2018 Carrying Value Fair Value Measurements Using Three Months Ended Nine Months Ended (In Thousands) Level 1 Level 2 Level 3 September 30, 2018 September 30, 2018 Assets REO $ 1,804 $ — $ — $ 1,804 $ (37 ) $ (162 ) The following table presents the net market valuation gains and losses recorded in each line item of our consolidated statements of income for the three and nine months ended September 30, 2018 and 2017 . Table 5.6 – Market Valuation Gains and Losses, Net Three Months Ended September 30, Nine Months Ended September 30, (In Thousands) 2018 2017 2018 2017 Mortgage Banking Activities, Net Residential loans held-for-sale, at fair value $ 5,626 $ 14,859 $ 16,522 $ 29,175 Single-family rental loans held-for-sale, at fair value (121 ) — (121 ) — Residential loan purchase and forward sale commitments 1,610 13,276 (8,116 ) 33,947 Risk management derivatives, net 3,796 (7,077 ) 38,378 (13,787 ) Total mortgage banking activities, net (1) $ 10,911 $ 21,058 $ 46,663 $ 49,335 Investment Fair Value Changes, Net Residential loans held-for-investment, at Redwood $ (17,063 ) $ 2,881 $ (71,058 ) $ 8,902 Fix-and-flip loans held-for-investment 53 — 53 — Trading securities 6,314 607 2,429 30,676 Valuation adjustments on commercial loans held-for-sale — — — 300 Net investments in Legacy Sequoia entities (2) (248 ) (1,045 ) (976 ) (3,842 ) Net investments in Sequoia Choice entities (2) (943 ) (256 ) 43 (256 ) Net investments in Freddie Mac K-Series entities (2) 511 — 511 — Risk-sharing investments (126 ) (267 ) (474 ) (985 ) Risk management derivatives, net 21,867 (1,592 ) 82,391 (24,557 ) Impairments on AFS securities (33 ) (4 ) (89 ) (248 ) Total investment fair value changes, net $ 10,332 $ 324 $ 12,830 $ 9,990 Other Income, Net MSRs $ (823 ) $ (1,351 ) $ 1,324 $ (10,842 ) MSR risk management derivatives, net (890 ) (422 ) (7,151 ) 1,869 Total other income, net (3) $ (1,713 ) $ (1,773 ) $ (5,827 ) $ (8,973 ) Total Market Valuation Gains, Net $ 19,530 $ 19,609 $ 53,666 $ 50,352 (1) Mortgage banking activities, net presented above does not include fee income or provisions for repurchases that are components of Mortgage banking activities, net presented on our consolidated statements of income, as these amounts do not represent market valuation changes. (2) Includes changes in fair value of the residential loans held-for-investment, REO and the ABS issued at the entities, which netted together represent the change in value of our retained investments at the consolidated VIEs. (3) Other income, net presented above does not include net MSR fee income or provisions for repurchases for MSRs, as these amounts do not represent market valuation adjustments. At September 30, 2018 , our valuation policy and processes had not changed from those described in our Annual Report on Form 10-K for the year ended December 31, 2017 . The following table provides quantitative information about the significant unobservable inputs used in the valuation of our Level 3 assets and liabilities measured at fair value. Table 5.7 – Fair Value Methodology for Level 3 Financial Instruments September 30, 2018 Fair Value Input Values (Dollars in Thousands, except Input Values) Unobservable Input Range Weighted Average Assets Residential loans, at fair value: Jumbo fixed-rate loans $ 2,729,424 Whole loan spread to TBA price $ 1.84 - $ 2.80 $ 2.77 Whole loan spread to swap rate 90 - 198 bps 193 bps Jumbo hybrid loans 319,029 Prepayment rate (annual CPR) 15 - 15 % 15 % Whole loan spread to swap rate 75 - 155 bps 125 bps Jumbo loans committed to sell 138,540 Whole loan committed sales price $ 100.98 - $ 101.15 $ 101.08 Loans held by Legacy Sequoia (1) 553,958 Liability price N/A N/A Loans held by Sequoia Choice (1) 2,181,195 Liability price N/A N/A Business purpose loans: Single-family rental loans 20,105 Whole loan spread to swap rate 247 - 247 bps 247 bps Prepayment rate (annual CPR) 3 - 3 % 3 % Fix-and-flip loans 95,515 Discount rate 7 - 8 % 7 % Multifamily loans held by Freddie Mac K-Series (1) 942,165 Liability price N/A N/A Trading and AFS securities 1,470,084 Discount rate 3 - 15 % 6 % Prepayment rate (annual CPR) — - 50 % 8 % Default rate — - 27 % 2 % Loss severity — - 40 % 22 % MSRs 63,785 Discount rate 11 - 67 % 11 % Prepayment rate (annual CPR) 4 - 22 % 7 % Per loan annual cost to service $ 82 - $ 82 $ 82 Guarantee asset 2,885 Discount rate 11 - 11 % 11 % Prepayment rate (annual CPR) 7 - 7 % 7 % REO 1,804 Loss severity 13 - 45 % 30 % Liabilities ABS issued (1) : At consolidated Sequoia entities 2,531,379 Discount rate 3 - 15 % 4 % Prepayment rate (annual CPR) 8 - 32 % 19 % Default rate — - 8 % 2 % Loss severity 20 - 20 % 20 % At consolidated Freddie Mac K-Series entities 875,606 Discount rate 3 9 % 4 % Prepayment rate (annual CPR) — — % — % Default rate 1 1 % 1 % Loss severity 20 20 % 20 % Loan purchase commitments, net 217 MSR multiple 1.0 - 5.4 x 3.5 x Pull-through rate 16 - 100 % 72 % Whole loan spread to TBA price $ 2.69 - $ 2.69 $ 2.69 Whole loan spread to swap rate - fixed rate 90 - 198 bps 196 bps Prepayment rate (annual CPR) 15 - 15 % 15 % Whole loan spread to swap rate - hybrid 75 - 155 bps 99 bps Footnote to Table 5.7 (1) The fair value of the loans held by consolidated entities was based on the fair value of the ABS issued by these entities, which we determined were more readily observable, in accordance with accounting guidance for collateralized financing entities. Determination of Fair Value A description of the instruments measured at fair value as well as the general classification of such instruments pursuant to the Level 1, Level 2, and Level 3 valuation hierarchy is listed herein. We generally use both market comparable information and discounted cash flow modeling techniques to determine the fair value of our Level 3 assets and liabilities. Use of these techniques requires determination of relevant inputs and assumptions, some of which represent significant unobservable inputs as indicated in the preceding table. Accordingly, a significant increase or decrease in any of these inputs – such as anticipated credit losses, prepayment rates, interest rates, or other valuation assumptions – in isolation would likely result in a significantly lower or higher fair value measurement. Residential loans at Redwood Estimated fair values for residential loans are determined using models that incorporate various observable inputs, including pricing information from whole loan sales and securitizations. Certain significant inputs in these models are considered unobservable and are therefore Level 3 in nature. Pricing inputs obtained from market whole loan transaction activity include indicative spreads to indexed to be announced ("TBA") prices and indexed swap rates for fixed-rate loans and indexed swap rates for hybrid loans (Level 3). Pricing inputs obtained from market securitization activity include indicative spreads to indexed TBA prices for senior residential mortgage-backed securities ("RMBS") and indexed swap rates for subordinate RMBS, and credit support levels (Level 3). Other unobservable inputs also include assumed future prepayment rates. Observable inputs include benchmark interest rates, swap rates, and TBA prices. These assets would generally decrease in value based upon an increase in the credit spread, prepayment speed, or credit support assumptions. Residential and multifamily loans at consolidated entities We have elected to account for the consolidated securitization entities as CFEs in accordance with GAAP. A CFE is a variable interest entity that holds financial assets and issues beneficial interests in those assets, and these beneficial interests have contractual recourse only to the related assets of the CFE. Accounting guidance for CFEs allow companies to elect to measure both the financial assets and financial liabilities of a CFE using the more observable of the fair value of the financial assets or fair value of the financial liabilities. Pursuant to this guidance, we use the fair value of the ABS issued by the CFEs (which we determined to be more observable) to determine the fair value of the loans held at these entities, whereby the net assets we consolidate in our financial statements related to these entities represent the estimated fair value of our retained interests in the CFEs. Business purpose loans Business purpose loans include fix-and-flip loans and single-family rental loans that are generally illiquid in nature and trade infrequently. Significant inputs in the valuation analysis are predominantly Level 3 in nature, due to the lack of readily available market quotes and related inputs. Prices for our single-family rental loans are determined using market comparable information. Significant inputs obtained from market activity include indicative spreads to indexed swap rates (Level 3) for fixed-rate loans and assumed future prepayment rates. These assets would generally decrease in value based upon an increase in the credit spread or prepayment speed assumptions. Prices for our fix-and-flip loans are determined using discounted cash flow modeling, which incorporates a primary significant unobservable input of discount rate. Other inputs include assumed future prepayment rates and anticipated credit losses. These assets would generally decrease in value based upon an increase in the discount rate. Real estate securities Real estate securities include residential, multifamily, and other mortgage-backed securities that are generally illiquid in nature and trade infrequently. Significant inputs in the valuation analysis are predominantly Level 3 in nature, due to the lack of readily available market quotes and related inputs. For real estate securities, we utilize both market comparable pricing and discounted cash flow analysis valuation techniques. Relevant market indicators that are factored into the analysis include bid/ask spreads, the amount and timing of credit losses, interest rates, and collateral prepayment rates. Estimated fair values are based on applying the market indicators to generate discounted cash flows (Level 3). These cash flow models use significant unobservable inputs such as a discount rate, prepayment rate, default rate and loss severity. The estimated fair value of our securities would generally decrease based upon an increase in default rates, loss severities, or a decrease in prepayment rates. As part of our securities valuation process, we request and consider indications of value from third-party securities dealers. For purposes of pricing our securities at September 30, 2018 , we received dealer price indications on 79% of our securities, representing 86% of our carrying value. In the aggregate, our internal valuations of the securities for which we received dealer price indications were within 1% of the aggregate average dealer valuations. Once we receive the price indications from dealers, they are compared to other relevant market inputs, such as actual or comparable trades, and the results of our discounted cash flow analysis. In circumstances where relevant market inputs cannot be obtained, increased reliance on discounted cash flow analysis and management judgment are required to estimate fair value. Derivative assets and liabilities Our derivative instruments include swaps, swaptions, TBAs, financial futures, loan purchase commitments ("LPCs"), and forward sale commitments ("FSCs"). Fair values of derivative instruments are determined using quoted prices from active markets, when available, or from valuation models and are supported by valuations provided by dealers active in derivative markets. Fair values of TBAs and financial futures are generally obtained using quoted prices from active markets (Level 1). Our derivative valuation models for swaps and swaptions require a variety of inputs, including contractual terms, market prices, yield curves, credit curves, measures of volatility, prepayment rates, and correlations of certain inputs. Model inputs can generally be verified and model selection does not involve significant management judgment (Level 2). LPC and FSC fair values for jumbo loans are estimated based on the estimated fair values of the underlying loans (as described in " Residential loans at Redwood " above). In addition, fair values for LPCs are estimated based on the probability that the mortgage loan will be purchased (the "Pull-through rate") (Level 3). For other derivatives, valuations are based on various factors such as liquidity, bid/ask spreads, and credit considerations for which we rely on available market inputs. In the absence of such inputs, management’s best estimate is used (Level 3). MSRs MSRs include the rights to service jumbo and conforming residential mortgage loans. Significant inputs in the valuation analysis are predominantly Level 3, due to the nature of these instruments and the lack of readily available market quotes. Changes in the fair value of MSRs occur primarily due to the collection/realization of expected cash flows, as well as changes in valuation inputs and assumptions. Estimated fair values are based on applying the inputs to generate the net present value of estimated future MSR income (Level 3). These discounted cash flow models utilize certain significant unobservable inputs including market discount rates, assumed future prepayment rates of serviced loans, and the market cost of servicing. An increase in these unobservable inputs would generally reduce the estimated fair value of the MSRs. As part of our MSR valuation process, we received a valuation estimate from a third-party valuations firm. In the aggregate, our internal valuation of the MSRs were within 2% of the third-party valuation. FHLBC stock Our Federal Home Loan Bank ("FHLB") member subsidiary is required to purchase Federal Home Loan Bank of Chicago ("FHLBC") stock under a borrowing agreement between our FHLB-member subsidiary and the FHLBC. Under this agreement, the stock is redeemable at face value, which represents the carrying value and fair value of the stock (Level 2). Guarantee asset The guarantee asset represents the estimated fair value of cash flows we are contractually entitled to receive related to a risk-sharing arrangement with Fannie Mae. Significant inputs in the valuation analysis are Level 3, due to the nature of this asset and the lack of market quotes. The fair value of the guarantee asset is determined using a discounted cash flow model, for which significant unobservable inputs include assumed future prepayment rates and market discount rate (Level 3). An increase in prepayment rates or discount rate would generally reduce the estimated fair value of the guarantee asset. Pledged collateral Pledged collateral consists of cash and U.S. Treasury securities held by a custodian in association with certain agreements we have entered into. Treasury securities are carried at their fair value, which is determined using quoted prices in active markets (Level 1). Cash and cash equivalents Cash and cash equivalents include cash on hand and highly liquid investments with original maturities of three months or less. Fair values equal carrying values (Level 1). Restricted cash Restricted cash primarily includes interest-earning cash balances related to risk-sharing transactions with the Agencies, cash held in association with borrowings from the FHLBC, and cash held at consolidated Sequoia entities for the purpose of distribution to investors and reinvestment. Due to the short-term nature of the restrictions, fair values approximate carrying values (Level 1). Accrued interest receivable and payable Accrued interest receivable and payable includes interest due on our assets and payable on our liabilities. Due to the short-term nature of when these interest payments will be received or paid, fair values approximate carrying values (Level 1). Real Estate Owned Real Estate Owned ("REO") includes properties owned in satisfaction of foreclosed loans. Fair values are determined using available market quotes, appraisals, broker price opinions, comparable properties, or other indications of value (Level 3). Margin receivable Margin receivable reflects cash collateral we have posted with our various derivative and debt counterparties as required to satisfy margin requirements. Fair values approximate carrying values (Level 2). Short-term debt Short-term debt includes our credit facilities that mature within one year. As these borrowings are secured and subject to margin calls and as the rates on these borrowings reset frequently to market rates, we believe that carrying values approximate fair values (Level 2). Additionally, at December 31, 2017, short-term debt included unsecured convertible senior notes with a maturity of less than one year. The fair value of the convertible notes is determined using quoted prices in generally active markets (Level 2). ABS issued ABS issued includes asset-backed securities issued through the Legacy Sequoia and Sequoia Choice securitization entities, as well as securities issued by certain third-party Freddie Mac K-series securitization entities which we consolidate. These instruments are generally illiquid in nature and trade infrequently. Significant inputs in the valuation analysis are predominantly Level 3, due to the nature of these instruments and the lack of readily available market quotes. For ABS issued, we utilize both market comparable pricing and discounted cash flow analysis valuation techniques. Relevant market indicators factored into the analysis include bid/ask spreads, the amount and timing of collateral credit losses, interest rates, and collateral prepayment rates. Estimated fair values are based on applying the market indicators to generate discounted cash flows (Level 3). These cash flow models use significant unobservable inputs such as a discount rate, prepayment rate, default rate, loss severity and credit support. A decrease in credit losses or discount rate, or an increase in prepayment rates, would generally cause the fair value of the ABS issued to decrease (i.e., become a larger liability). FHLBC borrowings FHLBC borrowings include amounts borrowed from the FHLBC that are secured, generally by residential mortgage loans. As these borrowings are secured and subject to margin calls and as the rates on these borrowings reset frequently to market rates, we believe that carrying values approximate fair values (Level 2). Financial Instruments Carried at Amortized Cost Participation in loan warehouse facility Our participation in a loan warehouse facility is carried at amortized cost (Level 2). Guarantee obligations In association with our risk-sharing transactions with the Agencies, we have made certain guarantees which are carried on our balance sheet at amortized cost (Level 3). Convertible notes Convertible notes include unsecured convertible and exchangeable senior notes that are carried at their unpaid principal balance net of any unamortized deferred issuance costs (Level 2). Trust preferred securities and subordinated notes Trust preferred securities and subordinated notes are carried at their unpaid principal balance net of any unamortized deferred issuance costs (Level 3).

Residential Loans

Residential Loans	9 Months Ended
	Sep. 30, 2018
Receivables [Abstract]
Residential Loans	Residential Loans We acquire residential loans from third-party originators and may sell or securitize these loans or hold them for investment. The following table summarizes the classifications and carrying values of the residential loans owned at Redwood and at consolidated Sequoia entities at September 30, 2018 and December 31, 2017 . Table 6.1 – Classifications and Carrying Values of Residential Loans September 30, 2018 Legacy Sequoia (In Thousands) Redwood Sequoia Choice Total Held-for-sale At fair value $ 866,331 $ — $ — $ 866,331 At lower of cost or fair value 113 — — 113 Total held-for-sale 866,444 — — 866,444 Held-for-investment at fair value 2,320,662 553,958 2,181,195 5,055,815 Total Residential Loans $ 3,187,106 $ 553,958 $ 2,181,195 $ 5,922,259 December 31, 2017 Legacy Sequoia (In Thousands) Redwood Sequoia Choice Total Held-for-sale At fair value $ 1,427,052 $ — $ — $ 1,427,052 At lower of cost or fair value 893 — — 893 Total held-for-sale 1,427,945 — — 1,427,945 Held-for-investment at fair value 2,434,386 632,817 620,062 3,687,265 Total Residential Loans $ 3,862,331 $ 632,817 $ 620,062 $ 5,115,210 At September 30, 2018 , we owned mortgage servicing rights associated with $2.53 billion (principal balance) of consolidated residential loans purchased from third-party originators. The value of these MSRs is included in the carrying value of the associated loans on our consolidated balance sheets. We contract with licensed sub-servicers that perform servicing functions for these loans. Residential Loans Held-for-Sale At Fair Value At September 30, 2018 , we owned 1,232 loans held-for-sale at fair value with an aggregate unpaid principal balance of $859 million and a fair value of $866 million , compared to 2,009 loans with an aggregate unpaid principal balance of $1.41 billion and a fair value of $1.43 billion at December 31, 2017 . At September 30, 2018 , one of these loans with a fair value of $0.6 million was greater than 90 days delinquent and none of these loans were in foreclosure. At December 31, 2017 , one of these loans with a fair value of $0.5 million was greater than 90 days delinquent and none of these loans were in foreclosure. During the three and nine months ended September 30, 2018 , we purchased $1.79 billion and $5.52 billion (principal balance) of loans, respectively, for which we elected the fair value option, and we sold $1.90 billion and $5.83 billion (principal balance) of loans, respectively, for which we recorded net market valuation gain s of $6 million and $16 million , respectively, through Mortgage banking activities, net on our consolidated statements of income. At September 30, 2018 , loans held-for-sale with a market value of $622 million were pledged as collateral under short-term borrowing agreements. During the three and nine months ended September 30, 2017 , we purchased $1.43 billion and $3.72 billion (principal balance) of loans, respectively, for which we elected the fair value option, and we sold $1.05 billion and $3.08 billion (principal balance) of loans, respectively, for which we recorded net market valuation gain s of $15 million and $29 million , respectively, through Mortgage banking activities, net on our consolidated statements of income. At Lower of Cost or Fair Value At September 30, 2018 and December 31, 2017 , we held two and four residential loans, respectively, at the lower of cost or fair value with $0.2 million and $1 million in outstanding principal balance, respectively, and carrying values of $0.1 million and $1 million , respectively. At September 30, 2018 , none of these loans were greater than 90 days delinquent or in foreclosure. At December 31, 2017 , one of these loans with an unpaid principal balance of $0.3 million was greater than 90 days delinquent and none of these loans were in foreclosure. Residential Loans Held-for-Investment at Fair Value At Redwood At September 30, 2018 , we owned 3,259 held-for-investment loans at Redwood with an aggregate unpaid principal balance of $2.36 billion and a fair value of $2.32 billion , compared to 3,292 loans with an aggregate unpaid principal balance of $2.41 billion and a fair value of $2.43 billion at December 31, 2017 . At September 30, 2018 , two of these loans with a total fair value of $1 million were greater than 90 days delinquent and none of these loans were in foreclosure. At December 31, 2017 , none of these loans were greater than 90 days delinquent or in foreclosure. During the three and nine months ended September 30, 2018 , we transferred loans with a fair value of $116 million and $204 million , respectively, from held-for-sale to held-for-investment. During the three and nine months ended September 30, 2018 , we transferred loans with a fair value of $16 million from held-for-investment to held-for-sale. During the three and nine months ended September 30, 2018 , we recorded net market valuation loss es of $17 million and $71 million , respectively, on residential loans held-for-investment at fair value through Investment fair value changes, net on our consolidated statements of income. At September 30, 2018 , loans with a fair value of $2.27 billion were pledged as collateral under a borrowing agreement with the FHLBC. During the three and nine months ended September 30, 2017 , we transferred loans with a fair value of $78 million and $326 million , respectively, from held-for-sale to held-for-investment. During both the three and nine months ended September 30, 2017 , we transferred loans with a fair value of $98 million from held-for-investment to held-for-sale. During the three and nine months ended September 30, 2017 , we recorded net market valuation gain s of $3 million and $9 million , respectively, on residential loans held-for-investment at fair value through Investment fair value changes, net on our consolidated statements of income. At September 30, 2018 , the outstanding loans held-for-investment at Redwood were prime-quality, first lien loans, of which 96% were originated between 2013 and 2018, and 4% were originated in 2012 and prior years. The weighted average Fair Isaac Corporation ("FICO") score of borrowers backing these loans was 769 (at origination) and the weighted average loan-to-value ("LTV") ratio of these loans was 66% (at origination). At September 30, 2018 , these loans were comprised of 87% fixed-rate loans with a weighted average coupon of 4.08% , and the remainder were hybrid or ARM loans with a weighted average coupon of 4.20% . At Consolidated Legacy Sequoia Entities At September 30, 2018 , we consolidated 2,777 held-for-investment loans at consolidated Legacy Sequoia entities, with an aggregate unpaid principal balance of $581 million and a fair value of $554 million , as compared to 3,178 loans at December 31, 2017 , with an aggregate unpaid principal balance of $698 million and a fair value of $633 million . At origination, the weighted average FICO score of borrowers backing these loans was 728 , the weighted average LTV ratio of these loans was 66% , and the loans were nearly all first lien and prime-quality. At September 30, 2018 and December 31, 2017 , the unpaid principal balance of loans at consolidated Legacy Sequoia entities delinquent greater than 90 days was $16 million and $25 million , respectively, of which the unpaid principal balance of loans in foreclosure was $8 million and $10 million , respectively. During the three and nine months ended September 30, 2018 , we recorded net market valuation gain s of $4 million and $37 million , respectively, on these loans through Investment fair value changes, net on our consolidated statements of income. During the three and nine months ended September 30, 2017 , we recorded net market valuation gain s of $4 million and $24 million , respectively, on these loans through Investment fair value changes, net on our consolidated statements of income. Pursuant to the collateralized financing entity guidelines, the market valuation changes of these loans are based on the estimated fair value of the associated ABS issued. The net impact to our income statement associated with our retained economic investment in the Legacy Sequoia securitization entities is presented in Note 5. At Consolidated Sequoia Choice Entities At September 30, 2018 , we consolidated 2,928 held-for-investment loans at the consolidated Sequoia Choice entities, with an aggregate unpaid balance of $2.16 billion and a fair value of $2.18 billion , as compared to 806 loans at December 31, 2017 with an aggregate unpaid principal balance of $605 million and a fair value of $620 million . At origination, the weighted average FICO score of borrowers backing these loans was 744 , the weighted average LTV ratio of these loans was 75% , and the loans were all first lien and prime-quality. At September 30, 2018 , one of these loans with an unpaid principal balance of $1 million was greater than 90 days delinquent and none of these loans were in foreclosure. At December 31, 2017 , none of these loans were greater than 90 days delinquent or in foreclosure. During the three and nine months ended September 30, 2018 , we transferred loans with a fair value of $796 million and $1.78 billion , respectively, from held-for-sale to held-for-investment associated with Choice securitizations. During the three and nine months ended September 30, 2018 , we recorded net market valuation loss es of $13 million and $25 million , respectively, on these loans through Investment fair value changes, net on our consolidated statements of income. Pursuant to the collateralized financing entity guidelines, the market valuation changes of these loans are based on the estimated fair value of the ABS issued associated with Choice securitizations . The net impact to our income statement associated with our retained economic investment in the Sequoia Choice securitization entities is presented in Note 5. Business Purpose Loans Our business purpose loans include single-family rental loans and fix-and-flip loans. At September 30, 2018, all of our outstanding business purpose loans were acquired from a related party, 5 Arches LLC ("5 Arches"). See Note 11 for information on our equity investment in 5 Arches. The following table summarizes the classifications and carrying values of the business purpose loans owned at Redwood at September 30, 2018 and December 31, 2017 . Table 7.1 – Classifications and Carrying Values of Business Purpose Loans (In Thousands) September 30, 2018 December 31, 2017 Single-family rental loans, held-for-sale at fair value $ 20,105 $ — Fix-and-flip loans, held-for-investment at fair value 95,515 — Total Business Purpose Loans $ 115,620 $ — Single-Family Rental Loans Held-for-Sale at Fair Value Under an agreement with 5 Arches, we have exclusive access to their single-family rental loan production through April 2019. At September 30, 2018 , we owned four single-family rental loans purchased under this agreement with an aggregate unpaid principal balance of $20 million and a fair value of $20 million . At September 30, 2018, none of these loans were greater than 90 days delinquent or in foreclosure. During both the three and nine months ended September 30, 2018 , we purchased $20 million (principal balance) of loans, for which we elected the fair value option, and we did no t sell any loans. During both the three and nine months ended September 30, 2018 , we recorded a net market valuation loss of $0.1 million on single-family rental loans held-for-sale at fair value through Mortgage banking activities, net on our consolidated statements of income. At September 30, 2018 , loans held-for-sale with a market value of $20 million were pledged as collateral under short-term borrowing agreements. The outstanding single-family rental loans held-for-sale at September 30, 2018 were first lien, fixed-rate loans with maturities of five, seven, or ten years. At September 30, 2018 , the weighted average coupon of our single-family rental loans was 5.71% and the weighted average loan term was seven years . At origination, the weighted average LTV ratio of these loans was 65% and the weighted average debt service coverage ratio ("DSCR") was 1.25 . Fix-and-Flip Loans Held-for-Investment at Fair Value At September 30, 2018 , we owned 128 fix-and-flip loans held-for-investment with an aggregate unpaid principal balance of $95 million and a fair value of $96 million . At September 30, 2018 , two of these loans with an aggregate unpaid principal balance of $1 million were greater than 90 days delinquent and none of these loans were in foreclosure. During both the three and nine months ended September 30, 2018 , we purchased $106 million (principal balance) of loans, and we did no t sell any loans. During both the three and nine months ended September 30, 2018 , we recorded a net market valuation gain of less than $0.1 million on fix-and-flip loans held-for-investment at fair value through Investment fair value changes, net on our consolidated statements of income. At September 30, 2018 , loans with a market value of $92 million were pledged as collateral under short-term borrowing agreements. The outstanding fix-and-flip loans held-for-investment at September 30, 2018 were first lien, fixed-rate, interest-only loans with a weighted average coupon of 9.14% and original maturities of 6 to 24 months. At origination, the weighted average FICO score of borrowers backing these loans was 718 , the weighted average LTV ratio of these loans was 76% , and the estimated rehabilitated LTV ratio was 57% . Multifamily Loans During the third quarter of 2018, we invested in multifamily subordinate securities issued by two Freddie Mac K-Series securitization trusts and were required to consolidate the underlying multifamily loans owned at these entities for financial reporting purposes in accordance with GAAP. At September 30, 2018 , we consolidated 80 held-for-investment multifamily loans, with an aggregate unpaid balance of $963 million and a fair value of $942 million . We did not own or consolidate any multifamily loans at December 31, 2017. The outstanding multifamily loans held-for-investment at the Freddie Mac K-Series entities at September 30, 2018 were first lien, fixed-rate loans that were originated in 2015 and 2016 and had original loan terms of seven to ten years and an original weighted average LTV ratio of 69% . At September 30, 2018 , the weighted average coupon of these multifamily loans was 4.15% and the weighted average loan term was seven years . At September 30, 2018, none of these loans were greater than 90 days delinquent or in foreclosure. During both the three and nine months ended September 30, 2018 , we recorded a net market valuation loss of $4 million on these loans through Investment fair value changes, net on our consolidated statements of income. Pursuant to the collateralized financing entity guidelines, the market valuation changes of these loans are based on the estimated fair value of the ABS issued associated with the securitizations . The net impact to our income statement associated with our economic investment in the securities of the Freddie Mac K-Series securitization entities is presented in Note 5.

Business Purpose Loans

Business Purpose Loans	9 Months Ended
	Sep. 30, 2018
Receivables [Abstract]
Business Purpose Loans	Residential Loans We acquire residential loans from third-party originators and may sell or securitize these loans or hold them for investment. The following table summarizes the classifications and carrying values of the residential loans owned at Redwood and at consolidated Sequoia entities at September 30, 2018 and December 31, 2017 . Table 6.1 – Classifications and Carrying Values of Residential Loans September 30, 2018 Legacy Sequoia (In Thousands) Redwood Sequoia Choice Total Held-for-sale At fair value $ 866,331 $ — $ — $ 866,331 At lower of cost or fair value 113 — — 113 Total held-for-sale 866,444 — — 866,444 Held-for-investment at fair value 2,320,662 553,958 2,181,195 5,055,815 Total Residential Loans $ 3,187,106 $ 553,958 $ 2,181,195 $ 5,922,259 December 31, 2017 Legacy Sequoia (In Thousands) Redwood Sequoia Choice Total Held-for-sale At fair value $ 1,427,052 $ — $ — $ 1,427,052 At lower of cost or fair value 893 — — 893 Total held-for-sale 1,427,945 — — 1,427,945 Held-for-investment at fair value 2,434,386 632,817 620,062 3,687,265 Total Residential Loans $ 3,862,331 $ 632,817 $ 620,062 $ 5,115,210 At September 30, 2018 , we owned mortgage servicing rights associated with $2.53 billion (principal balance) of consolidated residential loans purchased from third-party originators. The value of these MSRs is included in the carrying value of the associated loans on our consolidated balance sheets. We contract with licensed sub-servicers that perform servicing functions for these loans. Residential Loans Held-for-Sale At Fair Value At September 30, 2018 , we owned 1,232 loans held-for-sale at fair value with an aggregate unpaid principal balance of $859 million and a fair value of $866 million , compared to 2,009 loans with an aggregate unpaid principal balance of $1.41 billion and a fair value of $1.43 billion at December 31, 2017 . At September 30, 2018 , one of these loans with a fair value of $0.6 million was greater than 90 days delinquent and none of these loans were in foreclosure. At December 31, 2017 , one of these loans with a fair value of $0.5 million was greater than 90 days delinquent and none of these loans were in foreclosure. During the three and nine months ended September 30, 2018 , we purchased $1.79 billion and $5.52 billion (principal balance) of loans, respectively, for which we elected the fair value option, and we sold $1.90 billion and $5.83 billion (principal balance) of loans, respectively, for which we recorded net market valuation gain s of $6 million and $16 million , respectively, through Mortgage banking activities, net on our consolidated statements of income. At September 30, 2018 , loans held-for-sale with a market value of $622 million were pledged as collateral under short-term borrowing agreements. During the three and nine months ended September 30, 2017 , we purchased $1.43 billion and $3.72 billion (principal balance) of loans, respectively, for which we elected the fair value option, and we sold $1.05 billion and $3.08 billion (principal balance) of loans, respectively, for which we recorded net market valuation gain s of $15 million and $29 million , respectively, through Mortgage banking activities, net on our consolidated statements of income. At Lower of Cost or Fair Value At September 30, 2018 and December 31, 2017 , we held two and four residential loans, respectively, at the lower of cost or fair value with $0.2 million and $1 million in outstanding principal balance, respectively, and carrying values of $0.1 million and $1 million , respectively. At September 30, 2018 , none of these loans were greater than 90 days delinquent or in foreclosure. At December 31, 2017 , one of these loans with an unpaid principal balance of $0.3 million was greater than 90 days delinquent and none of these loans were in foreclosure. Residential Loans Held-for-Investment at Fair Value At Redwood At September 30, 2018 , we owned 3,259 held-for-investment loans at Redwood with an aggregate unpaid principal balance of $2.36 billion and a fair value of $2.32 billion , compared to 3,292 loans with an aggregate unpaid principal balance of $2.41 billion and a fair value of $2.43 billion at December 31, 2017 . At September 30, 2018 , two of these loans with a total fair value of $1 million were greater than 90 days delinquent and none of these loans were in foreclosure. At December 31, 2017 , none of these loans were greater than 90 days delinquent or in foreclosure. During the three and nine months ended September 30, 2018 , we transferred loans with a fair value of $116 million and $204 million , respectively, from held-for-sale to held-for-investment. During the three and nine months ended September 30, 2018 , we transferred loans with a fair value of $16 million from held-for-investment to held-for-sale. During the three and nine months ended September 30, 2018 , we recorded net market valuation loss es of $17 million and $71 million , respectively, on residential loans held-for-investment at fair value through Investment fair value changes, net on our consolidated statements of income. At September 30, 2018 , loans with a fair value of $2.27 billion were pledged as collateral under a borrowing agreement with the FHLBC. During the three and nine months ended September 30, 2017 , we transferred loans with a fair value of $78 million and $326 million , respectively, from held-for-sale to held-for-investment. During both the three and nine months ended September 30, 2017 , we transferred loans with a fair value of $98 million from held-for-investment to held-for-sale. During the three and nine months ended September 30, 2017 , we recorded net market valuation gain s of $3 million and $9 million , respectively, on residential loans held-for-investment at fair value through Investment fair value changes, net on our consolidated statements of income. At September 30, 2018 , the outstanding loans held-for-investment at Redwood were prime-quality, first lien loans, of which 96% were originated between 2013 and 2018, and 4% were originated in 2012 and prior years. The weighted average Fair Isaac Corporation ("FICO") score of borrowers backing these loans was 769 (at origination) and the weighted average loan-to-value ("LTV") ratio of these loans was 66% (at origination). At September 30, 2018 , these loans were comprised of 87% fixed-rate loans with a weighted average coupon of 4.08% , and the remainder were hybrid or ARM loans with a weighted average coupon of 4.20% . At Consolidated Legacy Sequoia Entities At September 30, 2018 , we consolidated 2,777 held-for-investment loans at consolidated Legacy Sequoia entities, with an aggregate unpaid principal balance of $581 million and a fair value of $554 million , as compared to 3,178 loans at December 31, 2017 , with an aggregate unpaid principal balance of $698 million and a fair value of $633 million . At origination, the weighted average FICO score of borrowers backing these loans was 728 , the weighted average LTV ratio of these loans was 66% , and the loans were nearly all first lien and prime-quality. At September 30, 2018 and December 31, 2017 , the unpaid principal balance of loans at consolidated Legacy Sequoia entities delinquent greater than 90 days was $16 million and $25 million , respectively, of which the unpaid principal balance of loans in foreclosure was $8 million and $10 million , respectively. During the three and nine months ended September 30, 2018 , we recorded net market valuation gain s of $4 million and $37 million , respectively, on these loans through Investment fair value changes, net on our consolidated statements of income. During the three and nine months ended September 30, 2017 , we recorded net market valuation gain s of $4 million and $24 million , respectively, on these loans through Investment fair value changes, net on our consolidated statements of income. Pursuant to the collateralized financing entity guidelines, the market valuation changes of these loans are based on the estimated fair value of the associated ABS issued. The net impact to our income statement associated with our retained economic investment in the Legacy Sequoia securitization entities is presented in Note 5. At Consolidated Sequoia Choice Entities At September 30, 2018 , we consolidated 2,928 held-for-investment loans at the consolidated Sequoia Choice entities, with an aggregate unpaid balance of $2.16 billion and a fair value of $2.18 billion , as compared to 806 loans at December 31, 2017 with an aggregate unpaid principal balance of $605 million and a fair value of $620 million . At origination, the weighted average FICO score of borrowers backing these loans was 744 , the weighted average LTV ratio of these loans was 75% , and the loans were all first lien and prime-quality. At September 30, 2018 , one of these loans with an unpaid principal balance of $1 million was greater than 90 days delinquent and none of these loans were in foreclosure. At December 31, 2017 , none of these loans were greater than 90 days delinquent or in foreclosure. During the three and nine months ended September 30, 2018 , we transferred loans with a fair value of $796 million and $1.78 billion , respectively, from held-for-sale to held-for-investment associated with Choice securitizations. During the three and nine months ended September 30, 2018 , we recorded net market valuation loss es of $13 million and $25 million , respectively, on these loans through Investment fair value changes, net on our consolidated statements of income. Pursuant to the collateralized financing entity guidelines, the market valuation changes of these loans are based on the estimated fair value of the ABS issued associated with Choice securitizations . The net impact to our income statement associated with our retained economic investment in the Sequoia Choice securitization entities is presented in Note 5. Business Purpose Loans Our business purpose loans include single-family rental loans and fix-and-flip loans. At September 30, 2018, all of our outstanding business purpose loans were acquired from a related party, 5 Arches LLC ("5 Arches"). See Note 11 for information on our equity investment in 5 Arches. The following table summarizes the classifications and carrying values of the business purpose loans owned at Redwood at September 30, 2018 and December 31, 2017 . Table 7.1 – Classifications and Carrying Values of Business Purpose Loans (In Thousands) September 30, 2018 December 31, 2017 Single-family rental loans, held-for-sale at fair value $ 20,105 $ — Fix-and-flip loans, held-for-investment at fair value 95,515 — Total Business Purpose Loans $ 115,620 $ — Single-Family Rental Loans Held-for-Sale at Fair Value Under an agreement with 5 Arches, we have exclusive access to their single-family rental loan production through April 2019. At September 30, 2018 , we owned four single-family rental loans purchased under this agreement with an aggregate unpaid principal balance of $20 million and a fair value of $20 million . At September 30, 2018, none of these loans were greater than 90 days delinquent or in foreclosure. During both the three and nine months ended September 30, 2018 , we purchased $20 million (principal balance) of loans, for which we elected the fair value option, and we did no t sell any loans. During both the three and nine months ended September 30, 2018 , we recorded a net market valuation loss of $0.1 million on single-family rental loans held-for-sale at fair value through Mortgage banking activities, net on our consolidated statements of income. At September 30, 2018 , loans held-for-sale with a market value of $20 million were pledged as collateral under short-term borrowing agreements. The outstanding single-family rental loans held-for-sale at September 30, 2018 were first lien, fixed-rate loans with maturities of five, seven, or ten years. At September 30, 2018 , the weighted average coupon of our single-family rental loans was 5.71% and the weighted average loan term was seven years . At origination, the weighted average LTV ratio of these loans was 65% and the weighted average debt service coverage ratio ("DSCR") was 1.25 . Fix-and-Flip Loans Held-for-Investment at Fair Value At September 30, 2018 , we owned 128 fix-and-flip loans held-for-investment with an aggregate unpaid principal balance of $95 million and a fair value of $96 million . At September 30, 2018 , two of these loans with an aggregate unpaid principal balance of $1 million were greater than 90 days delinquent and none of these loans were in foreclosure. During both the three and nine months ended September 30, 2018 , we purchased $106 million (principal balance) of loans, and we did no t sell any loans. During both the three and nine months ended September 30, 2018 , we recorded a net market valuation gain of less than $0.1 million on fix-and-flip loans held-for-investment at fair value through Investment fair value changes, net on our consolidated statements of income. At September 30, 2018 , loans with a market value of $92 million were pledged as collateral under short-term borrowing agreements. The outstanding fix-and-flip loans held-for-investment at September 30, 2018 were first lien, fixed-rate, interest-only loans with a weighted average coupon of 9.14% and original maturities of 6 to 24 months. At origination, the weighted average FICO score of borrowers backing these loans was 718 , the weighted average LTV ratio of these loans was 76% , and the estimated rehabilitated LTV ratio was 57% . Multifamily Loans During the third quarter of 2018, we invested in multifamily subordinate securities issued by two Freddie Mac K-Series securitization trusts and were required to consolidate the underlying multifamily loans owned at these entities for financial reporting purposes in accordance with GAAP. At September 30, 2018 , we consolidated 80 held-for-investment multifamily loans, with an aggregate unpaid balance of $963 million and a fair value of $942 million . We did not own or consolidate any multifamily loans at December 31, 2017. The outstanding multifamily loans held-for-investment at the Freddie Mac K-Series entities at September 30, 2018 were first lien, fixed-rate loans that were originated in 2015 and 2016 and had original loan terms of seven to ten years and an original weighted average LTV ratio of 69% . At September 30, 2018 , the weighted average coupon of these multifamily loans was 4.15% and the weighted average loan term was seven years . At September 30, 2018, none of these loans were greater than 90 days delinquent or in foreclosure. During both the three and nine months ended September 30, 2018 , we recorded a net market valuation loss of $4 million on these loans through Investment fair value changes, net on our consolidated statements of income. Pursuant to the collateralized financing entity guidelines, the market valuation changes of these loans are based on the estimated fair value of the ABS issued associated with the securitizations . The net impact to our income statement associated with our economic investment in the securities of the Freddie Mac K-Series securitization entities is presented in Note 5.

Multifamily Loans

Multifamily Loans	9 Months Ended
	Sep. 30, 2018
Receivables [Abstract]
Mutlifamily Loans	Residential Loans We acquire residential loans from third-party originators and may sell or securitize these loans or hold them for investment. The following table summarizes the classifications and carrying values of the residential loans owned at Redwood and at consolidated Sequoia entities at September 30, 2018 and December 31, 2017 . Table 6.1 – Classifications and Carrying Values of Residential Loans September 30, 2018 Legacy Sequoia (In Thousands) Redwood Sequoia Choice Total Held-for-sale At fair value $ 866,331 $ — $ — $ 866,331 At lower of cost or fair value 113 — — 113 Total held-for-sale 866,444 — — 866,444 Held-for-investment at fair value 2,320,662 553,958 2,181,195 5,055,815 Total Residential Loans $ 3,187,106 $ 553,958 $ 2,181,195 $ 5,922,259 December 31, 2017 Legacy Sequoia (In Thousands) Redwood Sequoia Choice Total Held-for-sale At fair value $ 1,427,052 $ — $ — $ 1,427,052 At lower of cost or fair value 893 — — 893 Total held-for-sale 1,427,945 — — 1,427,945 Held-for-investment at fair value 2,434,386 632,817 620,062 3,687,265 Total Residential Loans $ 3,862,331 $ 632,817 $ 620,062 $ 5,115,210 At September 30, 2018 , we owned mortgage servicing rights associated with $2.53 billion (principal balance) of consolidated residential loans purchased from third-party originators. The value of these MSRs is included in the carrying value of the associated loans on our consolidated balance sheets. We contract with licensed sub-servicers that perform servicing functions for these loans. Residential Loans Held-for-Sale At Fair Value At September 30, 2018 , we owned 1,232 loans held-for-sale at fair value with an aggregate unpaid principal balance of $859 million and a fair value of $866 million , compared to 2,009 loans with an aggregate unpaid principal balance of $1.41 billion and a fair value of $1.43 billion at December 31, 2017 . At September 30, 2018 , one of these loans with a fair value of $0.6 million was greater than 90 days delinquent and none of these loans were in foreclosure. At December 31, 2017 , one of these loans with a fair value of $0.5 million was greater than 90 days delinquent and none of these loans were in foreclosure. During the three and nine months ended September 30, 2018 , we purchased $1.79 billion and $5.52 billion (principal balance) of loans, respectively, for which we elected the fair value option, and we sold $1.90 billion and $5.83 billion (principal balance) of loans, respectively, for which we recorded net market valuation gain s of $6 million and $16 million , respectively, through Mortgage banking activities, net on our consolidated statements of income. At September 30, 2018 , loans held-for-sale with a market value of $622 million were pledged as collateral under short-term borrowing agreements. During the three and nine months ended September 30, 2017 , we purchased $1.43 billion and $3.72 billion (principal balance) of loans, respectively, for which we elected the fair value option, and we sold $1.05 billion and $3.08 billion (principal balance) of loans, respectively, for which we recorded net market valuation gain s of $15 million and $29 million , respectively, through Mortgage banking activities, net on our consolidated statements of income. At Lower of Cost or Fair Value At September 30, 2018 and December 31, 2017 , we held two and four residential loans, respectively, at the lower of cost or fair value with $0.2 million and $1 million in outstanding principal balance, respectively, and carrying values of $0.1 million and $1 million , respectively. At September 30, 2018 , none of these loans were greater than 90 days delinquent or in foreclosure. At December 31, 2017 , one of these loans with an unpaid principal balance of $0.3 million was greater than 90 days delinquent and none of these loans were in foreclosure. Residential Loans Held-for-Investment at Fair Value At Redwood At September 30, 2018 , we owned 3,259 held-for-investment loans at Redwood with an aggregate unpaid principal balance of $2.36 billion and a fair value of $2.32 billion , compared to 3,292 loans with an aggregate unpaid principal balance of $2.41 billion and a fair value of $2.43 billion at December 31, 2017 . At September 30, 2018 , two of these loans with a total fair value of $1 million were greater than 90 days delinquent and none of these loans were in foreclosure. At December 31, 2017 , none of these loans were greater than 90 days delinquent or in foreclosure. During the three and nine months ended September 30, 2018 , we transferred loans with a fair value of $116 million and $204 million , respectively, from held-for-sale to held-for-investment. During the three and nine months ended September 30, 2018 , we transferred loans with a fair value of $16 million from held-for-investment to held-for-sale. During the three and nine months ended September 30, 2018 , we recorded net market valuation loss es of $17 million and $71 million , respectively, on residential loans held-for-investment at fair value through Investment fair value changes, net on our consolidated statements of income. At September 30, 2018 , loans with a fair value of $2.27 billion were pledged as collateral under a borrowing agreement with the FHLBC. During the three and nine months ended September 30, 2017 , we transferred loans with a fair value of $78 million and $326 million , respectively, from held-for-sale to held-for-investment. During both the three and nine months ended September 30, 2017 , we transferred loans with a fair value of $98 million from held-for-investment to held-for-sale. During the three and nine months ended September 30, 2017 , we recorded net market valuation gain s of $3 million and $9 million , respectively, on residential loans held-for-investment at fair value through Investment fair value changes, net on our consolidated statements of income. At September 30, 2018 , the outstanding loans held-for-investment at Redwood were prime-quality, first lien loans, of which 96% were originated between 2013 and 2018, and 4% were originated in 2012 and prior years. The weighted average Fair Isaac Corporation ("FICO") score of borrowers backing these loans was 769 (at origination) and the weighted average loan-to-value ("LTV") ratio of these loans was 66% (at origination). At September 30, 2018 , these loans were comprised of 87% fixed-rate loans with a weighted average coupon of 4.08% , and the remainder were hybrid or ARM loans with a weighted average coupon of 4.20% . At Consolidated Legacy Sequoia Entities At September 30, 2018 , we consolidated 2,777 held-for-investment loans at consolidated Legacy Sequoia entities, with an aggregate unpaid principal balance of $581 million and a fair value of $554 million , as compared to 3,178 loans at December 31, 2017 , with an aggregate unpaid principal balance of $698 million and a fair value of $633 million . At origination, the weighted average FICO score of borrowers backing these loans was 728 , the weighted average LTV ratio of these loans was 66% , and the loans were nearly all first lien and prime-quality. At September 30, 2018 and December 31, 2017 , the unpaid principal balance of loans at consolidated Legacy Sequoia entities delinquent greater than 90 days was $16 million and $25 million , respectively, of which the unpaid principal balance of loans in foreclosure was $8 million and $10 million , respectively. During the three and nine months ended September 30, 2018 , we recorded net market valuation gain s of $4 million and $37 million , respectively, on these loans through Investment fair value changes, net on our consolidated statements of income. During the three and nine months ended September 30, 2017 , we recorded net market valuation gain s of $4 million and $24 million , respectively, on these loans through Investment fair value changes, net on our consolidated statements of income. Pursuant to the collateralized financing entity guidelines, the market valuation changes of these loans are based on the estimated fair value of the associated ABS issued. The net impact to our income statement associated with our retained economic investment in the Legacy Sequoia securitization entities is presented in Note 5. At Consolidated Sequoia Choice Entities At September 30, 2018 , we consolidated 2,928 held-for-investment loans at the consolidated Sequoia Choice entities, with an aggregate unpaid balance of $2.16 billion and a fair value of $2.18 billion , as compared to 806 loans at December 31, 2017 with an aggregate unpaid principal balance of $605 million and a fair value of $620 million . At origination, the weighted average FICO score of borrowers backing these loans was 744 , the weighted average LTV ratio of these loans was 75% , and the loans were all first lien and prime-quality. At September 30, 2018 , one of these loans with an unpaid principal balance of $1 million was greater than 90 days delinquent and none of these loans were in foreclosure. At December 31, 2017 , none of these loans were greater than 90 days delinquent or in foreclosure. During the three and nine months ended September 30, 2018 , we transferred loans with a fair value of $796 million and $1.78 billion , respectively, from held-for-sale to held-for-investment associated with Choice securitizations. During the three and nine months ended September 30, 2018 , we recorded net market valuation loss es of $13 million and $25 million , respectively, on these loans through Investment fair value changes, net on our consolidated statements of income. Pursuant to the collateralized financing entity guidelines, the market valuation changes of these loans are based on the estimated fair value of the ABS issued associated with Choice securitizations . The net impact to our income statement associated with our retained economic investment in the Sequoia Choice securitization entities is presented in Note 5. Business Purpose Loans Our business purpose loans include single-family rental loans and fix-and-flip loans. At September 30, 2018, all of our outstanding business purpose loans were acquired from a related party, 5 Arches LLC ("5 Arches"). See Note 11 for information on our equity investment in 5 Arches. The following table summarizes the classifications and carrying values of the business purpose loans owned at Redwood at September 30, 2018 and December 31, 2017 . Table 7.1 – Classifications and Carrying Values of Business Purpose Loans (In Thousands) September 30, 2018 December 31, 2017 Single-family rental loans, held-for-sale at fair value $ 20,105 $ — Fix-and-flip loans, held-for-investment at fair value 95,515 — Total Business Purpose Loans $ 115,620 $ — Single-Family Rental Loans Held-for-Sale at Fair Value Under an agreement with 5 Arches, we have exclusive access to their single-family rental loan production through April 2019. At September 30, 2018 , we owned four single-family rental loans purchased under this agreement with an aggregate unpaid principal balance of $20 million and a fair value of $20 million . At September 30, 2018, none of these loans were greater than 90 days delinquent or in foreclosure. During both the three and nine months ended September 30, 2018 , we purchased $20 million (principal balance) of loans, for which we elected the fair value option, and we did no t sell any loans. During both the three and nine months ended September 30, 2018 , we recorded a net market valuation loss of $0.1 million on single-family rental loans held-for-sale at fair value through Mortgage banking activities, net on our consolidated statements of income. At September 30, 2018 , loans held-for-sale with a market value of $20 million were pledged as collateral under short-term borrowing agreements. The outstanding single-family rental loans held-for-sale at September 30, 2018 were first lien, fixed-rate loans with maturities of five, seven, or ten years. At September 30, 2018 , the weighted average coupon of our single-family rental loans was 5.71% and the weighted average loan term was seven years . At origination, the weighted average LTV ratio of these loans was 65% and the weighted average debt service coverage ratio ("DSCR") was 1.25 . Fix-and-Flip Loans Held-for-Investment at Fair Value At September 30, 2018 , we owned 128 fix-and-flip loans held-for-investment with an aggregate unpaid principal balance of $95 million and a fair value of $96 million . At September 30, 2018 , two of these loans with an aggregate unpaid principal balance of $1 million were greater than 90 days delinquent and none of these loans were in foreclosure. During both the three and nine months ended September 30, 2018 , we purchased $106 million (principal balance) of loans, and we did no t sell any loans. During both the three and nine months ended September 30, 2018 , we recorded a net market valuation gain of less than $0.1 million on fix-and-flip loans held-for-investment at fair value through Investment fair value changes, net on our consolidated statements of income. At September 30, 2018 , loans with a market value of $92 million were pledged as collateral under short-term borrowing agreements. The outstanding fix-and-flip loans held-for-investment at September 30, 2018 were first lien, fixed-rate, interest-only loans with a weighted average coupon of 9.14% and original maturities of 6 to 24 months. At origination, the weighted average FICO score of borrowers backing these loans was 718 , the weighted average LTV ratio of these loans was 76% , and the estimated rehabilitated LTV ratio was 57% . Multifamily Loans During the third quarter of 2018, we invested in multifamily subordinate securities issued by two Freddie Mac K-Series securitization trusts and were required to consolidate the underlying multifamily loans owned at these entities for financial reporting purposes in accordance with GAAP. At September 30, 2018 , we consolidated 80 held-for-investment multifamily loans, with an aggregate unpaid balance of $963 million and a fair value of $942 million . We did not own or consolidate any multifamily loans at December 31, 2017. The outstanding multifamily loans held-for-investment at the Freddie Mac K-Series entities at September 30, 2018 were first lien, fixed-rate loans that were originated in 2015 and 2016 and had original loan terms of seven to ten years and an original weighted average LTV ratio of 69% . At September 30, 2018 , the weighted average coupon of these multifamily loans was 4.15% and the weighted average loan term was seven years . At September 30, 2018, none of these loans were greater than 90 days delinquent or in foreclosure. During both the three and nine months ended September 30, 2018 , we recorded a net market valuation loss of $4 million on these loans through Investment fair value changes, net on our consolidated statements of income. Pursuant to the collateralized financing entity guidelines, the market valuation changes of these loans are based on the estimated fair value of the ABS issued associated with the securitizations . The net impact to our income statement associated with our economic investment in the securities of the Freddie Mac K-Series securitization entities is presented in Note 5.

Real Estate Securities

Real Estate Securities	9 Months Ended
	Sep. 30, 2018
Investments, Debt and Equity Securities [Abstract]
Real Estate Securities	Real Estate Securities We invest in real estate securities that we acquire from third parties or create and retain from our Sequoia securitizations. The following table presents the fair values of our real estate securities by type at September 30, 2018 and December 31, 2017 . Table 9.1 – Fair Values of Real Estate Securities by Type (In Thousands) September 30, 2018 December 31, 2017 Trading $ 1,108,243 $ 968,844 Available-for-sale 361,841 507,666 Total Real Estate Securities $ 1,470,084 $ 1,476,510 Our real estate securities include mortgage-backed securities, which are presented in accordance with their general position within a securitization structure based on their rights to cash flows. Senior securities are those interests in a securitization that generally have the first right to cash flows and are last in line to absorb losses. Mezzanine securities are interests that are generally subordinate to senior securities in their rights to receive cash flows, and have subordinate securities below them that are first to absorb losses. Most of our mezzanine classified securities were initially rated AA through BBB- and issued in 2012 or later. Subordinate securities are all interests below mezzanine. Nearly all of our residential securities are supported by collateral that was designated as prime at the time of issuance. Trading Securities The following table presents the fair value of trading securities by position and collateral type at September 30, 2018 and December 31, 2017 . Table 9.2 – Trading Securities by Position and Collateral Type (In Thousands) September 30, 2018 December 31, 2017 Senior $ 163,022 $ 69,974 Mezzanine 602,235 563,475 Subordinate 342,986 335,395 Total Trading Securities $ 1,108,243 $ 968,844 We elected the fair value option for certain securities and classify them as trading securities. Our trading securities include both residential and multifamily securities. At September 30, 2018 , trading securities with a carrying value of $668 million as well as $129 million of securities retained from our consolidated Sequoia Choice securitizations were pledged as collateral under short-term borrowing agreements. See Note 12 for additional information on short-term debt. At September 30, 2018 and December 31, 2017 , our senior trading securities included $86 million and $70 million of interest-only securities, respectively, for which there is no principal balance, and the remaining unpaid principal balance of our senior trading securities was $79 million and zero , respectively. Our interest-only securities included $42 million and $15 million of A-IO-S securities at September 30, 2018 and December 31, 2017 , respectively, which are securities we retained from certain of our Sequoia securitizations that represent certificated servicing strips. At September 30, 2018 and December 31, 2017 , our mezzanine and subordinate trading securities had an unpaid principal balance of $1.07 billion and $943 million , respectively. At September 30, 2018 and December 31, 2017 , the fair value of our mezzanine and subordinate securities was $945 million and $899 million , respectively, and included $236 million and $301 million , respectively, of Agency residential mortgage credit risk transfer (or "CRT") securities, $68 million and $68 million , respectively, of Sequoia securities, $225 million and $206 million , respectively, of other third-party residential securities, and $417 million and $324 million , respectively, of third-party multifamily securities. During the three and nine months ended September 30, 2018 , we acquired $189 million and $567 million (principal balance), respectively, of securities for which we elected the fair value option and classified as trading, and sold $79 million and $323 million , respectively, of such securities. During the three and nine months ended September 30, 2017 , we acquired $171 million and $432 million (principal balance), respectively, of securities for which we elected the fair value option and classified as trading, and sold $25 million and $85 million , respectively, of such securities. During the three and nine months ended September 30, 2018 , we recorded net market valuation gain s of $6 million and $2 million , respectively, on trading securities, included in Investment fair value changes, net on our consolidated statements of income. During the three and nine months ended September 30, 2017 , we recorded net market valuation gain s of $1 million and $31 million , respectively, on trading securities, included in Investment fair value changes, net on our consolidated statements of income. AFS Securities The following table presents the fair value of our available-for-sale securities by position and collateral type at September 30, 2018 and December 31, 2017 . Table 9.3 – Available-for-Sale Securities by Position and Collateral Type (In Thousands) September 30, 2018 December 31, 2017 Senior $ 114,628 $ 179,864 Mezzanine 36,377 92,002 Subordinate 210,836 235,800 Total AFS Securities $ 361,841 $ 507,666 At September 30, 2018 and December 31, 2017 , all of our available-for-sale securities were comprised of residential mortgage-backed securities. At September 30, 2018 , AFS securities with a carrying value of $121 million were pledged as collateral under short-term borrowing agreements. See Note 12 for additional information on short-term debt. During the three and nine months ended September 30, 2018 , we purchased $1 million and $7 million of AFS securities, respectively, and sold $26 million and $118 million of AFS securities, respectively, which resulted in net realized gains of $7 million and $21 million , respectively. During the three and nine months ended September 30, 2017 , we purchased $4 million and $32 million of AFS securities, respectively, and sold $23 million and $61 million of AFS securities, respectively, which resulted in net realized gains of $2 million and $9 million , respectively. We often purchase AFS securities at a discount to their outstanding principal balances. To the extent we purchase an AFS security that has a likelihood of incurring a loss, we do not amortize into income the portion of the purchase discount that we do not expect to collect due to the inherent credit risk of the security. We may also expense a portion of our investment in the security to the extent we believe that principal losses will exceed the purchase discount. We designate any amount of unpaid principal balance that we do not expect to receive and thus do not expect to earn or recover as a credit reserve on the security. Any remaining net unamortized discounts or premiums on the security are amortized into income over time using the effective yield method. At September 30, 2018 , there were less than $0.1 million of AFS securities with contractual maturities less than five years , $2 million with contractual maturities greater than five years but less than 10 years , and the remainder of our AFS securities had contractual maturities greater than 10 years . The following table presents the components of carrying value (which equals fair value) of AFS securities at September 30, 2018 and December 31, 2017 . Table 9.4 – Carrying Value of AFS Securities September 30, 2018 (In Thousands) Senior Mezzanine Subordinate Total Principal balance $ 119,254 $ 37,385 $ 308,445 $ 465,084 Credit reserve (7,919 ) — (33,155 ) (41,074 ) Unamortized discount, net (25,173 ) (3,843 ) (131,783 ) (160,799 ) Amortized cost 86,162 33,542 143,507 263,211 Gross unrealized gains 29,134 2,835 67,896 99,865 Gross unrealized losses (668 ) — (567 ) (1,235 ) Carrying Value $ 114,628 $ 36,377 $ 210,836 $ 361,841 December 31, 2017 (In Thousands) Senior Mezzanine Subordinate Total Principal balance $ 189,125 $ 91,471 $ 327,549 $ 608,145 Credit reserve (8,756 ) — (37,793 ) (46,549 ) Unamortized discount, net (44,041 ) (9,407 ) (130,305 ) (183,753 ) Amortized cost 136,328 82,064 159,451 377,843 Gross unrealized gains 44,771 9,938 76,481 131,190 Gross unrealized losses (1,235 ) — (132 ) (1,367 ) Carrying Value $ 179,864 $ 92,002 $ 235,800 $ 507,666 The following table presents the changes for the three and nine months ended September 30, 2018 , in unamortized discount and designated credit reserves on residential AFS securities. Table 9.5 – Changes in Unamortized Discount and Designated Credit Reserves on AFS Securities Three Months Ended September 30, 2018 Nine Months Ended September 30, 2018 Credit Reserve Unamortized Discount, Net Credit Unamortized (In Thousands) Beginning balance $ 42,191 $ 170,090 $ 46,549 $ 183,753 Amortization of net discount — (3,323 ) — (11,231 ) Realized credit losses (616 ) — (1,957 ) — Acquisitions 637 224 5,424 2,354 Sales, calls, other (777 ) (6,586 ) (1,843 ) (21,265 ) Impairments 33 — 89 — (Release of) transfers to credit reserves, net (394 ) 394 (7,188 ) 7,188 Ending Balance $ 41,074 $ 160,799 $ 41,074 $ 160,799 AFS Securities with Unrealized Losses The following table presents the components comprising the total carrying value of residential AFS securities that were in a gross unrealized loss position at September 30, 2018 and December 31, 2017 . Table 9.6 – Components of Fair Value of Residential AFS Securities by Holding Periods Less Than 12 Consecutive Months 12 Consecutive Months or Longer Amortized Cost Unrealized Losses Fair Value Amortized Cost Unrealized Losses Fair (In Thousands) September 30, 2018 $ 14,791 $ (567 ) $ 14,224 $ 23,901 $ (668 ) $ 23,233 December 31, 2017 8,637 (132 ) 8,505 28,557 (1,235 ) 27,322 At September 30, 2018 , after giving effect to purchases, sales, and extinguishment due to credit losses, our consolidated balance sheet included 139 AFS securities, of which 11 were in an unrealized loss position and three were in a continuous unrealized loss position for 12 consecutive months or longer. At December 31, 2017 , our consolidated balance sheet included 167 AFS securities, of which nine were in an unrealized loss position and three were in a continuous unrealized loss position for 12 consecutive months or longer. Evaluating AFS Securities for Other-than-Temporary Impairments Gross unrealized losses on our AFS securities were $1 million at September 30, 2018 . We evaluate all securities in an unrealized loss position to determine if the impairment is temporary or other-than-temporary (resulting in an OTTI). At September 30, 2018 , we did not intend to sell any of our AFS securities that were in an unrealized loss position, and it is more likely than not that we will not be required to sell these securities before recovery of their amortized cost basis, which may be at their maturity. We review our AFS securities that are in an unrealized loss position to identify those securities with losses that are other-than-temporary based on an assessment of changes in expected cash flows for such securities, which considers recent security performance and expected future performance of the underlying collateral. For the three months ended September 30, 2018 , other-than-temporary impairments were $0.4 million , of which less than $0.1 million were recognized through our consolidated statements of income and $0.3 million were recognized in Accumulated other comprehensive income, a component of our consolidated balance sheet. For the nine months ended September 30, 2018 , other-than-temporary impairments were $0.6 million , of which $0.1 million were recognized through our consolidated statements of income and $0.5 million were recognized in Accumulated other comprehensive income, a component of our consolidated balance sheet. AFS securities for which OTTI is recognized have experienced, or are expected to experience, credit-related adverse cash flow changes. In determining our estimate of cash flows for AFS securities we may consider factors such as structural credit enhancement, past and expected future performance of underlying mortgage loans, including timing of expected future cash flows, which are informed by prepayment rates, default rates, loss severities, delinquency rates, percentage of non-performing loans, FICO scores at loan origination, year of origination, loan-to-value ratios, and geographic concentrations, as well as general market assessments. Changes in our evaluation of these factors impacted the cash flows expected to be collected at the OTTI assessment date and were used to determine if there were credit-related adverse cash flows and if so, the amount of credit related losses. Significant judgment is used in both our analysis of the expected cash flows for our AFS securities and any determination of the credit loss component of OTTI. The table below summarizes the significant valuation assumptions we used for our AFS securities in unrealized loss positions at September 30, 2018 . Table 9.7 – Significant Valuation Assumptions September 30, 2018 Range for Securities Prepayment rates 6% - 10% Projected losses 0.20% - 3% The following table details the activity related to the credit loss component of OTTI (i.e., OTTI recognized through earnings) for AFS securities held at September 30, 2018 and 2017 , for which a portion of an OTTI was recognized in other comprehensive income. Table 9.8 – Activity of the Credit Component of Other-than-Temporary Impairments Three Months Ended September 30, Nine Months Ended September 30, (In Thousands) 2018 2017 2018 2017 Balance at beginning of period $ 20,967 $ 25,802 $ 21,037 $ 28,261 Additions Initial credit impairments 33 — 76 178 Subsequent credit impairments — — — 47 Reductions Securities sold, or expected to sell (927 ) — (1,026 ) (2,282 ) Securities with no outstanding principal at period end (1,229 ) (42 ) (1,243 ) (444 ) Balance at End of Period $ 18,844 $ 25,760 $ 18,844 $ 25,760 Gains and losses from the sale of AFS securities are recorded as Realized gains, net, in our consolidated statements of income. The following table presents the gross realized gains and losses on sales and calls of AFS securities for the three and nine months ended September 30, 2018 and 2017 . Table 9.9 – Gross Realized Gains and Losses on AFS Securities Three Months Ended September 30, Nine Months Ended September 30, (In Thousands) 2018 2017 2018 2017 Gross realized gains - sales $ 7,275 $ 1,734 $ 21,312 $ 9,381 Gross realized gains - calls — — 43 677 Gross realized losses - sales — — (3 ) — Gross realized losses - calls — — — (497 ) Total Realized Gains on Sales and Calls of AFS Securities, net $ 7,275 $ 1,734 $ 21,352 $ 9,561

Derivative Financial Instrument

Derivative Financial Instruments	9 Months Ended
	Sep. 30, 2018
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Derivative Financial Instruments	Derivative Financial Instruments The following table presents the fair value and notional amount of our derivative financial instruments at September 30, 2018 and December 31, 2017 . Table 10.1 – Fair Value and Notional Amount of Derivative Financial Instruments September 30, 2018 December 31, 2017 Fair Value Notional Amount Fair Value Notional Amount (In Thousands) Assets - Risk Management Derivatives Interest rate swaps $ 78,006 $ 3,139,000 $ 10,122 $ 1,765,000 TBAs 6,987 1,480,000 133 295,000 Futures 44 15,000 1 7,500 Swaptions — — 42 200,000 Assets - Other Derivatives Loan purchase commitments 2,182 355,353 3,243 547,434 Loan forward sale commitments — — 2,177 343,681 Total Assets $ 87,219 $ 4,989,353 $ 15,718 $ 3,158,615 Liabilities - Cash Flow Hedges Interest rate swaps $ (26,796 ) $ 139,500 $ (43,679 ) $ 139,500 Liabilities - Risk Management Derivatives Interest rate swaps (11,785 ) 565,500 (11,888 ) 1,248,000 TBAs (1,744 ) 500,000 (3,808 ) 1,400,000 Liabilities - Other Derivatives Loan purchase commitments (2,399 ) 451,136 (3,706 ) 697,966 Total Liabilities $ (42,724 ) $ 1,656,136 $ (63,081 ) $ 3,485,466 Total Derivative Financial Instruments, Net $ 44,495 $ 6,645,489 $ (47,363 ) $ 6,644,081 Risk Management Derivatives To manage, to varying degrees, risks associated with certain assets and liabilities on our consolidated balance sheets, we may enter into derivative contracts. At September 30, 2018 , we were party to swaps and swaptions with an aggregate notional amount of $3.70 billion , TBA agreements sold with an aggregate notional amount of $1.98 billion , and financial futures contracts with an aggregate notional amount of $15 million . At December 31, 2017 , we were party to swaps and swaptions with an aggregate notional amount of $3.21 billion , TBA agreements sold with an aggregate notional amount of $1.70 billion , and financial futures contracts with an aggregate notional amount of $8 million . During the three and nine months ended September 30, 2018 , risk management derivatives had net market valuation gain s of $25 million and $114 million , respectively. During the three and nine months ended September 30, 2017 , risk management derivatives had net market valuation loss es of $9 million and $36 million , respectively. These market valuation gains and losses are recorded in Mortgage banking activities, net, Investment fair value changes, net, and Other income, net on our consolidated statements of income. Loan Purchase and Forward Sale Commitments LPCs and FSCs that qualify as derivatives are recorded at their estimated fair values. For the three and nine months ended September 30, 2018 , LPCs and FSCs had a net market valuation gain of $2 million and a net market valuation loss of $8 million , respectively, that were recorded in Mortgage banking activities, net on our consolidated statements of income. For the three and nine months ended September 30, 2017 , LPCs had net market valuation gain s of $13 million and $34 million , respectively, that were recorded in Mortgage banking activities, net on our consolidated statements of income. Derivatives Designated as Cash Flow Hedges To manage the variability in interest expense related to portions of our long-term debt that are included in our consolidated balance sheets for financial reporting purposes, we designated certain interest rate swaps as cash flow hedges with an aggregate notional balance of $140 million . For the three and nine months ended September 30, 2018 , changes in the values of designated cash flow hedges were positive $5 million and positive $17 million , respectively, and were recorded in Accumulated other comprehensive income, a component of equity. For the three and nine months ended September 30, 2017 , changes in the values of designated cash flow hedges were positive $0.3 million and negative $0.4 million , respectively, and were recorded in Accumulated other comprehensive income, a component of equity. For interest rate agreements currently or previously designated as cash flow hedges, our total unrealized loss reported in Accumulated other comprehensive income was $26 million and $43 million at September 30, 2018 and December 31, 2017 , respectively. The following table illustrates the impact on interest expense of our interest rate agreements accounted for as cash flow hedges for the three and nine months ended September 30, 2018 and 2017 . Table 10.2 – Impact on Interest Expense of Interest Rate Agreements Accounted for as Cash Flow Hedges Three Months Ended September 30, Nine Months Ended September 30, (In Thousands) 2018 2017 2018 2017 Net interest expense on cash flows hedges $ (734 ) $ (1,119 ) $ (2,536 ) $ (3,516 ) Realized net losses reclassified from other comprehensive income — (14 ) — (42 ) Total Interest Expense $ (734 ) $ (1,133 ) $ (2,536 ) $ (3,558 ) Derivative Counterparty Credit Risk As discussed in our Annual Report on Form 10-K for the year ended December 31, 2017 , we consider counterparty risk as part of our fair value assessments of all derivative financial instruments at each quarter-end. At September 30, 2018 , we assessed this risk as remote and did not record a specific valuation adjustment. At September 30, 2018 , we had outstanding derivative agreements with two counterparties (other than clearinghouses) and were in compliance with ISDA agreements governing our open derivative positions.

Other Assets and Liabilities

Other Assets and Liabilities	9 Months Ended
	Sep. 30, 2018
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]
Other Assets and Liabilities	Other Assets and Liabilities Other assets at September 30, 2018 and December 31, 2017 , are summarized in the following table. Table 11.1 – Components of Other Assets (In Thousands) September 30, 2018 December 31, 2017 Mortgage servicing rights $ 63,785 $ 63,598 Security purchase deposit 57,982 — Margin receivable 48,655 85,044 FHLBC stock 43,393 43,393 Pledged collateral 42,127 42,615 Participation in loan warehouse facility 39,219 — Investment receivable 36,463 1,147 Investment in 5 Arches 10,772 — Fixed assets and leasehold improvements (1) 5,409 2,645 REO 2,915 3,354 Guarantee asset 2,885 2,869 Other 12,270 13,899 Total Other Assets $ 365,875 $ 258,564 (1) Fixed assets and leasehold improvements had a basis of $10 million and accumulated depreciation of $5 million at September 30, 2018 . Accrued expenses and other liabilities at September 30, 2018 and December 31, 2017 are summarized in the following table. Table 11.2 – Components of Accrued Expenses and Other Liabilities (In Thousands) September 30, 2018 December 31, 2017 Margin payable $ 33,950 $ 390 Accrued compensation 18,485 24,025 Guarantee obligations 17,423 19,487 Deferred tax liabilities 11,764 11,764 Residential loan and MSR repurchase reserve 4,709 4,916 Unsettled trades 4,071 13 Accrued income taxes payable 3,313 — Legal reserve 2,000 2,000 Other 6,563 5,134 Total Accrued Expenses and Other Liabilities $ 102,278 $ 67,729 Mortgage Servicing Rights We invest in mortgage servicing rights associated with residential mortgage loans and contract with licensed sub-servicers to perform all servicing functions for these loans. The majority of our investments in MSRs were made through the retention of servicing rights associated with the residential jumbo mortgage loans that we acquired and subsequently transferred to third parties. We hold our MSR investments at our taxable REIT subsidiary. At September 30, 2018 and December 31, 2017, our MSRs had a fair value of $64 million for both periods, and were associated with loans with an aggregate principal balance of $5.02 billion and $5.56 billion , respectively. The following table presents activity for MSRs for the three and nine months ended September 30, 2018 and 2017 . Table 11.3 – Activity for MSRs Three Months Ended September 30, Nine Months Ended September 30, (In Thousands) 2018 2017 2018 2017 Balance at beginning of period $ 64,674 $ 63,770 $ 63,598 $ 118,526 Additions — 256 — 7,957 Sales — — (1,077 ) (52,966 ) Changes in fair value due to: Changes in assumptions (1) 1,099 563 6,388 (3,450 ) Other changes (2) (1,988 ) (1,661 ) (5,124 ) (7,139 ) Balance at End of Period $ 63,785 $ 62,928 $ 63,785 $ 62,928 (1) Primarily reflects changes in prepayment assumptions due to changes in market interest rates. (2) Represents changes due to the realization of expected cash flows. The following table presents the components of our MSR income for the three and nine months ended September 30, 2018 and 2017 . Table 11.4 – Components of MSR Income, net Three Months Ended September 30, Nine Months Ended September 30, (In Thousands) 2018 2017 2018 2017 Servicing income $ 4,004 $ 3,872 $ 11,601 $ 17,290 Cost of sub-servicer (324 ) (476 ) (1,254 ) (2,515 ) Net servicing fee income 3,680 3,396 10,347 14,775 Market valuation changes of MSRs (823 ) (1,351 ) 1,324 (10,842 ) Market valuation changes of associated derivatives (890 ) (422 ) (7,151 ) 1,869 MSR reversal of provision for repurchases — (8 ) 277 304 MSR Income, Net (1) $ 1,967 $ 1,615 $ 4,797 $ 6,106 (1) MSR income, net is included in Other income, net on our consolidated statements of income. Security Purchase Deposit In the third quarter of 2018, we entered into an agreement with Freddie Mac to purchase mortgage-backed securities to be issued in a securitization transaction sponsored by Freddie Mac that is expected to close in the fourth quarter of 2018. Pursuant to the terms of this agreement, we plan to acquire subordinate securities backed by a pool of seasoned re-performing residential first lien mortgage loans. We deposited $58 million with Freddie Mac towards the purchase price of these securities at the time we entered into this agreement. See Note 15 for further discussion of this agreement with Freddie Mac. Margin Receivable and Payable Margin receivable and payable resulted from margin calls between us and our counterparties under derivatives, master repurchase agreements, and warehouse facilities, whereby we or the counterparty posted collateral. FHLBC Stock In accordance with our FHLB-member subsidiary's borrowing agreement with the FHLBC, our subsidiary is required to purchase and hold stock in the FHLBC. See Note 3 and Note 14 for additional information on this borrowing agreement. Participation in Loan Warehouse Facility In the second quarter of 2018, we invested in a subordinated participation in a revolving mortgage loan warehouse credit facility of one of our loan sellers. While our interest is subordinated, it is secured by the loans collateralizing the facility and we have recourse to the loan seller. We account for this subordinated participation interest as a loan receivable at amortized cost, and all associated interest income is recorded as a component of Other interest income in our consolidated statements of income. We monitor the credit quality of the warehouse line of credit and utilize such information in our evaluation of the appropriateness of the allowance for credit losses. As of September 30, 2018 , we determined no allowance for credit losses was required for this receivable. Investment in 5 Arches On May 1, 2018, we acquired a 20% minority interest in 5 Arches for $10 million , which included a one -year option to purchase all remaining equity in the company for a combination of cash and stock totaling $40 million . 5 Arches is an originator and asset manager of business-purpose residential mortgage loans, including loans to investors in single-family rental properties, bridge loans for investors in multifamily properties, and fix-and-flip loans. In connection with this investment, we also entered into a loan flow purchase agreement, which gives us exclusive access to 5 Arches' single-family rental loan production for a one -year period. See Note 7 for discussion on our business purpose loan portfolio and the loans we have acquired from 5 Arches. We account for our ownership interest in 5 Arches using the equity method of accounting as we are able to exert significant influence over but do not control the activities of the investee. At September 30, 2018 , the carrying amount of our investment in 5 Arches was $7 million . We account for our purchase option as a cost method investment, which had a carrying value of $4 million at September 30, 2018 . We have elected to record our share of earnings or losses from 5 Arches on a one-quarter lag. During the three months ended September 30, 2018 , we recorded $0.2 million of gross income associated with this investment and, including amortization of certain intangible assets, recorded $0.1 million of net earnings in Other income, net on our consolidated statements of income. Guarantee Asset, Pledged Collateral, and Guarantee Obligations The pledged collateral, guarantee asset, and guarantee obligations presented in the tables above are related to our risk-sharing arrangements with Fannie Mae and Freddie Mac. In accordance with these arrangements, we are required to pledge collateral to secure our guarantee obligations. See Note 15 for additional information on our risk-sharing arrangements. Investment Receivable At September 30, 2018 , investment receivable primarily consisted of $35 million of trade receivables related to real estate securities sales. In accordance with our policy to record purchases and sales of securities on the trade date, if the trade and settlement of a purchase or sale crosses over a quarterly reporting period, we will record an investment receivable for sales and an unsettled trades liability for purchases. REO The carrying value of REO at September 30, 2018 was $3 million , which includes the net effect of $2 million related to transfers into REO during the nine months ended September 30, 2018 , offset by $3 million of REO liquidations, and $0.3 million of unrealized gains resulting from market valuation adjustments. At September 30, 2018 and December 31, 2017 , there were 10 and 14 REO properties, respectively, recorded on our consolidated balance sheets, all of which were owned at consolidated Legacy Sequoia entities. Legal and Repurchase Reserves See Note 15 for additional information on the legal and residential repurchase reserves.

Short-Term Debt

Short-Term Debt	9 Months Ended
	Sep. 30, 2018
Debt Disclosure [Abstract]
Short-Term Debt	Short-Term Debt We enter into repurchase agreements, bank warehouse agreements, and other forms of collateralized (and generally uncommitted) short-term borrowings with several banks and major investment banking firms. At September 30, 2018 , we had outstanding agreements with several counterparties and we were in compliance with all of the related covenants. For additional information about these financial covenants and our short-term debt, see Part I, Item 2 – Management’s Discussion and Analysis of Financial Condition and Results of Operations of this Quarterly Report on Form 10-Q and Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2017 . The table below summarizes our short-term debt, including the facilities that are available to us, the outstanding balances, the weighted average interest rate, and the maturity information at September 30, 2018 and December 31, 2017 . Table 12.1 – Short-Term Debt September 30, 2018 (Dollars in Thousands) Number of Facilities Outstanding Balance Limit Weighted Average Interest Rate Maturity Weighted Average Days Until Maturity Facilities Residential loan warehouse (1) 4 $ 578,157 $ 1,425,000 3.83 % 12/2018-8/2019 177 Real estate securities repo (1) 8 780,818 — 3.29 % 10/2018-12/2018 27 Single-family rental loan warehouse (2) 2 15,859 400,000 4.53 % 6/2020-6/2021 661 Fix-and-flip loan warehouse (2) 2 49,441 60,000 5.63 % 10/2019-11/2019 205 Total Short-Term Debt 16 $ 1,424,275 December 31, 2017 (Dollars in Thousands) Number of Facilities Outstanding Balance Limit Weighted Average Interest Rate Maturity Weighted Average Days Until Maturity Facilities Residential loan warehouse (1) 4 $ 1,039,666 $ 1,575,000 3.17 % 1/2018-12/2018 197 Real estate securities repo (1) 9 648,746 — 2.69 % 1/2018-3/2018 28 Total Short-Term Debt Facilities 13 1,688,412 Convertible notes, net N/A 250,270 — 4.63 % 4/2018 105 Total Short-Term Debt $ 1,938,682 (1) Borrowings under our facilities are generally charged interest based on a specified margin over the one-month LIBOR interest rate. At September 30, 2018 , all of these borrowings were under uncommitted facilities and were due within 364 days (or less) of the borrowing date. (2) Due to the revolving nature of the borrowings under these facilities, we have classified these facilities as short-term debt at September 30, 2018. Borrowings under these facilities will be repaid as the underlying loans mature or are sold to third parties or transferred to securitizations. The fair value of held-for-sale residential loans and real estate securities pledged as collateral under our short-term debt facilities was $622 million and $918 million , respectively, at September 30, 2018 and $1.15 billion and $788 million , respectively, at December 31, 2017 . At September 30, 2018 , the fair value of our real estate securities pledged as collateral included $129 million of securities retained from our consolidated Sequoia Choice securitizations and $11 million of securities we owned that were issued by consolidated Freddie Mac K-series securitizations. At September 30, 2018 , the fair value of single-family rental and fix-and-flip loans pledged as collateral under our warehouse facilities was $20 million and $92 million , respectively. For the three and nine months ended September 30, 2018 , the average balances of our short-term debt facilities were $1.56 billion and $1.47 billion , respectively. At September 30, 2018 and December 31, 2017 , accrued interest payable on our short-term debt facilities was $3 million and $2 million , respectively. During the second quarter of 2017, $288 million principal amount of 4.625% convertible senior notes and $2 million of unamortized deferred issuance costs were reclassified from long-term debt to short-term debt, as the maturity of the notes was less than one year as of April 2017. Additionally, during the second quarter of 2017, we repurchased $37 million par value of these notes at a premium and recorded a loss on extinguishment of debt of $1 million in Realized gains, net on our consolidated statements of income. In April 2018, we repaid these $250 million convertible notes and all related accrued interest in full. See Note 14 for additional information on our convertible notes. We also maintain a $10 million committed line of credit with a financial institution that is secured by certain mortgage-backed securities with a fair market value of $4 million at September 30, 2018 . At both September 30, 2018 and December 31, 2017 , we had no outstanding borrowings on this facility. Remaining Maturities of Short-Term Debt The following table presents the remaining maturities of our secured short-term debt by the type of collateral securing the debt at September 30, 2018 . Table 12.2 – Short-Term Debt by Collateral Type and Remaining Maturities September 30, 2018 (In Thousands) Within 30 days 31 to 90 days Over 90 days Total Collateral Type Held-for-sale residential loans $ — $ 141,712 $ 436,445 $ 578,157 Real estate securities 575,017 205,801 — 780,818 Single-family rental loans — — 15,859 15,859 Fix-and-flip loans 7,913 9,091 32,437 49,441 Total Short-Term Debt $ 582,930 $ 356,604 $ 484,741 $ 1,424,275

Asset-Backed Securities Issued

Asset-Backed Securities Issued	9 Months Ended
	Sep. 30, 2018
Debt Disclosure [Abstract]
Asset-Backed Securities Issued	Asset-Backed Securities Issued Through our Sequoia securitization program, we sponsor securitization transactions in which ABS backed by residential mortgage loans are issued by Sequoia entities. We consolidated the Legacy Sequoia and Sequoia Choice securitization entities, and beginning in the third quarter of 2018, certain third-party Freddie Mac K-Series securitization entities, that we determined were VIEs and for which we determined we were the primary beneficiary. Each consolidated securitization entity is independent of Redwood and of each other and the assets and liabilities are not owned by and are not legal obligations of Redwood. Our exposure to these entities is primarily through the financial interests we have retained, although we are exposed to certain financial risks associated with our role as a sponsor, servicing administrator, or depositor of these entities or as a result of our having sold assets directly or indirectly to these entities. We account for the ABS issued under our consolidated entities at fair value, with periodic changes in fair value recorded in Investment fair value changes, net on our consolidated statements of income. Pursuant to the CFE guidelines, the market valuation changes on our loans are based on the estimated fair value of the associated ABS issued. The net impact to our income statement associated with our retained economic investment in each of these securitization entities is presented in Note 5. The ABS issued by these entities consist of various classes of securities that pay interest on a monthly or quarterly basis. All ABS issued by the Sequoia Choice and Freddie Mac K-Series entities pay fixed rates of interest and substantially all ABS issued by the Legacy Sequoia entities pay variable rates of interest, which are indexed to one-, three-, or six-month LIBOR. ABS issued also includes some interest-only classes with coupons set at a fixed spread to a benchmark rate, or set at a spread to the interest rates earned on the assets less the interest rates paid on the liabilities of a securitization entity. The carrying values of ABS issued by Sequoia securitization entities we sponsored at September 30, 2018 and December 31, 2017 , along with other selected information, are summarized in the following table. Table 13.1 – Asset-Backed Securities Issued September 30, 2018 Legacy Sequoia Sequoia Freddie Mac K-Series Total (Dollars in Thousands) Certificates with principal balance $ 574,615 $ 1,952,059 $ 867,705 $ 3,394,379 Interest-only certificates 1,447 27,763 35,358 64,568 Market valuation adjustments (31,139 ) 6,634 (27,457 ) (51,962 ) ABS Issued, Net $ 544,923 $ 1,986,456 $ 875,606 $ 3,406,985 Range of weighted average interest rates, by series 2.33% to 3.43% 4.47% to 4.97% 3.39% to 3.80% Stated maturities 2024 - 2036 2047 - 2048 2025 - 2027 Number of series 20 6 2 December 31, 2017 Legacy Sequoia Sequoia Freddie Mac K-Series Total (Dollars in Thousands) Certificates with principal balance $ 691,125 $ 526,657 $ — $ 1,217,782 Interest-only certificates 1,972 7,695 — 9,667 Market valuation adjustments (70,652 ) 7,788 — (62,864 ) ABS Issued, Net $ 622,445 $ 542,140 $ — $ 1,164,585 Range of weighted average interest rates, by series 1.46% to 2.78% 4.52% to 4.73% — % Stated maturities 2024 - 2036 2047 — Number of series 20 2 — The actual maturity of each class of ABS issued is primarily determined by the rate of principal prepayments on the assets of the issuing entity. Each series is also subject to redemption prior to the stated maturity according to the terms of the respective governing documents of each ABS issuing entity. As a result, the actual maturity of ABS issued may occur earlier than its stated maturity. At September 30, 2018 , all of the ABS issued and outstanding had contractual maturities beyond five years . The following table summarizes the accrued interest payable on ABS issued at September 30, 2018 and December 31, 2017 . Interest due on consolidated ABS issued is payable monthly. Table 13.2 – Accrued Interest Payable on Asset-Backed Securities Issued (In Thousands) September 30, 2018 December 31, 2017 Legacy Sequoia $ 590 $ 537 Sequoia Choice 7,643 2,031 Freddie Mac K-Series 2,606 — Total Accrued Interest Payable on ABS Issued $ 10,839 $ 2,568 The following table summarizes the carrying value components of the collateral for ABS issued and outstanding at September 30, 2018 and December 31, 2017 . Table 13.3 – Collateral for Asset-Backed Securities Issued September 30, 2018 Legacy Sequoia Sequoia Choice Freddie Mac K-Series Total (In Thousands) Residential loans $ 553,958 $ 2,181,195 $ — $ 2,735,153 Multifamily loans — — 942,165 942,165 Restricted cash 147 11 — 158 Accrued interest receivable 860 9,046 2,843 12,749 REO 2,915 — — 2,915 Total Collateral for ABS Issued $ 557,880 $ 2,190,252 $ 945,008 $ 3,693,140 December 31, 2017 Legacy Sequoia Sequoia Freddie Mac K-Series Total (In Thousands) Residential loans $ 632,817 $ 620,062 $ — $ 1,252,879 Restricted cash 147 4 — 151 Accrued interest receivable 867 2,524 — 3,391 REO 3,353 — — 3,353 Total Collateral for ABS Issued $ 637,184 $ 622,590 $ — $ 1,259,774

Long-Term Debt

Long-Term Debt	9 Months Ended
	Sep. 30, 2018
Debt Disclosure [Abstract]
Long-Term Debt	Long-Term Debt FHLBC Borrowings In July 2014, our FHLB-member subsidiary entered into a borrowing agreement with the Federal Home Loan Bank of Chicago. At September 30, 2018 , under this agreement, our subsidiary could incur borrowings up to $2.00 billion , also referred to as “advances,” from the FHLBC secured by eligible collateral, including residential mortgage loans. During the three and nine months ended September 30, 2018 , our FHLB-member subsidiary made no additional borrowings under this agreement. Under a final rule published by the Federal Housing Finance Agency in January 2016, our FHLB-member subsidiary will remain an FHLB member through the five -year transition period for captive insurance companies. Our FHLB-member subsidiary's existing $2.00 billion of FHLB debt, which matures beyond this transition period, is permitted to remain outstanding until its stated maturity. As residential loans pledged as collateral for this debt pay down, we are permitted to pledge additional loans or other eligible assets to collateralize this debt; however, we do not expect to be able to increase our subsidiary's FHLB debt above the existing $2.00 billion maximum. At September 30, 2018 , $2.00 billion of advances were outstanding under this agreement, which were classified as long-term debt, with a weighted average interest rate of 2.24% and a weighted average maturity of approximately seven years. At December 31, 2017 , $2.00 billion of advances were outstanding under this agreement, which were classified as long-term debt, with a weighted average interest rate of 1.38% and a weighted average maturity of eight years. Advances under this agreement incur interest charges based on a specified margin over the FHLBC’s 13 -week discount note rate, which resets every 13 weeks. At September 30, 2018 , total advances under this agreement were secured by residential mortgage loans with a fair value of $2.27 billion and restricted cash of $25 million . This agreement also requires our subsidiary to purchase and hold stock in the FHLBC in an amount equal to a specified percentage of outstanding advances. At September 30, 2018 , our subsidiary held $43 million of FHLBC stock that is included in Other assets in our consolidated balance sheets. The following table presents maturities of our FHLBC borrowings by year at September 30, 2018 . Table 14.1 – Maturities of FHLBC Borrowings by Year (In Thousands) September 30, 2018 2024 $ 470,171 2025 887,639 2026 642,189 Total FHLBC Borrowings $ 1,999,999 For additional information about our FHLBC borrowings, see Part I, Item 2 of Quarterly Report on Form 10-Q under the heading “ Risks Relating to Debt Incurred under Short- and Long-Term Borrowing Facilities. ” Convertible Notes In June 2018, we issued $200 million principal amount of 5.625% convertible senior notes due 2024 at an issuance price of 99.5% . These convertible notes require semi-annual interest payments at a fixed coupon rate of 5.625% until maturity or conversion, which will be no later than July 15, 2024 . After deducting the issuance discount, the underwriting discount and offering costs, we received $194 million of net proceeds. Including amortization of deferred debt issuance costs and the debt discount, the weighted average interest expense yield on these convertible notes is approximately 6.2% per annum. These notes are convertible at the option of the holder at a conversion rate of 54.7645 common shares per $1,000 principal amount of convertible senior notes (equivalent to a conversion price of $18.26 per common share). Upon conversion of these notes by a holder, the holder will receive shares of our common stock. At September 30, 2018 , the outstanding principal amount of these notes was $200 million and the accrued interest payable on this debt was $3 million . At September 30, 2018 , the unamortized deferred issuance costs and debt discount were $5 million and $1 million , respectively. In August 2017, we issued $245 million principal amount of 4.75% convertible senior notes due 2023 . These convertible notes require semi-annual interest payments at a fixed coupon rate of 4.75% until maturity or conversion, which will be no later than August 15, 2023 . After deducting the underwriting discount and offering costs, we received $238 million of net proceeds. Including amortization of deferred debt issuance costs, the weighted average interest expense yield on these convertible notes is approximately 5.3% per annum. At September 30, 2018 , these notes were convertible at the option of the holder at a conversion rate of 53.9060 common shares per $1,000 principal amount of convertible senior notes (equivalent to a conversion price of $18.55 per common share). Upon conversion of these notes by a holder, the holder will receive shares of our common stock. At September 30, 2018 , the outstanding principal amount of these notes was $245 million . At September 30, 2018 , the accrued interest payable balance on this debt was $1 million and the unamortized deferred issuance costs were $6 million . In November 2014, RWT Holdings, Inc., a wholly-owned subsidiary of Redwood Trust, Inc., issued $205 million principal amount of 5.625% exchangeable senior notes due 2019 . These exchangeable notes require semi-annual interest payments at a fixed coupon rate of 5.625% until maturity or exchange, which will be no later than November 15, 2019 . After deducting the underwriting discount and offering costs, we received $198 million of net proceeds. Including amortization of deferred debt issuance costs, the weighted average interest expense yield on these exchangeable notes is approximately 6.3% per annum. At September 30, 2018 , these notes were convertible at the option of the holder at a conversion rate of 46.2370 common shares per $1,000 principal amount of convertible senior notes (equivalent to a conversion price of $21.63 per common share). Upon exchange of these notes by a holder, the holder will receive shares of our common stock. During 2016, we repurchased $4 million par value of these notes at a discount and recorded a gain on extinguishment of debt of $0.3 million in Realized gains, net on our consolidated statements of income. At September 30, 2018 , the outstanding principal amount of these notes was $201 million . At September 30, 2018 , the accrued interest payable balance on this debt was $4 million and the unamortized deferred issuance costs were $1 million . In March 2013, we issued $288 million principal amount of 4.625% convertible senior notes due in April 2018 . These convertible notes required semi-annual interest payments at a fixed coupon rate of 4.625% until the debt matured on April 15, 2018 . After deducting the underwriting discount and offering costs, we received $279 million of net proceeds. Including amortization of deferred debt issuance costs, the weighted average interest expense yield on these convertible notes was approximately 4.8% per annum. Until maturity, these notes were convertible at the option of the holder at a conversion rate of 41.1320 common shares per $1,000 principal amount of convertible senior notes (equivalent to a conversion price of $24.31 per common share). During 2017, $288 million principal amount of these convertible notes and $2 million of unamortized deferred issuance costs were reclassified from long-term debt to short-term debt, as the maturity of the notes was less than one year as of April 2017. Additionally, during 2017, we repurchased $37 million par value of these notes at a premium and recorded a loss on extinguishment of debt of $1 million in Realized gains, net on our consolidated statements of income. In April 2018, we repaid these $250 million convertible notes and all related accrued interest in full. Trust Preferred Securities and Subordinated Notes At September 30, 2018 , we had trust preferred securities and subordinated notes outstanding of $100 million and $40 million , respectively. This debt requires quarterly interest payments at a floating rate equal to three-month LIBOR plus 2.25% until the notes are redeemed. The $100 million trust preferred securities will be redeemed no later than January 30, 2037, and the $40 million subordinated notes will be redeemed no later than July 30, 2037. Prior to 2014, we entered into interest rate swaps with aggregate notional values totaling $140 million to hedge the variability in this long-term debt interest expense. Including hedging costs and amortization of deferred debt issuance costs, the weighted average interest expense yield on our trust preferred securities and subordinated notes is approximately 6.9% per annum. At both September 30, 2018 and December 31, 2017 , the accrued interest payable balance on our trust preferred securities and subordinated notes was $1 million . Under the terms of this debt, we covenant, among other things, to use our best efforts to continue to qualify as a REIT. If an event of default were to occur in respect of this debt, we would generally be restricted under its terms (subject to certain exceptions) from making dividend distributions to stockholders, from repurchasing common stock or repurchasing or redeeming any other then-outstanding equity securities, and from making any other payments in respect of any equity interests in us or in respect of any then-outstanding debt that is pari passu or subordinate to this debt.

Commitments and Contingencies

Commitments and Contingencies	9 Months Ended
	Sep. 30, 2018
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	Commitments and Contingencies Lease Commitments At September 30, 2018 , we were obligated under four non-cancelable operating leases with expiration dates through 2028 for $16 million of cumulative lease payments. Our operating lease expense was $2 million for both nine -month periods ended September 30, 2018 and 2017. The following table presents our future lease commitments at September 30, 2018 . Table 15.1 – Future Lease Commitments by Year (In Thousands) September 30, 2018 2018 (3 months) $ 491 2019 2,002 2020 1,966 2021 1,474 2022 and thereafter 10,217 Total Lease Commitments $ 16,150 Commitments to Fund Equity Investments At September 30, 2018 , we had committed to fund $50 million to a limited partnership created to finance clean energy projects. This partnership was dissolved in October 2018, and our funding obligation was terminated. Commitment to Participate in Loan Warehouse Facility In the second quarter of 2018, we invested in a participation in the mortgage loan warehouse credit facility of one of our loan sellers. This investment includes a commitment to participate in (and an obligation to fund) a designated amount of the loan seller's borrowings under this warehouse credit facility. This obligation is subject to daily funding requests by the financial institution, and fundings are recorded on our balance sheet as a Participation in loan warehouse facility. At September 30, 2018 , $39 million of our commitment had been funded, and, assuming future borrowings under this facility are collateralized by mortgage loans with characteristics consistent with those collateralizing the facility at September 30, 2018, we were committed to fund up to an additional $14 million . See Note 11 for additional detail on our participation in a loan warehouse facility. Commitment to Purchase Residential Mortgage-Backed Securities from Freddie Mac In the third quarter of 2018, we entered into an agreement with Freddie Mac to purchase mortgage-backed securities to be issued in a securitization transaction sponsored by Freddie Mac. Pursuant to the terms of this agreement, we plan to acquire subordinate securities backed by a pool of seasoned re-performing residential first lien mortgage loans. We deposited $58 million with Freddie Mac towards the purchase price of these securities and expect to fund the remainder of the purchase price of these securities, approximately $180 million , upon the closing of this transaction in the fourth quarter of 2018, which we expect will be partially financed by a third-party financial institution under a securities repurchase facility. Loss Contingencies — Risk-Sharing During 2015 and 2016, we sold conforming loans to the Agencies with an original unpaid principal balance of $3.19 billion , subject to our risk-sharing arrangements with the Agencies. At September 30, 2018 , the maximum potential amount of future payments we could be required to make under these arrangements was $44 million and this amount was fully collateralized by assets we transferred to pledged accounts and is presented as pledged collateral in Other assets on our consolidated balance sheets. We have no recourse to any third parties that would allow us to recover any amounts related to our obligations under the arrangements. At September 30, 2018 , we had not incurred any losses under these arrangements. For the three and nine months ended September 30, 2018 , other income related to these arrangements was $1 million and $3 million , respectively, and net market valuation losses related to these investments were $0.1 million and $0.5 million , respectively. For the three and nine months ended September 30, 2017 , other income related to these arrangements was $1 million and $2 million , respectively, and net market valuation losses related to these investments were $0.3 million and $1 million , respectively. All of the loans in the reference pools subject to these risk-sharing arrangements were originated in 2014 and 2015, and at September 30, 2018 , the loans had an unpaid principal balance of $1.89 billion and a weighted average FICO score of 759 (at origination) and LTV ratio of 76% (at origination). At September 30, 2018 , $4 million of the loans were 90 days or more delinquent, of which $1 million were in foreclosure. At September 30, 2018 , the carrying value of our guarantee obligation was $17 million and included $6 million designated as a non-amortizing credit reserve, which we believe is sufficient to cover current expected losses under these obligations. Our consolidated balance sheets include assets of special purpose entities ("SPEs") associated with these risk-sharing arrangements (i.e., the "pledged collateral" referred to above) that can only be used to settle obligations of these SPEs for which the creditors of these SPEs (the Agencies) do not have recourse to Redwood Trust, Inc. or its affiliates. At September 30, 2018 and December 31, 2017 , assets of such SPEs totaled $47 million and $48 million , respectively, and liabilities of such SPEs totaled $17 million and $19 million , respectively. Loss Contingencies — Residential Repurchase Reserve We maintain a repurchase reserve for potential obligations arising from representation and warranty violations related to residential loans we have sold to securitization trusts or third parties and for conforming residential loans associated with MSRs that we have purchased from third parties. We do not originate residential loans and we believe the initial risk of loss due to loan repurchases (i.e., due to a breach of representations and warranties) would generally be a contingency to the companies from whom we acquired the loans. However, in some cases, for example, where loans were acquired from companies that have since become insolvent, repurchase claims may result in our being liable for a repurchase obligation. At both September 30, 2018 and December 31, 2017 , our repurchase reserve associated with our residential loans and MSRs was $5 million and was recorded in Accrued expenses and other liabilities on our consolidated balance sheets. We received eight repurchase requests during the nine months ended September 30, 2018 , and did no t repurchase any loans during this period. During the nine months ended September 30, 2018 and 2017, we recorded reversals of repurchase provision of $0.2 million and $0.5 million , respectively, that were recorded in Mortgage banking activities, net and Other income, net on our consolidated statements of income. Loss Contingencies — Litigation On or about December 23, 2009, the Federal Home Loan Bank of Seattle (the “FHLB-Seattle”) filed a complaint in the Superior Court for the State of Washington (case number 09-2-46348-4 SEA) against Redwood Trust, Inc., our subsidiary, Sequoia Residential Funding, Inc. (“SRF”), Morgan Stanley & Co., and Morgan Stanley Capital I, Inc. (collectively, the “FHLB-Seattle Defendants”), which alleged that the FHLB-Seattle Defendants made false or misleading statements in offering materials for a mortgage pass-through certificate (the “Seattle Certificate”) issued in the Sequoia Mortgage Trust 2005-4 securitization transaction (the “2005-4 RMBS”) and purchased by the FHLB-Seattle. Specifically, the complaint alleged that the alleged misstatements concerned the (1) loan-to-value ratio of mortgage loans and the appraisals of the properties that secured loans supporting the 2005-4 RMBS, (2) occupancy status of the properties, (3) standards used to underwrite the loans, and (4) ratings assigned to the Seattle Certificate. The FHLB-Seattle alleged claims under the Securities Act of Washington (Section 21.20.005, et seq.) and sought to rescind the purchase of the Seattle Certificate and to collect interest on the original purchase price at the statutory interest rate of 8% per annum from the date of original purchase (net of interest received) as well as attorneys’ fees and costs. The Seattle Certificate was issued with an original principal amount of approximately $133 million , and, at September 30, 2018 , approximately $126 million of principal and $12 million of interest payments had been made in respect of the Seattle Certificate. The matter was subsequently resolved and the claims were dismissed by the FHLB Seattle as to all the FHLB Seattle Defendants. At the time the Seattle Certificate was issued, Redwood agreed to indemnify the underwriters of the 2005-4 RMBS, which underwriters were named as defendants in the action, for certain losses and expenses they might incur as a result of claims made against them relating to this RMBS, including, without limitation, certain legal expenses. Regardless of the resolution of this litigation, we could incur a loss as a result of these indemnities. On or about July 15, 2010, The Charles Schwab Corporation (“Schwab”) filed a complaint in the Superior Court for the State of California in San Francisco (case number CGC-10-501610) against SRF and 26 other defendants (collectively, the “Schwab Defendants”), which alleged that the Schwab Defendants made false or misleading statements in offering materials for various residential mortgage-backed securities sold or issued by the Schwab Defendants. Schwab alleged only a claim for negligent misrepresentation under California state law against SRF and sought unspecified damages and attorneys’ fees and costs from SRF. Schwab claimed that SRF made false or misleading statements in offering materials for a mortgage pass-through certificate (the “Schwab Certificate”) issued in the 2005-4 RMBS and purchased by Schwab. Specifically, the complaint alleged that the misstatements for the 2005-4 RMBS concerned the (1) loan-to-value ratio of mortgage loans and the appraisals of the properties that secured loans supporting the 2005-4 RMBS, (2) occupancy status of the properties, (3) standards used to underwrite the loans, and (4) ratings assigned to the Schwab Certificate. The Schwab Certificate was issued with an original principal amount of approximately $15 million , and, at September 30, 2018 , approximately $14 million of principal and $1 million of interest payments had been made in respect of the Schwab Certificate. On November 14, 2014, Schwab voluntarily dismissed with prejudice its negligent misrepresentation claim, which resulted in the dismissal with prejudice of SRF from the action. Subsequently, the matter was resolved and Schwab dismissed its claims against the lead underwriter of the 2005-4 RMBS. At the time the Schwab Certificate was issued, Redwood agreed to indemnify the underwriters of the 2005-4 RMBS, which underwriters were also named as defendants in the action, for certain losses and expenses they might incur as a result of claims made against them relating to this RMBS, including, without limitation, certain legal expenses. Regardless of the resolution of this litigation, Redwood could incur a loss as a result of these indemnities. Through certain of our wholly-owned subsidiaries, we have in the past engaged in, and expect to continue to engage in, activities relating to the acquisition and securitization of residential mortgage loans. In addition, certain of our wholly-owned subsidiaries have in the past engaged in activities relating to the acquisition and securitization of debt obligations and other assets through the issuance of collateralized debt obligations (commonly referred to as CDO transactions). Because of this involvement in the securitization and CDO businesses, we could become the subject of litigation relating to these businesses, including additional litigation of the type described above, and we could also become the subject of governmental investigations, enforcement actions, or lawsuits, and governmental authorities could allege that we violated applicable law or regulation in the conduct of our business. As an example, in July 2016 we became aware of a complaint filed by the State of California on April 1, 2016 against Morgan Stanley & Co. and certain of its affiliates alleging, among other things, that there were misleading statements contained in offering materials for 28 different mortgage pass-through certificates purchased by various California investors, including various California public pension systems, from Morgan Stanley and alleging that Morgan Stanley made false or fraudulent claims in connection with the sale of those certificates. Of the 28 mortgage pass-through certificates that were the subject of the complaint, two were Sequoia mortgage pass-through certificates issued in 2004 and two were Sequoia mortgage pass-through certificates issued in 2007. With respect to each of those certificates, our wholly-owned subsidiary, RWT Holdings, Inc., was the sponsor and our wholly-owned subsidiary, Sequoia Residential Funding, Inc., was the depositor. The plaintiffs subsequently withdrew from the litigation their claims based on eight of the 28 mortgage pass-through certificates, including one of the Sequoia mortgage pass-through certificates issued in 2004. At the time these Sequoia mortgage pass-through certificates were issued, Sequoia Residential Funding, Inc. and Redwood Trust agreed to indemnify the underwriters of these certificates for certain losses and expenses they might incur as a result of claims made against them relating to these certificates, including, without limitation, certain legal expenses. Regardless of the outcome of this litigation, we could incur a loss as a result of these indemnities. In accordance with GAAP, we review the need for any loss contingency reserves and establish reserves when, in the opinion of management, it is probable that a matter would result in a liability and the amount of loss, if any, can be reasonably estimated. Additionally, we record receivables for insurance recoveries relating to litigation-related losses and expenses if and when such amounts are covered by insurance and recovery of such losses or expenses are due. At September 30, 2018 , the aggregate amount of loss contingency reserves established in respect of the FHLB-Seattle and Schwab litigation matters described above was $2 million . We review our litigation matters each quarter to assess these loss contingency reserves and make adjustments in these reserves, upwards or downwards, as appropriate, in accordance with GAAP based on our review. In the ordinary course of any litigation matter, including certain of the above-referenced matters, we have engaged and may continue to engage in formal or informal settlement communications with the plaintiffs or co-defendants. Settlement communications we have engaged in relating to certain of the above-referenced litigation matters are one of the factors that have resulted in our determination to establish the loss contingency reserves described above. We cannot be certain that any of these matters will be resolved through a settlement prior to trial and we cannot be certain that the resolution of these matters, whether through trial or settlement, will not have a material adverse effect on our financial condition or results of operations in any future period. Future developments (including resolution of substantive pre-trial motions relating to these matters, receipt of additional information and documents relating to these matters (such as through pre-trial discovery), new or additional settlement communications with plaintiffs relating to these matters, or resolutions of similar claims against other defendants in these matters) could result in our concluding in the future to establish additional loss contingency reserves or to disclose an estimate of reasonably possible losses in excess of our established reserves with respect to these matters. Our actual losses with respect to the above-referenced litigation matters may be materially higher than the aggregate amount of loss contingency reserves we have established in respect of these litigation matters, including in the event that any of these matters proceeds to trial and the plaintiff prevails. Other factors that could result in our concluding to establish additional loss contingency reserves or estimate additional reasonably possible losses, or could result in our actual losses with respect to the above-referenced litigation matters being materially higher than the aggregate amount of loss contingency reserves we have established in respect of these litigation matters include that: there are significant factual and legal issues to be resolved; information obtained or rulings made during the lawsuits could affect the methodology for calculation of the available remedies; and we may have additional obligations pursuant to indemnity agreements, representations and warranties, and other contractual provisions with other parties relating to these litigation matters that could increase our potential losses.

Equity

Equity	9 Months Ended
	Sep. 30, 2018
Equity [Abstract]
Equity	Equity The following table provides a summary of changes to accumulated other comprehensive income by component for the three and nine months ended September 30, 2018 and 2017 . Table 16.1 – Changes in Accumulated Other Comprehensive Income by Component Three Months Ended September 30, 2018 Three Months Ended September 30, 2017 (In Thousands) Net Unrealized Gains on Available-for-Sale Securities Net Unrealized Losses on Interest Rate Agreements Accounted for as Cash Flow Hedges Net Unrealized Gains on Available-for-Sale Securities Net Unrealized Losses on Interest Rate Agreements Accounted for as Cash Flow Hedges Balance at beginning of period $ 106,725 $ (31,105 ) $ 114,364 $ (44,688 ) Other comprehensive (loss) income before reclassifications (1) (2,408 ) 4,801 13,158 321 Amounts reclassified from other accumulated comprehensive income (2) (5,686 ) — (853 ) 14 Net current-period other comprehensive (loss) income (8,094 ) 4,801 12,305 335 Balance at End of Period $ 98,631 $ (26,304 ) $ 126,669 $ (44,353 ) Nine Months Ended September 30, 2018 Nine Months Ended September 30, 2017 (In Thousands) Net Unrealized Gains on Available-for-Sale Securities Net Unrealized Losses on Interest Rate Agreements Accounted for as Cash Flow Hedges Net Unrealized Gains on Available-for-Sale Securities Net Unrealized Losses on Interest Rate Agreements Accounted for as Cash Flow Hedges Balance at beginning of period $ 128,201 $ (42,953 ) $ 115,873 $ (44,020 ) Other comprehensive income (loss) (1) (9,749 ) 16,649 17,899 (375 ) Amounts reclassified from other (2) (19,821 ) — (7,103 ) 42 Net current-period other comprehensive income (loss) (29,570 ) 16,649 10,796 (333 ) Balance at End of Period $ 98,631 $ (26,304 ) $ 126,669 $ (44,353 ) (1) Amounts presented for net unrealized gains on available-for-sale securities are net of tax benefit (provision) of zero and $0.1 million for the three and nine months ended September 30, 2018 , respectively, and zero and $(0.1) million for the three and nine months ended September 30, 2017 , respectively. (2) Amounts are presented net of tax provision of $2 million for both the three and nine months ended September 30, 2018 . The following table provides a summary of reclassifications out of accumulated other comprehensive income for the three and nine months ended September 30, 2018 and 2017 . Table 16.2 – Reclassifications Out of Accumulated Other Comprehensive Income Amount Reclassified From Accumulated Other Comprehensive Income Affected Line Item in the Three Months Ended September 30, (In Thousands) Income Statement 2018 2017 Net Realized (Gain) Loss on AFS Securities Other than temporary impairment (1) Investment fair value changes, net $ 33 $ 3 Gain on sale of AFS securities Realized gains, net (7,247 ) (856 ) Gain on sale of AFS securities Provision for income taxes 1,528 — $ (5,686 ) $ (853 ) Net Realized Loss on Interest Rate Amortization of deferred loss Interest expense $ — $ 14 $ — $ 14 Amount Reclassified From Accumulated Other Comprehensive Income Affected Line Item in the Nine Months Ended September 30, (In Thousands) Income Statement 2018 2017 Net Realized (Gain) Loss on AFS Securities Other than temporary impairment (1) Investment fair value changes, net $ 89 $ 248 Gain on sale of AFS securities Realized gains, net (21,438 ) (7,351 ) Gain on sale of AFS securities Provision for income taxes 1,528 — $ (19,821 ) $ (7,103 ) Net Realized Loss on Interest Rate Amortization of deferred loss Interest expense $ — $ 42 $ — $ 42 (1) For the three months ended September 30, 2018 , other-than-temporary impairments were $0.4 million , of which less than $0.1 million were recognized through our consolidated statements of income and $0.3 million were recognized in Accumulated other comprehensive income, a component of our consolidated balance sheet. For the nine months ended September 30, 2018 , other-than-temporary impairments were $0.6 million , of which $0.1 million were recognized through our consolidated statements of income and $0.5 million were recognized in Accumulated other comprehensive income, a component of our consolidated balance sheet. For the nine months ended September 30, 2017, other-than-temporary impairments were $0.6 million , of which $0.2 million were recognized through our consolidated statements of income and $0.4 million were recognized in Accumulated other comprehensive income, a component of our consolidated balance sheet. Issuance of Common Stock During the three and nine months ended September 30, 2018, we issued 7,187,500 shares of common stock in an underwritten public offering for net proceeds of $117 million . Earnings per Common Share The following table provides the basic and diluted earnings per common share computations for the three and nine months ended September 30, 2018 and 2017 . Table 16.3 – Basic and Diluted Earnings per Common Share Three Months Ended September 30, Nine Months Ended September 30, (In Thousands, except Share Data) 2018 2017 2018 2017 Basic Earnings per Common Share: Net income attributable to Redwood $ 40,921 $ 36,180 $ 120,513 $ 109,473 Less: Dividends and undistributed earnings allocated to participating securities (1,231 ) (948 ) (3,766 ) (2,800 ) Net income allocated to common shareholders $ 39,690 $ 35,232 $ 116,747 $ 106,673 Basic weighted average common shares outstanding 80,796,856 76,850,830 77,211,188 76,803,324 Basic Earnings per Common Share $ 0.49 $ 0.46 $ 1.51 $ 1.39 Diluted Earnings per Common Share: Net income attributable to Redwood $ 40,921 $ 36,180 $ 120,513 $ 109,473 Less: Dividends and undistributed earnings allocated to participating securities (1,284 ) (986 ) (3,867 ) (2,926 ) Add back: Interest expense on convertible notes for the period, net of tax 8,666 6,564 23,642 18,639 Net income allocated to common shareholders $ 48,303 $ 41,758 $ 140,288 $ 125,186 Weighted average common shares outstanding 80,796,856 76,850,830 77,211,188 76,803,324 Net effect of dilutive equity awards 443,191 298,955 251,935 215,141 Net effect of assumed convertible notes conversion to common shares 33,442,641 25,553,323 30,328,906 22,379,401 Diluted weighted average common shares outstanding 114,682,688 102,703,108 107,792,029 99,397,866 Diluted Earnings per Common Share $ 0.42 $ 0.41 $ 1.30 $ 1.26 We included participating securities, which are certain equity awards that have non-forfeitable dividend participation rights, in the calculations of basic and diluted earnings per common share as we determined that the two-class method was more dilutive than the alternative treasury stock method for these shares. Dividends and undistributed earnings allocated to participating securities under the basic and diluted earnings per share calculations require specific shares to be included that may differ in certain circumstances. During the three and nine months ended September 30, 2018 and 2017 , certain of our convertible notes were determined to be dilutive and were included in the calculation of diluted EPS under the "if-converted" method. Under this method, the periodic interest expense (net of applicable taxes) for dilutive notes is added back to the numerator and the weighted average number of shares that the notes are entitled to (if converted, regardless of whether they are in or out of the money) are included in the denominator. For the three and nine months ended September 30, 2018 , the number of outstanding equity awards that were antidilutive totaled 7,761 and 7,230 , respectively. For the three and nine months ended September 30, 2017, the number of outstanding equity awards that were antidilutive totaled 6,149 and 5,843 , respectively. Stock Repurchases In February 2016, our Board of Directors approved an authorization for the repurchase of up to $100 million of our common stock and also authorized the repurchase of outstanding debt securities, including convertible and exchangeable debt. This authorization replaced all previous share repurchase plans and has no expiration date. During the year ended December 31, 2017, we repurchased 610,342 shares of common stock pursuant to this authorization for $9 million . At December 31, 2017, approximately $77 million of this current authorization remained available for the repurchase of shares of our common stock. During January 2018, we repurchased 1,040,829 shares of our common stock pursuant to this authorization for $16 million . In February 2018, our Board of Directors approved an authorization for the repurchase of an additional $39 million of our common stock, increasing the total amount authorized for repurchases of common stock to $100 million , and also authorized the repurchase of outstanding debt securities, including convertible and exchangeable debt. As noted above, this authorization increased the previous share repurchase authorization approved in February 2016 and has no expiration date. This repurchase authorization does not obligate us to acquire any specific number of shares or securities. Under this authorization, shares or securities may be repurchased in privately negotiated and/or open market transactions, including under plans complying with Rule 10b5-1 under the Securities Exchange Act of 1934, as amended. At September 30, 2018 , $100 million of the current authorization remained available for the repurchase of shares of our common stock.

Equity Compensation Plans

Equity Compensation Plans	9 Months Ended
	Sep. 30, 2018
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Equity Compensation Plans	Equity Compensation Plans At September 30, 2018 and December 31, 2017 , 4,875,504 and 1,356,438 shares of common stock, respectively, were available for grant under our Incentive Plan. During the three months ended June 30, 2018, Redwood shareholders approved for grant an additional 4,000,000 shares of common stock under our Incentive Plan. The unamortized compensation cost of awards issued under the Incentive Plan and purchases under the Employee Stock Purchase Plan totaled $19 million at September 30, 2018 , as shown in the following table. Table 17.1 – Activities of Equity Compensation Costs by Award Type Nine Months Ended September 30, 2018 (In Thousands) Restricted Stock Deferred Stock Units Performance Stock Units Employee Stock Purchase Plan Total Unrecognized compensation cost at beginning of period $ 2,808 $ 13,364 $ 5,298 $ — $ 21,470 Equity grants 2,391 4,750 350 136 7,627 Equity grant forfeitures (112 ) — — — (112 ) Equity compensation expense (1,245 ) (6,264 ) (1,954 ) (102 ) (9,565 ) Unrecognized Compensation Cost at End of Period $ 3,842 $ 11,850 $ 3,694 $ 34 $ 19,420 At September 30, 2018 , the weighted average amortization period remaining for all of our equity awards was less than two years. Restricted Stock At September 30, 2018 and December 31, 2017 , there were 329,042 and 257,507 shares, respectively, of restricted stock outstanding. Restrictions on these shares lapse through 2022 . During the nine months ended September 30, 2018 , there were 162,330 shares of restricted stock granted, restrictions on 83,325 shares of restricted stock lapsed and those shares were distributed, and 7,470 shares of restricted stock awards were forfeited. Deferred Stock Units (“DSUs”) At September 30, 2018 and December 31, 2017 , there were 2,241,887 and 1,878,491 DSUs, respectively, outstanding of which 1,269,946 and 889,835 , respectively, had vested. During the nine months ended September 30, 2018 , there were 395,917 DSUs granted, 32,521 DSUs distributed, and no DSUs forfeited. Unvested DSUs at September 30, 2018 vest through 2022 . Performance Stock Units (“PSUs”) At September 30, 2018 and December 31, 2017 , the target number of PSUs that were unvested was 727,295 and 704,270 , respectively. Vesting for these PSUs will generally occur at the end of three years from their grant date, with the level of vesting at that time contingent on total shareholder return ("TSR"). TSR for these PSUs is defined as the percentage by which our common stock "per share price" has increased or decreased as of the last day of the three -year vesting period relative to the first day of such vesting period, adjusted to reflect the reinvestment of all dividends declared and/or paid on our common stock (" Three -Year TSR"). The number of underlying shares of our common stock that will vest in future years will vary between 0% (if Three -Year TSR is zero or negative) and 200% (if Three -Year TSR is greater than or equal to 125% ) of the target number of PSUs originally granted, adjusted upward (if vesting is greater than 0% ) to reflect the value of dividends paid during the three -year vesting period. During the three months ended June 30, 2018, 23,025 target number of PSUs with a per unit grant date fair value of $15.20 were granted to two executives in connection with their promotions. The grant date fair values of these PSUs were determined through Monte-Carlo simulations using the following assumptions: our common stock closing price at the grant date, the average closing price of our common stock price for the 60 trading days prior to the grant date and the range of performance-based vesting based on TSR over three years from the grant date. For this PSU grant, an implied volatility assumption of 27% (based on historical volatility), a risk-free rate of 2.71% (the three -year Treasury rate on the grant date), and a 0% dividend yield (the mathematical equivalent to reinvesting the dividends over the three -year performance period as is consistent with the terms of the PSUs) were used. Vesting for all PSUs will generally occur at the end of three years from their grant date based on various TSR performance calculations, as discussed in our Annual Report on Form 10-K for the year ended December 31, 2017 . Employee Stock Purchase Plan ("ESPP") The ESPP allows a maximum of 450,000 shares of common stock to be purchased in aggregate for all employees. As of September 30, 2018 and December 31, 2017 , 382,696 and 361,006 shares had been purchased, respectively, and there remained a negligible amount of uninvested employee contributions in the ESPP at September 30, 2018 .

Mortgage Banking Activities, Ne

Mortgage Banking Activities, Net	9 Months Ended
	Sep. 30, 2018
Mortgage Banking [Abstract]
Mortgage Banking Activities, Net	Mortgage Banking Activities, Net The following table presents the components of Mortgage banking activities, net, recorded in our consolidated statements of income for the three and nine months ended September 30, 2018 and 2017 . Table 18.1 – Mortgage Banking Activities Three Months Ended September 30, Nine Months Ended September 30, (In Thousands) 2018 2017 2018 2017 Mortgage Banking Activities, Net Changes in fair value of: Residential loans, at fair value (1) $ 7,236 $ 28,135 $ 8,406 $ 63,122 Single-family rental loans, at fair value (1) (121 ) — (121 ) — Risk management derivatives (2) 3,796 (7,077 ) 38,378 (13,787 ) Other income, net (3) 313 142 1,733 1,515 Mortgage Banking Activities, Net $ 11,224 $ 21,200 $ 48,396 $ 50,850 (1) Includes changes in fair value for associated loan purchase and forward sale commitments. (2) Represents market valuation changes of derivatives that were used to manage risks associated with our accumulation of residential loans. (3) Amounts in this line item include other fee income from loan acquisitions and the provision for repurchases expense, presented net.

Investment Fair Value Changes,

Investment Fair Value Changes, Net	9 Months Ended
	Sep. 30, 2018
Investments, Debt and Equity Securities [Abstract]
Investment Fair Value Changes, Net	Investment Fair Value Changes, Net The following table presents the components of Investment fair value changes, net, recorded in our consolidated statements of income for the three and nine months ended September 30, 2018 and 2017 . Table 19.1 – Investment Fair Value Changes Three Months Ended September 30, Nine Months Ended September 30, (In Thousands) 2018 2017 2018 2017 Investment Fair Value Changes, Net Changes in fair value of: Residential loans held-for-investment, at Redwood $ (17,063 ) $ 2,881 $ (71,058 ) $ 8,902 Fix-and-flip loans held-for-investment 53 — 53 — Trading securities 6,314 607 2,429 30,676 Net investments in Legacy Sequoia entities (1) (248 ) (1,045 ) (976 ) (3,842 ) Net investments in Sequoia Choice entities (1) (943 ) (256 ) 43 (256 ) Net investments in Freddie Mac K-Series entities (1) 511 — 511 — Risk-sharing investments (126 ) (267 ) (474 ) (985 ) Risk management derivatives, net 21,867 (1,592 ) 82,391 (24,557 ) Valuation adjustments on commercial loans held-for-sale — — — 300 Impairments on AFS securities (33 ) (4 ) (89 ) (248 ) Investment Fair Value Changes, Net $ 10,332 $ 324 $ 12,830 $ 9,990 (1) Includes changes in fair value of the residential loans held-for-investment, REO and the ABS issued at the entities, which netted together represent the change in value of our retained investments at the consolidated VIEs.

Operating Expenses

Operating Expenses	9 Months Ended
	Sep. 30, 2018
Other Income and Expenses [Abstract]
Operating Expenses	Operating Expenses Components of our operating expenses for the three and nine months ended September 30, 2018 and 2017 are presented in the following table. Table 20.1 – Components of Operating Expenses Three Months Ended September 30, Nine Months Ended September 30, (In Thousands) 2018 2017 2018 2017 Fixed compensation expense $ 5,922 $ 5,233 $ 18,136 $ 16,556 Variable compensation expense 4,923 6,467 13,655 14,713 Equity compensation expense 3,033 2,337 9,565 7,634 Total compensation expense 13,878 14,037 41,356 38,903 Systems and consulting 1,794 1,856 5,434 5,183 Loan acquisition costs (1) 1,887 1,187 5,860 3,397 Office costs 1,173 988 3,397 3,231 Accounting and legal 1,170 519 3,078 2,322 Corporate costs 462 415 1,462 1,363 Other operating expenses 1,126 920 2,942 2,390 Total Operating Expenses $ 21,490 $ 19,922 $ 63,529 $ 56,789 (1) Loan acquisition costs primarily includes underwriting and due diligence costs related to the acquisition of residential loans held-for-sale at fair value.

Taxes

Taxes	9 Months Ended
	Sep. 30, 2018
Income Tax Disclosure [Abstract]
Taxes	Taxes For the nine months ended September 30, 2018 and 2017 , we recognized a provision for income taxes of $12 million and $17 million , respectively. The following is a reconciliation of the statutory federal and state tax rates to our effective tax rate at September 30, 2018 and 2017 . Table 21.1 – Reconciliation of Statutory Tax Rate to Effective Tax Rate September 30, 2018 September 30, 2017 Federal statutory rate 21.0 % 34.0 % State statutory rate, net of Federal tax effect 8.6 % 7.2 % Differences in taxable (loss) income from GAAP income (1.8 )% (6.8 )% Change in valuation allowance (3.2 )% (2.8 )% Dividends paid deduction (15.3 )% (18.3 )% Effective Tax Rate 9.3 % 13.3 % The reduction of the federal statutory rate from 34% to 21% is due to the enactment of the Tax Act. We assessed our tax positions for all open tax years (i.e., Federal, 2015 to 2018, and State, 2014 to 2018) at September 30, 2018 and December 31, 2017 , and concluded that we had no uncertain tax positions that resulted in material unrecognized tax benefits.

Segment Information

Segment Information	9 Months Ended
	Sep. 30, 2018
Segment Reporting [Abstract]
Segment Information	Segment Information Redwood operates in two segments: Investment Portfolio and Mortgage Banking. Our segments are based on our organizational and management structure, which aligns with how our results are monitored and performance is assessed. For a full description of our segments, see Item 1—Business in our Annual Report on Form 10-K for the year ended December 31, 2017 . Additionally, beginning in the third quarter of 2018, our Investment Portfolio segment includes fix-and-flip loans held-for-investment as well as the multifamily loans held-for-investment at consolidated Freddie Mac securitization entities and our Mortgage Banking segment includes our single-family rental loans held-for-sale. Segment contribution represents the measure of profit that management uses to assess the performance of our business segments and make resource allocation and operating decisions. Certain corporate expenses not directly assigned or allocated to one of our two segments, as well as activity from certain consolidated Sequoia entities, are included in the Corporate/Other column as reconciling items to our consolidated financial statements. These unallocated corporate expenses primarily include interest expense associated with certain long-term debt, indirect operating expenses, and other expense. The following tables present financial information by segment for the three and nine months ended September 30, 2018 and 2017 . Table 22.1 – Business Segment Financial Information Three Months Ended September 30, 2018 (In Thousands) Investment Portfolio Mortgage Banking Corporate/ Other Total Interest income $ 79,556 $ 14,427 $ 5,414 $ 99,397 Interest expense (40,852 ) (7,537 ) (15,962 ) (64,351 ) Net interest income (loss) 38,704 6,890 (10,548 ) 35,046 Non-interest income Mortgage banking activities, net — 11,224 — 11,224 Investment fair value changes, net 10,566 — (234 ) 10,332 Other income, net 3,334 — 119 3,453 Realized gains, net 7,275 — — 7,275 Total non-interest income, net 21,175 11,224 (115 ) 32,284 Direct operating expenses (2,659 ) (6,570 ) (12,261 ) (21,490 ) Provision for income taxes (2,840 ) (2,079 ) — (4,919 ) Segment Contribution $ 54,380 $ 9,465 $ (22,924 ) Net Income $ 40,921 Non-cash amortization income (expense), net $ 4,019 $ (54 ) $ (1,176 ) $ 2,789 Three Months Ended September 30, 2017 (In Thousands) Investment Portfolio Mortgage Banking Corporate/ Total Interest income $ 47,023 $ 10,626 $ 5,088 $ 62,737 Interest expense (9,445 ) (4,135 ) (13,863 ) (27,443 ) Net interest income (loss) 37,578 6,491 (8,775 ) 35,294 Non-interest income Mortgage banking activities, net — 21,200 — 21,200 Investment fair value changes, net 1,372 — (1,048 ) 324 Other income, net 2,812 — — 2,812 Realized gains, net 1,734 — — 1,734 Total non-interest income, net 5,918 21,200 (1,048 ) 26,070 Direct operating expenses (1,324 ) (6,107 ) (12,491 ) (19,922 ) Provision for income taxes (433 ) (4,829 ) — (5,262 ) Segment Contribution $ 41,739 $ 16,755 $ (22,314 ) Net Income $ 36,180 Non-cash amortization income (expense) $ 5,222 $ (25 ) $ (787 ) $ 4,410 Nine Months Ended September 30, 2018 (In Thousands) Investment Portfolio Mortgage Banking Corporate/ Total Interest income $ 202,882 $ 40,408 $ 15,702 $ 258,992 Interest expense (87,719 ) (21,303 ) (45,056 ) (154,078 ) Net interest income (loss) 115,163 19,105 (29,354 ) 104,914 Non-interest income Mortgage banking activities, net — 48,396 — 48,396 Investment fair value changes, net 13,756 — (926 ) 12,830 Other income, net 8,774 — 119 8,893 Realized gains, net 21,352 — — 21,352 Total non-interest income, net 43,882 48,396 (807 ) 91,471 Direct operating expenses (6,524 ) (20,941 ) (36,064 ) (63,529 ) Provision for income taxes (4,858 ) (7,485 ) — (12,343 ) Segment Contribution $ 147,663 $ 39,075 $ (66,225 ) Net Income $ 120,513 Non-cash amortization income (expense) $ 13,290 $ (99 ) $ (3,021 ) $ 10,170 Nine Months Ended September 30, 2017 (In Thousands) Investment Portfolio Mortgage Banking Corporate/ Total Interest income $ 135,106 $ 26,515 $ 14,968 $ 176,589 Interest expense (21,940 ) (11,462 ) (39,306 ) (72,708 ) Net interest income (loss) 113,166 15,053 (24,338 ) 103,881 Non-interest income Mortgage banking activities, net — 50,850 — 50,850 Investment fair value changes, net 13,846 — (3,856 ) 9,990 Other income, net 9,473 — — 9,473 Realized gains, net 9,561 — (752 ) 8,809 Total non-interest income, net 32,880 50,850 (4,608 ) 79,122 Direct operating expenses (4,371 ) (18,009 ) (34,409 ) (56,789 ) Provision for income taxes (4,490 ) (12,251 ) — (16,741 ) Segment Contribution $ 137,185 $ 35,643 $ (63,355 ) Net Income $ 109,473 Non-cash amortization income (expense) $ 16,263 $ (79 ) $ (2,528 ) $ 13,656 The following table presents the components of Corporate/Other for the three and nine months ended September 30, 2018 and 2017 . Table 22.2 – Components of Corporate/Other Three Months Ended September 30, 2018 2017 (In Thousands) Legacy Consolidated VIEs (1) Other Total Legacy Consolidated VIEs (1) Other Total Interest income $ 5,174 $ 240 $ 5,414 $ 4,875 $ 213 $ 5,088 Interest expense (4,257 ) (11,705 ) (15,962 ) (3,838 ) (10,025 ) (13,863 ) Net interest income (loss) 917 (11,465 ) (10,548 ) 1,037 (9,812 ) (8,775 ) Non-interest income Investment fair value changes, net (248 ) 14 (234 ) (1,045 ) (3 ) (1,048 ) Other income — 119 119 — — — Total non-interest income, net (248 ) 133 (115 ) (1,045 ) (3 ) (1,048 ) Direct operating expenses — (12,261 ) (12,261 ) — (12,491 ) (12,491 ) Total $ 669 $ (23,593 ) $ (22,924 ) $ (8 ) $ (22,306 ) $ (22,314 ) Nine Months Ended September 30, 2018 2017 (In Thousands) Legacy Consolidated VIEs (1) Other Total Legacy Consolidated VIEs (1) Other Total Interest income $ 15,003 $ 699 $ 15,702 $ 14,576 $ 392 $ 14,968 Interest expense (12,324 ) (32,732 ) (45,056 ) (11,046 ) (28,260 ) (39,306 ) Net interest income (loss) 2,679 (32,033 ) (29,354 ) 3,530 (27,868 ) (24,338 ) Non-interest income Investment fair value changes, net (976 ) 50 (926 ) (3,842 ) (14 ) (3,856 ) Other income — 119 119 — — — Realized gains, net — — — — (752 ) (752 ) Total non-interest income, net (976 ) 169 (807 ) (3,842 ) (766 ) (4,608 ) Direct operating expenses — (36,064 ) (36,064 ) — (34,409 ) (34,409 ) Total $ 1,703 $ (67,928 ) $ (66,225 ) $ (312 ) $ (63,043 ) $ (63,355 ) (1) Legacy consolidated VIEs represent Legacy Sequoia entities that are consolidated for GAAP financial reporting purposes. See Note 4 for further discussion on VIEs. The following table presents supplemental information by segment at September 30, 2018 and December 31, 2017 . Table 22.3 – Supplemental Segment Information (In Thousands) Investment Portfolio Mortgage Banking Corporate/ Other Total September 30, 2018 Residential loans $ 4,501,857 $ 866,444 $ 553,958 $ 5,922,259 Business purpose loans 95,515 20,105 — 115,620 Multifamily loans 942,165 — — 942,165 Real estate securities 1,470,084 — — 1,470,084 Total assets 7,436,674 909,926 793,035 9,139,635 December 31, 2017 Residential loans $ 3,054,448 $ 1,427,945 $ 632,817 $ 5,115,210 Real estate securities 1,476,510 — — 1,476,510 Total assets 4,743,873 1,453,069 842,880 7,039,822

Summary of Significant Accoun_2

Summary of Significant Accounting Policies (Policies)	9 Months Ended
	Sep. 30, 2018
Accounting Policies [Abstract]
Basis of Presentation	The consolidated financial statements presented herein are at September 30, 2018 and December 31, 2017 , and for the three and nine months ended September 30, 2018 and 2017 . These interim unaudited consolidated financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission ("SEC"). Certain information and note disclosures normally included in our annual financial statements prepared in accordance with U.S. generally accepted accounting principles ("GAAP") — as prescribed by the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) — have been condensed or omitted in these interim financial statements according to these SEC rules and regulations. Management believes that the disclosures included in these interim financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the company's Annual Report on Form 10-K for the year ended December 31, 2017 . In the opinion of management, all normal and recurring adjustments to present fairly the financial condition of the company at September 30, 2018 and results of operations for all periods presented have been made. The results of operations for the three and nine months ended September 30, 2018 should not be construed as indicative of the results to be expected for the full year.
Principles of Consolidation	In accordance with GAAP, we determine whether we must consolidate transferred financial assets and variable interest entities (“VIEs”) for financial reporting purposes. We currently consolidate the assets and liabilities of certain Sequoia securitization entities issued prior to 2012 where we maintain an ongoing involvement ("Legacy Sequoia"), as well as entities formed in connection with the securitization of Redwood Choice expanded-prime loans beginning in the third quarter of 2017 ("Sequoia Choice"). In addition, we consolidated the assets and liabilities of certain third-party Freddie Mac K-Series securitization trusts beginning in the third quarter of 2018. Each securitization entity is independent of Redwood and of each other and the assets and liabilities are not owned by and are not legal obligations of Redwood Trust, Inc. Our exposure to these entities is primarily through the financial interests we have retained, although we are exposed to certain financial risks associated with our role as a sponsor, servicing administrator, or depositor of these entities or as a result of our having sold assets directly or indirectly to these entities. For financial reporting purposes, the underlying loans owned at the consolidated Sequoia entities are shown under Residential loans, held-for-investment, at fair value, and the underlying loans owned at the consolidated Freddie Mac K-Series are shown under Multifamily loans held-for-investment, at fair value, on our consolidated balance sheets. The asset-backed securities (“ABS”) issued to third parties by these entities are shown under ABS issued. In our consolidated statements of income, we recorded interest income on the loans owned at these entities and interest expense on the ABS issued by these entities as well as other income and expenses associated with these entities' activities.
Use of Estimates	The preparation of financial statements requires us to make a number of significant estimates. These include estimates of fair value of certain assets and liabilities, amounts and timing of credit losses, prepayment rates, and other estimates that affect the reported amounts of certain assets and liabilities as of the date of the consolidated financial statements and the reported amounts of certain revenues and expenses during the reported periods. It is likely that changes in these estimates (e.g., valuation changes due to supply and demand, credit performance, prepayments, interest rates, or other reasons) will occur in the near term. Our estimates are inherently subjective in nature and actual results could differ from our estimates and the differences could be material.
Recent Accounting Pronouncements	Newly Adopted Accounting Standards Updates ("ASUs") In May 2017, the FASB issued ASU 2017-09, "Compensation - Stock Compensation (Topic 718)." This new guidance provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718. This new guidance is effective for fiscal years beginning after December 15, 2017, and should be applied prospectively to an award modified on or after the adoption date. We adopted this guidance, as required, in the first quarter of 2018, which did not have a material impact on our consolidated financial statements. In November 2016, the FASB issued ASU 2016-18, "Statement of Cash Flows (Topic 230): Restricted Cash." This new guidance amends previous guidance on how to classify and present changes in restricted cash on the statement of cash flows. This new guidance is effective for fiscal years beginning after December 15, 2017. We adopted this guidance, as required, in the first quarter of 2018, which did not have a material impact on our results of operations but impacted the presentation of the statements of cash flows and related footnote disclosures. In October 2016, the FASB issued ASU 2016-16, "Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory." This new guidance allows an entity to recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. It also eliminates the exceptions for an intra-entity transfer of assets other than inventory. This new guidance is effective for fiscal years beginning after December 15, 2017. We adopted this guidance, as required, in the first quarter of 2018, which did not have a material impact on our consolidated financial statements. In August 2016, the FASB issued ASU 2016-15, "Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments." This new guidance provides guidance on how to present and classify certain cash receipts and cash payments in the statement of cash flows. This new guidance is effective for fiscal years beginning after December 15, 2017. We adopted this guidance, as required, in the first quarter of 2018, which did not have a material impact on our consolidated financial statements. In January 2016, the FASB issued ASU 2016-01, "Recognition and Measurement of Financial Assets and Financial Liabilities." This new guidance amends accounting related to the classification and measurement of investments in equity securities and the presentation of certain fair value changes for financial liabilities measured at fair value. This new guidance also amends certain disclosure requirements associated with the fair value of financial instruments and it is effective for fiscal years beginning after December 15, 2017. In February 2018, the FASB issued ASU 2018-03, "Technical Corrections and Improvements to Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities," which clarified certain aspects of the guidance issued in ASU 2016-01. We adopted this guidance, as required, in the first quarter of 2018. This did not have a material impact on our consolidated financial statements as our investments in debt securities and loans were not subject to the amendments in this ASU. In accordance with this guidance, we amended certain fair value disclosures related to financial instruments that are carried at amortized cost on the consolidated balance sheets. In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers.” The update modifies the guidance companies use to recognize revenue from contracts with customers for transfers of goods or services and transfers of nonfinancial assets, unless those contracts are within the scope of other standards. The guidance also requires new qualitative and quantitative disclosures, including information about contract balances and performance obligations. In July 2015, the FASB approved a one-year deferral of the effective date. Accordingly, the update is effective for us in the first quarter of 2018 with retrospective application to prior periods presented or as a cumulative effect adjustment in the period of adoption. In March 2016, the FASB issued ASU 2016-08, "Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net)." This new guidance provides additional implementation guidance on how an entity should identify the unit of accounting for the principal versus agent evaluations. In May 2016, the FASB issued ASU 2016-12, "Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients," and in December 2016, the FASB issued ASU 2016-20, "Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers." These new ASUs provide more specific guidance on certain aspects of Topic 606. In September 2017, the FASB issued ASU 2017-13, "Revenue Recognition (Topic 605), Revenue from Contracts with Customers (Topic 606), Leases (Topic 840), and Leases (Topic 842): Amendments to SEC Paragraphs Pursuant to the Staff Announcement at the July 20, 2017 EITF Meeting and Rescission of Prior SEC Staff Announcements and Observer Comments (SEC Update)." This new ASU allows certain public business entities to use the nonpublic business entity effective dates for adoption of the new revenue standard. In November 2017, the FASB issued ASU 2017-14, "Income Statement - Reporting Comprehensive Income (Topic 220), Revenue Recognition (Topic 605), and Revenue from Contracts with Customers (Topic 606): Amendments to SEC Paragraphs Pursuant to Staff Accounting Bulletin No. 116 and SEC Release No. 33-10403." This new ASU amends various paragraphs that contain SEC guidance. We adopted this guidance, as required, in the first quarter of 2018. This did not have a material impact on our consolidated financial statements as nearly all of our income is generated from financial instruments, which are explicitly scoped out of these standards. Other Recent Accounting Pronouncements In August 2018, the FASB issued ASU 2018-13, "Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement." This new guidance amends previous guidance by removing and modifying certain existing fair value disclosure requirements, while adding other new disclosure requirements. This new guidance is effective for fiscal years beginning after December 15, 2019. Early adoption is permitted and entities may elect to early adopt the removal or modification of disclosures immediately and delay adoption of the new disclosure requirements until their effective date. We plan to adopt this new guidance by the required date and do not anticipate that this update will have a material impact on our consolidated financial statements. In July 2018, the FASB issued ASU 2018-09, "Codification Improvements." This new guidance is intended to clarify, correct, and make minor improvements to the FASB Accounting Standards Codification. The transition and effective dates are based on the facts and circumstances of each amendment, with some amendments becoming effective upon issuance of this ASU and others becoming effective for annual periods beginning after December 15, 2018. We plan to adopt this new guidance by the required date and do not anticipate that this update will have a material impact on our consolidated financial statements. In February 2018, the FASB issued ASU 2018-02, "Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income." This new guidance allows a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act of 2017 (the "Tax Act"). This new guidance is effective for fiscal years beginning after December 15, 2018. Early adoption is permitted. We plan to adopt this new guidance by the required date and do not anticipate that this update will have a material impact on our consolidated financial statements. In August 2017, the FASB issued ASU 2017-12, "Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities." This new guidance amends previous guidance to better align an entity's risk management activities and financial reporting for hedging relationships through changes to both the designation and measurement guidance for qualifying hedging relationships and the presentation of hedge results. This new guidance is effective for fiscal years beginning after December 15, 2018. Early adoption is permitted. We plan to adopt this new guidance by the required date and do not anticipate that this update will have a material impact on our consolidated financial statements. In July 2017, the FASB issued ASU 2017-11, "Earnings Per Share (Topic 260); Distinguishing Liabilities from Equity (Topic 480); Derivatives and Hedging (Topic 815): (Part I) Accounting for Certain Financial Instruments with Down Round Features, (Part II) Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception." This new guidance changes the classification analysis of certain equity-linked financial instruments (or embedded conversion options) with down round features. This new guidance is effective for fiscal years beginning after December 15, 2018. Early adoption is permitted. We plan to adopt this new guidance by the required date and do not anticipate that this update will have a material impact on our consolidated financial statements. In March 2017, the FASB issued ASU 2017-08, "Receivables - Nonrefundable Fees and Other Costs (Subtopic 310-20)." This new guidance shortens the amortization period for certain callable debt securities purchased at a premium by requiring the premium to be amortized to the earliest call date. This new guidance is effective for fiscal years beginning after December 15, 2018. Early adoption is permitted. We plan to adopt this new guidance by the required date and do not anticipate that this update will have a material impact on our consolidated financial statements. In June 2016, the FASB issued ASU 2016-13, "Financial Instruments - Credit Losses." This new guidance provides a new impairment model that is based on expected losses rather than incurred losses to determine the allowance for credit losses. This new guidance is effective for fiscal years beginning after December 15, 2019. Early adoption is permitted for fiscal years beginning after December 15, 2018. We currently have only a small balance of loans receivable that are not carried at fair value and would be subject to this new guidance for allowance for credit losses. Separately, we account for our available-for-sale securities under the other-than-temporary impairment ("OTTI") model for debt securities. This new guidance requires that credit impairments on our available-for-sale securities be recorded in earnings using an allowance for credit losses, with the allowance limited to the amount by which the security's fair value is less than its amortized cost basis. Subsequent reversals in credit loss estimates are recognized in income. We plan to adopt this new guidance by the required date and continue to evaluate the impact that this update will have on our consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, "Leases." This new guidance requires lessees to recognize most leases on their balance sheet as a right-of-use asset and a lease liability. This new guidance retains a dual lease accounting model, which requires leases to be classified as either operating or capital leases for lessees, for purposes of income statement recognition. This new guidance is effective for fiscal years beginning after December 15, 2018. Early adoption is permitted. In July 2018, the FASB issued ASU 2018-10, "Codification Improvements to Topic 842, Leases," which provides more specific guidance on certain aspects of Topic 842. Additionally, in July 2018, the FASB issued ASU 2018-11, "Leases (Topic 842): Targeted Improvements." This new ASU introduces an additional transition method which allows entities to apply the new standard at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. As discussed in Note 15 , our only material leases are those related to our leased office space, for which future payments under these leases totaled $16 million at September 30, 2018 . Upon adoption of this standard in the first quarter of 2019, we will record a right-of-use asset and lease liability equal to the present value of these future lease payments discounted at our incremental borrowing rate. Based on our initial evaluation of this new guidance, and taking into consideration our current in-place leases, we do not expect that its adoption will have a material impact on our consolidated financial statements. We will continue evaluating this new standard and caution that any changes in our business or additional leases we may enter into could change our initial assessment.
Balance Sheet Netting	Certain of our derivatives and short-term debt are subject to master netting arrangements or similar agreements. Under GAAP, in certain circumstances we may elect to present certain financial assets, liabilities and related collateral subject to master netting arrangements in a net position on our consolidated balance sheets. However, we do not report any of these financial assets or liabilities on a net basis, and instead present them on a gross basis on our consolidated balance sheets. For each category of financial instrument set forth in the table above, the assets and liabilities resulting from individual transactions within that category between us and a counterparty are subject to a master netting arrangement or similar agreement with that counterparty that provides for individual transactions to be aggregated and treated as a single transaction. For certain categories of these instruments, some of our transactions are cleared and settled through one or more clearinghouses that are substituted as our counterparty. References herein to master netting arrangements or similar agreements include the arrangements and agreements governing the clearing and settlement of these transactions through the clearinghouses. In the event of the termination and close-out of any of those transactions, the corresponding master netting agreement or similar agreement provides for settlement on a net basis. Any such settlement would include the proceeds of the liquidation of any corresponding collateral, subject to certain limitations on termination, settlement, and liquidation of collateral that may apply in the event of the bankruptcy or insolvency of a party. Such limitations should not inhibit the eventual practical realization of the principal benefits of those transactions or the corresponding master netting arrangement or similar agreement and any corresponding collateral.

Summary of Significant Accoun_3

Summary of Significant Accounting Policies (Tables)	9 Months Ended
	Sep. 30, 2018
Accounting Policies [Abstract]
Offsetting of Financial Assets, Liabilities, and Collateral	The table below presents financial assets and liabilities that are subject to master netting arrangements or similar agreements categorized by financial instrument, together with corresponding financial instruments and corresponding collateral received or pledged at September 30, 2018 and December 31, 2017 . Table 3.1 – Offsetting of Financial Assets, Liabilities, and Collateral Gross Amounts of Recognized Assets (Liabilities) Gross Amounts Offset in Consolidated Balance Sheet Net Amounts of Assets (Liabilities) Presented in Consolidated Balance Sheet Gross Amounts Not Offset in Consolidated (1) Net Amount September 30, 2018 Financial Instruments Cash Collateral (Received) Pledged Assets (2) Interest rate agreements $ 78,006 $ — $ 78,006 $ (10,429 ) $ (28,159 ) $ 39,418 TBAs 6,987 — 6,987 (919 ) (5,234 ) 834 Futures 44 — 44 — — 44 Total Assets $ 85,037 $ — $ 85,037 $ (11,348 ) $ (33,393 ) $ 40,296 Liabilities (2) Interest rate agreements $ (38,581 ) $ — $ (38,581 ) $ 10,429 $ 28,152 $ — TBAs (1,744 ) — (1,744 ) 919 762 (63 ) Loan warehouse debt (578,157 ) — (578,157 ) 578,157 — — Security repurchase agreements (780,818 ) — (780,818 ) 780,818 — — Total Liabilities $ (1,399,300 ) $ — $ (1,399,300 ) $ 1,370,323 $ 28,914 $ (63 ) Gross Amounts of Recognized Assets (Liabilities) Gross Amounts Offset in Consolidated Balance Sheet Net Amounts of Assets (Liabilities) Presented in Consolidated Balance Sheet Gross Amounts Not Offset in Consolidated (1) Net Amount December 31, 2017 Financial Instruments Cash Collateral (Received) Pledged Assets (2) Interest rate agreements $ 10,164 $ — $ 10,164 $ (6,196 ) $ (42 ) $ 3,926 TBAs 133 — 133 (133 ) — — Futures 1 — 1 — — 1 Total Assets $ 10,298 $ — $ 10,298 $ (6,329 ) $ (42 ) $ 3,927 Liabilities (2) Interest rate agreements $ (55,567 ) $ — $ (55,567 ) $ 6,196 $ 49,371 $ — TBAs (3,808 ) — (3,808 ) 133 1,376 (2,299 ) Loan warehouse debt (1,039,666 ) — (1,039,666 ) 1,039,666 — — Security repurchase agreements (648,746 ) — (648,746 ) 648,746 — — Total Liabilities $ (1,747,787 ) $ — $ (1,747,787 ) $ 1,694,741 $ 50,747 $ (2,299 ) (1) Amounts presented in these columns are limited in total to the net amount of assets or liabilities presented in the prior column by instrument. In certain cases, there is excess cash collateral or financial assets we have pledged to a counterparty (which may, in certain circumstances, be a clearinghouse) that exceed the financial liabilities subject to a master netting arrangement or similar agreement. Additionally, in certain cases, counterparties may have pledged excess cash collateral to us that exceeds our corresponding financial assets. In each case, any of these excess amounts are excluded from the table although they are separately reported in our consolidated balance sheets as assets or liabilities, respectively. (2) Interest rate agreements, TBAs, and futures are components of derivatives instruments on our consolidated balance sheets. Loan warehouse debt, which is secured by residential mortgage loans, and security repurchase agreements are components of Short-term debt on our consolidated balance sheets.

Principles of Consolidation (Ta

Principles of Consolidation (Tables)	9 Months Ended
	Sep. 30, 2018
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Assets and Liabilities of Consolidated VIEs	The following table presents a summary of the assets and liabilities of these VIEs. Table 4.1 – Assets and Liabilities of Consolidated VIEs September 30, 2018 Legacy Sequoia Sequoia Choice Freddie Mac K-Series Total Consolidated VIEs (Dollars in Thousands) Residential loans, held-for-investment $ 553,958 $ 2,181,195 $ — $ 2,735,153 Multifamily loans, held-for-investment — — 942,165 942,165 Restricted cash 147 11 — 158 Accrued interest receivable 860 9,046 2,843 12,749 REO 2,915 — — 2,915 Total Assets $ 557,880 $ 2,190,252 $ 945,008 $ 3,693,140 Accrued interest payable $ 590 $ 7,643 $ 2,606 $ 10,839 Accrued expenses and other liabilities — 11 — 11 Asset-backed securities issued 544,923 1,986,456 875,606 3,406,985 Total Liabilities $ 545,513 $ 1,994,110 $ 878,212 $ 3,417,835 Number of VIEs 20 6 2 28 December 31, 2017 Legacy Sequoia Sequoia Freddie Mac K-Series Total Consolidated VIEs (Dollars in Thousands) Residential loans, held-for-investment $ 632,817 $ 620,062 $ — $ 1,252,879 Restricted cash 147 4 — 151 Accrued interest receivable 867 2,524 — 3,391 REO 3,353 — — 3,353 Total Assets $ 637,184 $ 622,590 $ — $ 1,259,774 Accrued interest payable $ 537 $ 2,031 $ — $ 2,568 Accrued expenses and other liabilities — 4 — 4 Asset-backed securities issued 622,445 542,140 — 1,164,585 Total Liabilities $ 622,982 $ 544,175 $ — $ 1,167,157 Number of VIEs 20 2 — 22
Securitization Activity Related to Unconsolidated Variable Interest Entity's Sponsored by Redwood	The following table presents information related to securitization transactions that occurred during the three and nine months ended September 30, 2018 and 2017 . Table 4.2 – Securitization Activity Related to Unconsolidated VIEs Sponsored by Redwood Three Months Ended September 30, Nine Months Ended September 30, (In Thousands) 2018 2017 2018 2017 Principal balance of loans transferred $ 327,511 $ 839,264 $ 2,735,644 $ 2,223,387 Trading securities retained, at fair value 2,583 24,617 48,831 55,607 AFS securities retained, at fair value 776 4,416 6,728 11,476 MSRs recognized — — — 7,123
Cash Flows Related to Unconsolidated Variable Interest Entity's Sponsored by Redwood	The following table summarizes the cash flows during the three and nine months ended September 30, 2018 and 2017 between us and the unconsolidated VIEs sponsored by us and accounted for as sales since 2012. Table 4.3 – Cash Flows Related to Unconsolidated VIEs Sponsored by Redwood Three Months Ended September 30, Nine Months Ended September 30, (In Thousands) 2018 2017 2018 2017 Proceeds from new transfers $ 329,231 $ 839,642 $ 2,723,012 $ 2,213,151 MSR fees received 3,405 3,631 10,216 10,804 Funding of compensating interest, net (46 ) (35 ) (102 ) (114 ) Cash flows received on retained securities 7,267 6,882 21,720 19,843
Assumptions Related to Assets Retained from Unconsolidated Variable Interest Entity's Sponsored by Redwood	The following table presents the key weighted-average assumptions used to measure MSRs and securities retained at the date of securitization for securitizations completed during the three and nine months ended September 30, 2018 and 2017 . Table 4.4 – Assumptions Related to Assets Retained from Unconsolidated VIEs Sponsored by Redwood Three Months Ended September 30, 2018 Three Months Ended September 30, 2017 At Date of Securitization MSRs Senior IO Securities Subordinate Securities MSRs Senior IO Securities Subordinate Securities Prepayment rates N/A 9 % 9 % N/A 11 % 10 % Discount rates N/A 14 % 7 % N/A 14 % 5 % Credit loss assumptions N/A 0.20 % 0.20 % N/A 0.25 % 0.25 % Nine Months Ended September 30, 2018 Nine Months Ended September 30, 2017 At Date of Securitization MSRs Senior IO Securities Subordinate Securities MSRs Senior IO Securities Subordinate Securities Prepayment rates N/A 9 % 10 % 9 % 10 % 10 % Discount rates N/A 14 % 5 % 11 % 13 % 5 % Credit loss assumptions N/A 0.20 % 0.20 % N/A 0.25 % 0.25 %
Unconsolidated Variable Interest Entity's Sponsored by Redwood	The following table presents additional information at September 30, 2018 and December 31, 2017 , related to unconsolidated VIEs sponsored by Redwood and accounted for as sales since 2012. Table 4.5 – Unconsolidated VIEs Sponsored by Redwood (In Thousands) September 30, 2018 December 31, 2017 On-balance sheet assets, at fair value: Interest-only, senior and subordinate securities, classified as trading $ 130,598 $ 101,426 Subordinate securities, classified as AFS 163,870 219,255 Mortgage servicing rights 62,325 60,980 Maximum loss exposure (1) $ 356,793 $ 381,661 Assets transferred: Principal balance of loans outstanding $ 10,349,405 $ 8,364,148 Principal balance of loans 30+ days delinquent 19,625 27,926 (1) 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.
Key Assumptions and Sensitivity Analysis for Assets Retained from Unconsolidated Variable Interest Entity's Sponsored by Redwood	The following table presents key economic assumptions for assets retained from unconsolidated VIEs and the sensitivity of their fair values to immediate adverse changes in those assumptions at September 30, 2018 and December 31, 2017 . Table 4.6 – Key Assumptions and Sensitivity Analysis for Assets Retained from Unconsolidated VIEs Sponsored by Redwood September 30, 2018 MSRs Senior Securities (1) Subordinate Securities (Dollars in Thousands) Fair value at September 30, 2018 $ 62,325 $ 62,996 $ 231,472 Expected life (in years) (2) 9 8 15 Prepayment speed assumption (annual CPR) (2) 7 % 9 % 9 % Decrease in fair value from: 10% adverse change $ 1,631 $ 2,156 $ 547 25% adverse change 3,974 5,145 1,361 Discount rate assumption (2) 11 % 11 % 6 % Decrease in fair value from: 100 basis point increase $ 2,469 $ 2,383 $ 22,243 200 basis point increase 4,812 4,592 41,116 Credit loss assumption (2) N/A 0.20 % 0.20 % Decrease in fair value from: 10% higher losses N/A $ — $ 559 25% higher losses N/A — 4,220 December 31, 2017 MSRs Senior Securities (1) Subordinate Securities (Dollars in Thousands) Fair value at December 31, 2017 $ 60,980 $ 33,773 $ 286,908 Expected life (in years) (2) 8 6 13 Prepayment speed assumption (annual CPR) (2) 9 % 10 % 11 % Decrease in fair value from: 10% adverse change $ 2,022 $ 1,371 $ 611 25% adverse change 4,839 3,289 1,506 Discount rate assumption (2) 11 % 11 % 5 % Decrease in fair value from: 100 basis point increase $ 2,386 $ 1,158 $ 25,827 200 basis point increase 4,597 2,265 47,885 Credit loss assumption (2) N/A 0.25 % 0.25 % Decrease in fair value from: 10% higher losses N/A $ — $ 1,551 25% higher losses N/A — 3,873 (1) Senior securities included $63 million and $34 million of interest-only securities at September 30, 2018 and December 31, 2017 , respectively. (2) Expected life, prepayment speed assumption, discount rate assumption, and credit loss assumption presented in the tables above represent weighted averages.
Schedule of Third-Party Sponsored VIE Summary	The following table presents a summary of our interests in third-party VIEs at September 30, 2018 , grouped by security type. Table 4.7 – Third-Party Sponsored VIE Summary (Dollars in Thousands) September 30, 2018 December 31, 2017 Mortgage-Backed Securities Senior $ 214,655 $ 216,066 Mezzanine 538,847 508,010 Subordinate 422,114 431,753 Total Investments in Third-Party Sponsored VIEs $ 1,175,616 $ 1,155,829

Fair Value of Financial Instr_2

Fair Value of Financial Instruments (Tables)	9 Months Ended
	Sep. 30, 2018
Fair Value Disclosures [Abstract]
Carrying Values and Fair Values of Assets and Liabilities	The following table presents the carrying values and estimated fair values of assets and liabilities that are required to be recorded or disclosed at fair value at September 30, 2018 and December 31, 2017 . Table 5.1 – Carrying Values and Fair Values of Assets and Liabilities September 30, 2018 December 31, 2017 Carrying Value Fair Value Carrying Value Fair Value (In Thousands) Assets Residential loans, held-for-sale At fair value $ 866,331 $ 866,331 $ 1,427,052 $ 1,427,052 At lower of cost or fair value 113 133 893 993 Residential loans, held-for-investment At fair value 5,055,815 5,055,815 3,687,265 3,687,265 Business purpose loans 115,620 115,620 — — Multifamily loans 942,165 942,165 — — Trading securities 1,108,243 1,108,243 968,844 968,844 Available-for-sale securities 361,841 361,841 507,666 507,666 Cash and cash equivalents 173,516 173,516 144,663 144,663 Restricted cash 27,253 27,253 2,144 2,144 Accrued interest receivable 35,644 35,644 27,013 27,013 Derivative assets 87,219 87,219 15,718 15,718 MSRs (1) 63,785 63,785 63,598 63,598 REO (1) 2,915 3,490 3,354 3,806 Margin receivable (1) 48,655 48,655 85,044 85,044 FHLBC stock (1) 43,393 43,393 43,393 43,393 Guarantee asset (1) 2,885 2,885 2,869 2,869 Pledged collateral (1) 42,127 42,127 42,615 42,615 Participation in loan warehouse facility (1) 39,219 39,219 — — Liabilities Short-term debt $ 1,424,275 $ 1,424,275 $ 1,688,412 $ 1,688,412 Accrued interest payable 31,076 31,076 18,435 18,435 Margin payable (2) 33,950 33,950 390 390 Guarantee obligation (2) 17,423 17,409 19,487 18,878 Derivative liabilities 42,724 42,724 63,081 63,081 ABS issued at fair value, net 3,406,985 3,406,985 1,164,585 1,164,585 FHLBC long-term borrowings 1,999,999 1,999,999 1,999,999 1,999,999 Convertible notes, net 632,401 639,684 686,759 692,369 Trust preferred securities and subordinated notes, net 138,570 108,113 138,535 103,230 (1) These assets are included in Other assets on our consolidated balance sheets. (2) These liabilities are included in Accrued expenses and other liabilities on our consolidated balance sheets.
Assets and Liabilities Measured at Fair Value on Recurring Basis	The following table presents the assets and liabilities that are reported at fair value on our consolidated balance sheets on a recurring basis at September 30, 2018 and December 31, 2017 , as well as the fair value hierarchy of the valuation inputs used to measure fair value. Table 5.2 – Assets and Liabilities Measured at Fair Value on a Recurring Basis September 30, 2018 Carrying Value Fair Value Measurements Using (In Thousands) Level 1 Level 2 Level 3 Assets Residential loans $ 5,922,146 $ — $ — $ 5,922,146 Business purpose loans 115,620 — — 115,620 Multifamily loans 942,165 — — 942,165 Trading securities 1,108,243 — — 1,108,243 Available-for-sale securities 361,841 — — 361,841 Derivative assets 87,219 7,031 78,006 2,182 MSRs 63,785 — — 63,785 Pledged collateral 42,127 42,127 — — FHLBC stock 43,393 — 43,393 — Guarantee asset 2,885 — — 2,885 Liabilities Derivative liabilities $ 42,724 $ 1,744 $ 38,581 $ 2,399 ABS issued 3,406,985 — — 3,406,985 December 31, 2017 Carrying Value Fair Value Measurements Using (In Thousands) Level 1 Level 2 Level 3 Assets Residential loans $ 5,114,317 $ — $ — $ 5,114,317 Trading securities 968,844 — — 968,844 Available-for-sale securities 507,666 — — 507,666 Derivative assets 15,718 134 10,164 5,420 MSRs 63,598 — — 63,598 Pledged collateral 42,615 42,615 — — FHLBC stock 43,393 — 43,393 — Guarantee asset 2,869 — — 2,869 Liabilities Derivative liabilities $ 63,081 $ 3,808 $ 55,567 $ 3,706 ABS issued 1,164,585 — — 1,164,585
Changes in Level 3 Assets and Liabilities Measured at Fair Value on Recurring Basis	The following table presents additional information about Level 3 assets and liabilities measured at fair value on a recurring basis for the nine months ended September 30, 2018 . Table 5.3 – Changes in Level 3 Assets and Liabilities Measured at Fair Value on a Recurring Basis Assets Liabilities Residential Loans Business Purpose Loans Multifamily Loans Trading Securities AFS Securities MSRs Guarantee Asset Derivatives (1) ABS Issued (In Thousands) Beginning balance - December 31, 2017 $ 5,114,317 $ — $ — $ 968,844 $ 507,666 $ 63,598 $ 2,869 $ 1,714 $ 1,164,585 Acquisitions 5,570,683 126,214 946,650 522,293 6,728 — — — 2,539,451 Sales (4,135,911 ) — — (348,054 ) (118,423 ) (1,077 ) — — — Principal paydowns (587,162 ) (10,912 ) (286 ) (25,847 ) (35,431 ) — — — (305,529 ) Gains (losses) in net income, net (37,641 ) 318 (4,199 ) 2,098 32,494 1,264 16 (8,093 ) 8,478 Unrealized losses in OCI, net — — — — (31,193 ) — — — — Other settlements, net (2) (2,140 ) — — (11,091 ) — — — 6,162 — Ending Balance - September 30, 2018 $ 5,922,146 $ 115,620 $ 942,165 $ 1,108,243 $ 361,841 $ 63,785 $ 2,885 $ (217 ) $ 3,406,985 (1) For the purpose of this presentation, derivative assets and liabilities, which consist of loan purchase and forward sale commitments, are presented on a net basis. (2) Other settlements, net for residential loans represents the transfer of loans to REO, and for derivatives, the settlement of forward sale commitments and the transfer of the fair value of loan purchase commitments at the time loans are acquired to the basis of residential loans. Other settlements, net for our trading securities relates to the consolidation of the Freddie Mac K-Series entities during the three months ended September 30, 2018.
Portion of Net Gains (Losses) Attributable to Level 3 Assets and Liabilities Still Held and Included in Net Income	The following table presents the portion of gains or losses included in our consolidated statements of income that were attributable to Level 3 assets and liabilities recorded at fair value on a recurring basis and held at September 30, 2018 and 2017 . Gains or losses incurred on assets or liabilities sold, matured, called, or fully written down during the three and nine months ended September 30, 2018 and 2017 are not included in this presentation. Table 5.4 – Portion of Net Gains (Losses) Attributable to Level 3 Assets and Liabilities Still Held at September 30, 2018 and 2017 Included in Net Income Included in Net Income Three Months Ended September 30, Nine Months Ended September 30, (In Thousands) 2018 2017 2018 2017 Assets Residential loans at Redwood $ (18,100 ) $ 14,359 $ (70,316 ) $ 24,227 Residential loans at consolidated Sequoia entities (8,978 ) 3,497 11,936 22,949 Business purpose loans (20 ) — (20 ) — Multifamily loans at consolidated Freddie Mac K-Series entities (4,199 ) — (4,199 ) — Trading securities 3,821 (36 ) (1,956 ) 24,452 Available-for-sale securities (33 ) (3 ) (90 ) (248 ) MSRs 337 317 4,861 (1,005 ) Loan purchase commitments 2,168 2,117 2,157 2,121 Other assets - Guarantee asset (51 ) (239 ) 15 (1,043 ) Liabilities Loan purchase commitments $ (2,314 ) $ — $ (2,388 ) $ — ABS issued 12,536 (7,771 ) (8,478 ) (30,286 )
Assets and Liabilities Measured at Fair Value on Non-Recurring Basis	The following table presents information on assets recorded at fair value on a non-recurring basis at September 30, 2018 . This table does not include the carrying value and gains or losses associated with the asset types below that were not recorded at fair value on our consolidated balance sheets at September 30, 2018 . Table 5.5 – Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis at September 30, 2018 Gain (Loss) for September 30, 2018 Carrying Value Fair Value Measurements Using Three Months Ended Nine Months Ended (In Thousands) Level 1 Level 2 Level 3 September 30, 2018 September 30, 2018 Assets REO $ 1,804 $ — $ — $ 1,804 $ (37 ) $ (162 )
Market Valuation Gains and Losses, Net	The following table presents the net market valuation gains and losses recorded in each line item of our consolidated statements of income for the three and nine months ended September 30, 2018 and 2017 . Table 5.6 – Market Valuation Gains and Losses, Net Three Months Ended September 30, Nine Months Ended September 30, (In Thousands) 2018 2017 2018 2017 Mortgage Banking Activities, Net Residential loans held-for-sale, at fair value $ 5,626 $ 14,859 $ 16,522 $ 29,175 Single-family rental loans held-for-sale, at fair value (121 ) — (121 ) — Residential loan purchase and forward sale commitments 1,610 13,276 (8,116 ) 33,947 Risk management derivatives, net 3,796 (7,077 ) 38,378 (13,787 ) Total mortgage banking activities, net (1) $ 10,911 $ 21,058 $ 46,663 $ 49,335 Investment Fair Value Changes, Net Residential loans held-for-investment, at Redwood $ (17,063 ) $ 2,881 $ (71,058 ) $ 8,902 Fix-and-flip loans held-for-investment 53 — 53 — Trading securities 6,314 607 2,429 30,676 Valuation adjustments on commercial loans held-for-sale — — — 300 Net investments in Legacy Sequoia entities (2) (248 ) (1,045 ) (976 ) (3,842 ) Net investments in Sequoia Choice entities (2) (943 ) (256 ) 43 (256 ) Net investments in Freddie Mac K-Series entities (2) 511 — 511 — Risk-sharing investments (126 ) (267 ) (474 ) (985 ) Risk management derivatives, net 21,867 (1,592 ) 82,391 (24,557 ) Impairments on AFS securities (33 ) (4 ) (89 ) (248 ) Total investment fair value changes, net $ 10,332 $ 324 $ 12,830 $ 9,990 Other Income, Net MSRs $ (823 ) $ (1,351 ) $ 1,324 $ (10,842 ) MSR risk management derivatives, net (890 ) (422 ) (7,151 ) 1,869 Total other income, net (3) $ (1,713 ) $ (1,773 ) $ (5,827 ) $ (8,973 ) Total Market Valuation Gains, Net $ 19,530 $ 19,609 $ 53,666 $ 50,352 (1) Mortgage banking activities, net presented above does not include fee income or provisions for repurchases that are components of Mortgage banking activities, net presented on our consolidated statements of income, as these amounts do not represent market valuation changes. (2) Includes changes in fair value of the residential loans held-for-investment, REO and the ABS issued at the entities, which netted together represent the change in value of our retained investments at the consolidated VIEs. (3) Other income, net presented above does not include net MSR fee income or provisions for repurchases for MSRs, as these amounts do not represent market valuation adjustments.
Quantitative Information about Significant Unobservable Inputs Used in Valuation of Level 3 Assets and Liabilities Measured at Fair Value	The following table provides quantitative information about the significant unobservable inputs used in the valuation of our Level 3 assets and liabilities measured at fair value. Table 5.7 – Fair Value Methodology for Level 3 Financial Instruments September 30, 2018 Fair Value Input Values (Dollars in Thousands, except Input Values) Unobservable Input Range Weighted Average Assets Residential loans, at fair value: Jumbo fixed-rate loans $ 2,729,424 Whole loan spread to TBA price $ 1.84 - $ 2.80 $ 2.77 Whole loan spread to swap rate 90 - 198 bps 193 bps Jumbo hybrid loans 319,029 Prepayment rate (annual CPR) 15 - 15 % 15 % Whole loan spread to swap rate 75 - 155 bps 125 bps Jumbo loans committed to sell 138,540 Whole loan committed sales price $ 100.98 - $ 101.15 $ 101.08 Loans held by Legacy Sequoia (1) 553,958 Liability price N/A N/A Loans held by Sequoia Choice (1) 2,181,195 Liability price N/A N/A Business purpose loans: Single-family rental loans 20,105 Whole loan spread to swap rate 247 - 247 bps 247 bps Prepayment rate (annual CPR) 3 - 3 % 3 % Fix-and-flip loans 95,515 Discount rate 7 - 8 % 7 % Multifamily loans held by Freddie Mac K-Series (1) 942,165 Liability price N/A N/A Trading and AFS securities 1,470,084 Discount rate 3 - 15 % 6 % Prepayment rate (annual CPR) — - 50 % 8 % Default rate — - 27 % 2 % Loss severity — - 40 % 22 % MSRs 63,785 Discount rate 11 - 67 % 11 % Prepayment rate (annual CPR) 4 - 22 % 7 % Per loan annual cost to service $ 82 - $ 82 $ 82 Guarantee asset 2,885 Discount rate 11 - 11 % 11 % Prepayment rate (annual CPR) 7 - 7 % 7 % REO 1,804 Loss severity 13 - 45 % 30 % Liabilities ABS issued (1) : At consolidated Sequoia entities 2,531,379 Discount rate 3 - 15 % 4 % Prepayment rate (annual CPR) 8 - 32 % 19 % Default rate — - 8 % 2 % Loss severity 20 - 20 % 20 % At consolidated Freddie Mac K-Series entities 875,606 Discount rate 3 9 % 4 % Prepayment rate (annual CPR) — — % — % Default rate 1 1 % 1 % Loss severity 20 20 % 20 % Loan purchase commitments, net 217 MSR multiple 1.0 - 5.4 x 3.5 x Pull-through rate 16 - 100 % 72 % Whole loan spread to TBA price $ 2.69 - $ 2.69 $ 2.69 Whole loan spread to swap rate - fixed rate 90 - 198 bps 196 bps Prepayment rate (annual CPR) 15 - 15 % 15 % Whole loan spread to swap rate - hybrid 75 - 155 bps 99 bps Footnote to Table 5.7 (1) The fair value of the loans held by consolidated entities was based on the fair value of the ABS issued by these entities, which we determined were more readily observable, in accordance with accounting guidance for collateralized financing entities.

Residential Loans (Tables)

Residential Loans (Tables)	9 Months Ended
	Sep. 30, 2018
Receivables [Abstract]
Classifications and Carrying Value of Loans	The following table summarizes the classifications and carrying values of the residential loans owned at Redwood and at consolidated Sequoia entities at September 30, 2018 and December 31, 2017 . Table 6.1 – Classifications and Carrying Values of Residential Loans September 30, 2018 Legacy Sequoia (In Thousands) Redwood Sequoia Choice Total Held-for-sale At fair value $ 866,331 $ — $ — $ 866,331 At lower of cost or fair value 113 — — 113 Total held-for-sale 866,444 — — 866,444 Held-for-investment at fair value 2,320,662 553,958 2,181,195 5,055,815 Total Residential Loans $ 3,187,106 $ 553,958 $ 2,181,195 $ 5,922,259 December 31, 2017 Legacy Sequoia (In Thousands) Redwood Sequoia Choice Total Held-for-sale At fair value $ 1,427,052 $ — $ — $ 1,427,052 At lower of cost or fair value 893 — — 893 Total held-for-sale 1,427,945 — — 1,427,945 Held-for-investment at fair value 2,434,386 632,817 620,062 3,687,265 Total Residential Loans $ 3,862,331 $ 632,817 $ 620,062 $ 5,115,210 Classifications and Carrying Values of Business Purpose Loans (In Thousands) September 30, 2018 December 31, 2017 Single-family rental loans, held-for-sale at fair value $ 20,105 $ — Fix-and-flip loans, held-for-investment at fair value 95,515 — Total Business Purpose Loans $ 115,620 $ —

Business Purpose Loans (Tables)

Business Purpose Loans (Tables)	9 Months Ended
	Sep. 30, 2018
Receivables [Abstract]
Classifications and Carrying Value of Loans	The following table summarizes the classifications and carrying values of the residential loans owned at Redwood and at consolidated Sequoia entities at September 30, 2018 and December 31, 2017 . Table 6.1 – Classifications and Carrying Values of Residential Loans September 30, 2018 Legacy Sequoia (In Thousands) Redwood Sequoia Choice Total Held-for-sale At fair value $ 866,331 $ — $ — $ 866,331 At lower of cost or fair value 113 — — 113 Total held-for-sale 866,444 — — 866,444 Held-for-investment at fair value 2,320,662 553,958 2,181,195 5,055,815 Total Residential Loans $ 3,187,106 $ 553,958 $ 2,181,195 $ 5,922,259 December 31, 2017 Legacy Sequoia (In Thousands) Redwood Sequoia Choice Total Held-for-sale At fair value $ 1,427,052 $ — $ — $ 1,427,052 At lower of cost or fair value 893 — — 893 Total held-for-sale 1,427,945 — — 1,427,945 Held-for-investment at fair value 2,434,386 632,817 620,062 3,687,265 Total Residential Loans $ 3,862,331 $ 632,817 $ 620,062 $ 5,115,210 Classifications and Carrying Values of Business Purpose Loans (In Thousands) September 30, 2018 December 31, 2017 Single-family rental loans, held-for-sale at fair value $ 20,105 $ — Fix-and-flip loans, held-for-investment at fair value 95,515 — Total Business Purpose Loans $ 115,620 $ —

Real Estate Securities (Tables)

Real Estate Securities (Tables)	9 Months Ended
	Sep. 30, 2018
Investments, Debt and Equity Securities [Abstract]
Fair Values of Real Estate Securities by Type	The following table presents the fair values of our real estate securities by type at September 30, 2018 and December 31, 2017 . Table 9.1 – Fair Values of Real Estate Securities by Type (In Thousands) September 30, 2018 December 31, 2017 Trading $ 1,108,243 $ 968,844 Available-for-sale 361,841 507,666 Total Real Estate Securities $ 1,470,084 $ 1,476,510
Trading Securities by Collateral Type	The following table presents the fair value of trading securities by position and collateral type at September 30, 2018 and December 31, 2017 . Table 9.2 – Trading Securities by Position and Collateral Type (In Thousands) September 30, 2018 December 31, 2017 Senior $ 163,022 $ 69,974 Mezzanine 602,235 563,475 Subordinate 342,986 335,395 Total Trading Securities $ 1,108,243 $ 968,844
Available-for-Sale Securities by Collateral Type	The following table presents the fair value of our available-for-sale securities by position and collateral type at September 30, 2018 and December 31, 2017 . Table 9.3 – Available-for-Sale Securities by Position and Collateral Type (In Thousands) September 30, 2018 December 31, 2017 Senior $ 114,628 $ 179,864 Mezzanine 36,377 92,002 Subordinate 210,836 235,800 Total AFS Securities $ 361,841 $ 507,666
Carrying Value of Residential Available for Sale Securities	The following table presents the components of carrying value (which equals fair value) of AFS securities at September 30, 2018 and December 31, 2017 . Table 9.4 – Carrying Value of AFS Securities September 30, 2018 (In Thousands) Senior Mezzanine Subordinate Total Principal balance $ 119,254 $ 37,385 $ 308,445 $ 465,084 Credit reserve (7,919 ) — (33,155 ) (41,074 ) Unamortized discount, net (25,173 ) (3,843 ) (131,783 ) (160,799 ) Amortized cost 86,162 33,542 143,507 263,211 Gross unrealized gains 29,134 2,835 67,896 99,865 Gross unrealized losses (668 ) — (567 ) (1,235 ) Carrying Value $ 114,628 $ 36,377 $ 210,836 $ 361,841 December 31, 2017 (In Thousands) Senior Mezzanine Subordinate Total Principal balance $ 189,125 $ 91,471 $ 327,549 $ 608,145 Credit reserve (8,756 ) — (37,793 ) (46,549 ) Unamortized discount, net (44,041 ) (9,407 ) (130,305 ) (183,753 ) Amortized cost 136,328 82,064 159,451 377,843 Gross unrealized gains 44,771 9,938 76,481 131,190 Gross unrealized losses (1,235 ) — (132 ) (1,367 ) Carrying Value $ 179,864 $ 92,002 $ 235,800 $ 507,666
Changes of Unamortized Discount and Designated Credit Reserves on Residential Available for Sale Securities	The following table presents the changes for the three and nine months ended September 30, 2018 , in unamortized discount and designated credit reserves on residential AFS securities. Table 9.5 – Changes in Unamortized Discount and Designated Credit Reserves on AFS Securities Three Months Ended September 30, 2018 Nine Months Ended September 30, 2018 Credit Reserve Unamortized Discount, Net Credit Unamortized (In Thousands) Beginning balance $ 42,191 $ 170,090 $ 46,549 $ 183,753 Amortization of net discount — (3,323 ) — (11,231 ) Realized credit losses (616 ) — (1,957 ) — Acquisitions 637 224 5,424 2,354 Sales, calls, other (777 ) (6,586 ) (1,843 ) (21,265 ) Impairments 33 — 89 — (Release of) transfers to credit reserves, net (394 ) 394 (7,188 ) 7,188 Ending Balance $ 41,074 $ 160,799 $ 41,074 $ 160,799
Components of Fair Value of Available for Sale Securities Securities by Holding Periods	The following table presents the components comprising the total carrying value of residential AFS securities that were in a gross unrealized loss position at September 30, 2018 and December 31, 2017 . Table 9.6 – Components of Fair Value of Residential AFS Securities by Holding Periods Less Than 12 Consecutive Months 12 Consecutive Months or Longer Amortized Cost Unrealized Losses Fair Value Amortized Cost Unrealized Losses Fair (In Thousands) September 30, 2018 $ 14,791 $ (567 ) $ 14,224 $ 23,901 $ (668 ) $ 23,233 December 31, 2017 8,637 (132 ) 8,505 28,557 (1,235 ) 27,322
Summary of Significant Valuation Assumptions for Available for Sale Securities	The table below summarizes the significant valuation assumptions we used for our AFS securities in unrealized loss positions at September 30, 2018 . Table 9.7 – Significant Valuation Assumptions September 30, 2018 Range for Securities Prepayment rates 6% - 10% Projected losses 0.20% - 3%
Activity of Credit Component of Other-than-Temporary Impairments	The following table details the activity related to the credit loss component of OTTI (i.e., OTTI recognized through earnings) for AFS securities held at September 30, 2018 and 2017 , for which a portion of an OTTI was recognized in other comprehensive income. Table 9.8 – Activity of the Credit Component of Other-than-Temporary Impairments Three Months Ended September 30, Nine Months Ended September 30, (In Thousands) 2018 2017 2018 2017 Balance at beginning of period $ 20,967 $ 25,802 $ 21,037 $ 28,261 Additions Initial credit impairments 33 — 76 178 Subsequent credit impairments — — — 47 Reductions Securities sold, or expected to sell (927 ) — (1,026 ) (2,282 ) Securities with no outstanding principal at period end (1,229 ) (42 ) (1,243 ) (444 ) Balance at End of Period $ 18,844 $ 25,760 $ 18,844 $ 25,760
Gross Realized Gains and Losses on Available for Sale Securities	The following table presents the gross realized gains and losses on sales and calls of AFS securities for the three and nine months ended September 30, 2018 and 2017 . Table 9.9 – Gross Realized Gains and Losses on AFS Securities Three Months Ended September 30, Nine Months Ended September 30, (In Thousands) 2018 2017 2018 2017 Gross realized gains - sales $ 7,275 $ 1,734 $ 21,312 $ 9,381 Gross realized gains - calls — — 43 677 Gross realized losses - sales — — (3 ) — Gross realized losses - calls — — — (497 ) Total Realized Gains on Sales and Calls of AFS Securities, net $ 7,275 $ 1,734 $ 21,352 $ 9,561

Derivative Financial Instrume_2

Derivative Financial Instruments (Tables)	9 Months Ended
	Sep. 30, 2018
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Fair Value and Notional Amount of Derivative Financial Instruments	The following table presents the fair value and notional amount of our derivative financial instruments at September 30, 2018 and December 31, 2017 . Table 10.1 – Fair Value and Notional Amount of Derivative Financial Instruments September 30, 2018 December 31, 2017 Fair Value Notional Amount Fair Value Notional Amount (In Thousands) Assets - Risk Management Derivatives Interest rate swaps $ 78,006 $ 3,139,000 $ 10,122 $ 1,765,000 TBAs 6,987 1,480,000 133 295,000 Futures 44 15,000 1 7,500 Swaptions — — 42 200,000 Assets - Other Derivatives Loan purchase commitments 2,182 355,353 3,243 547,434 Loan forward sale commitments — — 2,177 343,681 Total Assets $ 87,219 $ 4,989,353 $ 15,718 $ 3,158,615 Liabilities - Cash Flow Hedges Interest rate swaps $ (26,796 ) $ 139,500 $ (43,679 ) $ 139,500 Liabilities - Risk Management Derivatives Interest rate swaps (11,785 ) 565,500 (11,888 ) 1,248,000 TBAs (1,744 ) 500,000 (3,808 ) 1,400,000 Liabilities - Other Derivatives Loan purchase commitments (2,399 ) 451,136 (3,706 ) 697,966 Total Liabilities $ (42,724 ) $ 1,656,136 $ (63,081 ) $ 3,485,466 Total Derivative Financial Instruments, Net $ 44,495 $ 6,645,489 $ (47,363 ) $ 6,644,081
Impact on Interest Expense of Interest Rate Agreements Accounted for as Cash Flow Hedges	The following table illustrates the impact on interest expense of our interest rate agreements accounted for as cash flow hedges for the three and nine months ended September 30, 2018 and 2017 . Table 10.2 – Impact on Interest Expense of Interest Rate Agreements Accounted for as Cash Flow Hedges Three Months Ended September 30, Nine Months Ended September 30, (In Thousands) 2018 2017 2018 2017 Net interest expense on cash flows hedges $ (734 ) $ (1,119 ) $ (2,536 ) $ (3,516 ) Realized net losses reclassified from other comprehensive income — (14 ) — (42 ) Total Interest Expense $ (734 ) $ (1,133 ) $ (2,536 ) $ (3,558 )

Other Assets and Liabilities (T

Other Assets and Liabilities (Tables)	9 Months Ended
	Sep. 30, 2018
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]
Components of Other Assets	Other assets at September 30, 2018 and December 31, 2017 , are summarized in the following table. Table 11.1 – Components of Other Assets (In Thousands) September 30, 2018 December 31, 2017 Mortgage servicing rights $ 63,785 $ 63,598 Security purchase deposit 57,982 — Margin receivable 48,655 85,044 FHLBC stock 43,393 43,393 Pledged collateral 42,127 42,615 Participation in loan warehouse facility 39,219 — Investment receivable 36,463 1,147 Investment in 5 Arches 10,772 — Fixed assets and leasehold improvements (1) 5,409 2,645 REO 2,915 3,354 Guarantee asset 2,885 2,869 Other 12,270 13,899 Total Other Assets $ 365,875 $ 258,564 (1) Fixed assets and leasehold improvements had a basis of $10 million and accumulated depreciation of $5 million at September 30, 2018 .
Components of Accrued Expenses and Other Liabilities	Accrued expenses and other liabilities at September 30, 2018 and December 31, 2017 are summarized in the following table. Table 11.2 – Components of Accrued Expenses and Other Liabilities (In Thousands) September 30, 2018 December 31, 2017 Margin payable $ 33,950 $ 390 Accrued compensation 18,485 24,025 Guarantee obligations 17,423 19,487 Deferred tax liabilities 11,764 11,764 Residential loan and MSR repurchase reserve 4,709 4,916 Unsettled trades 4,071 13 Accrued income taxes payable 3,313 — Legal reserve 2,000 2,000 Other 6,563 5,134 Total Accrued Expenses and Other Liabilities $ 102,278 $ 67,729
Activity for Mortgage Servicing Rights	The following table presents activity for MSRs for the three and nine months ended September 30, 2018 and 2017 . Table 11.3 – Activity for MSRs Three Months Ended September 30, Nine Months Ended September 30, (In Thousands) 2018 2017 2018 2017 Balance at beginning of period $ 64,674 $ 63,770 $ 63,598 $ 118,526 Additions — 256 — 7,957 Sales — — (1,077 ) (52,966 ) Changes in fair value due to: Changes in assumptions (1) 1,099 563 6,388 (3,450 ) Other changes (2) (1,988 ) (1,661 ) (5,124 ) (7,139 ) Balance at End of Period $ 63,785 $ 62,928 $ 63,785 $ 62,928 (1) Primarily reflects changes in prepayment assumptions due to changes in market interest rates. (2) Represents changes due to the realization of expected cash flows.
Components of Mortgage Servicing Rights Income (Loss), net	The following table presents the components of our MSR income for the three and nine months ended September 30, 2018 and 2017 . Table 11.4 – Components of MSR Income, net Three Months Ended September 30, Nine Months Ended September 30, (In Thousands) 2018 2017 2018 2017 Servicing income $ 4,004 $ 3,872 $ 11,601 $ 17,290 Cost of sub-servicer (324 ) (476 ) (1,254 ) (2,515 ) Net servicing fee income 3,680 3,396 10,347 14,775 Market valuation changes of MSRs (823 ) (1,351 ) 1,324 (10,842 ) Market valuation changes of associated derivatives (890 ) (422 ) (7,151 ) 1,869 MSR reversal of provision for repurchases — (8 ) 277 304 MSR Income, Net (1) $ 1,967 $ 1,615 $ 4,797 $ 6,106 (1) MSR income, net is included in Other income, net on our consolidated statements of income.

Short-Term Debt (Tables)

Short-Term Debt (Tables)	9 Months Ended
	Sep. 30, 2018
Debt Disclosure [Abstract]
Short-Term Debt Facilities	The table below summarizes our short-term debt, including the facilities that are available to us, the outstanding balances, the weighted average interest rate, and the maturity information at September 30, 2018 and December 31, 2017 . Table 12.1 – Short-Term Debt September 30, 2018 (Dollars in Thousands) Number of Facilities Outstanding Balance Limit Weighted Average Interest Rate Maturity Weighted Average Days Until Maturity Facilities Residential loan warehouse (1) 4 $ 578,157 $ 1,425,000 3.83 % 12/2018-8/2019 177 Real estate securities repo (1) 8 780,818 — 3.29 % 10/2018-12/2018 27 Single-family rental loan warehouse (2) 2 15,859 400,000 4.53 % 6/2020-6/2021 661 Fix-and-flip loan warehouse (2) 2 49,441 60,000 5.63 % 10/2019-11/2019 205 Total Short-Term Debt 16 $ 1,424,275 December 31, 2017 (Dollars in Thousands) Number of Facilities Outstanding Balance Limit Weighted Average Interest Rate Maturity Weighted Average Days Until Maturity Facilities Residential loan warehouse (1) 4 $ 1,039,666 $ 1,575,000 3.17 % 1/2018-12/2018 197 Real estate securities repo (1) 9 648,746 — 2.69 % 1/2018-3/2018 28 Total Short-Term Debt Facilities 13 1,688,412 Convertible notes, net N/A 250,270 — 4.63 % 4/2018 105 Total Short-Term Debt $ 1,938,682 (1) Borrowings under our facilities are generally charged interest based on a specified margin over the one-month LIBOR interest rate. At September 30, 2018 , all of these borrowings were under uncommitted facilities and were due within 364 days (or less) of the borrowing date. (2) Due to the revolving nature of the borrowings under these facilities, we have classified these facilities as short-term debt at September 30, 2018. Borrowings under these facilities will be repaid as the underlying loans mature or are sold to third parties or transferred to securitizations.
Short-Term Debt by Collateral Type and Remaining Maturities	The following table presents the remaining maturities of our secured short-term debt by the type of collateral securing the debt at September 30, 2018 . Table 12.2 – Short-Term Debt by Collateral Type and Remaining Maturities September 30, 2018 (In Thousands) Within 30 days 31 to 90 days Over 90 days Total Collateral Type Held-for-sale residential loans $ — $ 141,712 $ 436,445 $ 578,157 Real estate securities 575,017 205,801 — 780,818 Single-family rental loans — — 15,859 15,859 Fix-and-flip loans 7,913 9,091 32,437 49,441 Total Short-Term Debt $ 582,930 $ 356,604 $ 484,741 $ 1,424,275

Asset-Backed Securities Issued

Asset-Backed Securities Issued (Tables)	9 Months Ended
	Sep. 30, 2018
Debt Disclosure [Abstract]
Asset-Backed Securities Issued	The carrying values of ABS issued by Sequoia securitization entities we sponsored at September 30, 2018 and December 31, 2017 , along with other selected information, are summarized in the following table. Table 13.1 – Asset-Backed Securities Issued September 30, 2018 Legacy Sequoia Sequoia Freddie Mac K-Series Total (Dollars in Thousands) Certificates with principal balance $ 574,615 $ 1,952,059 $ 867,705 $ 3,394,379 Interest-only certificates 1,447 27,763 35,358 64,568 Market valuation adjustments (31,139 ) 6,634 (27,457 ) (51,962 ) ABS Issued, Net $ 544,923 $ 1,986,456 $ 875,606 $ 3,406,985 Range of weighted average interest rates, by series 2.33% to 3.43% 4.47% to 4.97% 3.39% to 3.80% Stated maturities 2024 - 2036 2047 - 2048 2025 - 2027 Number of series 20 6 2 December 31, 2017 Legacy Sequoia Sequoia Freddie Mac K-Series Total (Dollars in Thousands) Certificates with principal balance $ 691,125 $ 526,657 $ — $ 1,217,782 Interest-only certificates 1,972 7,695 — 9,667 Market valuation adjustments (70,652 ) 7,788 — (62,864 ) ABS Issued, Net $ 622,445 $ 542,140 $ — $ 1,164,585 Range of weighted average interest rates, by series 1.46% to 2.78% 4.52% to 4.73% — % Stated maturities 2024 - 2036 2047 — Number of series 20 2 —
Accrued Interest Payable on Asset-Backed Securities Issued	Accrued Interest Payable on Asset-Backed Securities Issued (In Thousands) September 30, 2018 December 31, 2017 Legacy Sequoia $ 590 $ 537 Sequoia Choice 7,643 2,031 Freddie Mac K-Series 2,606 — Total Accrued Interest Payable on ABS Issued $ 10,839 $ 2,568
Collateral for ABS Issued	The following table summarizes the carrying value components of the collateral for ABS issued and outstanding at September 30, 2018 and December 31, 2017 . Table 13.3 – Collateral for Asset-Backed Securities Issued September 30, 2018 Legacy Sequoia Sequoia Choice Freddie Mac K-Series Total (In Thousands) Residential loans $ 553,958 $ 2,181,195 $ — $ 2,735,153 Multifamily loans — — 942,165 942,165 Restricted cash 147 11 — 158 Accrued interest receivable 860 9,046 2,843 12,749 REO 2,915 — — 2,915 Total Collateral for ABS Issued $ 557,880 $ 2,190,252 $ 945,008 $ 3,693,140 December 31, 2017 Legacy Sequoia Sequoia Freddie Mac K-Series Total (In Thousands) Residential loans $ 632,817 $ 620,062 $ — $ 1,252,879 Restricted cash 147 4 — 151 Accrued interest receivable 867 2,524 — 3,391 REO 3,353 — — 3,353 Total Collateral for ABS Issued $ 637,184 $ 622,590 $ — $ 1,259,774

Long-Term Debt (Tables)

Long-Term Debt (Tables)	9 Months Ended
	Sep. 30, 2018
Debt Disclosure [Abstract]
Maturities of FHLBC Borrowings by Year	The following table presents maturities of our FHLBC borrowings by year at September 30, 2018 . Table 14.1 – Maturities of FHLBC Borrowings by Year (In Thousands) September 30, 2018 2024 $ 470,171 2025 887,639 2026 642,189 Total FHLBC Borrowings $ 1,999,999

Commitments and Contingencies (

Commitments and Contingencies (Tables)	9 Months Ended
	Sep. 30, 2018
Commitments and Contingencies Disclosure [Abstract]
Future Lease Commitments by Year	The following table presents our future lease commitments at September 30, 2018 . Table 15.1 – Future Lease Commitments by Year (In Thousands) September 30, 2018 2018 (3 months) $ 491 2019 2,002 2020 1,966 2021 1,474 2022 and thereafter 10,217 Total Lease Commitments $ 16,150

Equity (Tables)

Equity (Tables)	9 Months Ended
	Sep. 30, 2018
Equity [Abstract]
Changes to Accumulated Other Comprehensive Income by Component	The following table provides a summary of changes to accumulated other comprehensive income by component for the three and nine months ended September 30, 2018 and 2017 . Table 16.1 – Changes in Accumulated Other Comprehensive Income by Component Three Months Ended September 30, 2018 Three Months Ended September 30, 2017 (In Thousands) Net Unrealized Gains on Available-for-Sale Securities Net Unrealized Losses on Interest Rate Agreements Accounted for as Cash Flow Hedges Net Unrealized Gains on Available-for-Sale Securities Net Unrealized Losses on Interest Rate Agreements Accounted for as Cash Flow Hedges Balance at beginning of period $ 106,725 $ (31,105 ) $ 114,364 $ (44,688 ) Other comprehensive (loss) income before reclassifications (1) (2,408 ) 4,801 13,158 321 Amounts reclassified from other accumulated comprehensive income (2) (5,686 ) — (853 ) 14 Net current-period other comprehensive (loss) income (8,094 ) 4,801 12,305 335 Balance at End of Period $ 98,631 $ (26,304 ) $ 126,669 $ (44,353 ) Nine Months Ended September 30, 2018 Nine Months Ended September 30, 2017 (In Thousands) Net Unrealized Gains on Available-for-Sale Securities Net Unrealized Losses on Interest Rate Agreements Accounted for as Cash Flow Hedges Net Unrealized Gains on Available-for-Sale Securities Net Unrealized Losses on Interest Rate Agreements Accounted for as Cash Flow Hedges Balance at beginning of period $ 128,201 $ (42,953 ) $ 115,873 $ (44,020 ) Other comprehensive income (loss) (1) (9,749 ) 16,649 17,899 (375 ) Amounts reclassified from other (2) (19,821 ) — (7,103 ) 42 Net current-period other comprehensive income (loss) (29,570 ) 16,649 10,796 (333 ) Balance at End of Period $ 98,631 $ (26,304 ) $ 126,669 $ (44,353 ) (1) Amounts presented for net unrealized gains on available-for-sale securities are net of tax benefit (provision) of zero and $0.1 million for the three and nine months ended September 30, 2018 , respectively, and zero and $(0.1) million for the three and nine months ended September 30, 2017 , respectively. (2) Amounts are presented net of tax provision of $2 million for both the three and nine months ended September 30, 2018 .
Reclassifications out of Accumulated Other Comprehensive Income	The following table provides a summary of reclassifications out of accumulated other comprehensive income for the three and nine months ended September 30, 2018 and 2017 . Table 16.2 – Reclassifications Out of Accumulated Other Comprehensive Income Amount Reclassified From Accumulated Other Comprehensive Income Affected Line Item in the Three Months Ended September 30, (In Thousands) Income Statement 2018 2017 Net Realized (Gain) Loss on AFS Securities Other than temporary impairment (1) Investment fair value changes, net $ 33 $ 3 Gain on sale of AFS securities Realized gains, net (7,247 ) (856 ) Gain on sale of AFS securities Provision for income taxes 1,528 — $ (5,686 ) $ (853 ) Net Realized Loss on Interest Rate Amortization of deferred loss Interest expense $ — $ 14 $ — $ 14 Amount Reclassified From Accumulated Other Comprehensive Income Affected Line Item in the Nine Months Ended September 30, (In Thousands) Income Statement 2018 2017 Net Realized (Gain) Loss on AFS Securities Other than temporary impairment (1) Investment fair value changes, net $ 89 $ 248 Gain on sale of AFS securities Realized gains, net (21,438 ) (7,351 ) Gain on sale of AFS securities Provision for income taxes 1,528 — $ (19,821 ) $ (7,103 ) Net Realized Loss on Interest Rate Amortization of deferred loss Interest expense $ — $ 42 $ — $ 42 (1) For the three months ended September 30, 2018 , other-than-temporary impairments were $0.4 million , of which less than $0.1 million were recognized through our consolidated statements of income and $0.3 million were recognized in Accumulated other comprehensive income, a component of our consolidated balance sheet. For the nine months ended September 30, 2018 , other-than-temporary impairments were $0.6 million , of which $0.1 million were recognized through our consolidated statements of income and $0.5 million were recognized in Accumulated other comprehensive income, a component of our consolidated balance sheet. For the nine months ended September 30, 2017, other-than-temporary impairments were $0.6 million , of which $0.2 million were recognized through our consolidated statements of income and $0.4 million were recognized in Accumulated other comprehensive income, a component of our consolidated balance sheet.
Basic and Diluted Earnings Per Common Share	The following table provides the basic and diluted earnings per common share computations for the three and nine months ended September 30, 2018 and 2017 . Table 16.3 – Basic and Diluted Earnings per Common Share Three Months Ended September 30, Nine Months Ended September 30, (In Thousands, except Share Data) 2018 2017 2018 2017 Basic Earnings per Common Share: Net income attributable to Redwood $ 40,921 $ 36,180 $ 120,513 $ 109,473 Less: Dividends and undistributed earnings allocated to participating securities (1,231 ) (948 ) (3,766 ) (2,800 ) Net income allocated to common shareholders $ 39,690 $ 35,232 $ 116,747 $ 106,673 Basic weighted average common shares outstanding 80,796,856 76,850,830 77,211,188 76,803,324 Basic Earnings per Common Share $ 0.49 $ 0.46 $ 1.51 $ 1.39 Diluted Earnings per Common Share: Net income attributable to Redwood $ 40,921 $ 36,180 $ 120,513 $ 109,473 Less: Dividends and undistributed earnings allocated to participating securities (1,284 ) (986 ) (3,867 ) (2,926 ) Add back: Interest expense on convertible notes for the period, net of tax 8,666 6,564 23,642 18,639 Net income allocated to common shareholders $ 48,303 $ 41,758 $ 140,288 $ 125,186 Weighted average common shares outstanding 80,796,856 76,850,830 77,211,188 76,803,324 Net effect of dilutive equity awards 443,191 298,955 251,935 215,141 Net effect of assumed convertible notes conversion to common shares 33,442,641 25,553,323 30,328,906 22,379,401 Diluted weighted average common shares outstanding 114,682,688 102,703,108 107,792,029 99,397,866 Diluted Earnings per Common Share $ 0.42 $ 0.41 $ 1.30 $ 1.26

Equity Compensation Plans (Tabl

Equity Compensation Plans (Tables)	9 Months Ended
	Sep. 30, 2018
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Equity Compensation Costs by Award Type	The unamortized compensation cost of awards issued under the Incentive Plan and purchases under the Employee Stock Purchase Plan totaled $19 million at September 30, 2018 , as shown in the following table. Table 17.1 – Activities of Equity Compensation Costs by Award Type Nine Months Ended September 30, 2018 (In Thousands) Restricted Stock Deferred Stock Units Performance Stock Units Employee Stock Purchase Plan Total Unrecognized compensation cost at beginning of period $ 2,808 $ 13,364 $ 5,298 $ — $ 21,470 Equity grants 2,391 4,750 350 136 7,627 Equity grant forfeitures (112 ) — — — (112 ) Equity compensation expense (1,245 ) (6,264 ) (1,954 ) (102 ) (9,565 ) Unrecognized Compensation Cost at End of Period $ 3,842 $ 11,850 $ 3,694 $ 34 $ 19,420

Mortgage Banking Activities, _2

Mortgage Banking Activities, Net (Tables)	9 Months Ended
	Sep. 30, 2018
Mortgage Banking [Abstract]
Mortgage Banking Activities	The following table presents the components of Mortgage banking activities, net, recorded in our consolidated statements of income for the three and nine months ended September 30, 2018 and 2017 . Table 18.1 – Mortgage Banking Activities Three Months Ended September 30, Nine Months Ended September 30, (In Thousands) 2018 2017 2018 2017 Mortgage Banking Activities, Net Changes in fair value of: Residential loans, at fair value (1) $ 7,236 $ 28,135 $ 8,406 $ 63,122 Single-family rental loans, at fair value (1) (121 ) — (121 ) — Risk management derivatives (2) 3,796 (7,077 ) 38,378 (13,787 ) Other income, net (3) 313 142 1,733 1,515 Mortgage Banking Activities, Net $ 11,224 $ 21,200 $ 48,396 $ 50,850 (1) Includes changes in fair value for associated loan purchase and forward sale commitments. (2) Represents market valuation changes of derivatives that were used to manage risks associated with our accumulation of residential loans. (3) Amounts in this line item include other fee income from loan acquisitions and the provision for repurchases expense, presented net.

Investment Fair Value Changes_2

Investment Fair Value Changes, Net (Tables)	9 Months Ended
	Sep. 30, 2018
Investments, Debt and Equity Securities [Abstract]
Investment Fair Value Changes	The following table presents the components of Investment fair value changes, net, recorded in our consolidated statements of income for the three and nine months ended September 30, 2018 and 2017 . Table 19.1 – Investment Fair Value Changes Three Months Ended September 30, Nine Months Ended September 30, (In Thousands) 2018 2017 2018 2017 Investment Fair Value Changes, Net Changes in fair value of: Residential loans held-for-investment, at Redwood $ (17,063 ) $ 2,881 $ (71,058 ) $ 8,902 Fix-and-flip loans held-for-investment 53 — 53 — Trading securities 6,314 607 2,429 30,676 Net investments in Legacy Sequoia entities (1) (248 ) (1,045 ) (976 ) (3,842 ) Net investments in Sequoia Choice entities (1) (943 ) (256 ) 43 (256 ) Net investments in Freddie Mac K-Series entities (1) 511 — 511 — Risk-sharing investments (126 ) (267 ) (474 ) (985 ) Risk management derivatives, net 21,867 (1,592 ) 82,391 (24,557 ) Valuation adjustments on commercial loans held-for-sale — — — 300 Impairments on AFS securities (33 ) (4 ) (89 ) (248 ) Investment Fair Value Changes, Net $ 10,332 $ 324 $ 12,830 $ 9,990 (1) Includes changes in fair value of the residential loans held-for-investment, REO and the ABS issued at the entities, which netted together represent the change in value of our retained investments at the consolidated VIEs.

Operating Expenses (Tables)

Operating Expenses (Tables)	9 Months Ended
	Sep. 30, 2018
Other Income and Expenses [Abstract]
Components of Operating Expenses	Components of our operating expenses for the three and nine months ended September 30, 2018 and 2017 are presented in the following table. Table 20.1 – Components of Operating Expenses Three Months Ended September 30, Nine Months Ended September 30, (In Thousands) 2018 2017 2018 2017 Fixed compensation expense $ 5,922 $ 5,233 $ 18,136 $ 16,556 Variable compensation expense 4,923 6,467 13,655 14,713 Equity compensation expense 3,033 2,337 9,565 7,634 Total compensation expense 13,878 14,037 41,356 38,903 Systems and consulting 1,794 1,856 5,434 5,183 Loan acquisition costs (1) 1,887 1,187 5,860 3,397 Office costs 1,173 988 3,397 3,231 Accounting and legal 1,170 519 3,078 2,322 Corporate costs 462 415 1,462 1,363 Other operating expenses 1,126 920 2,942 2,390 Total Operating Expenses $ 21,490 $ 19,922 $ 63,529 $ 56,789 (1) Loan acquisition costs primarily includes underwriting and due diligence costs related to the acquisition of residential loans held-for-sale at fair value.

Taxes (Tables)

Taxes (Tables)	9 Months Ended
	Sep. 30, 2018
Income Tax Disclosure [Abstract]
Reconciliation of Statutory Tax Rate to Effective Tax Rate	The following is a reconciliation of the statutory federal and state tax rates to our effective tax rate at September 30, 2018 and 2017 . Table 21.1 – Reconciliation of Statutory Tax Rate to Effective Tax Rate September 30, 2018 September 30, 2017 Federal statutory rate 21.0 % 34.0 % State statutory rate, net of Federal tax effect 8.6 % 7.2 % Differences in taxable (loss) income from GAAP income (1.8 )% (6.8 )% Change in valuation allowance (3.2 )% (2.8 )% Dividends paid deduction (15.3 )% (18.3 )% Effective Tax Rate 9.3 % 13.3 %

Segment Information (Tables)

Segment Information (Tables)	9 Months Ended
	Sep. 30, 2018
Segment Reporting [Abstract]
Business Segment Financial Information	The following tables present financial information by segment for the three and nine months ended September 30, 2018 and 2017 . Table 22.1 – Business Segment Financial Information Three Months Ended September 30, 2018 (In Thousands) Investment Portfolio Mortgage Banking Corporate/ Other Total Interest income $ 79,556 $ 14,427 $ 5,414 $ 99,397 Interest expense (40,852 ) (7,537 ) (15,962 ) (64,351 ) Net interest income (loss) 38,704 6,890 (10,548 ) 35,046 Non-interest income Mortgage banking activities, net — 11,224 — 11,224 Investment fair value changes, net 10,566 — (234 ) 10,332 Other income, net 3,334 — 119 3,453 Realized gains, net 7,275 — — 7,275 Total non-interest income, net 21,175 11,224 (115 ) 32,284 Direct operating expenses (2,659 ) (6,570 ) (12,261 ) (21,490 ) Provision for income taxes (2,840 ) (2,079 ) — (4,919 ) Segment Contribution $ 54,380 $ 9,465 $ (22,924 ) Net Income $ 40,921 Non-cash amortization income (expense), net $ 4,019 $ (54 ) $ (1,176 ) $ 2,789 Three Months Ended September 30, 2017 (In Thousands) Investment Portfolio Mortgage Banking Corporate/ Total Interest income $ 47,023 $ 10,626 $ 5,088 $ 62,737 Interest expense (9,445 ) (4,135 ) (13,863 ) (27,443 ) Net interest income (loss) 37,578 6,491 (8,775 ) 35,294 Non-interest income Mortgage banking activities, net — 21,200 — 21,200 Investment fair value changes, net 1,372 — (1,048 ) 324 Other income, net 2,812 — — 2,812 Realized gains, net 1,734 — — 1,734 Total non-interest income, net 5,918 21,200 (1,048 ) 26,070 Direct operating expenses (1,324 ) (6,107 ) (12,491 ) (19,922 ) Provision for income taxes (433 ) (4,829 ) — (5,262 ) Segment Contribution $ 41,739 $ 16,755 $ (22,314 ) Net Income $ 36,180 Non-cash amortization income (expense) $ 5,222 $ (25 ) $ (787 ) $ 4,410 Nine Months Ended September 30, 2018 (In Thousands) Investment Portfolio Mortgage Banking Corporate/ Total Interest income $ 202,882 $ 40,408 $ 15,702 $ 258,992 Interest expense (87,719 ) (21,303 ) (45,056 ) (154,078 ) Net interest income (loss) 115,163 19,105 (29,354 ) 104,914 Non-interest income Mortgage banking activities, net — 48,396 — 48,396 Investment fair value changes, net 13,756 — (926 ) 12,830 Other income, net 8,774 — 119 8,893 Realized gains, net 21,352 — — 21,352 Total non-interest income, net 43,882 48,396 (807 ) 91,471 Direct operating expenses (6,524 ) (20,941 ) (36,064 ) (63,529 ) Provision for income taxes (4,858 ) (7,485 ) — (12,343 ) Segment Contribution $ 147,663 $ 39,075 $ (66,225 ) Net Income $ 120,513 Non-cash amortization income (expense) $ 13,290 $ (99 ) $ (3,021 ) $ 10,170 Nine Months Ended September 30, 2017 (In Thousands) Investment Portfolio Mortgage Banking Corporate/ Total Interest income $ 135,106 $ 26,515 $ 14,968 $ 176,589 Interest expense (21,940 ) (11,462 ) (39,306 ) (72,708 ) Net interest income (loss) 113,166 15,053 (24,338 ) 103,881 Non-interest income Mortgage banking activities, net — 50,850 — 50,850 Investment fair value changes, net 13,846 — (3,856 ) 9,990 Other income, net 9,473 — — 9,473 Realized gains, net 9,561 — (752 ) 8,809 Total non-interest income, net 32,880 50,850 (4,608 ) 79,122 Direct operating expenses (4,371 ) (18,009 ) (34,409 ) (56,789 ) Provision for income taxes (4,490 ) (12,251 ) — (16,741 ) Segment Contribution $ 137,185 $ 35,643 $ (63,355 ) Net Income $ 109,473 Non-cash amortization income (expense) $ 16,263 $ (79 ) $ (2,528 ) $ 13,656
Components of Corporate and Other	The following table presents the components of Corporate/Other for the three and nine months ended September 30, 2018 and 2017 . Table 22.2 – Components of Corporate/Other Three Months Ended September 30, 2018 2017 (In Thousands) Legacy Consolidated VIEs (1) Other Total Legacy Consolidated VIEs (1) Other Total Interest income $ 5,174 $ 240 $ 5,414 $ 4,875 $ 213 $ 5,088 Interest expense (4,257 ) (11,705 ) (15,962 ) (3,838 ) (10,025 ) (13,863 ) Net interest income (loss) 917 (11,465 ) (10,548 ) 1,037 (9,812 ) (8,775 ) Non-interest income Investment fair value changes, net (248 ) 14 (234 ) (1,045 ) (3 ) (1,048 ) Other income — 119 119 — — — Total non-interest income, net (248 ) 133 (115 ) (1,045 ) (3 ) (1,048 ) Direct operating expenses — (12,261 ) (12,261 ) — (12,491 ) (12,491 ) Total $ 669 $ (23,593 ) $ (22,924 ) $ (8 ) $ (22,306 ) $ (22,314 ) Nine Months Ended September 30, 2018 2017 (In Thousands) Legacy Consolidated VIEs (1) Other Total Legacy Consolidated VIEs (1) Other Total Interest income $ 15,003 $ 699 $ 15,702 $ 14,576 $ 392 $ 14,968 Interest expense (12,324 ) (32,732 ) (45,056 ) (11,046 ) (28,260 ) (39,306 ) Net interest income (loss) 2,679 (32,033 ) (29,354 ) 3,530 (27,868 ) (24,338 ) Non-interest income Investment fair value changes, net (976 ) 50 (926 ) (3,842 ) (14 ) (3,856 ) Other income — 119 119 — — — Realized gains, net — — — — (752 ) (752 ) Total non-interest income, net (976 ) 169 (807 ) (3,842 ) (766 ) (4,608 ) Direct operating expenses — (36,064 ) (36,064 ) — (34,409 ) (34,409 ) Total $ 1,703 $ (67,928 ) $ (66,225 ) $ (312 ) $ (63,043 ) $ (63,355 ) (1) Legacy consolidated VIEs represent Legacy Sequoia entities that are consolidated for GAAP financial reporting purposes. See Note 4 for further discussion on VIEs.
Supplemental Information by Segment	The following table presents supplemental information by segment at September 30, 2018 and December 31, 2017 . Table 22.3 – Supplemental Segment Information (In Thousands) Investment Portfolio Mortgage Banking Corporate/ Other Total September 30, 2018 Residential loans $ 4,501,857 $ 866,444 $ 553,958 $ 5,922,259 Business purpose loans 95,515 20,105 — 115,620 Multifamily loans 942,165 — — 942,165 Real estate securities 1,470,084 — — 1,470,084 Total assets 7,436,674 909,926 793,035 9,139,635 December 31, 2017 Residential loans $ 3,054,448 $ 1,427,945 $ 632,817 $ 5,115,210 Real estate securities 1,476,510 — — 1,476,510 Total assets 4,743,873 1,453,069 842,880 7,039,822

Organization (Details)

Organization (Details)	9 Months Ended
	Sep. 30, 2018Segment
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Number of operating segments	2

Summary of Significant Accoun_4

Summary of Significant Accounting Policies - Offsetting of Financial Assets, Liabilities, and Collateral (Details) - USD ($) $ in Thousands		9 Months Ended
		Sep. 30, 2018	Dec. 31, 2017
Offsetting Asset and Liabilities [Line Items]
Future lease commitments with expiration date		$ 16,150
Net Amounts of Assets Presented in Consolidated Balance Sheet	[1]	87,219	$ 15,718
Gross Amounts of Recognized Liabilities, Including Assets Under Repurchase Agreements		(1,399,300)	(1,747,787)
Gross Amounts Offset in Consolidated Balance Sheet Including Assets Under Repurchase Agreement		0	0
Net Amounts of Liabilities Presented in Consolidated Balance Sheet	[1]	(42,724)	(63,081)
Net Amounts of Liabilities Presented in Consolidated Balance Sheet Including Assets Under Repurchase Agreement		(1,399,300)	(1,747,787)
Gross Amounts Not Offset in Consolidated Balance Sheet, Financial Instruments Including Assets Under Repurchase Agreement		1,370,323	1,694,741
Gross Amounts Not Offset in Consolidated Balance Sheet, Cash Collateral Pledged Including Assets Under Repurchase Agreement		28,914	50,747
Net Amount Including Assets Under Repurchase Agreement		$ (63)	(2,299)
Fix-and-flip loans held-for-investment
Offsetting Asset and Liabilities [Line Items]
Loans held-for-investment, term		2 years
Interest Rate Agreement, TBAs, And Futures
Offsetting Asset and Liabilities [Line Items]
Gross Amounts of Recognized Assets		$ 85,037	10,298
Net Amounts of Assets Presented in Consolidated Balance Sheet		85,037	10,298
Gross Amounts Not Offset in Consolidated Balance Sheet - Financial Instruments		(11,348)	(6,329)
Gross Amounts Not Offset in Consolidated Balance Sheet, Cash Collateral Pledged		(33,393)	(42)
Net Amount		40,296	3,927
Interest rate agreements
Offsetting Asset and Liabilities [Line Items]
Gross Amounts of Recognized Assets		78,006	10,164
Gross Amounts Offset in Consolidated Balance Sheet		0	0
Net Amounts of Assets Presented in Consolidated Balance Sheet		78,006	10,164
Gross Amounts Not Offset in Consolidated Balance Sheet - Financial Instruments		(10,429)	(6,196)
Gross Amounts Not Offset in Consolidated Balance Sheet, Cash Collateral Pledged		(28,159)	(42)
Net Amount		39,418	3,926
Gross Amounts of Recognized Liabilities		(38,581)	(55,567)
Gross Amounts Offset in Consolidated Balance Sheet		0	0
Net Amounts of Liabilities Presented in Consolidated Balance Sheet		(38,581)	(55,567)
Gross Amounts Not Offset in Consolidated Balance Sheet, Financial Instruments		10,429	6,196
Gross Amounts Not Offset in Consolidated Balance Sheet, Cash Collateral Pledged		28,152	49,371
Net Amount		0	0
TBAs
Offsetting Asset and Liabilities [Line Items]
Gross Amounts of Recognized Assets		6,987	133
Gross Amounts Offset in Consolidated Balance Sheet		0	0
Net Amounts of Assets Presented in Consolidated Balance Sheet		6,987	133
Gross Amounts Not Offset in Consolidated Balance Sheet - Financial Instruments		(919)	(133)
Gross Amounts Not Offset in Consolidated Balance Sheet, Cash Collateral Pledged		(5,234)	0
Net Amount		834	0
Gross Amounts of Recognized Liabilities		(1,744)	(3,808)
Gross Amounts Offset in Consolidated Balance Sheet		0	0
Net Amounts of Liabilities Presented in Consolidated Balance Sheet		(1,744)	(3,808)
Gross Amounts Not Offset in Consolidated Balance Sheet, Financial Instruments		919	133
Gross Amounts Not Offset in Consolidated Balance Sheet, Cash Collateral Pledged		762	1,376
Net Amount		(63)	(2,299)
Futures
Offsetting Asset and Liabilities [Line Items]
Gross Amounts of Recognized Assets		44	1
Gross Amounts Offset in Consolidated Balance Sheet		0	0
Net Amounts of Assets Presented in Consolidated Balance Sheet		44	1
Gross Amounts Not Offset in Consolidated Balance Sheet - Financial Instruments		0	0
Gross Amounts Not Offset in Consolidated Balance Sheet, Cash Collateral Pledged		0	0
Net Amount		44	1
Loan warehouse debt
Offsetting Asset and Liabilities [Line Items]
Gross Amounts of Recognized Liabilities - Under Repurchase Agreements		(578,157)	(1,039,666)
Gross Amounts Offset in Consolidated Balance Sheet - Under Repurchase Agreement		0	0
Net Amounts of Liabilities Presented in Consolidated Balance Sheet - Under Repurchase Agreement		(578,157)	(1,039,666)
Gross Amounts Not Offset in Consolidated Balance Sheet, Financial Instruments - Under Repurchase Agreement		578,157	1,039,666
Gross Amounts Not Offset in Consolidated Balance Sheet, Cash Collateral Pledged - Under Repurchase Agreement		0	0
Security repurchase agreements
Offsetting Asset and Liabilities [Line Items]
Gross Amounts of Recognized Liabilities - Under Repurchase Agreements		(780,818)	(648,746)
Gross Amounts Offset in Consolidated Balance Sheet - Under Repurchase Agreement		0	0
Net Amounts of Liabilities Presented in Consolidated Balance Sheet - Under Repurchase Agreement		(780,818)	(648,746)
Gross Amounts Not Offset in Consolidated Balance Sheet, Financial Instruments - Under Repurchase Agreement		780,818	648,746
Gross Amounts Not Offset in Consolidated Balance Sheet, Cash Collateral Pledged - Under Repurchase Agreement		0	0
Net Amount - Under Repurchase Agreement		$ 0	$ 0
[1]	Our consolidated balance sheets include assets of consolidated variable interest entities (“VIEs”) that can only be used to settle obligations of these VIEs and liabilities of consolidated VIEs for which creditors do not have recourse to Redwood Trust, Inc. or its affiliates. At September 30, 2018 and December 31, 2017, assets of consolidated VIEs totaled $3,693,140 and $1,259,774, respectively. At September 30, 2018 and December 31, 2017, liabilities of consolidated VIEs totaled $3,417,835 and $1,167,157, respectively. See Note 4 for further discussion.

Principles of Consolidation - A

Principles of Consolidation - Additional Information (Details) $ in Millions	69 Months Ended
	Sep. 30, 2018USD ($)Entity
Variable Interest Entity, Not Primary Beneficiary
Variable Interest Entity [Line Items]
Number of securitization entities to which asset transferred (in entities) | Entity	43
Legacy Sequoia | Variable Interest Entity, Primary Beneficiary
Variable Interest Entity [Line Items]
Estimated fair value of investments	$ 12
Sequoia Choice | Variable Interest Entity, Primary Beneficiary
Variable Interest Entity [Line Items]
Estimated fair value of investments	196
Freddie Mac K-Series | Variable Interest Entity, Primary Beneficiary
Variable Interest Entity [Line Items]
Estimated fair value of investments	$ 67

Principles of Consolidation -_2

Principles of Consolidation - Assets and Liabilities of Consolidated Variable Interest Entity's (Details) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2018USD ($)Investment	Dec. 31, 2017USD ($)Investment
Variable Interest Entity [Line Items]
Assets	$ 3,693,140	$ 1,259,774
Liabilities	3,417,835	1,167,157
Total Consolidated VIEs
Variable Interest Entity [Line Items]
Assets	3,693,140	1,259,774
Liabilities	$ 3,417,835	$ 1,167,157
Number of VIEs (in investments) | Investment	28	22
Total Consolidated VIEs | Residential loans held-for-investment, at Redwood
Variable Interest Entity [Line Items]
Assets	$ 2,735,153	$ 1,252,879
Total Consolidated VIEs | Multifamily loans, held-for-investment
Variable Interest Entity [Line Items]
Assets	942,165
Total Consolidated VIEs | Restricted cash
Variable Interest Entity [Line Items]
Assets	158	151
Total Consolidated VIEs | Accrued interest receivable
Variable Interest Entity [Line Items]
Assets	12,749	3,391
Total Consolidated VIEs | REO
Variable Interest Entity [Line Items]
Assets	2,915	3,353
Total Consolidated VIEs | Accrued interest payable
Variable Interest Entity [Line Items]
Liabilities	10,839	2,568
Total Consolidated VIEs | Accrued expenses and other liabilities
Variable Interest Entity [Line Items]
Liabilities	11	4
Total Consolidated VIEs | Asset-backed securities issued
Variable Interest Entity [Line Items]
Liabilities	3,406,985	1,164,585
Legacy Sequoia
Variable Interest Entity [Line Items]
Assets	557,880	637,184
Liabilities	$ 545,513	$ 622,982
Number of VIEs (in investments) | Investment	20	20
Legacy Sequoia | Residential loans held-for-investment, at Redwood
Variable Interest Entity [Line Items]
Assets	$ 553,958	$ 632,817
Legacy Sequoia | Multifamily loans, held-for-investment
Variable Interest Entity [Line Items]
Assets	0
Legacy Sequoia | Restricted cash
Variable Interest Entity [Line Items]
Assets	147	147
Legacy Sequoia | Accrued interest receivable
Variable Interest Entity [Line Items]
Assets	860	867
Legacy Sequoia | REO
Variable Interest Entity [Line Items]
Assets	2,915	3,353
Legacy Sequoia | Accrued interest payable
Variable Interest Entity [Line Items]
Liabilities	590	537
Legacy Sequoia | Accrued expenses and other liabilities
Variable Interest Entity [Line Items]
Liabilities	0	0
Legacy Sequoia | Asset-backed securities issued
Variable Interest Entity [Line Items]
Liabilities	544,923	622,445
Sequoia Choice
Variable Interest Entity [Line Items]
Assets	2,190,252	622,590
Liabilities	$ 1,994,110	$ 544,175
Number of VIEs (in investments) | Investment	6	2
Sequoia Choice | Residential loans held-for-investment, at Redwood
Variable Interest Entity [Line Items]
Assets	$ 2,181,195	$ 620,062
Sequoia Choice | Multifamily loans, held-for-investment
Variable Interest Entity [Line Items]
Assets	0
Sequoia Choice | Restricted cash
Variable Interest Entity [Line Items]
Assets	11	4
Sequoia Choice | Accrued interest receivable
Variable Interest Entity [Line Items]
Assets	9,046	2,524
Sequoia Choice | REO
Variable Interest Entity [Line Items]
Assets	0	0
Sequoia Choice | Accrued interest payable
Variable Interest Entity [Line Items]
Liabilities	7,643	2,031
Sequoia Choice | Accrued expenses and other liabilities
Variable Interest Entity [Line Items]
Liabilities	11	4
Sequoia Choice | Asset-backed securities issued
Variable Interest Entity [Line Items]
Liabilities	1,986,456	542,140
Freddie Mac K-Series
Variable Interest Entity [Line Items]
Assets	945,008	0
Liabilities	$ 878,212	$ 0
Number of VIEs (in investments) | Investment	2	0
Freddie Mac K-Series | Residential loans held-for-investment, at Redwood
Variable Interest Entity [Line Items]
Assets	$ 0	$ 0
Freddie Mac K-Series | Multifamily loans, held-for-investment
Variable Interest Entity [Line Items]
Assets	942,165
Freddie Mac K-Series | Restricted cash
Variable Interest Entity [Line Items]
Assets	0	0
Freddie Mac K-Series | Accrued interest receivable
Variable Interest Entity [Line Items]
Assets	2,843	0
Freddie Mac K-Series | REO
Variable Interest Entity [Line Items]
Assets	0	0
Freddie Mac K-Series | Accrued interest payable
Variable Interest Entity [Line Items]
Liabilities	2,606	0
Freddie Mac K-Series | Accrued expenses and other liabilities
Variable Interest Entity [Line Items]
Liabilities	0	0
Freddie Mac K-Series | Asset-backed securities issued
Variable Interest Entity [Line Items]
Liabilities	$ 875,606	$ 0

Principles of Consolidation - S

Principles of Consolidation - Securitization Activity Related to Unconsolidated Variable Interest Entity's Sponsored by Redwood (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Variable Interest Entity [Line Items]
MSRs recognized			$ 0	$ 7,387
Variable Interest Entity, Not Primary Beneficiary
Variable Interest Entity [Line Items]
Principal balance of loans transferred	$ 327,511	$ 839,264	2,735,644	2,223,387
MSRs recognized	0	0	0	7,123
Variable Interest Entity, Not Primary Beneficiary | Trading securities retained, at fair value
Variable Interest Entity [Line Items]
Securities retained, at fair value	2,583	24,617	48,831	55,607
Variable Interest Entity, Not Primary Beneficiary | AFS securities retained, at fair value
Variable Interest Entity [Line Items]
Securities retained, at fair value	$ 776	$ 4,416	$ 6,728	$ 11,476

Principles of Consolidation - C

Principles of Consolidation - Cash Flows Related to Unconsolidated Variable Interest Entity's Sponsored by Redwood (Details) - Variable Interest Entity, Not Primary Beneficiary - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Variable Interest Entity [Line Items]
Proceeds from new transfers	$ 329,231	$ 839,642	$ 2,723,012	$ 2,213,151
MSR fees received	3,405	3,631	10,216	10,804
Funding of compensating interest, net	(46)	(35)	(102)	(114)
Cash flows received on retained securities	$ 7,267	$ 6,882	$ 21,720	$ 19,843

Principles of Consolidation -_3

Principles of Consolidation - Assumptions Related to Unconsolidated Variable Interest Entity's Sponsored by Redwood (Details) - Variable Interest Entity, Not Primary Beneficiary	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
MSRs
Fair Value Assumption, Date of Securitization or Asset-backed Financing Arrangement, Transferor's Continuing Involvement, Servicing Assets or Liabilities [Line Items]
Prepayment rates				9.00%
Discount rates				11.00%
Senior IO Securities
Fair Value Assumption, Date of Securitization or Asset-backed Financing Arrangement, Transferor's Continuing Involvement, Servicing Assets or Liabilities [Line Items]
Prepayment rates	9.00%	11.00%	9.00%	10.00%
Discount rates	14.00%	14.00%	14.00%	13.00%
Credit loss assumptions	0.20%	0.25%	0.20%	0.25%
Subordinate Securities
Fair Value Assumption, Date of Securitization or Asset-backed Financing Arrangement, Transferor's Continuing Involvement, Servicing Assets or Liabilities [Line Items]
Prepayment rates	9.00%	10.00%	10.00%	10.00%
Discount rates	7.00%	5.00%	5.00%	5.00%
Credit loss assumptions	0.20%	0.25%	0.20%	0.25%

Principles of Consolidation -_4

Principles of Consolidation - Summary of Unconsolidated Variable Interest Entity's Sponsored by Redwood (Details) - Variable Interest Entity, Not Primary Beneficiary - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
On-balance sheet assets, at fair value:
Maximum loss exposure	$ 356,793	$ 381,661
Assets transferred:
Principal balance of loans outstanding	10,349,405	8,364,148
Principal balance of loans 30 days delinquent	19,625	27,926
Interest-only, senior and subordinate securities, classified as trading
On-balance sheet assets, at fair value:
Securities	130,598	101,426
Subordinate securities, classified as AFS
On-balance sheet assets, at fair value:
Securities	163,870	219,255
Mortgage servicing rights
On-balance sheet assets, at fair value:
Securities	$ 62,325	$ 60,980

Principles of Consolidation - K

Principles of Consolidation - Key Assumptions and Sensitivity Analysis for Assets Retained from Unconsolidated Variable Interest Entity's Sponsored by Redwood (Details) - Variable Interest Entity, Not Primary Beneficiary - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2018	Dec. 31, 2017
MSRs
Sensitivity Analysis of Fair Value of Interests Continued to be Held by Transferor, Servicing Assets or Liabilities, Impact of Adverse Change in Assumption [Line Items]
Fair value	$ 62,325	$ 60,980
Expected life (in years)	9 years	8 years
Prepayment speed assumption (annual CPR)	7.00%	9.00%
Decrease in fair value from:
10% adverse change	$ 1,631	$ 2,022
25% adverse change	$ 3,974	$ 4,839
Discount rate assumption	11.00%	11.00%
Decrease in fair value from:
100 basis point increase	$ 2,469	$ 2,386
200 basis point increase	$ 4,812	4,597
Decrease in fair value from:
Impact of adverse change in prepayment speed	25.00%
Impact of increase in discount rate assumption	1.00%
Impact of adverse change in expected credit losses	25.00%
Senior IO Securities
Sensitivity Analysis of Fair Value of Interests Continued to be Held by Transferor, Servicing Assets or Liabilities, Impact of Adverse Change in Assumption [Line Items]
Fair value	$ 62,996	$ 33,773
Expected life (in years)	8 years	6 years
Prepayment speed assumption (annual CPR)	9.00%	10.00%
Decrease in fair value from:
10% adverse change	$ 2,156	$ 1,371
25% adverse change	$ 5,145	$ 3,289
Discount rate assumption	11.00%	11.00%
Decrease in fair value from:
100 basis point increase	$ 2,383	$ 1,158
200 basis point increase	$ 4,592	$ 2,265
Credit loss assumption	0.20%	0.25%
Decrease in fair value from:
10% higher losses	$ 0	$ 0
25% higher losses	$ 0	0
Impact of adverse change in prepayment speed	25.00%
Impact of increase in discount rate assumption	1.00%
Impact of adverse change in expected credit losses	25.00%
Subordinate Securities
Sensitivity Analysis of Fair Value of Interests Continued to be Held by Transferor, Servicing Assets or Liabilities, Impact of Adverse Change in Assumption [Line Items]
Fair value	$ 231,472	$ 286,908
Expected life (in years)	15 years	13 years
Prepayment speed assumption (annual CPR)	9.00%	11.00%
Decrease in fair value from:
10% adverse change	$ 547	$ 611
25% adverse change	$ 1,361	$ 1,506
Discount rate assumption	6.00%	5.00%
Decrease in fair value from:
100 basis point increase	$ 22,243	$ 25,827
200 basis point increase	$ 41,116	$ 47,885
Credit loss assumption	0.20%	0.25%
Decrease in fair value from:
10% higher losses	$ 559	$ 1,551
25% higher losses	$ 4,220	$ 3,873
Impact of adverse change in prepayment speed	25.00%
Impact of increase in discount rate assumption	1.00%
Impact of adverse change in expected credit losses	25.00%

Principles of Consolidation -_5

Principles of Consolidation - Summary of Redwood's Interest in Third-Party Variable Interest Entity's (Details) - REO - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
Variable Interest Entity [Line Items]
Assets	$ 1,175,616	$ 1,155,829
Senior
Variable Interest Entity [Line Items]
Assets	214,655	216,066
Mezzanine
Variable Interest Entity [Line Items]
Assets	538,847	508,010
Subordinate
Variable Interest Entity [Line Items]
Assets	$ 422,114	$ 431,753

Fair Value of Financial Instr_3

Fair Value of Financial Instruments - Carrying Values and Estimated Fair Values of Assets and Liabilities (Details) - USD ($) $ in Thousands		Sep. 30, 2018	Dec. 31, 2017
Assets
Trading securities		$ 1,108,243	$ 968,844
Available-for-sale securities		361,841	507,666
Derivative assets	[1]	87,219	15,718
Pledged collateral		42,127	42,615
Liabilities
Derivative liabilities	[1]	42,724	63,081
Carrying Value
Assets
Business purpose loans		115,620	0
Multifamily loans		942,165	0
Trading securities		1,108,243	968,844
Available-for-sale securities		361,841	507,666
Cash and cash equivalents		173,516	144,663
Restricted cash		27,253	2,144
Accrued interest receivable		35,644	27,013
Derivative assets		87,219	15,718
MSRs		63,785	63,598
REO		2,915	3,354
Margin receivable		48,655	85,044
FHLBC stock		43,393	43,393
Guarantee asset		2,885	2,869
Pledged collateral		42,127	42,615
Participation in loan warehouse facility		39,219	0
Liabilities
Short-term debt		1,424,275	1,688,412
Accrued interest payable		31,076	18,435
Margin payable		33,950	390
Guarantee obligation		17,423	19,487
Derivative liabilities		42,724	63,081
ABS issued at fair value, net		3,406,985	1,164,585
FHLBC long-term borrowings		1,999,999	1,999,999
Convertible notes, net		632,401	686,759
Trust preferred securities and subordinated notes, net		138,570	138,535
Carrying Value | Residential loans | Residential Loans
Assets
Loans, held-for-sale		866,331	1,427,052
Carrying Value | Residential loans | Residential loans, at lower of cost or fair value
Assets
Loans, held-for-sale		113	893
Carrying Value | Residential loans | Residential Loans Held For Investment at Fair Value
Assets
Loans receivable, fair value		5,055,815	3,687,265
Fair Value
Assets
Business purpose loans		115,620	0
Multifamily loans		942,165	0
Trading securities		1,108,243	968,844
Available-for-sale securities		361,841	507,666
Cash and cash equivalents		173,516	144,663
Restricted cash		27,253	2,144
Accrued interest receivable		35,644	27,013
Derivative assets		87,219	15,718
MSRs		63,785	63,598
REO		3,490	3,806
Margin receivable		48,655	85,044
FHLBC stock		43,393	43,393
Guarantee asset		2,885	2,869
Pledged collateral		42,127	42,615
Participation in loan warehouse facility		39,219	0
Liabilities
Short-term debt		1,424,275	1,688,412
Accrued interest payable		31,076	18,435
Margin payable		33,950	390
Guarantee obligation		17,409	18,878
Derivative liabilities		42,724	63,081
ABS issued at fair value, net		3,406,985	1,164,585
FHLBC long-term borrowings		1,999,999	1,999,999
Convertible notes, net		639,684	692,369
Trust preferred securities and subordinated notes, net		108,113	103,230
Fair Value | Residential loans | Residential Loans
Assets
Loans, held-for-sale		866,331	1,427,052
Fair Value | Residential loans | Residential loans, at lower of cost or fair value
Assets
Loans, held-for-sale		133	993
Fair Value | Residential loans | Residential Loans Held For Investment at Fair Value
Assets
Loans receivable, fair value		$ 5,055,815	$ 3,687,265
[1]	Our consolidated balance sheets include assets of consolidated variable interest entities (“VIEs”) that can only be used to settle obligations of these VIEs and liabilities of consolidated VIEs for which creditors do not have recourse to Redwood Trust, Inc. or its affiliates. At September 30, 2018 and December 31, 2017, assets of consolidated VIEs totaled $3,693,140 and $1,259,774, respectively. At September 30, 2018 and December 31, 2017, liabilities of consolidated VIEs totaled $3,417,835 and $1,167,157, respectively. See Note 4 for further discussion.

Fair Value of Financial Instr_4

Fair Value of Financial Instruments - Additional Information (Details) $ in Millions	3 Months Ended	9 Months Ended
	Sep. 30, 2018USD ($)	Sep. 30, 2018USD ($)
Residential loans
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Fair value option elected aggregate carrying amount, asset	$ 1,790	$ 5,520
Business purpose loans, at fair value
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Fair value option elected aggregate carrying amount, asset	126
Multifamily loans, held-for-investment, at fair value
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Fair value option elected aggregate carrying amount, asset	$ 963
Real estate securities | Maximum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Dealer marks of securities (as a percent)	79.00%	79.00%
Carrying value for which dealer quotes have been received (as a percent)	86.00%	86.00%
Difference of internal valuation than dealer marks (as a percent)	1.00%	1.00%
Residential Senior Securities
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Fair value option elected aggregate carrying amount, asset	$ 32	$ 105
Residential Subordinate Securities | Subordinate Securities
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Fair value option elected aggregate carrying amount, asset	$ 128	$ 417
Mortgage servicing rights | Maximum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Difference of internal valuation than dealer marks (as a percent)	2.00%	2.00%

Fair Value of Financial Instr_5

Fair Value of Financial Instruments - Assets and Liabilities Measured at Fair Value on Recurring Basis (Details) - USD ($) $ in Thousands		Sep. 30, 2018	Dec. 31, 2017
Assets
Trading securities		$ 1,108,243	$ 968,844
Available-for-sale securities		361,841	507,666
Derivative assets	[1]	87,219	15,718
Pledged collateral		42,127	42,615
Liabilities
Derivative liabilities	[1]	42,724	63,081
Fair Value, Measurements, Recurring
Assets
Business purpose loans		115,620
Multifamily loans		942,165
Trading securities		1,108,243	968,844
Available-for-sale securities		361,841	507,666
Derivative assets		87,219	15,718
MSRs		63,785	63,598
Pledged collateral		42,127	42,615
FHLBC stock		43,393	43,393
Guarantee asset		2,885	2,869
Liabilities
Derivative liabilities		42,724	63,081
ABS issued		3,406,985	1,164,585
Fair Value, Measurements, Recurring | Residential Loans
Assets
Residential loans		5,922,146	5,114,317
Fair Value, Measurements, Recurring | Level 1
Assets
Business purpose loans		0
Multifamily loans		0
Trading securities		0	0
Available-for-sale securities		0	0
Derivative assets		7,031	134
MSRs		0	0
Pledged collateral		42,127	42,615
FHLBC stock		0	0
Guarantee asset		0	0
Liabilities
Derivative liabilities		1,744	3,808
ABS issued		0	0
Fair Value, Measurements, Recurring | Level 1 | Residential Loans
Assets
Residential loans		0	0
Fair Value, Measurements, Recurring | Level 2
Assets
Business purpose loans		0
Multifamily loans		0
Trading securities		0	0
Available-for-sale securities		0	0
Derivative assets		78,006	10,164
MSRs		0	0
Pledged collateral		0	0
FHLBC stock		43,393	43,393
Guarantee asset		0	0
Liabilities
Derivative liabilities		38,581	55,567
ABS issued		0	0
Fair Value, Measurements, Recurring | Level 2 | Residential Loans
Assets
Residential loans		0	0
Fair Value, Measurements, Recurring | Level 3
Assets
Business purpose loans		115,620
Multifamily loans		942,165
Trading securities		1,108,243	968,844
Available-for-sale securities		361,841	507,666
Derivative assets		2,182	5,420
MSRs		63,785	63,598
Pledged collateral		0	0
FHLBC stock		0	0
Guarantee asset		2,885	2,869
Liabilities
Derivative liabilities		2,399	3,706
ABS issued		3,406,985	1,164,585
Fair Value, Measurements, Recurring | Level 3 | Residential Loans
Assets
Residential loans		$ 5,922,146	$ 5,114,317
[1]	Our consolidated balance sheets include assets of consolidated variable interest entities (“VIEs”) that can only be used to settle obligations of these VIEs and liabilities of consolidated VIEs for which creditors do not have recourse to Redwood Trust, Inc. or its affiliates. At September 30, 2018 and December 31, 2017, assets of consolidated VIEs totaled $3,693,140 and $1,259,774, respectively. At September 30, 2018 and December 31, 2017, liabilities of consolidated VIEs totaled $3,417,835 and $1,167,157, respectively. See Note 4 for further discussion.

Fair Value of Financial Instr_6

Fair Value of Financial Instruments - Changes in Level 3 Assets and Liabilities Measured at Fair Value on Recurring Basis (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2018USD ($)
ABS Issued
Liabilities
Beginning balance	$ 1,164,585
Acquisitions	2,539,451
Sales	0
Principal paydowns	(305,529)
Gains (losses) in net income, net	8,478
Unrealized losses in OCI, net	0
Other settlements, net	0
Ending balance	3,406,985
Residential Loans
Assets
Beginning balance	5,114,317
Acquisitions	5,570,683
Sales	(4,135,911)
Principal paydowns	(587,162)
Gains (losses) in net income, net	(37,641)
Unrealized losses in OCI, net	0
Other settlements, net	(2,140)
Ending balance	5,922,146
Business purpose loans, at fair value
Assets
Beginning balance	0
Acquisitions	126,214
Sales	0
Principal paydowns	(10,912)
Gains (losses) in net income, net	318
Unrealized losses in OCI, net	0
Other settlements, net	0
Ending balance	115,620
Multifamily loans, held-for-investment, at fair value
Assets
Beginning balance	0
Acquisitions	946,650
Sales	0
Principal paydowns	(286)
Gains (losses) in net income, net	(4,199)
Unrealized losses in OCI, net	0
Other settlements, net	0
Ending balance	942,165
Trading securities
Assets
Beginning balance	968,844
Acquisitions	522,293
Sales	(348,054)
Principal paydowns	(25,847)
Gains (losses) in net income, net	2,098
Unrealized losses in OCI, net	0
Other settlements, net	(11,091)
Ending balance	1,108,243
AFS Securities
Assets
Beginning balance	507,666
Acquisitions	6,728
Sales	(118,423)
Principal paydowns	(35,431)
Gains (losses) in net income, net	32,494
Unrealized losses in OCI, net	(31,193)
Other settlements, net	0
Ending balance	361,841
MSRs
Assets
Beginning balance	63,598
Acquisitions	0
Sales	(1,077)
Principal paydowns	0
Gains (losses) in net income, net	1,264
Unrealized losses in OCI, net	0
Other settlements, net	0
Ending balance	63,785
Guarantee Asset
Assets
Beginning balance	2,869
Acquisitions	0
Sales	0
Principal paydowns	0
Gains (losses) in net income, net	16
Unrealized losses in OCI, net	0
Other settlements, net	0
Ending balance	2,885
Derivatives
Assets
Beginning balance	1,714
Acquisitions	0
Sales	0
Principal paydowns	0
Gains (losses) in net income, net	(8,093)
Unrealized losses in OCI, net	0
Other settlements, net	6,162
Ending balance	$ (217)

Fair Value of Financial Instr_7

Fair Value of Financial Instruments - Portion of Net Gains (Losses) Attributable to Level 3 Assets and Liabilities Still Held Included in Net Income (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Loan purchase commitments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Net gains (losses) attributable to level 3 liabilities still held included in net income	$ (2,314)	$ 0	$ (2,388)	$ 0
Asset-backed securities issued
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Net gains (losses) attributable to level 3 liabilities still held included in net income	12,536	(7,771)	(8,478)	(30,286)
Residential Loans Held For Investment at Fair Value | Residential loans at Redwood
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Net gains (losses) attributable to level 3 assets still held included in net income	(18,100)	14,359	(70,316)	24,227
Residential Loans Held For Investment at Fair Value | Residential loans at consolidated Sequoia entities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Net gains (losses) attributable to level 3 assets still held included in net income	(8,978)	3,497	11,936	22,949
Business purpose loans, at fair value
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Net gains (losses) attributable to level 3 assets still held included in net income	(20)	0	(20)	0
Multifamily loans, held-for-investment, at fair value | Freddie Mac K-Series
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Net gains (losses) attributable to level 3 assets still held included in net income	(4,199)	0	(4,199)	0
Trading securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Net gains (losses) attributable to level 3 assets still held included in net income	3,821	(36)	(1,956)	24,452
AFS securities retained, at fair value
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Net gains (losses) attributable to level 3 assets still held included in net income	(33)	(3)	(90)	(248)
MSRs
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Net gains (losses) attributable to level 3 assets still held included in net income	337	317	4,861	(1,005)
Loan purchase commitments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Net gains (losses) attributable to level 3 assets still held included in net income	2,168	2,117	2,157	2,121
Guarantee Asset
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Net gains (losses) attributable to level 3 assets still held included in net income	$ (51)	$ (239)	$ 15	$ (1,043)

Fair Value of Financial Instr_8

Fair Value of Financial Instruments - Assets and Liabilities Measured at Fair Value on Non-Recurring Basis (Details) - Fair Value, Measurements, Nonrecurring - REO $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2018USD ($)	Sep. 30, 2018USD ($)
Fair Value, Assets and Liabilities Measured on Nonrecurring Basis [Line Items]
REO	$ 1,804	$ 1,804
Gain (loss) on assets measured at fair value on a non-recurring basis	(37)	(162)
Level 1
Fair Value, Assets and Liabilities Measured on Nonrecurring Basis [Line Items]
REO	0	0
Level 2
Fair Value, Assets and Liabilities Measured on Nonrecurring Basis [Line Items]
REO	0	0
Level 3
Fair Value, Assets and Liabilities Measured on Nonrecurring Basis [Line Items]
REO	$ 1,804	$ 1,804

Fair Value of Financial Instr_9

Fair Value of Financial Instruments - Market Valuation Adjustments, Net (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total Market Valuation Gains, Net	$ 19,530	$ 19,609	$ 53,666	$ 50,352
Mortgage Banking Activities, Net
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Market valuations gains and losses, net	10,911	21,058	46,663	49,335
Mortgage Banking Activities, Net | Residential Loans
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Market valuations gains and losses, net	5,626	14,859	16,522	29,175
Mortgage Banking Activities, Net | Single-family rental loans held-for-sale, at fair value
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Market valuations gains and losses, net	(121)	0	(121)	0
Mortgage Banking Activities, Net | Residential loan purchase and forward sale commitments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Market valuations gains and losses, net	1,610	13,276	(8,116)	33,947
Mortgage Banking Activities, Net | Risk management derivatives, net
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Market valuations gains and losses, net	3,796	(7,077)	38,378	(13,787)
Investment Fair Value Changes, Net
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Market valuations gains and losses, net	10,332	324	12,830	9,990
Investment Fair Value Changes, Net | Risk management derivatives, net
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Market valuations gains and losses, net	21,867	(1,592)	82,391	(24,557)
Investment Fair Value Changes, Net | Residential loans held-for-investment, at Redwood
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Market valuations gains and losses, net	(17,063)	2,881	(71,058)	8,902
Investment Fair Value Changes, Net | Fix-and-flip loans held-for-investment
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Market valuations gains and losses, net	53	0	53	0
Investment Fair Value Changes, Net | Trading securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Market valuations gains and losses, net	6,314	607	2,429	30,676
Investment Fair Value Changes, Net | Valuation adjustments on commercial loans held-for-sale
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Market valuations gains and losses, net	0	0	0	300
Investment Fair Value Changes, Net | Legacy Sequoia
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Market valuations gains and losses, net	(248)	(1,045)	(976)	(3,842)
Investment Fair Value Changes, Net | Sequoia Choice
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Market valuations gains and losses, net	(943)	(256)	43	(256)
Investment Fair Value Changes, Net | Freddie Mac K-Series
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Market valuations gains and losses, net	511	0	511	0
Investment Fair Value Changes, Net | Risk-sharing investments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Market valuations gains and losses, net	(126)	(267)	(474)	(985)
Investment Fair Value Changes, Net | Impairments on AFS securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Market valuations gains and losses, net	(33)	(4)	(89)	(248)
Other Income, Net
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total other income, net	(1,713)	(1,773)	(5,827)	(8,973)
Other Income, Net | Risk management derivatives, net
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total other income, net	(890)	(422)	(7,151)	1,869
Other Income, Net | MSRs
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total other income, net	$ (823)	$ (1,351)	$ 1,324	$ (10,842)

Fair Value of Financial Inst_10

Fair Value of Financial Instruments - Quantitative Information about Significant Unobservable Inputs Used in Valuation of Level 3 Assets and Liabilities Measured at Fair Value (Details) $ in Thousands	Sep. 30, 2018USD ($)$ / loan	Dec. 31, 2017USD ($)
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Mortgage servicing rights | $	$ 63,785	$ 63,598
ABS Issued
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
ABS issued | $	$ 2,531,379
ABS Issued | Prepayment rate (annual CPR) | Minimum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
ABS issued, measurement input	0.08
ABS Issued | Prepayment rate (annual CPR) | Maximum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
ABS issued, measurement input	0.32
ABS Issued | Prepayment rate (annual CPR) | Weighted Average
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
ABS issued, measurement input	0.19
ABS Issued | Discount rate | Minimum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
ABS issued, measurement input	0.03
ABS Issued | Discount rate | Maximum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
ABS issued, measurement input	0.15
ABS Issued | Discount rate | Weighted Average
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
ABS issued, measurement input	0.04
ABS Issued | Default rate | Minimum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
ABS issued, measurement input	0
ABS Issued | Default rate | Maximum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
ABS issued, measurement input	0.08
ABS Issued | Default rate | Weighted Average
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
ABS issued, measurement input	0.02
ABS Issued | Loss severity | Minimum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
ABS issued, measurement input	0.20
ABS Issued | Loss severity | Maximum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
ABS issued, measurement input	0.20
ABS Issued | Loss severity | Weighted Average
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
ABS issued, measurement input	0.20
Freddie Mac K-Series
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
ABS issued | $	$ 875,606
Freddie Mac K-Series | Prepayment rate (annual CPR) | Minimum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
ABS issued, measurement input	0
Freddie Mac K-Series | Prepayment rate (annual CPR) | Maximum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
ABS issued, measurement input	0
Freddie Mac K-Series | Prepayment rate (annual CPR) | Weighted Average
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
ABS issued, measurement input	0
Freddie Mac K-Series | Discount rate | Minimum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
ABS issued, measurement input	0.03
Freddie Mac K-Series | Discount rate | Maximum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
ABS issued, measurement input	0.09
Freddie Mac K-Series | Discount rate | Weighted Average
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
ABS issued, measurement input	0.04
Freddie Mac K-Series | Default rate | Minimum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
ABS issued, measurement input	0.01
Freddie Mac K-Series | Default rate | Maximum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
ABS issued, measurement input	0.01
Freddie Mac K-Series | Default rate | Weighted Average
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
ABS issued, measurement input	0.01
Freddie Mac K-Series | Loss severity | Minimum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
ABS issued, measurement input	0.20
Freddie Mac K-Series | Loss severity | Maximum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
ABS issued, measurement input	0.20
Freddie Mac K-Series | Loss severity | Weighted Average
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
ABS issued, measurement input	0.20
Loan purchase commitments
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Loan purchase commitments, net | $	$ 217
Loan purchase commitments | Whole loan spread to TBA price | Minimum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Loan purchase commitments, net, measurement input	2.69
Loan purchase commitments | Whole loan spread to TBA price | Maximum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Loan purchase commitments, net, measurement input	2.69
Loan purchase commitments | Whole loan spread to TBA price | Weighted Average
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Loan purchase commitments, net, measurement input	2.69
Loan purchase commitments | Prepayment rate (annual CPR) | Minimum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Loan purchase commitments, net, measurement input	0.15
Loan purchase commitments | Prepayment rate (annual CPR) | Maximum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Loan purchase commitments, net, measurement input	0.15
Loan purchase commitments | Prepayment rate (annual CPR) | Weighted Average
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Loan purchase commitments, net, measurement input	0.15
Loan purchase commitments | MSR multiple | Minimum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Loan purchase commitments, net, measurement input	1
Loan purchase commitments | MSR multiple | Maximum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Loan purchase commitments, net, measurement input	5.4
Loan purchase commitments | MSR multiple | Weighted Average
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Loan purchase commitments, net, measurement input	3.5
Loan purchase commitments | Pull-through rate | Minimum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Loan purchase commitments, net, measurement input	0.16
Loan purchase commitments | Pull-through rate | Maximum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Loan purchase commitments, net, measurement input	1
Loan purchase commitments | Pull-through rate | Weighted Average
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Loan purchase commitments, net, measurement input	0.72
Loan purchase commitments | Whole loan spread to swap rate - fixed rate | Minimum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Loan purchase commitments, net, measurement input	0.90
Loan purchase commitments | Whole loan spread to swap rate - fixed rate | Maximum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Loan purchase commitments, net, measurement input	1.98
Loan purchase commitments | Whole loan spread to swap rate - fixed rate | Weighted Average
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Loan purchase commitments, net, measurement input	1.96
Loan purchase commitments | Whole loan spread to swap rate - hybrid | Minimum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Loan purchase commitments, net, measurement input	0.75
Loan purchase commitments | Whole loan spread to swap rate - hybrid | Maximum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Loan purchase commitments, net, measurement input	1.55
Loan purchase commitments | Whole loan spread to swap rate - hybrid | Weighted Average
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Loan purchase commitments, net, measurement input	0.99
Jumbo fixed-rate loans
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Residential loans, at fair value | $	$ 2,729,424
Jumbo fixed-rate loans | Whole loan spread to TBA price | Minimum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Residential loans, measurement input	1.84
Jumbo fixed-rate loans | Whole loan spread to TBA price | Maximum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Residential loans, measurement input	2.80
Jumbo fixed-rate loans | Whole loan spread to TBA price | Weighted Average
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Residential loans, measurement input	2.77
Jumbo fixed-rate loans | Whole loan spread to swap rate | Minimum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Residential loans, measurement input	0.90
Jumbo fixed-rate loans | Whole loan spread to swap rate | Maximum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Residential loans, measurement input	1.98
Jumbo fixed-rate loans | Whole loan spread to swap rate | Weighted Average
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Residential loans, measurement input	1.93
Jumbo hybrid loans
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Residential loans, at fair value | $	$ 319,029
Jumbo hybrid loans | Whole loan spread to swap rate | Minimum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Residential loans, measurement input	0.75
Jumbo hybrid loans | Whole loan spread to swap rate | Maximum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Residential loans, measurement input	1.55
Jumbo hybrid loans | Whole loan spread to swap rate | Weighted Average
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Residential loans, measurement input	1.25
Jumbo hybrid loans | Prepayment rate (annual CPR) | Minimum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Residential loans, measurement input	0.15
Jumbo hybrid loans | Prepayment rate (annual CPR) | Maximum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Residential loans, measurement input	0.15
Jumbo hybrid loans | Prepayment rate (annual CPR) | Weighted Average
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Residential loans, measurement input	0.15
Jumbo loans committed to sell
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Residential loans, at fair value | $	$ 138,540
Jumbo loans committed to sell | Whole loan committed sales price | Minimum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Residential loans, measurement input	100.98
Jumbo loans committed to sell | Whole loan committed sales price | Maximum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Residential loans, measurement input	101.15
Jumbo loans committed to sell | Whole loan committed sales price | Weighted Average
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Residential loans, measurement input	101.08
Legacy Sequoia
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Residential loans, at fair value | $	$ 553,958
Sequoia Choice
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Residential loans, at fair value | $	2,181,195
Business purpose loans, at fair value
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Residential loans, at fair value | $	$ 20,105
Business purpose loans, at fair value | Whole loan spread to swap rate | Minimum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Residential loans, measurement input	2.47
Business purpose loans, at fair value | Whole loan spread to swap rate | Maximum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Residential loans, measurement input	2.47
Business purpose loans, at fair value | Whole loan spread to swap rate | Weighted Average
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Residential loans, measurement input	2.47
Business purpose loans, at fair value | Prepayment rate (annual CPR) | Minimum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Trading and AFS securities, measurement input	0.03
Business purpose loans, at fair value | Prepayment rate (annual CPR) | Maximum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Trading and AFS securities, measurement input	0.03
Business purpose loans, at fair value | Prepayment rate (annual CPR) | Weighted Average
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Trading and AFS securities, measurement input	0.03
Business purpose loans, at fair value | Discount rate | Minimum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
MSR, measurement input	0.07
Business purpose loans, at fair value | Discount rate | Maximum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
MSR, measurement input	0.08
Business purpose loans, at fair value | Discount rate | Weighted Average
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
MSR, measurement input	0.07
Fix-and-flip loans
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Residential loans, at fair value | $	$ 95,515
Freddie Mac K-Series
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Residential loans, at fair value | $	942,165
Trading and AFS securities
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Trading and AFS securities | $	$ 1,470,084
Trading and AFS securities | Prepayment rate (annual CPR) | Minimum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Trading and AFS securities, measurement input	0
Trading and AFS securities | Prepayment rate (annual CPR) | Maximum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Trading and AFS securities, measurement input	0.50
Trading and AFS securities | Prepayment rate (annual CPR) | Weighted Average
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Trading and AFS securities, measurement input	0.08
Trading and AFS securities | Discount rate | Minimum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Trading and AFS securities, measurement input	0.03
Trading and AFS securities | Discount rate | Maximum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Trading and AFS securities, measurement input	0.15
Trading and AFS securities | Discount rate | Weighted Average
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Trading and AFS securities, measurement input	0.06
Trading and AFS securities | Default rate | Minimum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Trading and AFS securities, measurement input	0
Trading and AFS securities | Default rate | Maximum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Trading and AFS securities, measurement input	0.27
Trading and AFS securities | Default rate | Weighted Average
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Trading and AFS securities, measurement input	0.02
Trading and AFS securities | Loss severity | Minimum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Trading and AFS securities, measurement input	0
Trading and AFS securities | Loss severity | Maximum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Trading and AFS securities, measurement input	0.40
Trading and AFS securities | Loss severity | Weighted Average
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Trading and AFS securities, measurement input	0.22
MSRs
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Mortgage servicing rights | $	$ 63,785
MSRs | Prepayment rate (annual CPR) | Minimum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
MSR, measurement input	0.04
MSRs | Prepayment rate (annual CPR) | Maximum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
MSR, measurement input	0.22
MSRs | Prepayment rate (annual CPR) | Weighted Average
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
MSR, measurement input	0.07
MSRs | Discount rate | Minimum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
MSR, measurement input	0.11
MSRs | Discount rate | Maximum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
MSR, measurement input	0.67
MSRs | Discount rate | Weighted Average
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
MSR, measurement input	0.11
MSRs | Per loan annual cost to service | Minimum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
MSR, measurement input	82
MSRs | Per loan annual cost to service | Maximum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
MSR, measurement input	82
MSRs | Per loan annual cost to service | Weighted Average
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
MSR, measurement input	82
Guarantee asset
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Guarantee asset | $	$ 2,885
Guarantee asset | Prepayment rate (annual CPR) | Minimum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Guarantee asset, measurement input	0.07
Guarantee asset | Prepayment rate (annual CPR) | Maximum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Guarantee asset, measurement input	0.07
Guarantee asset | Prepayment rate (annual CPR) | Weighted Average
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Guarantee asset, measurement input	0.07
Guarantee asset | Discount rate | Minimum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Guarantee asset, measurement input	0.11
Guarantee asset | Discount rate | Maximum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Guarantee asset, measurement input	0.11
Guarantee asset | Discount rate | Weighted Average
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Guarantee asset, measurement input	0.11
REO
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
REO | $	$ 1,804
REO | Loss severity | Minimum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
REO, measurement input	0.13
REO | Loss severity | Maximum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
REO, measurement input	0.45
REO | Loss severity | Weighted Average
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
REO, measurement input	0.30

Residential Loans - Summary of

Residential Loans - Summary of Classifications and Carrying Value of Residential Loans (Details) - USD ($) $ in Thousands		Sep. 30, 2018	Dec. 31, 2017
Residential Loans Held For Sale
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Residential loans	[1]	$ 866,444	$ 1,427,945
Residential Loans
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Residential loans		866,000	1,430,000
Residential loans, at lower of cost or fair value
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Residential loans		100	1,000
Legacy Sequoia | Residential Loans Held For Investment at Fair Value
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Residential loans		554,000	633,000
Sequoia Choice | Residential Loans Held For Investment at Fair Value
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Residential loans		2,180,000	620,000
Redwood | Residential Loans Held For Investment at Fair Value
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Residential loans			2,430,000
Residential loans
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Residential loans		5,922,259	5,115,210
Residential loans | Residential Loans Held For Sale
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Residential loans		866,444	1,427,945
Residential loans | Residential Loans | Jumbo Loans
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Residential loans		866,331	1,427,052
Residential loans | Residential loans, at lower of cost or fair value
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Residential loans		113	893
Residential loans | Residential Loans Held For Investment at Fair Value | Jumbo Loans
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Residential loans		5,055,815	3,687,265
Residential loans | Legacy Sequoia
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Residential loans		553,958	632,817
Residential loans | Legacy Sequoia | Residential Loans Held For Sale
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Residential loans		0	0
Residential loans | Legacy Sequoia | Residential Loans | Jumbo Loans
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Residential loans		0	0
Residential loans | Legacy Sequoia | Residential loans, at lower of cost or fair value
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Residential loans		0	0
Residential loans | Legacy Sequoia | Residential Loans Held For Investment at Fair Value | Jumbo Loans
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Residential loans		553,958	632,817
Residential loans | Sequoia Choice
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Residential loans		2,181,195	620,062
Residential loans | Sequoia Choice | Residential Loans Held For Sale
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Residential loans		0	0
Residential loans | Sequoia Choice | Residential Loans | Jumbo Loans
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Residential loans		0	0
Residential loans | Sequoia Choice | Residential loans, at lower of cost or fair value
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Residential loans		0	0
Residential loans | Sequoia Choice | Residential Loans Held For Investment at Fair Value | Jumbo Loans
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Residential loans		2,181,195	620,062
Residential loans | Redwood
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Residential loans		3,187,106	3,862,331
Residential loans | Redwood | Residential Loans Held For Sale
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Residential loans		866,444	1,427,945
Residential loans | Redwood | Residential Loans | Jumbo Loans
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Residential loans		866,331	1,427,052
Residential loans | Redwood | Residential loans, at lower of cost or fair value
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Residential loans		113	893
Residential loans | Redwood | Residential Loans Held For Investment at Fair Value | Jumbo Loans
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Residential loans		$ 2,320,662	$ 2,434,386
[1]	Our consolidated balance sheets include assets of consolidated variable interest entities (“VIEs”) that can only be used to settle obligations of these VIEs and liabilities of consolidated VIEs for which creditors do not have recourse to Redwood Trust, Inc. or its affiliates. At September 30, 2018 and December 31, 2017, assets of consolidated VIEs totaled $3,693,140 and $1,259,774, respectively. At September 30, 2018 and December 31, 2017, liabilities of consolidated VIEs totaled $3,417,835 and $1,167,157, respectively. See Note 4 for further discussion.

Residential Loans - Additional

Residential Loans - Additional Information (Details)	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2018USD ($)loan	Sep. 30, 2017USD ($)	Sep. 30, 2018USD ($)loan	Sep. 30, 2017USD ($)	Dec. 31, 2017USD ($)loan
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Transfers from loans held-for-sale to loans held-for-investment			$ 1,981,170,000	$ 643,876,000
Transfers from loans held-for-investment to loans held-for-sale			15,717,000	98,853,000
Held-for-sale residential loans
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Residential loans	$ 5,922,259,000		5,922,259,000		$ 5,115,210,000
Held-for-sale residential loans | Legacy Sequoia
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Residential loans	553,958,000		553,958,000		632,817,000
Held-for-sale residential loans | Sequoia Choice
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Residential loans	2,181,195,000		2,181,195,000		620,062,000
Redwood | Held-for-sale residential loans
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Residential loans	$ 3,187,106,000		$ 3,187,106,000		$ 3,862,331,000
Redwood | Fixed rate residential mortgage
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Weighted average coupon rate	4.08%		4.08%
Residential Loans
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Number of loans | loan			1,232		2,009
Loan Principal	$ 859,000,000		$ 859,000,000		$ 1,410,000,000
Residential loans	866,000,000		866,000,000		1,430,000,000
Loans held-for-investment, delinquent greater than 90 days					$ 500,000
Number of loans in foreclosure | loan					0
Principal value of loans purchased	1,790,000,000	$ 1,430,000,000	5,520,000,000	3,720,000,000
Principal balance of loans sold during period	1,900,000,000	1,050,000,000	5,830,000,000	3,080,000,000
Gain (loss) on assets measured at fair value on a non-recurring basis	6,000,000	15,000,000	16,000,000	29,000,000
Loan pledged as collateral	622,000,000		622,000,000
Loans held-for-investment, in foreclosure	1,000,000		1,000,000
Residential Loans | Jumbo Loans | Held-for-sale residential loans
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Residential loans	866,331,000		866,331,000		$ 1,427,052,000
Residential Loans | Jumbo Loans | Held-for-sale residential loans | Legacy Sequoia
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Residential loans	0		0		0
Residential Loans | Jumbo Loans | Held-for-sale residential loans | Sequoia Choice
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Residential loans	0		0		0
Residential Loans | Jumbo Loans | Redwood | Held-for-sale residential loans
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Residential loans	$ 866,331,000		$ 866,331,000		$ 1,427,052,000
Residential Loans | Financing Receivables, Equal to Greater than 90 Days Past Due
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Number of loans past due | loan	1		1		1
Loans held-for-investment, delinquent greater than 90 days	$ 600,000		$ 600,000
Residential loans, at lower of cost or fair value
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Number of loans | loan			2		4
Loan Principal	200,000		$ 200,000		$ 1,000,000
Residential loans	100,000		100,000		1,000,000
Loans held-for-investment, delinquent greater than 90 days					$ 300,000
Number of loans in foreclosure | loan					0
Residential loans, at lower of cost or fair value | Held-for-sale residential loans
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Residential loans	113,000		113,000		$ 893,000
Residential loans, at lower of cost or fair value | Held-for-sale residential loans | Legacy Sequoia
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Residential loans	0		0		0
Residential loans, at lower of cost or fair value | Held-for-sale residential loans | Sequoia Choice
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Residential loans	0		0		0
Residential loans, at lower of cost or fair value | Redwood | Held-for-sale residential loans
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Residential loans	$ 113,000		$ 113,000		$ 893,000
Residential loans, at lower of cost or fair value | Financing Receivables, Equal to Greater than 90 Days Past Due
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Number of loans past due | loan	0		0		1
Number of loans in foreclosure | loan	0		0
Residential Loans Held For Investment at Fair Value | Legacy Sequoia
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Valuation adjustment gain (loss)	$ 4,000,000	4,000,000		24,000,000
Residential Loans Held For Investment at Fair Value | Sequoia Choice
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Transfers from loans held-for-sale to loans held-for-investment	796,000,000
Residential Loans Held For Investment at Fair Value | Legacy Sequoia
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Number of loans | loan			2,777		3,178
Loan Principal	581,000,000		$ 581,000,000		$ 698,000,000
Residential loans	554,000,000		554,000,000		633,000,000
Loans held-for-investment, delinquent greater than 90 days	16,000,000		16,000,000		$ 25,000,000
Weighted average original Fair Isaac Corporation (FICO) score					728
Weighted average original loan-to-value (LTV)					66.00%
Loans held-for-investment, in foreclosure	8,000,000		8,000,000		$ 10,000,000
Residential Loans Held For Investment at Fair Value | Legacy Sequoia | Legacy Sequoia
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Valuation adjustment gain (loss)			$ 37,000,000
Residential Loans Held For Investment at Fair Value | Sequoia Choice
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Number of loans | loan			2,928		806
Loan Principal	2,160,000,000		$ 2,160,000,000		$ 605,000,000
Residential loans	$ 2,180,000,000		$ 2,180,000,000		$ 620,000,000
Number of loans past due | loan	1		1		0
Loans held-for-investment, delinquent greater than 90 days	$ 980,000		$ 980,000
Number of loans in foreclosure | loan	0		0		0
Weighted average original Fair Isaac Corporation (FICO) score					744
Weighted average original loan-to-value (LTV)					75.00%
Valuation adjustment gain (loss)	$ (13,000,000)		$ (25,000,000)
Residential Loans Held For Investment at Fair Value | Sequoia Choice | Sequoia Choice
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Transfers from loans held-for-investment to loans held-for-sale			$ 1,780,000,000
Residential Loans Held For Investment at Fair Value | Redwood
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Number of loans | loan			3,259		3,292
Loan Principal	$ 2,360,000,000		$ 2,360,000,000		$ 2,410,000,000
Residential loans					2,430,000,000
Number of loans in foreclosure | loan	0		0
Gain (loss) on assets measured at fair value on a non-recurring basis	$ (17,000,000)	3,000,000	$ (71,000,000)	9,000,000
Transfers from loans held-for-sale to loans held-for-investment	116,000,000	78,000,000	204,000,000	$ 326,000,000
Transfers from loans held-for-investment to loans held-for-sale	$ 15,717,000	$ 98,000,000	$ 16,000,000
Weighted average original Fair Isaac Corporation (FICO) score	769		769
Weighted average original loan-to-value (LTV)	66.00%		66.00%
Percentage of fixed-rate loans	87.00%		87.00%
Residential Loans Held For Investment at Fair Value | Redwood | Originated Between 2013 and 2018
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Percentage of loan portfolio originated in year	96.00%		96.00%
Residential Loans Held For Investment at Fair Value | Redwood | Originated 2012 and prior years
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Percentage of loan portfolio originated in year	4.00%		4.00%
Residential Loans Held For Investment at Fair Value | Redwood | Hybrid or ARM Loans
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Weighted average coupon rate	4.20%		4.20%
Residential Loans Held For Investment at Fair Value | Jumbo Loans | Held-for-sale residential loans
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Residential loans	$ 5,055,815,000		$ 5,055,815,000		3,687,265,000
Residential Loans Held For Investment at Fair Value | Jumbo Loans | Held-for-sale residential loans | Legacy Sequoia
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Residential loans	553,958,000		553,958,000		632,817,000
Residential Loans Held For Investment at Fair Value | Jumbo Loans | Held-for-sale residential loans | Sequoia Choice
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Residential loans	2,181,195,000		2,181,195,000		620,062,000
Residential Loans Held For Investment at Fair Value | Jumbo Loans | Redwood | Held-for-sale residential loans
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Residential loans	2,320,662,000		2,320,662,000		$ 2,434,386,000
Residential Loans Held For Investment at Fair Value | Financing Receivables, Equal to Greater than 90 Days Past Due | Redwood
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Loan Principal	$ 1,000,000		$ 1,000,000
Number of loans past due | loan	2		2		0
Number of loans in foreclosure | loan					0
MSRs
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Mortgage servicing rights, at amortized cost	$ 2,530,000,000		$ 2,530,000,000

Business Purpose Loans (Details

Business Purpose Loans (Details)	3 Months Ended	9 Months Ended
	Sep. 30, 2018USD ($)loan	Sep. 30, 2018USD ($)loan	Sep. 30, 2017USD ($)	Dec. 31, 2017USD ($)
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Purchases of held-for-sale loans		$ 5,596,326,000	$ 3,760,110,000
Proceeds from sales of held-for-sale loans		4,097,211,000	$ 3,079,877,000
Business purpose loans, at fair value
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Residential loans	$ 115,620,000	$ 115,620,000		$ 0
Single-family rental loans, held-for-sale at fair value
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Number of loans | loan		4
Loan Principal	20,000,000	$ 20,000,000
Residential loans	$ 20,105,000	$ 20,105,000		0
Number of loans past due | loan	0	0
Number of loans in foreclosure | loan	0	0
Purchases of held-for-sale loans	$ 20,000,000	$ 20,000,000
Proceeds from sales of held-for-sale loans	0	0
Gain (loss) on investments	(100,000)	(100,000)
Collateral amounts	$ 20,000,000	$ 20,000,000
Weighted average coupon rate	5.71%	5.71%
Weighted average original loan-to-value (LTV)	65.00%	65.00%
Weighted-average debt service coverage ratio		1.25
Contract maturities		7 years
Fix and flip loan warehouse
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Collateral amounts	$ 92,000,000	$ 92,000,000
Fix-and-flip loans held-for-investment
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Number of loans | loan		128
Loan Principal	95,000,000	$ 95,000,000
Residential loans	$ 95,515,000	$ 95,515,000		$ 0
Number of loans past due | loan	2	2
Purchases of held-for-sale loans	$ 106,000,000
Proceeds from sales of held-for-sale loans	0	$ 0
Gain (loss) on investments	$ 100,000	$ 100,000
Weighted average coupon rate	9.14%	9.14%
Weighted average original loan-to-value (LTV)	76.00%	76.00%
Weighted average original Fair Isaac Corporation (FICO) score	718	718
Unpaid principal balance on delinquent or foreclosure loans	$ 1,000,000	$ 1,000,000
Estimated rehabilitated loan-to-value ratio	57.00%	57.00%
Fix-and-flip loans held-for-investment | Minimum
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Contract maturities		6 months
Fix-and-flip loans held-for-investment | Maximum
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Contract maturities		24 months

Multifamily Loans (Details)

Multifamily Loans (Details) - Multifamily loans, held-for-investment, at fair value $ in Millions	3 Months Ended	9 Months Ended
	Sep. 30, 2018USD ($)loan	Sep. 30, 2018USD ($)loan
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Number of loans | loan		80
Residential loans | $	$ 963	$ 963
Loan Principal | $	$ 942	$ 942
Weighted average original loan-to-value (LTV)	69.00%	69.00%
Weighted average coupon rate	4.15%	4.15%
Contract maturities		7 years
Number of loans past due | loan	0	0
Number of loans in foreclosure | loan	0	0
Valuation adjustment gain (loss) | $	$ (4)	$ (4)
Minimum
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Weighted average maturity (in years)		7 years
Maximum
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Weighted average maturity (in years)		10 years

Real Estate Securities - Fair V

Real Estate Securities - Fair Values of Real Estate Securities (Details) - USD ($) $ in Thousands		Sep. 30, 2018	Dec. 31, 2017
Investments, Debt and Equity Securities [Abstract]
Trading		$ 1,108,243	$ 968,844
Available-for-sale		361,841	507,666
Total Real Estate Securities	[1]	$ 1,470,084	$ 1,476,510
[1]	Our consolidated balance sheets include assets of consolidated variable interest entities (“VIEs”) that can only be used to settle obligations of these VIEs and liabilities of consolidated VIEs for which creditors do not have recourse to Redwood Trust, Inc. or its affiliates. At September 30, 2018 and December 31, 2017, assets of consolidated VIEs totaled $3,693,140 and $1,259,774, respectively. At September 30, 2018 and December 31, 2017, liabilities of consolidated VIEs totaled $3,417,835 and $1,167,157, respectively. See Note 4 for further discussion.

Real Estate Securities - Tradin

Real Estate Securities - Trading Securities by Collateral Type (Details) - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
Investment Holdings [Line Items]
Trading securities	$ 1,108,243	$ 968,844
Senior IO Securities
Investment Holdings [Line Items]
Trading securities	163,022	69,974
Subordinate Securities | Mezzanine
Investment Holdings [Line Items]
Trading securities	602,235	563,475
Subordinate Securities | Subordinate
Investment Holdings [Line Items]
Trading securities	$ 342,986	$ 335,395

Real Estate Securities - Additi

Real Estate Securities - Additional Information (Details)	3 Months Ended		9 Months Ended
	Sep. 30, 2018USD ($)Investment	Sep. 30, 2017USD ($)	Sep. 30, 2018USD ($)Investment	Sep. 30, 2017USD ($)	Dec. 31, 2017USD ($)Investment
Investment Holdings [Line Items]
Trading securities pledged as collateral	$ 668,000,000		$ 668,000,000
Trading securities	1,108,243,000		1,108,243,000		$ 968,844,000
Trading securities acquired	189,000,000	$ 171,000,000	567,000,000	$ 432,000,000
Trading securities sold	79,000,000	25,000,000	323,000,000	85,000,000
Increase (decrease) in valuation of trading securities	6,000,000	1,000,000	2,000,000	31,000,000
Available-for-sale securities purchased	1,000,000	4,000,000	7,000,000	32,000,000
Available-for-sale securities sold	26,000,000	23,000,000	118,000,000	61,000,000
Net realized gains on AFS securities	$ 7,000,000	2,000,000	$ 21,000,000	9,000,000
Number of AFS securities (in investments) | Investment	139		139		167
Number of securities in unrealized loss position (in investments) | Investment	11		11		9
Number of securities in a continuous unrealized loss position for twelve consecutive months or longer (in investments) | Investment	3		3		3
Investment fair value changes, net	$ 10,332,000	324,000	$ 12,830,000	9,990,000
Other than temporary impairment recognized in AOCI	300,000		500,000	400,000
Reclassification out of Accumulated Other Comprehensive Income | Net Unrealized Gains on Available-for-Sale Securities
Investment Holdings [Line Items]
Other than temporary impairment	400,000		600,000
Investment fair value changes, net	(33,000)	$ (3,000)	(89,000)	$ (248,000)
Residential
Investment Holdings [Line Items]
Securities pledged as collateral	918,000,000		918,000,000		$ 788,000,000
Gross unrealized losses	1,235,000		1,235,000		1,367,000
Subordinate Securities | Residential
Investment Holdings [Line Items]
Gross unrealized losses	567,000		567,000		132,000
Sequoia securities | Subordinate Securities
Investment Holdings [Line Items]
Trading securities	68,000,000		68,000,000		68,000,000
Sequoia securities | Sequoia Choice
Investment Holdings [Line Items]
Trading securities pledged as collateral	129,000,000		129,000,000
Interest-only Senior Trading Securities
Investment Holdings [Line Items]
Debt securities, trading	86,000,000		86,000,000		70,000,000
Unpaid principal balance	79,000,000		79,000,000		0
Interest-only Senior Trading Securities | Certificated Servicing Strips
Investment Holdings [Line Items]
Debt securities, trading	42,000,000		42,000,000		15,000,000
Trading securities | Residential Subordinate Securities
Investment Holdings [Line Items]
Unpaid principal balance	1,070,000,000		1,070,000,000		943,000,000
CRT securities | Mezzanine Securities
Investment Holdings [Line Items]
Trading securities	945,000,000		945,000,000		899,000,000
CRT securities | Subordinate Securities
Investment Holdings [Line Items]
Trading securities	236,000,000		236,000,000		301,000,000
Other third party securities | Subordinate Securities
Investment Holdings [Line Items]
Trading securities	225,000,000		225,000,000		206,000,000
Third-party multifamily mortgage-backed securities | Subordinate Securities
Investment Holdings [Line Items]
Trading securities	417,000,000		417,000,000		$ 324,000,000
Residential
Investment Holdings [Line Items]
Marketable securities, less than five years	100,000		100,000
Marketable securities, due from five to ten years	2,000,000		2,000,000
Residential | AFS securities retained, at fair value
Investment Holdings [Line Items]
Securities pledged as collateral	$ 121,000,000		$ 121,000,000

Real Estate Securities - Availa

Real Estate Securities - Available for Sale Securities by Collateral Type (Details) - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
Investment Holdings [Line Items]
Available-for-sale securities	$ 361,841	$ 507,666
Senior IO Securities
Investment Holdings [Line Items]
Available-for-sale securities	114,628	179,864
Subordinate Securities | Mezzanine
Investment Holdings [Line Items]
Available-for-sale securities	36,377	92,002
Subordinate Securities | Subordinate
Investment Holdings [Line Items]
Available-for-sale securities	$ 210,836	$ 235,800

Real Estate Securities - Compon

Real Estate Securities - Components of Carrying Value (Which Equals Fair Value) of Residential Available for Sale Securities (Details) - Residential - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
Debt Securities, Available-for-sale [Line Items]
Principal balance	$ 465,084	$ 608,145
Credit reserve	(41,074)	(46,549)
Unamortized discount, net	(160,799)	(183,753)
Amortized cost	263,211	377,843
Gross unrealized gains	99,865	131,190
Gross unrealized losses	(1,235)	(1,367)
Carrying Value	361,841	507,666
Senior IO Securities
Debt Securities, Available-for-sale [Line Items]
Principal balance	119,254	189,125
Credit reserve	(7,919)	(8,756)
Unamortized discount, net	(25,173)	(44,041)
Amortized cost	86,162	136,328
Gross unrealized gains	29,134	44,771
Gross unrealized losses	(668)	(1,235)
Carrying Value	114,628	179,864
Mezzanine
Debt Securities, Available-for-sale [Line Items]
Principal balance	37,385	91,471
Credit reserve	0	0
Unamortized discount, net	(3,843)	(9,407)
Amortized cost	33,542	82,064
Gross unrealized gains	2,835	9,938
Gross unrealized losses	0	0
Carrying Value	36,377	92,002
Subordinate Securities
Debt Securities, Available-for-sale [Line Items]
Principal balance	308,445	327,549
Credit reserve	(33,155)	(37,793)
Unamortized discount, net	(131,783)	(130,305)
Amortized cost	143,507	159,451
Gross unrealized gains	67,896	76,481
Gross unrealized losses	(567)	(132)
Carrying Value	$ 210,836	$ 235,800

Real Estate Securities - Change

Real Estate Securities - Changes of Unamortized Discount and Designated Credit Reserves on Residential Available for Sale Securities (Details) - Residential - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2018
Credit Reserve
Beginning balance	$ 42,191	$ 46,549
Amortization of net discount	0	0
Realized credit losses	(616)	(1,957)
Acquisitions	637	5,424
Sales, calls, other	(777)	(1,843)
Impairments	33	89
(Release of) transfers to credit reserves, net	(394)	(7,188)
Ending Balance	41,074	41,074
Unamortized Discount, Net
Beginning balance	170,090	183,753
Amortization of net discount	(3,323)	(11,231)
Realized credit losses	0	0
Acquisitions	224	2,354
Sales, calls, other	(6,586)	(21,265)
Impairments	0	0
(Release of) transfers to credit reserves, net	394	7,188
Ending Balance	$ 160,799	$ 160,799

Real Estate Securities - Comp_2

Real Estate Securities - Components of Carrying Value of Residential Available for Sale Securities in Unrealized Loss Position (Details) - Residential - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
Debt Securities, Available-for-sale [Line Items]
Less Than 12 Consecutive Months Amortized Cost	$ 14,791	$ 8,637
Less Than 12 Consecutive Months Unrealized Losses	(567)	(132)
Less Than 12 Consecutive Months Fair Value	14,224	8,505
12 Consecutive Months or Longer Amortized Cost	23,901	28,557
12 Consecutive Months or Longer Unrealized Losses	(668)	(1,235)
12 Consecutive Months or Longer Fair Value	$ 23,233	$ 27,322

Real Estate Securities - Summar

Real Estate Securities - Summary of Significant Valuation Assumptions for Available for Sale Securities (Details) - Prime	9 Months Ended
	Sep. 30, 2018
Minimum
Debt Securities, Available-for-sale [Line Items]
Prepayment rates	6.00%
Projected losses	0.20%
Maximum
Debt Securities, Available-for-sale [Line Items]
Prepayment rates	10.00%
Projected losses	3.00%

Real Estate Securities - Activi

Real Estate Securities - Activity of Credit Component of Other-than-Temporary Impairments (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Activity of the Credit Component of Other-than-Temporary Impairments
Balance at beginning of period	$ 20,967	$ 25,802	$ 21,037	$ 28,261
Additions
Initial credit impairments	33	0	76	178
Subsequent credit impairments	0	0	0	47
Reductions
Securities sold, or expected to sell	(927)	0	(1,026)	(2,282)
Securities with no outstanding principal at period end	(1,229)	(42)	(1,243)	(444)
Balance at End of Period	$ 18,844	$ 25,760	$ 18,844	$ 25,760

Real Estate Securities - Gross

Real Estate Securities - Gross Realized Gains and Losses on Sales and Calls of Available for Sale Securities (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Debt Securities, Available-for-sale [Line Items]
Total Realized Gains on Sales and Calls of AFS Securities, net	$ 7,275	$ 1,734	$ 21,352	$ 9,561
Sales
Debt Securities, Available-for-sale [Line Items]
Gross realized gains	7,275	1,734	21,312	9,381
Gross realized losses	0	0	(3)	0
Calls
Debt Securities, Available-for-sale [Line Items]
Gross realized gains	0	0	43	677
Gross realized losses	$ 0	$ 0	$ 0	$ (497)

Derivative Financial Instrume_3

Derivative Financial Instruments - Aggregate Fair Value and Notional Amount of Derivative Financial Instruments (Details) - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
Derivative [Line Items]
Fair Value	$ 44,495	$ (47,363)
Notional Amount	6,645,489	6,644,081
TBAs
Derivative [Line Items]
Notional Amount	1,980,000	1,700,000
Futures
Derivative [Line Items]
Notional Amount	15,000	8,000
Derivative Liabilities
Derivative [Line Items]
Fair Value	(42,724)	(63,081)
Notional Amount	1,656,136	3,485,466
Derivative Liabilities | Interest rate swaps
Derivative [Line Items]
Fair Value	(11,785)	(11,888)
Notional Amount	565,500	1,248,000
Derivative Liabilities | Interest rate swaps | Cash Flow Hedging
Derivative [Line Items]
Fair Value	(26,796)	(43,679)
Notional Amount	139,500	139,500
Derivative Liabilities | TBAs
Derivative [Line Items]
Fair Value	(1,744)	(3,808)
Notional Amount	500,000	1,400,000
Derivative Liabilities | Loan purchase commitments
Derivative [Line Items]
Fair Value	(2,399)	(3,706)
Notional Amount	451,136	697,966
Derivative Assets
Derivative [Line Items]
Fair Value	87,219	15,718
Notional Amount	4,989,353	3,158,615
Derivative Assets | Interest rate swaps
Derivative [Line Items]
Fair Value	78,006	10,122
Notional Amount	3,139,000	1,765,000
Derivative Assets | TBAs
Derivative [Line Items]
Fair Value	6,987	133
Notional Amount	1,480,000	295,000
Derivative Assets | Futures
Derivative [Line Items]
Fair Value	44	1
Notional Amount	15,000	7,500
Derivative Assets | Swaptions
Derivative [Line Items]
Fair Value	0	42
Notional Amount	0	200,000
Derivative Assets | Loan purchase commitments
Derivative [Line Items]
Fair Value	2,182	3,243
Notional Amount	355,353	547,434
Derivative Assets | Loan forward sale commitments
Derivative [Line Items]
Fair Value	0	2,177
Notional Amount	$ 0	$ 343,681

Derivative Financial Instrume_4

Derivative Financial Instruments - Additional Information (Details) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018USD ($)counterparty	Sep. 30, 2017USD ($)	Sep. 30, 2018USD ($)counterparty	Sep. 30, 2017USD ($)	Jun. 30, 2018USD ($)	Dec. 31, 2017USD ($)	Jun. 30, 2017USD ($)	Dec. 31, 2016USD ($)
Derivative [Line Items]
Notional amount	$ 6,645,489		$ 6,645,489			$ 6,644,081
Net unrealized gain (loss) on interest rate agreements	4,801	$ 321	16,649	$ (375)
Accumulated other comprehensive income	$ 1,361,327	1,208,640	$ 1,361,327	1,208,640		1,212,287		$ 1,149,428
Number of counterparties | counterparty	2		2
Net Unrealized Losses on Interest Rate Agreements Accounted for as Cash Flow Hedges
Derivative [Line Items]
Accumulated other comprehensive income	$ (26,304)	(44,353)	$ (26,304)	(44,353)	$ (31,105)	(42,953)	$ (44,688)	$ (44,020)
Derivative Liabilities
Derivative [Line Items]
Notional amount	1,656,136		1,656,136			3,485,466
Mortgage Banking Activities, Net
Derivative [Line Items]
Market valuations gains and losses, net	10,911	21,058	46,663	49,335
Loan purchase commitments | Mortgage Banking Activities, Net
Derivative [Line Items]
Market valuations gains and losses, net	1,610	13,276	(8,116)	33,947
Interest rate contract
Derivative [Line Items]
Notional amount	3,700,000		3,700,000			3,210,000
TBAs
Derivative [Line Items]
Notional amount	1,980,000		1,980,000			1,700,000
TBAs | Derivative Liabilities
Derivative [Line Items]
Notional amount	500,000		500,000			1,400,000
Futures
Derivative [Line Items]
Notional amount	15,000		15,000			8,000
Unsecuritized Residential and Commercial Loans
Derivative [Line Items]
Derivative gain (loss)	25,000	(9,000)	114,000	(36,000)
Interest rate swaps | Cash Flow Hedging
Derivative [Line Items]
Derivative gain (loss)	5,000	$ 300
Net unrealized gain (loss) on interest rate agreements			17,000	$ (400)
Interest rate swaps | Derivative Liabilities
Derivative [Line Items]
Notional amount	565,500		565,500			1,248,000
Interest rate swaps | Derivative Liabilities | Cash Flow Hedging
Derivative [Line Items]
Notional amount	$ 139,500		$ 139,500			$ 139,500

Derivative Financial Instrume_5

Derivative Financial Instruments - Impact on Interest Expense of Interest Rate Agreements Accounted for as Cash Flow Hedges (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Derivative [Line Items]
Total Interest Expense	$ (64,351)	$ (27,443)	$ (154,078)	$ (72,708)
Cash Flow Hedging | Interest rate contract
Derivative [Line Items]
Net interest expense on cash flows hedges	(734)	(1,119)	(2,536)	(3,516)
Realized net losses reclassified from other comprehensive income	0	(14)	0	(42)
Total Interest Expense	$ (734)	$ (1,133)	$ (2,536)	$ (3,558)

Other Assets and Liabilities -

Other Assets and Liabilities - Components of Other Assets (Details) - USD ($) $ in Thousands		Sep. 30, 2018	Dec. 31, 2017
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]
Mortgage servicing rights		$ 63,785	$ 63,598
Security purchase deposit		57,982	0
Margin receivable		48,655	85,044
FHLBC stock		43,393	43,393
Pledged collateral		42,127	42,615
Participation in loan warehouse facility		39,219	0
Investment receivable		36,463	1,147
Investment in 5 Arches		10,772	0
Fixed assets and leasehold improvements		5,409	2,645
REO		2,915	3,354
Guarantee asset		2,885	2,869
Other		12,270	13,899
Total Other Assets	[1]	365,875	$ 258,564
Fixed assets		10,000
Accumulated depreciation		$ 5,000
[1]	Our consolidated balance sheets include assets of consolidated variable interest entities (“VIEs”) that can only be used to settle obligations of these VIEs and liabilities of consolidated VIEs for which creditors do not have recourse to Redwood Trust, Inc. or its affiliates. At September 30, 2018 and December 31, 2017, assets of consolidated VIEs totaled $3,693,140 and $1,259,774, respectively. At September 30, 2018 and December 31, 2017, liabilities of consolidated VIEs totaled $3,417,835 and $1,167,157, respectively. See Note 4 for further discussion.

Other Assets and Liabilities _2

Other Assets and Liabilities - Accrued Expenses and Other Liabilities (Details) - USD ($) $ in Thousands		Sep. 30, 2018	Dec. 31, 2017
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]
Margin payable		$ 33,950	$ 390
Accrued compensation		18,485	24,025
Guarantee obligations		17,423	19,487
Deferred tax liabilities		11,764	11,764
Residential loan and MSR repurchase reserve		4,709	4,916
Unsettled trades		4,071	13
Accrued income taxes payable		3,313	0
Legal reserve		2,000	2,000
Other		6,563	5,134
Total Accrued Expenses and Other Liabilities	[1]	$ 102,278	$ 67,729
[1]	Our consolidated balance sheets include assets of consolidated variable interest entities (“VIEs”) that can only be used to settle obligations of these VIEs and liabilities of consolidated VIEs for which creditors do not have recourse to Redwood Trust, Inc. or its affiliates. At September 30, 2018 and December 31, 2017, assets of consolidated VIEs totaled $3,693,140 and $1,259,774, respectively. At September 30, 2018 and December 31, 2017, liabilities of consolidated VIEs totaled $3,417,835 and $1,167,157, respectively. See Note 4 for further discussion.

Other Assets and Liabilities _3

Other Assets and Liabilities - Additional Information (Details) $ in Thousands	May 01, 2018USD ($)	Sep. 30, 2018USD ($)property	Sep. 30, 2018USD ($)property	Jun. 30, 2018USD ($)	Dec. 31, 2017USD ($)property	Sep. 30, 2017USD ($)	Jun. 30, 2017USD ($)	Dec. 31, 2016USD ($)
Other Assets and Other Liabilities [Line Items]
Mortgage servicing rights		$ 63,785	$ 63,785		$ 63,598
Security purchase deposit		57,982	57,982		0
Investment receivable		36,463	36,463		1,147
Real estate owned (REO)		$ 2,915	2,915		$ 3,354
Amount related to transfers into REO			2,000
REO liquidations			3,000
Unrealized gain resulting from market valuation adjustments on REO			$ 300
Legacy Sequoia
Other Assets and Other Liabilities [Line Items]
Number of REO properties recorded on balance sheet (in properties) | property		10	10		14
5 Arches, LLC
Other Assets and Other Liabilities [Line Items]
Minority interest acquired	20.00%
Payments to acquire equity method investments	$ 10,000
Option to purchase additional equity, option term	1 year
Option to purchase additional remaining equity	$ 40,000
Loan flow purchase agreement, agreement term	1 year
Equity Method Investments		$ 7,000	$ 7,000
Cost method investment, purchase option		4,000	4,000
Equity method investment earnings (losses), excluding intangible asset amortization		200
Equity method investment earnings (losses)		100
Mortgage servicing rights
Other Assets and Other Liabilities [Line Items]
MSRs		63,785	63,785	$ 64,674	$ 63,598	$ 62,928	$ 63,770	$ 118,526
Mortgage servicing rights		5,020,000	5,020,000		$ 5,560,000
Real estate securities
Other Assets and Other Liabilities [Line Items]
Investment receivable		$ 35,000	$ 35,000

Other Assets and Liabilities _4

Other Assets and Liabilities - Activity for MSRs (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Servicing Assets at Fair Value [Line Items]
Additions			$ 0	$ 7,387
Mortgage servicing rights
Servicing Assets at Fair Value [Line Items]
Balance at beginning of period	$ 64,674	$ 63,770	63,598	118,526
Additions	0	256	0	7,957
Sales	0	0	(1,077)	(52,966)
Changes in assumptions	1,099	563	6,388	(3,450)
Other changes	(1,988)	(1,661)	(5,124)	(7,139)
Balance at End of Period	$ 63,785	$ 62,928	$ 63,785	$ 62,928

Other Assets and Liabilities _5

Other Assets and Liabilities - Components of MSR income (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]
Servicing income	$ 4,004	$ 3,872	$ 11,601	$ 17,290
Cost of sub-servicer	(324)	(476)	(1,254)	(2,515)
Net servicing fee income	3,680	3,396	10,347	14,775
Market valuation changes of MSRs	(823)	(1,351)	1,324	(10,842)
Market valuation changes of associated derivatives	(890)	(422)	(7,151)	1,869
MSR reversal of provision for repurchases	0	(8)	277	304
MSR Income, Net	$ 1,967	$ 1,615	$ 4,797	$ 6,106

Short-Term Debt - Outstanding B

Short-Term Debt - Outstanding Balances of Short-Term Debt by Type of Collateral Securing Debt (Details)		9 Months Ended	12 Months Ended
		Sep. 30, 2018USD ($)Facility	Dec. 31, 2017USD ($)Facility
Short-term Debt [Line Items]
Outstanding Balance	[1],[2]	$ 1,424,275,000	$ 1,938,682,000
Facilities
Short-term Debt [Line Items]
Number of Facilities | Facility		16	13
Outstanding Balance		$ 1,424,275,000	$ 1,688,412,000
Facilities | Residential loan warehouse
Short-term Debt [Line Items]
Number of Facilities | Facility		4	4
Outstanding Balance		$ 578,157,000	$ 1,039,666,000
Limit		$ 1,425,000,000	$ 1,575,000,000
Weighted Average Interest Rate		3.83%	3.17%
Weighted Average Days Until Maturity (in days)		177 days	197 days
Facilities | Real estate securities repo
Short-term Debt [Line Items]
Number of Facilities | Facility		8	9
Outstanding Balance		$ 780,818,000	$ 648,746,000
Limit		$ 0	$ 0
Weighted Average Interest Rate		3.29%	2.69%
Weighted Average Days Until Maturity (in days)		27 days	28 days
Facilities | Single-family rental loan warehouse
Short-term Debt [Line Items]
Number of Facilities | Facility		2
Outstanding Balance		$ 15,859,000
Limit		$ 400,000,000
Weighted Average Interest Rate		4.53%
Weighted Average Days Until Maturity (in days)		661 days
Facilities | Fix and flip loan warehouse
Short-term Debt [Line Items]
Number of Facilities | Facility		2
Outstanding Balance		$ 49,441,000
Limit		$ 60,000,000
Weighted Average Interest Rate		5.63%
Weighted Average Days Until Maturity (in days)		205 days
Convertible notes, net
Short-term Debt [Line Items]
Outstanding Balance			$ 250,270,000
Weighted Average Interest Rate			4.63%
Weighted Average Days Until Maturity (in days)			105 days
[1]	At December 31, 2017, balance includes $250 million of convertible notes, which matured in April 2018. See Note 12 for further discussion.
[2]	Our consolidated balance sheets include assets of consolidated variable interest entities (“VIEs”) that can only be used to settle obligations of these VIEs and liabilities of consolidated VIEs for which creditors do not have recourse to Redwood Trust, Inc. or its affiliates. At September 30, 2018 and December 31, 2017, assets of consolidated VIEs totaled $3,693,140 and $1,259,774, respectively. At September 30, 2018 and December 31, 2017, liabilities of consolidated VIEs totaled $3,417,835 and $1,167,157, respectively. See Note 4 for further discussion.

Short-Term Debt - Additional In

Short-Term Debt - Additional Information (Details) - USD ($)		3 Months Ended	9 Months Ended	12 Months Ended
		Sep. 30, 2018	Sep. 30, 2018	Dec. 31, 2017	Apr. 30, 2018	Mar. 31, 2013
Short-term Debt [Line Items]
Trading securities pledged as collateral		$ 668,000,000	$ 668,000,000
Average balance of short-term debt		1,560,000,000	1,470,000,000
Accrued interest payable on short-term debt		3,000,000	3,000,000	$ 2,000,000
Committed line of credit		10,000,000	10,000,000
Fair value of mortgage backed securities securing loan (in excess)		4,000,000	4,000,000
Committed line of credit with financial institutions, outstanding		0	0	0
Accrued interest payable	[1]	31,076,000	31,076,000	18,435,000
Convertible Debt | Convertible Senior Notes Due 2018
Short-term Debt [Line Items]
Convertible notes				288,000,000		$ 288,000,000
Debt Instrument interest rate						4.625%
Unamortized deferred issuance costs				2,000,000
Amount of debt repurchased				37,000,000	$ 250,000,000
Gain (loss) on extinguishment of debt				(1,000,000)
Sequoia securities | Sequoia Choice
Short-term Debt [Line Items]
Trading securities pledged as collateral		129,000,000	129,000,000
Sequoia securities | Freddie Mac K-Series
Short-term Debt [Line Items]
Trading securities pledged as collateral		11,000,000	11,000,000
Residential loans
Short-term Debt [Line Items]
Loan pledged as collateral				1,150,000,000
Residential
Short-term Debt [Line Items]
Securities pledged as collateral		918,000,000	918,000,000	$ 788,000,000
Single-family rental loans, held-for-sale at fair value
Short-term Debt [Line Items]
Collateral amounts		20,000,000	20,000,000
Fix and flip loan warehouse
Short-term Debt [Line Items]
Collateral amounts		92,000,000	92,000,000
Residential Loans
Short-term Debt [Line Items]
Loan pledged as collateral		$ 622,000,000	$ 622,000,000
[1]	Our consolidated balance sheets include assets of consolidated variable interest entities (“VIEs”) that can only be used to settle obligations of these VIEs and liabilities of consolidated VIEs for which creditors do not have recourse to Redwood Trust, Inc. or its affiliates. At September 30, 2018 and December 31, 2017, assets of consolidated VIEs totaled $3,693,140 and $1,259,774, respectively. At September 30, 2018 and December 31, 2017, liabilities of consolidated VIEs totaled $3,417,835 and $1,167,157, respectively. See Note 4 for further discussion.

Short-Term Debt - Remaining Mat

Short-Term Debt - Remaining Maturities of Short Term Debt (Details) - USD ($) $ in Thousands		Sep. 30, 2018	Dec. 31, 2017
Short-term Debt [Line Items]
Short-term debt	[1],[2]	$ 1,424,275	$ 1,938,682
Within 30 Days
Short-term Debt [Line Items]
Short-term debt		582,930
31 to 90 days
Short-term Debt [Line Items]
Short-term debt		356,604
Over 90 days
Short-term Debt [Line Items]
Short-term debt		484,741
Facilities
Short-term Debt [Line Items]
Short-term debt		1,424,275	1,688,412
Facilities | Residential loan warehouse
Short-term Debt [Line Items]
Short-term debt		578,157	1,039,666
Facilities | Residential loan warehouse | Within 30 Days
Short-term Debt [Line Items]
Short-term debt		0
Facilities | Residential loan warehouse | 31 to 90 days
Short-term Debt [Line Items]
Short-term debt		141,712
Facilities | Residential loan warehouse | Over 90 days
Short-term Debt [Line Items]
Short-term debt		436,445
Facilities | Real estate securities repo
Short-term Debt [Line Items]
Short-term debt		780,818	$ 648,746
Facilities | Real estate securities repo | Within 30 Days
Short-term Debt [Line Items]
Short-term debt		575,017
Facilities | Real estate securities repo | 31 to 90 days
Short-term Debt [Line Items]
Short-term debt		205,801
Facilities | Real estate securities repo | Over 90 days
Short-term Debt [Line Items]
Short-term debt		0
Facilities | Single-family rental loan warehouse
Short-term Debt [Line Items]
Short-term debt		15,859
Facilities | Single-family rental loan warehouse | Within 30 Days
Short-term Debt [Line Items]
Short-term debt		0
Facilities | Single-family rental loan warehouse | 31 to 90 days
Short-term Debt [Line Items]
Short-term debt		0
Facilities | Single-family rental loan warehouse | Over 90 days
Short-term Debt [Line Items]
Short-term debt		15,859
Facilities | Fix and flip loan warehouse
Short-term Debt [Line Items]
Short-term debt		49,441
Facilities | Fix and flip loan warehouse | Within 30 Days
Short-term Debt [Line Items]
Short-term debt		7,913
Facilities | Fix and flip loan warehouse | 31 to 90 days
Short-term Debt [Line Items]
Short-term debt		9,091
Facilities | Fix and flip loan warehouse | Over 90 days
Short-term Debt [Line Items]
Short-term debt		$ 32,437
[1]	At December 31, 2017, balance includes $250 million of convertible notes, which matured in April 2018. See Note 12 for further discussion.
[2]	Our consolidated balance sheets include assets of consolidated variable interest entities (“VIEs”) that can only be used to settle obligations of these VIEs and liabilities of consolidated VIEs for which creditors do not have recourse to Redwood Trust, Inc. or its affiliates. At September 30, 2018 and December 31, 2017, assets of consolidated VIEs totaled $3,693,140 and $1,259,774, respectively. At September 30, 2018 and December 31, 2017, liabilities of consolidated VIEs totaled $3,417,835 and $1,167,157, respectively. See Note 4 for further discussion.

Asset-Backed Securities Issue_2

Asset-Backed Securities Issued - Components of Asset-Backed Securities Issued by Consolidated Securitization Entities Sponsored, Along With Other Selected Information (Details) $ in Thousands		Sep. 30, 2018USD ($)series	Dec. 31, 2017USD ($)series
Debt Instrument [Line Items]
Total FHLBC Borrowings	[1]	$ 2,770,970	$ 2,575,023
Asset-backed securities issued
Debt Instrument [Line Items]
Market valuation adjustments		(51,962)	(62,864)
Total FHLBC Borrowings		3,406,985	1,164,585
Asset-backed securities issued | Certificates with principal balance
Debt Instrument [Line Items]
Certificates with principal balance		3,394,379	1,217,782
Asset-backed securities issued | Interest-only certificates
Debt Instrument [Line Items]
Certificates with principal balance		64,568	9,667
Asset-backed securities issued | Legacy Sequoia
Debt Instrument [Line Items]
Market valuation adjustments		(31,139)	(70,652)
Total FHLBC Borrowings		$ 544,923	$ 622,445
Number of series | series		20	20
Asset-backed securities issued | Legacy Sequoia | Minimum
Debt Instrument [Line Items]
Weighted average interest rates, by series		2.33%	1.46%
Asset-backed securities issued | Legacy Sequoia | Maximum
Debt Instrument [Line Items]
Weighted average interest rates, by series		3.43%	2.78%
Asset-backed securities issued | Legacy Sequoia | Certificates with principal balance
Debt Instrument [Line Items]
Certificates with principal balance		$ 574,615	$ 691,125
Asset-backed securities issued | Legacy Sequoia | Interest-only certificates
Debt Instrument [Line Items]
Certificates with principal balance		1,447	1,972
Asset-backed securities issued | Sequoia Choice
Debt Instrument [Line Items]
Market valuation adjustments		6,634	7,788
Total FHLBC Borrowings		$ 1,986,456	$ 542,140
Number of series | series		6	2
Asset-backed securities issued | Sequoia Choice | Minimum
Debt Instrument [Line Items]
Weighted average interest rates, by series		4.47%	4.52%
Asset-backed securities issued | Sequoia Choice | Maximum
Debt Instrument [Line Items]
Weighted average interest rates, by series		4.97%	4.73%
Asset-backed securities issued | Sequoia Choice | Certificates with principal balance
Debt Instrument [Line Items]
Certificates with principal balance		$ 1,952,059	$ 526,657
Asset-backed securities issued | Sequoia Choice | Interest-only certificates
Debt Instrument [Line Items]
Certificates with principal balance		27,763	7,695
Asset-backed securities issued | Freddie Mac K-Series
Debt Instrument [Line Items]
Market valuation adjustments		(27,457)	0
Total FHLBC Borrowings		$ 875,606	$ 0
Weighted average interest rates, by series			0.00%
Number of series | series		2	0
Asset-backed securities issued | Freddie Mac K-Series | Minimum
Debt Instrument [Line Items]
Weighted average interest rates, by series		3.39%
Asset-backed securities issued | Freddie Mac K-Series | Maximum
Debt Instrument [Line Items]
Weighted average interest rates, by series		3.80%
Asset-backed securities issued | Freddie Mac K-Series | Certificates with principal balance
Debt Instrument [Line Items]
Certificates with principal balance		$ 867,705	$ 0
Asset-backed securities issued | Freddie Mac K-Series | Interest-only certificates
Debt Instrument [Line Items]
Certificates with principal balance		$ 35,358	$ 0
[1]	Our consolidated balance sheets include assets of consolidated variable interest entities (“VIEs”) that can only be used to settle obligations of these VIEs and liabilities of consolidated VIEs for which creditors do not have recourse to Redwood Trust, Inc. or its affiliates. At September 30, 2018 and December 31, 2017, assets of consolidated VIEs totaled $3,693,140 and $1,259,774, respectively. At September 30, 2018 and December 31, 2017, liabilities of consolidated VIEs totaled $3,417,835 and $1,167,157, respectively. See Note 4 for further discussion.

Asset-Backed Securities Issue_3

Asset-Backed Securities Issued - Additional Information (Details)	9 Months Ended
	Sep. 30, 2018
Asset-backed securities issued | Contractual maturities of over five years
Debt Instrument [Line Items]
Contractual maturities of ABS (in years)	5 years

Asset-Backed Securities Issue_4

Asset-Backed Securities Issued - Accrued Interest Payable (Details) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2018	Dec. 31, 2017
Debt Instrument [Line Items]
Amortization of debt issuance costs	$ 10,839	$ 2,568
Freddie Mac K-Series
Debt Instrument [Line Items]
Amortization of debt issuance costs	2,606	0
Asset-backed securities issued | Legacy Sequoia
Debt Instrument [Line Items]
Amortization of debt issuance costs	590	537
Asset-backed securities issued | Sequoia Choice
Debt Instrument [Line Items]
Amortization of debt issuance costs	$ 7,643	$ 2,031

Asset-Backed Securities Issue_5

Asset-Backed Securities Issued - Summary of Carrying Value Components of Collateral for Asset-Backed Securities Issued and Outstanding (Details) - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
Financial Instruments Owned and Pledged as Collateral [Line Items]
Collateral for ABS Issued	$ 3,693,140	$ 1,259,774
Residential loans
Financial Instruments Owned and Pledged as Collateral [Line Items]
Collateral for ABS Issued	2,735,153	1,252,879
Multifamily loans, held-for-investment, at fair value
Financial Instruments Owned and Pledged as Collateral [Line Items]
Collateral for ABS Issued	942,165
Restricted cash
Financial Instruments Owned and Pledged as Collateral [Line Items]
Collateral for ABS Issued	158	151
Accrued interest receivable
Financial Instruments Owned and Pledged as Collateral [Line Items]
Collateral for ABS Issued	12,749	3,391
REO
Financial Instruments Owned and Pledged as Collateral [Line Items]
Collateral for ABS Issued	2,915	3,353
Legacy Sequoia
Financial Instruments Owned and Pledged as Collateral [Line Items]
Collateral for ABS Issued	557,880	637,184
Legacy Sequoia | Residential loans
Financial Instruments Owned and Pledged as Collateral [Line Items]
Collateral for ABS Issued	553,958	632,817
Legacy Sequoia | Multifamily loans, held-for-investment, at fair value
Financial Instruments Owned and Pledged as Collateral [Line Items]
Collateral for ABS Issued	0
Legacy Sequoia | Restricted cash
Financial Instruments Owned and Pledged as Collateral [Line Items]
Collateral for ABS Issued	147	147
Legacy Sequoia | Accrued interest receivable
Financial Instruments Owned and Pledged as Collateral [Line Items]
Collateral for ABS Issued	860	867
Legacy Sequoia | REO
Financial Instruments Owned and Pledged as Collateral [Line Items]
Collateral for ABS Issued	2,915	3,353
Sequoia Choice
Financial Instruments Owned and Pledged as Collateral [Line Items]
Collateral for ABS Issued	2,190,252	622,590
Sequoia Choice | Residential loans
Financial Instruments Owned and Pledged as Collateral [Line Items]
Collateral for ABS Issued	2,181,195	620,062
Sequoia Choice | Multifamily loans, held-for-investment, at fair value
Financial Instruments Owned and Pledged as Collateral [Line Items]
Collateral for ABS Issued	0
Sequoia Choice | Restricted cash
Financial Instruments Owned and Pledged as Collateral [Line Items]
Collateral for ABS Issued	11	4
Sequoia Choice | Accrued interest receivable
Financial Instruments Owned and Pledged as Collateral [Line Items]
Collateral for ABS Issued	9,046	2,524
Sequoia Choice | REO
Financial Instruments Owned and Pledged as Collateral [Line Items]
Collateral for ABS Issued	0	0
Freddie Mac K-Series
Financial Instruments Owned and Pledged as Collateral [Line Items]
Collateral for ABS Issued	945,008	0
Freddie Mac K-Series | Residential loans
Financial Instruments Owned and Pledged as Collateral [Line Items]
Collateral for ABS Issued	0	0
Freddie Mac K-Series | Multifamily loans, held-for-investment, at fair value
Financial Instruments Owned and Pledged as Collateral [Line Items]
Collateral for ABS Issued	942,165
Freddie Mac K-Series | Restricted cash
Financial Instruments Owned and Pledged as Collateral [Line Items]
Collateral for ABS Issued	0	0
Freddie Mac K-Series | Accrued interest receivable
Financial Instruments Owned and Pledged as Collateral [Line Items]
Collateral for ABS Issued	2,843	0
Freddie Mac K-Series | REO
Financial Instruments Owned and Pledged as Collateral [Line Items]
Collateral for ABS Issued	$ 0	$ 0

Long-Term Debt - Additional Inf

Long-Term Debt - Additional Information (Details) - USD ($)		1 Months Ended					3 Months Ended	9 Months Ended	12 Months Ended
		Jun. 30, 2018	Aug. 31, 2017	Jan. 31, 2016	Nov. 30, 2014	Mar. 31, 2013	Sep. 30, 2018	Sep. 30, 2018	Dec. 31, 2017	Dec. 31, 2016	Apr. 30, 2018
Debt Instrument [Line Items]
Transition period for subsidiary to be a FHLB-member (in years)				5 years
Existing debt							$ 0	$ 0	$ 0
Federal home loan bank stock							43,393,000	43,393,000	43,393,000
Accrued interest payable							3,000,000	3,000,000	2,000,000
Notional amount							6,645,489,000	6,645,489,000	6,644,081,000
Accrued interest payable	[1]						$ 31,076,000	$ 31,076,000	18,435,000
Trust Preferred Securities And Subordinated Notes
Debt Instrument [Line Items]
Weighted average interest rates, by series							6.90%	6.90%
Accrued interest payable							$ 1,000,000	$ 1,000,000	1,000,000
Trust Preferred Securities And Subordinated Notes | Interest rate swaps
Debt Instrument [Line Items]
Notional amount							140,000,000	$ 140,000,000
Trust Preferred Securities And Subordinated Notes | LIBOR
Debt Instrument [Line Items]
Basis spread on variable rate								2.25%
Trust Preferred Securities
Debt Instrument [Line Items]
Debt instrument face amount							100,000,000	$ 100,000,000
Subordinated Notes
Debt Instrument [Line Items]
Debt instrument face amount							40,000,000	40,000,000
Senior Notes Due 2024 | Convertible Debt
Debt Instrument [Line Items]
Convertible notes		$ 200,000,000					200,000,000	$ 200,000,000
Debt Instrument interest rate		5.625%
Debt instrument, percent of par		99.50%
Net proceeds from issuance of convertible debt		$ 194,000,000
Interest expense yield								6.20%
Convertible senior notes conversion rate								0.0547645
Convertible senior notes conversion per share (in dollars per share)		$ 18.26
Accrued interest payable							3,000,000	$ 3,000,000
Unamortized debt issuance costs							5,000,000	5,000,000
Unamortized discount							(1,000,000)	(1,000,000)
Senior Notes Due 2023 | Convertible Debt
Debt Instrument [Line Items]
Convertible notes			$ 245,000,000				$ 245,000,000	$ 245,000,000
Debt Instrument interest rate			4.75%
Net proceeds from issuance of convertible debt			$ 238,000,000
Interest expense yield								5.30%
Convertible senior notes conversion rate								0.0539060
Convertible senior notes conversion per share (in dollars per share)							$ 18.55	$ 18.55
Accrued interest payable							$ 1,000,000	$ 1,000,000
Unamortized debt issuance costs							6,000,000	6,000,000
Debt instrument maturity year			2,023
Exchangeable Senior Notes Due 2019 | Convertible Debt
Debt Instrument [Line Items]
Convertible notes					$ 205,000,000		$ 201,000,000	$ 201,000,000
Debt Instrument interest rate					5.625%
Net proceeds from issuance of convertible debt					$ 198,000,000
Interest expense yield								6.30%
Convertible senior notes conversion rate								0.0462370
Convertible senior notes conversion per share (in dollars per share)							$ 21.63	$ 21.63
Accrued interest payable							$ 4,000,000	$ 4,000,000
Unamortized debt issuance costs							$ 1,000,000	$ 1,000,000
Debt instrument maturity year					2,019
Debt instrument redemption date								Nov. 15, 2019
Amount of debt repurchased										$ 4,000,000
Exchangeable Senior Notes Due 2019 | Convertible Debt | Gain (loss) on investments
Debt Instrument [Line Items]
Gain on extinguishment of debt										$ 300,000
Convertible Senior Notes Due 2018 | Convertible Debt
Debt Instrument [Line Items]
Convertible notes						$ 288,000,000			288,000,000
Debt Instrument interest rate						4.625%
Net proceeds from issuance of convertible debt						$ 279,000,000
Interest expense yield								4.80%
Convertible senior notes conversion rate								0.0411320
Convertible senior notes conversion per share (in dollars per share)							$ 24.31	$ 24.31
Amount of debt repurchased									37,000,000		$ 250,000,000
Gain on extinguishment of debt									(1,000,000)
Unamortized deferred issuance costs									2,000,000
FHLB Chicago
Debt Instrument [Line Items]
Federal home loan bank advances, reset period of basis margin (in days)								91 days
FHLB Chicago | FHLB Member Subsidiary
Debt Instrument [Line Items]
Maximum borrowing limit							$ 2,000,000,000	$ 2,000,000,000
Additional borrowings from FHLBC							0	0
Existing debt							2,000,000,000	2,000,000,000
Federal home loan bank advances outstanding							$ 2,000,000,000	$ 2,000,000,000	$ 2,000,000,000
Weighted average interest rate							2.24%	2.24%	1.38%
Weighted average maturity (in years)								7 years	8 years
FHLB Chicago | Redwood | Held-for-sale residential loans | Residential Real Estate
Debt Instrument [Line Items]
Loans pledged as collateral under borrowing agreement with FHLBC							$ 2,270,000,000	$ 2,270,000,000
FHLB Chicago | Redwood | Held-for-sale residential loans | Restricted cash
Debt Instrument [Line Items]
Loans pledged as collateral under borrowing agreement with FHLBC							$ 25,000,000	$ 25,000,000
[1]	Our consolidated balance sheets include assets of consolidated variable interest entities (“VIEs”) that can only be used to settle obligations of these VIEs and liabilities of consolidated VIEs for which creditors do not have recourse to Redwood Trust, Inc. or its affiliates. At September 30, 2018 and December 31, 2017, assets of consolidated VIEs totaled $3,693,140 and $1,259,774, respectively. At September 30, 2018 and December 31, 2017, liabilities of consolidated VIEs totaled $3,417,835 and $1,167,157, respectively. See Note 4 for further discussion.

Long-Term Debt - FHLBC Borrowin

Long-Term Debt - FHLBC Borrowings (Details) - USD ($) $ in Thousands		Sep. 30, 2018	Dec. 31, 2017
Debt Instrument [Line Items]
Total FHLBC Borrowings	[1]	$ 2,770,970	$ 2,575,023
FHLB Chicago | FHLB Member Subsidiary
Debt Instrument [Line Items]
2,024		470,171
2,025		887,639
2,026		642,189
Total FHLBC Borrowings		$ 1,999,999
[1]	Our consolidated balance sheets include assets of consolidated variable interest entities (“VIEs”) that can only be used to settle obligations of these VIEs and liabilities of consolidated VIEs for which creditors do not have recourse to Redwood Trust, Inc. or its affiliates. At September 30, 2018 and December 31, 2017, assets of consolidated VIEs totaled $3,693,140 and $1,259,774, respectively. At September 30, 2018 and December 31, 2017, liabilities of consolidated VIEs totaled $3,417,835 and $1,167,157, respectively. See Note 4 for further discussion.

Commitments and Contingencies -

Commitments and Contingencies - Additional Information (Details) $ in Thousands	Jul. 15, 2010Plaintiff	Sep. 30, 2018USD ($)lease	Sep. 30, 2017USD ($)	Sep. 30, 2018USD ($)loanleasecertificaterepurchase_request	Sep. 30, 2017USD ($)	Dec. 31, 2007certificate	Dec. 31, 2004certificate	Dec. 31, 2007certificate	Dec. 31, 2018USD ($)	Dec. 31, 2017USD ($)	Dec. 31, 2016USD ($)	Dec. 23, 2009
Loss Contingencies [Line Items]
Number of noncancelable leases | lease		4		4
Operating lease expiration dates				2,028
Future lease commitments with expiration date		$ 16,150		$ 16,150
Operating lease expense				2,000	$ 2,000
Remaining commitment to fund equity investments		50,000		50,000
Participation in loan warehouse facility		39,219		39,219						$ 0
Loan warehouse facility, additional liability		14,000		14,000
Security purchase deposit		57,982		57,982						0
Guarantee obligations		17,423		17,423						19,487
Guarantee obligations, credit reserve		6,000		6,000
Special Purpose Entities (SPEs) assets		47,000		47,000						48,000
Special Purpose Entities (SPEs) liabilities		17,000		17,000						19,000
Residential repurchase reserve		4,709		$ 4,709						4,916
Number of residential repurchase requests (in repurchase requests) | repurchase_request				8
Number of loans repurchased | loan				0
Residential repurchase provisions recorded				$ (200)	(500)
Aggregate amount of loss contingency reserves		2,000		$ 2,000						2,000
Morgan Stanley & Co.
Loss Contingencies [Line Items]
Number of mortgage pass-through certificates issued (in certificates) | certificate				28
Sequoia Residential Funding
Loss Contingencies [Line Items]
Number of mortgage pass-through certificates issued (in certificates) | certificate						2	2	4
Schwab
Loss Contingencies [Line Items]
Number of other named defendants along with SRF (in plaintiffs) | Plaintiff	26
Residential Loans
Loss Contingencies [Line Items]
Loan Principal		859,000		$ 859,000						$ 1,410,000
Loans held-for-investment, in foreclosure		1,000		1,000
Other income
Loss Contingencies [Line Items]
Other income related to risk sharing agreement		1,000	$ 1,000	3,000	2,000
Mortgage banking and investment activities
Loss Contingencies [Line Items]
Market valuation changes in fair value of guarantee asset (less than for three months ending June 30, 2015)		(100)	$ (300)	(500)	$ (1,000)
Guarantee Obligations
Loss Contingencies [Line Items]
Original unpaid balance of loans subject to risk sharing agreements											$ 3,190,000
Potential future payments on loans		44,000		44,000
Loan Principal		$ 1,890,000		$ 1,890,000
Weighted average original Fair Isaac Corporation (FICO) score		759		759
Weighted average original loan-to-value (LTV)		76.00%		76.00%
Guarantee Obligations | Financing Receivables, Equal to Greater than 90 Days Past Due
Loss Contingencies [Line Items]
Balance of loans 90 days or more delinquent		$ 4,000		$ 4,000
Residential | Sequoia | FHLB Seattle
Loss Contingencies [Line Items]
Statutory interest rate per annum (as a percent)												8.00%
Principal value		133,000		133,000
Debt instrument principal payment amount				126,000
Debt instrument interest payment amount				12,000
Residential | Sequoia | Schwab
Loss Contingencies [Line Items]
Principal value		15,000		15,000
Principal balance of securities		14,000		14,000
Debt instrument interest amount		$ 1,000		$ 1,000
Forecast
Loss Contingencies [Line Items]
Security purchase deposit									$ 180,000

Commitments and Contingencies_2

Commitments and Contingencies - Future Lease Commitments (Details) $ in Thousands	Sep. 30, 2018USD ($)
Commitments and Contingencies Disclosure [Abstract]
2018 (3 months)	$ 491
2,019	2,002
2,020	1,966
2,021	1,474
2022 and thereafter	10,217
Total	$ 16,150

Equity - Changes to Accumulated

Equity - Changes to Accumulated Other Comprehensive Income (Loss) by Component (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Beginning balance			$ 1,212,287,000	$ 1,149,428,000
Ending balance	$ 1,361,327,000	$ 1,208,640,000	1,361,327,000	1,208,640,000
Net unrealized gain (loss) on available-for-sale securities, tax benefit (provision)	0	0	100,000	(100,000)
Available-for-sale, tax provision	(2,000,000)		(2,000,000)
Net Unrealized Gains on Available-for-Sale Securities
Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Beginning balance	106,725,000	114,364,000	128,201,000	115,873,000
Other comprehensive income (loss) before reclassifications	(2,408,000)	13,158,000	(9,749,000)	17,899,000
Amounts reclassified from other accumulated comprehensive income (2)	(5,686,000)	(853,000)	(19,821,000)	(7,103,000)
Net current-period other comprehensive (loss) income	(8,094,000)	12,305,000	(29,570,000)	10,796,000
Ending balance	98,631,000	126,669,000	98,631,000	126,669,000
Net Unrealized Losses on Interest Rate Agreements Accounted for as Cash Flow Hedges
Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Beginning balance	(31,105,000)	(44,688,000)	(42,953,000)	(44,020,000)
Other comprehensive income (loss) before reclassifications	4,801,000	321,000	16,649,000	(375,000)
Amounts reclassified from other accumulated comprehensive income (2)	0	14,000	0	42,000
Net current-period other comprehensive (loss) income	4,801,000	335,000	16,649,000	(333,000)
Ending balance	$ (26,304,000)	$ (44,353,000)	$ (26,304,000)	$ (44,353,000)

Equity - Reclassifications out

Equity - Reclassifications out of Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Investment fair value changes, net	$ (10,332)	$ (324)	$ (12,830)	$ (9,990)
Realized gains, net	(7,275)	(1,734)	(21,352)	(8,809)
Provision for income taxes	4,919	5,262	12,343	16,741
Net Income before Provision for Income Taxes	(45,840)	(41,442)	(132,856)	(126,214)
Interest expense	64,351	27,443	154,078	72,708
Other than temporary impairment recognized in AOCI	300		500	400
Reclassification out of Accumulated Other Comprehensive Income | Net Unrealized Gains on Available-for-Sale Securities
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Investment fair value changes, net	33	3	89	248
Realized gains, net	(7,247)	(856)	(21,438)	(7,351)
Provision for income taxes	1,528	0	1,528	0
Net Income before Provision for Income Taxes	(5,686)	(853)	(19,821)	(7,103)
Other than temporary impairment	400		600
Impairment losses, investments				600
Reclassification out of Accumulated Other Comprehensive Income | Net Unrealized Losses on Interest Rate Agreements Accounted for as Cash Flow Hedges
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Net Income before Provision for Income Taxes	0	14	0	42
Reclassification out of Accumulated Other Comprehensive Income | Net Unrealized Losses on Interest Rate Agreements Accounted for as Cash Flow Hedges | Interest rate contract
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Interest expense	$ 0	$ 14	$ 0	$ 42

Equity - Basic and Diluted Earn

Equity - Basic and Diluted Earnings Per Common Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Basic Earnings per Common Share:
Net income attributable to Redwood	$ 40,921	$ 36,180	$ 120,513	$ 109,473
Less: Dividends and undistributed earnings allocated to participating securities	(1,231)	(948)	(3,766)	(2,800)
Net income allocated to common shareholders	$ 39,690	$ 35,232	$ 116,747	$ 106,673
Basic weighted average common shares outstanding (in shares)	80,796,856	76,850,830	77,211,188	76,803,324
Basic earnings per common share (in dollars per share)	$ 0.49	$ 0.46	$ 1.51	$ 1.39
Earnings Per Share, Diluted [Abstract]
Net income attributable to Redwood	$ 40,921	$ 36,180	$ 120,513	$ 109,473
Less: Dividends and undistributed earnings allocated to participating securities	(1,284)	(986)	(3,867)	(2,926)
Add back: Interest expense on convertible notes for the period, net of tax	8,666	6,564	23,642	18,639
Net income allocated to common shareholders	$ 48,303	$ 41,758	$ 140,288	$ 125,186
Basic weighted average common shares outstanding (in shares)	80,796,856	76,850,830	77,211,188	76,803,324
Net effect of dilutive equity awards (in shares)	443,191	298,955	251,935	215,141
Net effect of assumed convertible notes conversion to common shares (in shares)	33,442,641	25,553,323	30,328,906	22,379,401
Diluted weighted average common shares outstanding (in shares)	114,682,688	102,703,108	107,792,029	99,397,866
Diluted earnings per common share (in dollars per share)	$ 0.42	$ 0.41	$ 1.30	$ 1.26

Equity - Additional Information

Equity - Additional Information (Details) - USD ($)	1 Months Ended		3 Months Ended		9 Months Ended		12 Months Ended
	Feb. 28, 2018	Jan. 31, 2018	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017	Feb. 29, 2016
Stockholders Equity Note [Line Items]
Net proceeds from issuance of common stock			$ 117,000,000		$ 117,311,000	$ 224,000
Share repurchases					15,544,000
Share Repurchase Plan, February 2016
Stockholders Equity Note [Line Items]
Common stock authorized to repurchase by Board								$ 100,000,000
Shares repurchased pursuant to authorization (in shares)		1,040,829					610,342
Share repurchases		$ 16,000,000					$ 9,000,000
Available authorization remaining for repurchase							$ 77,000,000
Share Repurchase Plan, February 2018
Stockholders Equity Note [Line Items]
Common stock authorized to repurchase by Board	$ 100,000,000
Available authorization remaining for repurchase			$ 100,000,000		$ 100,000,000
Increase in authorized repurchase amount	$ 39,000,000
Equity awards
Stockholders Equity Note [Line Items]
Securities excluded in the calculation of diluted earnings per share (in shares)			7,761	6,149	7,230	5,843
Common Stock
Stockholders Equity Note [Line Items]
Issuance of common stock (in shares)			7,187,500		7,187,500

Equity Compensation Plans - Add

Equity Compensation Plans - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended	12 Months Ended
	Sep. 30, 2018	Jun. 30, 2018	Sep. 30, 2018	Dec. 31, 2017
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares of common stock available for grant under Redwood's Incentive Plan (in shares)	4,875,504		4,875,504	1,356,438
Additional shares authorized under Incentive Plan	4,000,000
Unrecognized compensation cost	$ 19,420		$ 19,420	$ 21,470
Number of shares purchased by employees (in shares)			382,696	361,006
Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Weighted average amortization period remaining for equity awards (less than)			2 years
Shares of common stock to be purchased in aggregate for all employees (in shares)	450,000		450,000
Performance Share Units (PSUs), 2017
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Fair value, average closing price of common stock, measurement period		60 days
Restricted Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unvested outstanding stock awards (in shares)	329,042		329,042	257,507
Number of stock awards granted (in shares)			162,330
Number of stock awards vested (in shares)			83,325
Number of stock awards forfeited (in shares)			7,470
Deferred Stock Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unvested outstanding stock awards (in shares)	2,241,887		2,241,887	1,878,491
Number of stock awards granted (in shares)			395,917
Number of stock awards vested (in shares)			1,269,946	889,835
Number of stock awards forfeited (in shares)			0
Number of stock awards distributed (in shares)			32,521
Performance Stock Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unvested outstanding stock awards (in shares)	727,295		727,295	704,270
Number of stock awards granted (in shares)		23,025
Share-based compensation, vesting period (in years)		3 years	3 years
PSU, weighted average grant date fair value (in dollars per share)		$ 15.20
Performance Stock Units | Performance Share Units (PSUs), 2015 and 2017
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
TSR, percent			125.00%
Performance Stock Units | Performance Share Units (PSUs), 2015 and 2017 | Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting rights, percentage			200.00%
Performance Stock Units | Performance Share Units (PSUs), 2015 and 2017 | Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting rights, percentage			0.00%
Performance Stock Units | Performance Share Units (PSUs), 2017
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Fair value assumptions, expected volatility rate			27.00%
Fair value assumptions, risk free interest rate			2.71%
Fair value, expected dividend rate			0.00%
Performance Stock Units | Performance Share Units (PSUs), 2016
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation, vesting period (in years)			3 years

Equity Compensation Plans - Unr

Equity Compensation Plans - Unrecognized Compensation Cost (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2018USD ($)
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized [Roll Forward]
Unrecognized compensation cost at beginning of period	$ 21,470
Equity grants	7,627
Equity grant forfeitures	(112)
Equity compensation expense	(9,565)
Unrecognized Compensation Cost at End of Period	19,420
Incentive Plans | Restricted Stock
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized [Roll Forward]
Unrecognized compensation cost at beginning of period	2,808
Equity grants	2,391
Equity grant forfeitures	(112)
Equity compensation expense	(1,245)
Unrecognized Compensation Cost at End of Period	3,842
Incentive Plans | Deferred Stock Units
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized [Roll Forward]
Unrecognized compensation cost at beginning of period	13,364
Equity grants	4,750
Equity grant forfeitures	0
Equity compensation expense	(6,264)
Unrecognized Compensation Cost at End of Period	11,850
Incentive Plans | Performance Stock Units
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized [Roll Forward]
Unrecognized compensation cost at beginning of period	5,298
Equity grants	350
Equity grant forfeitures	0
Equity compensation expense	(1,954)
Unrecognized Compensation Cost at End of Period	3,694
Employee Stock Purchase Plan
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized [Roll Forward]
Unrecognized compensation cost at beginning of period	0
Equity grants	136
Equity grant forfeitures	0
Equity compensation expense	(102)
Unrecognized Compensation Cost at End of Period	$ 34

Mortgage Banking Activities, _3

Mortgage Banking Activities, Net - Components of Mortgage Banking Activities (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Other income, net	$ 3,453	$ 2,812	$ 8,893	$ 9,473
Mortgage banking activities, net	11,224	21,200	48,396	50,850
Residential Mortgage Banking Activities
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Other income, net	313	142	1,733	1,515
Residential Mortgage Banking Activities | Residential loans, at fair value
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Changes in fair value of assets	7,236	28,135	8,406	63,122
Residential Mortgage Banking Activities | Single-family rental loans, held-for-sale at fair value
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Changes in fair value of assets	(121)	0	(121)	0
Residential Mortgage Banking Activities | Risk management derivatives, net
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Risk management derivatives	$ 3,796	$ (7,077)	$ 38,378	$ (13,787)

Investment Fair Value Changes_3

Investment Fair Value Changes, Net - Components of Investment Activities (Details) - Investment Fair Value Changes, Net - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Investment Holdings [Line Items]
Changes in fair value of assets	$ 10,332	$ 324	$ 12,830	$ 9,990
Residential loans held-for-investment, at Redwood
Investment Holdings [Line Items]
Changes in fair value of assets	(17,063)	2,881	(71,058)	8,902
Fix-and-flip loans held-for-investment
Investment Holdings [Line Items]
Changes in fair value of assets	53	0	53	0
Trading securities
Investment Holdings [Line Items]
Changes in fair value of assets	6,314	607	2,429	30,676
Legacy Sequoia
Investment Holdings [Line Items]
Changes in fair value of assets	(248)	(1,045)	(976)	(3,842)
Sequoia Choice
Investment Holdings [Line Items]
Changes in fair value of assets	(943)	(256)	43	(256)
Freddie Mac K-Series
Investment Holdings [Line Items]
Changes in fair value of assets	511	0	511	0
Risk-sharing investments
Investment Holdings [Line Items]
Changes in fair value of assets	(126)	(267)	(474)	(985)
Risk management derivatives, net
Investment Holdings [Line Items]
Changes in fair value of assets	21,867	(1,592)	82,391	(24,557)
Commercial loan
Investment Holdings [Line Items]
Changes in fair value of assets	0	0	0	300
Impairments on AFS securities
Investment Holdings [Line Items]
Changes in fair value of assets	$ (33)	$ (4)	$ (89)	$ (248)

Operating Expenses - Components

Operating Expenses - Components of Operating Expenses (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Other Income and Expenses [Abstract]
Fixed compensation expense	$ 5,922	$ 5,233	$ 18,136	$ 16,556
Variable compensation expense	4,923	6,467	13,655	14,713
Equity compensation expense	3,033	2,337	9,565	7,634
Total compensation expense	13,878	14,037	41,356	38,903
Systems and consulting	1,794	1,856	5,434	5,183
Loan acquisition costs	1,887	1,187	5,860	3,397
Office costs	1,173	988	3,397	3,231
Accounting and legal	1,170	519	3,078	2,322
Corporate costs	462	415	1,462	1,363
Other operating expenses	1,126	920	2,942	2,390
Total Operating Expenses	$ 21,490	$ 19,922	$ 63,529	$ 56,789

Taxes - Additional Information

Taxes - Additional Information (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Income Tax Disclosure [Abstract]
Provision for income taxes	$ (4,919)	$ (5,262)	$ (12,343)	$ (16,741)

Taxes - Reconciliation of Statu

Taxes - Reconciliation of Statutory Tax Rate to Effective Tax Rate (Details)	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017
Income Tax Disclosure [Abstract]
Federal statutory rate	21.00%	34.00%
State statutory rate, net of Federal tax effect	8.60%	7.20%
Differences in taxable (loss) income from GAAP income	(1.80%)	(6.80%)
Change in valuation allowance	(3.20%)	(2.80%)
Dividends paid deduction	(15.30%)	(18.30%)
Effective Tax Rate	9.30%	13.30%

Segment Information - Additiona

Segment Information - Additional Information (Details)	9 Months Ended
	Sep. 30, 2018Segment
Segment Reporting [Abstract]
Number of operating segments	2

Segment Information - Financial

Segment Information - Financial Information by Segment (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Segment Reporting Information [Line Items]
Interest income	$ 99,397	$ 62,737	$ 258,992	$ 176,589
Interest expense	(64,351)	(27,443)	(154,078)	(72,708)
Net Interest Income	35,046	35,294	104,914	103,881
Non-interest Income
Mortgage banking activities, net	11,224	21,200	48,396	50,850
Investment fair value changes, net	10,332	324	12,830	9,990
Other income, net	3,453	2,812	8,893	9,473
Realized gains, net	7,275	1,734	21,352	8,809
Total non-interest income, net	32,284	26,070	91,471	79,122
Direct operating expenses	(21,490)	(19,922)	(63,529)	(56,789)
Provision for income taxes	(4,919)	(5,262)	(12,343)	(16,741)
Net Income	40,921	36,180	120,513	109,473
Non-cash amortization income (expense), net	2,789	4,410	10,170	13,656
Operating Segments | Investment Portfolio
Segment Reporting Information [Line Items]
Interest income	79,556	47,023	202,882	135,106
Interest expense	(40,852)	(9,445)	(87,719)	(21,940)
Net Interest Income	38,704	37,578	115,163	113,166
Non-interest Income
Mortgage banking activities, net	0	0	0	0
Investment fair value changes, net	10,566	1,372	13,756	13,846
Other income, net	3,334	2,812	8,774	9,473
Realized gains, net	7,275	1,734	21,352	9,561
Total non-interest income, net	21,175	5,918	43,882	32,880
Direct operating expenses	(2,659)	(1,324)	(6,524)	(4,371)
Provision for income taxes	(2,840)	(433)	(4,858)	(4,490)
Net Income	54,380	41,739	147,663	137,185
Non-cash amortization income (expense), net	4,019	5,222	13,290	16,263
Operating Segments | Mortgage Banking
Segment Reporting Information [Line Items]
Interest income	14,427	10,626	40,408	26,515
Interest expense	(7,537)	(4,135)	(21,303)	(11,462)
Net Interest Income	6,890	6,491	19,105	15,053
Non-interest Income
Mortgage banking activities, net	11,224	21,200	48,396	50,850
Investment fair value changes, net	0	0	0	0
Other income, net	0	0	0	0
Realized gains, net	0	0	0	0
Total non-interest income, net	11,224	21,200	48,396	50,850
Direct operating expenses	(6,570)	(6,107)	(20,941)	(18,009)
Provision for income taxes	(2,079)	(4,829)	(7,485)	(12,251)
Net Income	9,465	16,755	39,075	35,643
Non-cash amortization income (expense), net	(54)	(25)	(99)	(79)
Corporate/Other
Segment Reporting Information [Line Items]
Interest income	5,414	5,088	15,702	14,968
Interest expense	(15,962)	(13,863)	(45,056)	(39,306)
Net Interest Income	(10,548)	(8,775)	(29,354)	(24,338)
Non-interest Income
Mortgage banking activities, net	0	0	0	0
Investment fair value changes, net	(234)	(1,048)	(926)	(3,856)
Other income, net	119	0	119	0
Realized gains, net	0	0	0	(752)
Total non-interest income, net	(115)	(1,048)	(807)	(4,608)
Direct operating expenses	(12,261)	(12,491)	(36,064)	(34,409)
Provision for income taxes	0	0	0	0
Net Income	(22,924)	(22,314)	(66,225)	(63,355)
Non-cash amortization income (expense), net	$ (1,176)	$ (787)	$ (3,021)	$ (2,528)

Segment Information - Component

Segment Information - Components of Corporate/Other (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Segment Reporting Information [Line Items]
Interest income	$ 99,397	$ 62,737	$ 258,992	$ 176,589
Interest expense	(64,351)	(27,443)	(154,078)	(72,708)
Net Interest Income	35,046	35,294	104,914	103,881
Investment fair value changes, net	10,332	324	12,830	9,990
Realized gains, net	7,275	1,734	21,352	8,809
Total non-interest income, net	32,284	26,070	91,471	79,122
Direct operating expenses	(21,490)	(19,922)	(63,529)	(56,789)
Net Income	40,921	36,180	120,513	109,473
Corporate/Other
Segment Reporting Information [Line Items]
Interest income	5,414	5,088	15,702	14,968
Interest expense	(15,962)	(13,863)	(45,056)	(39,306)
Net Interest Income	(10,548)	(8,775)	(29,354)	(24,338)
Investment fair value changes, net	(234)	(1,048)	(926)	(3,856)
Other income	119	0	119	0
Realized gains, net	0	0	0	(752)
Total non-interest income, net	(115)	(1,048)	(807)	(4,608)
Direct operating expenses	(12,261)	(12,491)	(36,064)	(34,409)
Net Income	(22,924)	(22,314)	(66,225)	(63,355)
Corporate/Other | Legacy Consolidated VIEs
Segment Reporting Information [Line Items]
Interest income	5,174	4,875	15,003	14,576
Interest expense	(4,257)	(3,838)	(12,324)	(11,046)
Net Interest Income	917	1,037	2,679	3,530
Investment fair value changes, net	(248)	(1,045)	(976)	(3,842)
Other income	0	0	0	0
Realized gains, net			0	0
Total non-interest income, net	(248)	(1,045)	(976)	(3,842)
Direct operating expenses	0	0	0	0
Net Income	669	(8)	1,703	(312)
Corporate/Other | Other
Segment Reporting Information [Line Items]
Interest income	240	213	699	392
Interest expense	(11,705)	(10,025)	(32,732)	(28,260)
Net Interest Income	(11,465)	(9,812)	(32,033)	(27,868)
Investment fair value changes, net	14	(3)	50	(14)
Other income	119	0	119	0
Realized gains, net			0	(752)
Total non-interest income, net	133	(3)	169	(766)
Direct operating expenses	(12,261)	(12,491)	(36,064)	(34,409)
Net Income	$ (23,593)	$ (22,306)	$ (67,928)	$ (63,043)

Segment Information - Supplemen

Segment Information - Supplemental Information by Segment (Details) - USD ($) $ in Thousands		Sep. 30, 2018	Dec. 31, 2017
Segment Reporting Information [Line Items]
Real estate securities	[1]	$ 1,470,084	$ 1,476,510
Total assets	[1]	9,139,635	7,039,822
Residential loans
Segment Reporting Information [Line Items]
Loans, at fair value		5,922,259	5,115,210
Business purpose loans, at fair value
Segment Reporting Information [Line Items]
Loans, at fair value		115,620
Multifamily loans, held-for-investment, at fair value
Segment Reporting Information [Line Items]
Loans, at fair value		942,165
Operating Segments | Investment Portfolio
Segment Reporting Information [Line Items]
Real estate securities		1,470,084	1,476,510
Total assets		7,436,674	4,743,873
Operating Segments | Investment Portfolio | Residential loans
Segment Reporting Information [Line Items]
Loans, at fair value		4,501,857	3,054,448
Operating Segments | Investment Portfolio | Business purpose loans, at fair value
Segment Reporting Information [Line Items]
Loans, at fair value		95,515
Operating Segments | Investment Portfolio | Multifamily loans, held-for-investment, at fair value
Segment Reporting Information [Line Items]
Loans, at fair value		942,165
Operating Segments | Mortgage Banking
Segment Reporting Information [Line Items]
Real estate securities		0	0
Total assets		909,926	1,453,069
Operating Segments | Mortgage Banking | Residential loans
Segment Reporting Information [Line Items]
Loans, at fair value		866,444	1,427,945
Operating Segments | Mortgage Banking | Business purpose loans, at fair value
Segment Reporting Information [Line Items]
Loans, at fair value		20,105
Operating Segments | Mortgage Banking | Multifamily loans, held-for-investment, at fair value
Segment Reporting Information [Line Items]
Loans, at fair value		0
Corporate/Other
Segment Reporting Information [Line Items]
Real estate securities		0	0
Total assets		793,035	842,880
Corporate/Other | Residential loans
Segment Reporting Information [Line Items]
Loans, at fair value		553,958	$ 632,817
Corporate/Other | Business purpose loans, at fair value
Segment Reporting Information [Line Items]
Loans, at fair value		0
Corporate/Other | Multifamily loans, held-for-investment, at fair value
Segment Reporting Information [Line Items]
Loans, at fair value		$ 0
[1]	Our consolidated balance sheets include assets of consolidated variable interest entities (“VIEs”) that can only be used to settle obligations of these VIEs and liabilities of consolidated VIEs for which creditors do not have recourse to Redwood Trust, Inc. or its affiliates. At September 30, 2018 and December 31, 2017, assets of consolidated VIEs totaled $3,693,140 and $1,259,774, respectively. At September 30, 2018 and December 31, 2017, liabilities of consolidated VIEs totaled $3,417,835 and $1,167,157, respectively. See Note 4 for further discussion.