Redwood Trust (RWT) 10-Q 8 Aug 19 2019 Q2 Quarterly report Financial data

Cover Page

Cover Page - shares	6 Months Ended
	Jun. 30, 2019	Aug. 05, 2019
Cover page.
Document Type	10-Q
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Jun. 30, 2019
Entity File Number	1-13759
Entity Registrant Name	REDWOOD TRUST INC
Entity Incorporation, State or Country Code	MD
Entity Tax Identification Number	68-0329422
Entity Address Address Line	One Belvedere Place, Suite 300
Entity Address City Or Town	Mill Valley,
Entity Address, State or Province	CA
Entity Address Postal Zip Code	94941
City Area Code	415
Local Phone Number	389-7373
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity small business	false
Emerging growth company	false
Entity Shell Company	false
Title of 12(b) Security	Common stock, par value $0.01 per share
Trading Symbol	RWT
Security Exchange Name	NYSE
Entity Common Stock, Shares Outstanding		97,715,021
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q2
Entity Central Index Key	0000930236
Current Fiscal Year End Date	--12-31
Amendment Flag	false

CONSOLIDATED BALANCE SHEETS

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands		Jun. 30, 2019	Dec. 31, 2018
ASSETS
Real estate securities, at fair value	[1]	$ 1,477,486	$ 1,452,494
Other investments	[1]	372,130	438,518
Cash and cash equivalents	[1]	218,145	175,764
Restricted cash	[1]	33,953	29,313
Goodwill and intangible assets	[1]	50,999	0
Accrued interest receivable	[1]	54,265	47,105
Derivative assets	[1]	26,609	35,789
Other assets	[1]	334,123	217,825
Total Assets	[1]	13,851,586	11,937,406
Liabilities
Short-term debt, net	[1],[2]	2,462,885	2,400,279
Accrued interest payable	[1]	47,092	42,528
Derivative liabilities	[1]	173,847	84,855
Accrued expenses and other liabilities	[1]	117,428	78,719
Asset-backed securities issued, at fair value	[1]	6,913,129	5,410,073
Long-term debt, net	[1]	2,573,173	2,572,158
Total liabilities	[1]	12,287,554	10,588,612
Commitments and Contingencies (see Note 16)	[1]
Equity
Common stock, par value $0.01 per share, 270,000,000 and 180,000,000 shares authorized; 97,715,021 and 84,884,344 issued and outstanding	[1]	977	849
Additional paid-in capital	[1]	2,013,044	1,811,422
Accumulated other comprehensive income	[1]	48,923	61,297
Cumulative earnings	[1]	1,495,671	1,409,941
Cumulative distributions to stockholders	[1]	(1,994,583)	(1,934,715)
Total equity	[1]	1,564,032	1,348,794
Total Liabilities and Equity	[1]	13,851,586	11,937,406
Residential loans, held-for-sale, at fair value
ASSETS
Loans, at fair value	[1]	1,056,287	1,048,801
Residential loans, held-for-investment, at fair value
ASSETS
Loans, at fair value	[1]	6,227,078	6,205,941
Business purpose residential loans, at fair value
ASSETS
Loans, at fair value	[1]	250,854	141,258
Multifamily loans, held-for-investment, at fair value
ASSETS
Loans, at fair value	[1]	$ 3,749,657	$ 2,144,598
[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 June 30, 2019 and December 31, 2018 , assets of consolidated VIEs totaled $7,937,685 and $6,331,191 , respectively. At June 30, 2019 and December 31, 2018 , liabilities of consolidated VIEs totaled $7,189,086 and $5,709,807 , respectively. See Note 4 for further discussion.
[2]	Includes $201 million of convertible notes, which were reclassified from Long-term debt, net to Short-term debt as the maturity of the notes was less than one year as of November 15, 2018. See Note 13 for further discussion.

CONSOLIDATED BALANCE SHEETS (PA

CONSOLIDATED BALANCE SHEETS (PARENTHETICAL) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Statement of Financial Position [Abstract]
Common stock, par value (usd per share)	$ 0.01	$ 0.01
Common stock, shares authorized (shares)	270,000,000	180,000,000
Common stock, issued (shares)	97,715,021	84,884,344
Common stock, outstanding (shares)	97,715,021	84,884,344
Variable interest held by entity, assets	$ 7,937,685	$ 6,331,191
Variable interest held by entity, liabilities	$ 7,189,086	$ 5,709,807

CONSOLIDATED STATEMENTS OF INCO

CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Interest Income
Residential loans	$ 77,288	$ 55,514	$ 153,238	$ 105,745
Business purpose residential loans	3,996	0	6,785	0
Multifamily loans	35,917	0	57,305	0
Real estate securities	25,017	26,296	49,467	51,991
Other interest income	6,324	1,166	12,788	1,859
Total interest income	148,542	82,976	279,583	159,595
Interest Expense
Short-term debt	(24,275)	(13,175)	(46,493)	(26,610)
Asset-backed securities issued	(70,113)	(16,349)	(125,408)	(27,750)
Long-term debt	(21,832)	(18,689)	(43,595)	(35,367)
Total interest expense	(116,220)	(48,213)	(215,496)	(89,727)
Net Interest Income	32,322	34,763	64,087	69,868
Non-interest Income
Mortgage banking activities, net	19,160	10,596	31,469	37,172
Investment fair value changes, net	3,138	889	23,297	2,498
Other income, net	2,407	3,322	5,994	5,440
Realized gains, net	2,827	4,714	13,513	14,077
Total non-interest income, net	27,532	19,521	74,273	59,187
Operating expenses	(26,255)	(19,009)	(49,414)	(42,039)
Net Income before Provision for Income Taxes	33,599	35,275	88,946	87,016
Provision for income taxes	(2,333)	(2,528)	(3,216)	(7,424)
Net Income	$ 31,266	$ 32,747	$ 85,730	$ 79,592
Basic earnings per common share (in dollars per share)	$ 0.31	$ 0.42	$ 0.88	$ 1.02
Diluted earnings per common share (in dollars per share)	$ 0.30	$ 0.38	$ 0.78	$ 0.88
Basic weighted average shares outstanding (in shares)	96,983,764	75,380,715	94,846,431	75,388,638
Diluted weighted average shares outstanding (in shares)	130,696,954	100,431,993	128,499,431	104,291,180

CONSOLIDATED STATEMENTS OF COMP

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Statement of Comprehensive Income [Abstract]
Net Income	$ 31,266	$ 32,747	$ 85,730	$ 79,592
Other comprehensive loss:
Net unrealized gain (loss) on available-for-sale securities	8,562	(3,104)	15,280	(7,341)
Reclassification of unrealized gain on available-for-sale securities to net income	(2,822)	(4,748)	(12,315)	(14,135)
Net unrealized (loss) gain on interest rate agreements	(9,501)		(15,339)
Net unrealized (loss) gain on interest rate agreements		3,417		11,848
Total other comprehensive loss	(3,761)	(4,435)	(12,374)	(9,628)
Total Comprehensive Income	$ 27,505	$ 28,312	$ 73,356	$ 69,964

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
Balance at beginning of period 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	79,592				79,592
Other comprehensive loss	(9,628)			(9,628)
Employee stock purchase and incentive plans	(194)	$ 1	(195)
Employee stock purchase and incentive plans (in shares)		183,576
Non-cash equity award compensation	7,633		7,633
Share repurchases	(15,544)	$ (10)	(15,534)
Share repurchases (in shares)		(1,040,829)
Common dividends declared ($0.58 per share)	(45,191)					(45,191)
Balance at End of Period at Jun. 30, 2018	1,228,955	$ 757	1,665,749	75,620	1,369,933	(1,883,104)
Ending balance (in shares) at Jun. 30, 2018		75,742,719
Balance at beginning of period at Mar. 31, 2018	1,219,983	$ 757	1,661,701	80,055	1,337,186	(1,859,716)
Beginning balance (in shares) at Mar. 31, 2018		75,703,107
Increase (Decrease) in Stockholders' Equity
Net Income	32,747				32,747
Other comprehensive loss	(4,435)			(4,435)
Employee stock purchase and incentive plans	89	$ 0	89
Employee stock purchase and incentive plans (in shares)		39,612
Non-cash equity award compensation	3,959		3,959
Common dividends declared ($0.58 per share)	(23,388)					(23,388)
Balance at End of Period at Jun. 30, 2018	1,228,955	$ 757	1,665,749	75,620	1,369,933	(1,883,104)
Ending balance (in shares) at Jun. 30, 2018		75,742,719
Balance at beginning of period at Dec. 31, 2018	1,348,794	$ 849	1,811,422	61,297	1,409,941	(1,934,715)
Beginning balance (in shares) at Dec. 31, 2018		84,884,344
Increase (Decrease) in Stockholders' Equity
Net Income	85,730				85,730
Other comprehensive loss	(12,374)			(12,374)
Issuance of common stock	190,108	$ 123	189,985
Issuance of common stock (in shares)		12,291,191
Direct stock purchase and dividend reinvestment plan	6,307	$ 4	6,303
Direct stock purchase and dividend reinvestment plan (in shares)		399,838
Employee stock purchase and incentive plans	(1,920)	$ 1	(1,921)
Employee stock purchase and incentive plans (in shares)		139,648
Non-cash equity award compensation	7,255		7,255
Common dividends declared ($0.58 per share)	(59,868)					(59,868)
Balance at End of Period at Jun. 30, 2019	1,564,032	$ 977	2,013,044	48,923	1,495,671	(1,994,583)
Ending balance (in shares) at Jun. 30, 2019		97,715,021
Balance at beginning of period at Mar. 31, 2019	1,549,927	$ 969	1,996,358	52,684	1,464,405	(1,964,489)
Beginning balance (in shares) at Mar. 31, 2019		96,866,464
Increase (Decrease) in Stockholders' Equity
Net Income	31,266				31,266
Other comprehensive loss	(3,761)			(3,761)
Issuance of common stock	12,511	$ 8	12,503
Issuance of common stock (in shares)		791,191
Direct stock purchase and dividend reinvestment plan	0	$ 0	0
Direct stock purchase and dividend reinvestment plan (in shares)		0
Employee stock purchase and incentive plans	18	$ 0	18
Employee stock purchase and incentive plans (in shares)		57,366
Non-cash equity award compensation	4,165		4,165
Common dividends declared ($0.58 per share)	(30,094)					(30,094)
Balance at End of Period at Jun. 30, 2019	$ 1,564,032	$ 977	$ 2,013,044	$ 48,923	$ 1,495,671	$ (1,994,583)
Ending balance (in shares) at Jun. 30, 2019		97,715,021

CONSOLIDATED STATEMENTS OF CH_2

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (Parenthetical) - $ / shares	3 Months Ended		6 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Jun. 30, 2019	Jun. 30, 2018
Statement of Stockholders' Equity [Abstract]
Common dividends declared (in dollars per share)	$ 0.30	$ 0.30	$ 0.60	$ 0.58

CONSOLIDATED STATEMENTS OF CASH

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands		6 Months Ended
		Jun. 30, 2019	Jun. 30, 2018
Cash Flows From Operating Activities:
Net Income		$ 85,730	$ 79,592
Adjustments to reconcile net income to net cash used in operating activities:
Amortization of premiums, discounts, and securities issuance costs, net		144	(7,963)
Depreciation and amortization of non-financial assets		696	582
Originations of held-for-sale loans		(84,924)	0
Purchases of held-for-sale loans		(2,534,886)	(3,772,494)
Proceeds from sales of held-for-sale loans		2,123,794	2,966,508
Principal payments on held-for-sale loans		49,894	30,656
Net settlements of derivatives		(25,751)	40,426
Non-cash equity award compensation expense		7,255	7,633
Market valuation adjustments		(48,172)	(34,136)
Realized gains, net		(13,513)	(14,077)
Net change in:
Accrued interest receivable and other assets		(108,985)	32,478
Accrued interest payable and accrued expenses and other liabilities		(9,744)	(3,582)
Net cash used in operating activities		(558,462)	(674,377)
Cash Flows From Investing Activities:
Originations of loans held-for-investment		(84,638)	0
Purchases of loans held-for-investment		(49,489)	0
Proceeds from sales of loans held-for-investment		2,780	0
Principal payments on loans held-for-investment		619,085	335,720
Purchases of real estate securities		(242,970)	(319,975)
Purchases of multifamily securities held in consolidated securitization trusts		(68,601)	0
Proceeds from sales of real estate securities		241,217	352,563
Principal payments on real estate securities		39,041	33,974
Purchases of servicer advance investments		(68,976)	0
Principal repayments from servicer advance investments		111,662	0
Acquisition of 5 Arches, net of cash acquired		(3,714)	0
Net investment in participation in loan warehouse facility		38,209	(34,333)
Net investment in multifamily loan fund		(28,673)	0
Other investing activities, net		(7,616)	(3,935)
Net cash provided by investing activities		497,317	364,014
Cash Flows From Financing Activities:
Proceeds from borrowings on short-term debt		2,731,731	3,219,350
Repayments on short-term debt		(2,675,308)	(3,731,917)
Proceeds from issuance of asset-backed securities		330,534	925,845
Repayments on asset-backed securities issued		(416,789)	(181,781)
Proceeds from issuance of long-term debt		0	199,000
Deferred long-term debt issuance costs paid		0	(4,940)
Net proceeds from issuance of common stock		198,333	177
Net payments on repurchase of common stock		0	(16,315)
Dividends paid		(59,868)	(45,191)
Other financing activities, net		(467)	(608)
Net cash provided by financing activities		108,166	363,620
Net increase in cash, cash equivalents and restricted cash		47,021	53,257
Cash, cash equivalents and restricted cash at beginning of period	[1]	205,077	146,807
Cash, cash equivalents, and restricted cash at end of period	[1]	252,098	200,064
Cash paid during the period for:
Interest		203,086	83,781
Taxes		4,158	3,722
Supplemental Noncash Information:
Real estate securities retained from loan securitizations		5,462	43,513
Retention of mortgage servicing rights from loan securitizations and sales		868	0
Consolidation of multifamily loans held in securitization trusts		1,481,554	0
Consolidation of multifamily ABS		1,408,002	0
Transfers from loans held-for-sale to loans held-for-investment		518,521	1,069,326
Transfers from loans held-for-investment to loans held-for-sale		22,808	0
Transfers from residential loans to real estate owned		5,098	1,835
Right-of-use asset obtained in exchange for operating lease liability		$ 13,016	$ 0
[1]	Cash, cash equivalents, and restricted cash at June 30, 2019 includes cash and cash equivalents of $218 million and restricted cash of $34 million , and at December 31, 2018 includes cash and cash equivalents of $176 million and restricted cash of $29 million .

CONSOLIDATED STATEMENTS OF CA_2

CONSOLIDATED STATEMENTS OF CASH FLOWS (PARENTHETICAL) - USD ($) $ in Thousands		Jun. 30, 2019	Dec. 31, 2018
Statement of Cash Flows [Abstract]
Cash and cash equivalents	[1]	$ 218,145	$ 175,764
Restricted cash	[1]	$ 33,953	$ 29,313
[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 June 30, 2019 and December 31, 2018 , assets of consolidated VIEs totaled $7,937,685 and $6,331,191 , respectively. At June 30, 2019 and December 31, 2018 , liabilities of consolidated VIEs totaled $7,189,086 and $5,709,807 , respectively. See Note 4 for further discussion.

Organization

Organization	6 Months Ended
	Jun. 30, 2019
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 single-family residential and multifamily 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 portfolio 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 residential loans and their subsequent sale or securitization, as well as through the origination of business purpose residential loans. 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.”

Basis of Presentation

Basis of Presentation	6 Months Ended
	Jun. 30, 2019
Accounting Policies [Abstract]
Basis of Presentation	Basis of Presentation The consolidated financial statements presented herein are at June 30, 2019 and December 31, 2018 , and for the three and six months ended June 30, 2019 and 2018 . 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, 2018 . In the opinion of management, all normal and recurring adjustments to present fairly the financial condition of the company at June 30, 2019 and results of operations for all periods presented have been made. The results of operations for the three and six months ended June 30, 2019 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 Freddie Mac K-Series securitizations beginning in the third quarter of 2018, and the assets and liabilities of one Freddie Mac SLST securitization beginning in the fourth 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 purchased or 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. For financial reporting purposes, the underlying loans owned at the consolidated Sequoia and Freddie Mac SLST entities are shown under Residential loans, held-for-investment, at fair value, and the underlying loans 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 14 for further discussion on ABS issued. Beginning in the fourth quarter of 2018, we consolidated two partnerships ("Servicing Investment" entities) through which we have invested in servicing-related assets. We maintain an 80% ownership interest in each entity and have determined that we are the primary beneficiary of these partnerships. Beginning in the first quarter of 2019, we consolidated 5 Arches, LLC ("5 Arches"), an originator of business purpose residential loans, pursuant to the exercise of our purchase option and the acquisition of the remaining equity in the company. 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. Acquisition of 5 Arches, LLC On March 1, 2019, we completed the acquisition of the remaining 80% interest in 5 Arches, an originator of business purpose residential loans. In May 2018, Redwood acquired a 20% minority interest in 5 Arches for $10 million in cash, with a one -year option to purchase all remaining equity in the company. At closing, we paid approximately $13 million of cash and the remainder of the consideration, which could total up to an additional $27 million , will be paid in a mix of cash and Redwood common stock and is contingent on the achievement of certain specified loan origination thresholds over the next two years . We accounted for the acquisition of 5 Arches under the acquisition method of accounting pursuant to ASC 805. We performed the preliminary purchase price allocation and recorded underlying assets acquired and liabilities assumed based on their estimated fair values using the information available as of the acquisition date, with the excess of the purchase price allocated to goodwill. Through June 30, 2019, there have been no changes to our preliminary purchase price allocation, which is summarized in the following table. Table 2.1 – 5 Arches Purchase Price Allocation (In Thousands) March 1, 2019 Purchase price: Cash $ 12,575 Contingent consideration, at fair value 24,621 Purchase option, at fair value 5,082 Equity method investment, at fair value 8,052 Total consideration $ 50,330 Allocated to: Tangible net assets acquired (1) $ 1,004 Goodwill 28,728 Intangible assets 24,800 Deferred tax liability (4,202 ) Total net assets acquired $ 50,330 (1) 5 Arches net assets acquired consisted of assets of $19 million and liabilities of $18 million as of March 1, 2019. Because we owned a 20% noncontrolling interest in 5 Arches immediately before obtaining full control, we remeasured our initial minority investment and purchase option at their acquisition-date fair values using the income approach, which resulted in a gain of $2 million that was recorded in Other income, net on our consolidated statements of income during the three months ended March 31, 2019. As part of this acquisition, we identified and recorded finite-lived intangible assets totaling $25 million . The amortization period for each of these assets and the activity for the period from March 1, 2019 to June 30, 2019 is summarized in the table below. Table 2.2 – Intangible Assets – Activity (Dollars in Thousands) Carrying Value at December 31, 2018 Additions Amortization Expense Carrying Value at June 30, 2019 Weighted Average Amortization Period (in years) Finite-lived intangible assets: Broker network $ — $ 18,100 $ (1,207 ) $ 16,893 5 Non-compete agreements — 2,900 (322 ) 2,578 3 Management fee on existing assets under management — 2,600 (867 ) 1,733 1 Tradename — 1,200 (133 ) 1,067 3 Total $ — $ 24,800 $ (2,529 ) $ 22,271 4 All of our intangible assets are amortized on a straight-line basis. Estimated amortization expense for the remainder of 2019 and the following years is summarized in the table below. Table 2.3 – Intangible Asset Amortization Expense by Year (In Thousands) June 30, 2019 2019 (6 months) $ 3,794 2020 5,420 2021 4,987 2022 3,848 2023 and thereafter 4,222 Total Future Intangible Asset Amortization $ 22,271 We recorded goodwill of $29 million as a result of the total consideration exceeding the fair value of the net assets acquired. The goodwill was attributed to the expected business synergies and expansion into business purpose loan markets, as well as access to the knowledgeable and experienced workforce continuing to provide services to the business. We expect $3 million of our goodwill balance to be deductible for tax purposes. The following table presents the goodwill activity for the six months ended June 30, 2019. Table 2.4 – Goodwill – Activity (In Thousands) Six Months Ended June 30, 2019 Beginning balance $ — Goodwill recognized from 5 Arches acquisition 28,728 Impairment — Ending Balance $ 28,728 The liability resulting from the contingent consideration arrangement was recorded at its acquisition-date fair value of $25 million as part of total consideration for the acquisition of 5 Arches. At June 30, 2019, our estimated fair value of this contingent liability was $25 million and was recorded as a component of Accrued expenses and other liabilities on our consolidated balance sheets. See Note 16 for additional information on our contingent consideration liability. The following unaudited pro forma financial information presents Net interest income, Non-interest income, and Net income of Redwood and 5 Arches combined, as if the acquisition occurred as of January 1, 2018. These pro forma amounts have been adjusted to include the amortization of intangible assets for both periods, and to exclude the income statement impacts related to our equity method investment in 5 Arches. The unaudited pro forma financial information is not intended to represent or be indicative of the consolidated financial results of operations that would have been reported if the acquisition had been completed as of January 1, 2018 and should not be taken as indicative of our future consolidated results of operations. During the period from March 1, 2019 to June 30, 2019, 5 Arches had mortgage banking income of $6 million and a net loss of $2 million . Included in the net loss for this period was intangible asset amortization expense of $3 million . Table 2.5 – Unaudited Pro Forma Financial Information Three Months Ended June 30, Six Months Ended June 30, (In Thousands) 2019 2018 2019 2018 Supplementary pro forma information: Net interest income $ 32,322 $ 35,099 $ 64,588 $ 70,430 Non-interest income 27,532 21,321 71,282 62,404 Net income 31,266 32,310 81,499 78,436

Principles of Consolidation

Principles of Consolidation	6 Months Ended
	Jun. 30, 2019
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 June 30, 2019 , 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, beginning in the second half of 2018, we consolidated certain Freddie Mac K-Series securitization entities and the Freddie Mac SLST securitization entity 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 June 30, 2019 , the estimated fair value of our investments in the consolidated Legacy Sequoia, Sequoia Choice, Freddie Mac SLST and Freddie Mac K-Series entities was $11 million , $220 million , $244 million , and $207 million , respectively. Beginning in the fourth quarter of 2018, we consolidated two Servicing Investment entities formed to invest in servicing-related assets that we determined were VIEs and for which we determined we were the primary beneficiary. At June 30, 2019 , we held an 80% ownership interest in, and were responsible for the management of, each entity. See Note 10 for a further description of these entities and the investments they hold and Note 12 for additional information on the minority partner’s interest. Additionally, beginning in the fourth quarter of 2018, we consolidated an entity that was formed to finance servicer advances that we determined was a VIE and for which we, through our control of one of the aforementioned partnerships, were the primary beneficiary. The servicer advance financing consists of non-recourse short-term securitization debt, secured by servicer advances. We consolidate the securitization entity, but the securitization entity is independent of Redwood and the assets and liabilities are not owned by and are not legal obligations of Redwood. See Note 13 for additional information on the servicer advance financing. At June 30, 2019 , the estimated fair value of our investment in the Servicing Investment entities was $67 million . The following table presents a summary of the assets and liabilities of these VIEs. Table 4.1 – Assets and Liabilities of Consolidated VIEs June 30, 2019 Legacy Sequoia Sequoia Choice Freddie Mac SLST Freddie Mac K-Series Servicing Investment Total Consolidated VIEs (Dollars in Thousands) Residential loans, held-for-investment $ 457,750 $ 2,147,356 $ 1,235,089 $ — $ — $ 3,840,195 Multifamily loans, held-for-investment — — — 3,749,657 — 3,749,657 Other investments — — — — 274,617 274,617 Cash and cash equivalents — — — — 19,393 19,393 Restricted cash 144 14 — — 23,650 23,808 Accrued interest receivable 771 8,946 3,786 11,317 3,747 28,567 REO 1,448 — — — — 1,448 Total Assets $ 460,113 $ 2,156,316 $ 1,238,875 $ 3,760,974 $ 321,407 $ 7,937,685 Short-term debt $ — $ — $ — $ — $ 236,231 $ 236,231 Accrued interest payable 519 7,322 2,774 10,822 321 21,758 Accrued expenses and other liabilities — 14 — — 17,954 17,968 Asset-backed securities issued 448,862 1,929,444 991,766 3,543,057 — 6,913,129 Total Liabilities $ 449,381 $ 1,936,780 $ 994,540 $ 3,553,879 $ 254,506 $ 7,189,086 Number of VIEs 20 7 1 4 3 35 December 31, 2018 Legacy Sequoia Sequoia Freddie Mac SLST Freddie Mac K-Series Servicing Investment Total Consolidated VIEs (Dollars in Thousands) Residential loans, held-for-investment $ 519,958 $ 2,079,382 $ 1,222,669 $ — $ — $ 3,822,009 Multifamily loans, held-for-investment — — — 2,144,598 — 2,144,598 Other investments — — — — 312,688 312,688 Restricted cash 146 1,022 — — 25,363 26,531 Accrued interest receivable 822 8,988 3,926 6,595 1,091 21,422 REO 3,943 — — — — 3,943 Total Assets $ 524,869 $ 2,089,392 $ 1,226,595 $ 2,151,193 $ 339,142 $ 6,331,191 Short-term debt $ — $ — $ — $ — $ 262,740 $ 262,740 Accrued interest payable 571 7,180 2,907 6,239 483 17,380 Accrued expenses and other liabilities — 1,022 — — 18,592 19,614 Asset-backed securities issued 512,240 1,885,010 993,748 2,019,075 — 5,410,073 Total Liabilities $ 512,811 $ 1,893,212 $ 996,655 $ 2,025,314 $ 281,815 $ 5,709,807 Number of VIEs 20 6 1 3 3 33 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. We consolidate the assets and liabilities of certain Freddie Mac K-Series securitization trusts and a Freddie Mac SLST securitization trust resulting from our investment in subordinate securities issued by these trusts. Additionally, we consolidate the assets and liabilities of Servicing Investment entities from our investment in servicer advance investments and excess MSRs. In each case, we maintain certain discretionary rights associated with the ownership of these investments that we determined reflected a controlling financial interest, as 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 VIEs that could potentially be significant to the VIEs. Analysis of Unconsolidated VIEs with Continuing Involvement Since 2012, we have transferred residential loans to 44 Sequoia securitization entities sponsored by us that are still outstanding as of June 30, 2019 , 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. During the first quarter of 2019, the master servicer for one of our unconsolidated Sequoia entities exercised their right to call the securitization and paid off the underlying securities. We realized a $4 million gain related to the called securities, which was recognized through Realized gains, net on our consolidated statements of income. In connection with this called securitization, Redwood acquired $39 million of residential real estate loans that were held in both our held-for-sale and held-for-investment portfolios at Redwood at June 30, 2019. The following table presents information related to securitization transactions that occurred during the three and six months ended June 30, 2019 and 2018 . Table 4.2 – Securitization Activity Related to Unconsolidated VIEs Sponsored by Redwood Three Months Ended June 30, Six Months Ended June 30, (In Thousands) 2019 2018 2019 2018 Principal balance of loans transferred $ 400,836 $ 1,127,665 $ 749,093 $ 2,408,133 Trading securities retained, at fair value 1,792 33,757 3,508 46,248 AFS securities retained, at fair value 1,069 2,047 1,954 5,952 The following table summarizes the cash flows during the three and six months ended June 30, 2019 and 2018 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 June 30, Six Months Ended June 30, (In Thousands) 2019 2018 2019 2018 Proceeds from new transfers $ 410,281 $ 1,104,094 $ 762,652 $ 2,393,781 MSR fees received 3,105 3,397 6,165 6,811 Funding of compensating interest, net (47 ) (31 ) (137 ) (56 ) Cash flows received on retained securities 6,743 7,410 14,289 14,453 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 six months ended June 30, 2019 and 2018 . Table 4.4 – Assumptions Related to Assets Retained from Unconsolidated VIEs Sponsored by Redwood Three Months Ended June 30, 2019 Three Months Ended June 30, 2018 At Date of Securitization Senior IO Securities Subordinate Securities Senior IO Securities Subordinate Securities Prepayment rates 16 % 15 % 10 % 10 % Discount rates 14 % 7 % 14 % 5 % Credit loss assumptions 0.20 % 0.20 % 0.20 % 0.20 % Six Months Ended June 30, 2019 Six Months Ended June 30, 2018 At Date of Securitization Senior IO Securities Subordinate Securities Senior IO Securities Subordinate Securities Prepayment rates 16 % 15 % 9 % 10 % Discount rates 14 % 7 % 14 % 5 % Credit loss assumptions 0.20 % 0.20 % 0.20 % 0.20 % The following table presents additional information at June 30, 2019 and December 31, 2018 , related to unconsolidated VIEs sponsored by Redwood and accounted for as sales since 2012. Table 4.5 – Unconsolidated VIEs Sponsored by Redwood (In Thousands) June 30, 2019 December 31, 2018 On-balance sheet assets, at fair value: Interest-only, senior and subordinate securities, classified as trading $ 121,825 $ 129,111 Subordinate securities, classified as AFS 136,310 162,314 Mortgage servicing rights 45,010 58,572 Maximum loss exposure (1) $ 303,145 $ 349,997 Assets transferred: Principal balance of loans outstanding $ 10,586,480 $ 10,580,216 Principal balance of loans 30+ days delinquent 24,749 21,805 (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 June 30, 2019 and December 31, 2018 . Table 4.6 – Key Assumptions and Sensitivity Analysis for Assets Retained from Unconsolidated VIEs Sponsored by Redwood June 30, 2019 MSRs Senior Securities (1) Subordinate Securities (Dollars in Thousands) Fair value at June 30, 2019 $ 45,010 $ 49,014 $ 209,121 Expected life (in years) (2) 6 6 14 Prepayment speed assumption (annual CPR) (2) 11 % 12 % 13 % Decrease in fair value from: 10% adverse change $ 1,898 $ 1,905 $ 158 25% adverse change 4,513 4,857 1,124 Discount rate assumption (2) 11 % 13 % 5 % Decrease in fair value from: 100 basis point increase $ 1,624 $ 1,310 $ 20,756 200 basis point increase 3,135 2,758 38,452 Credit loss assumption (2) N/A 0.21 % 0.21 % Decrease in fair value from: 10% higher losses N/A $ — $ 1,645 25% higher losses N/A — 4,112 December 31, 2018 MSRs Senior Securities (1) Subordinate Securities (Dollars in Thousands) Fair value at December 31, 2018 $ 58,572 $ 61,178 $ 230,247 Expected life (in years) (2) 8 7 15 Prepayment speed assumption (annual CPR) (2) 7 % 10 % 9 % Decrease in fair value from: 10% adverse change $ 1,668 $ 2,151 $ 201 25% adverse change 4,027 5,127 1,372 Discount rate assumption (2) 11 % 12 % 6 % Decrease in fair value from: 100 basis point increase $ 2,323 $ 2,190 $ 21,982 200 basis point increase 4,493 4,226 40,641 Credit loss assumption (2) N/A 0.20 % 0.20 % Decrease in fair value from: 10% higher losses N/A $ — $ 1,387 25% higher losses N/A — 3,471 (1) Senior securities included $49 million and $61 million of interest-only securities at June 30, 2019 and December 31, 2018 , 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 and other investments 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 June 30, 2019 and December 31, 2018, grouped by asset type. Table 4.7 – Third-Party Sponsored VIE Summary (In Thousands) June 30, 2019 December 31, 2018 Mortgage-Backed Securities Senior $ 166,184 $ 185,107 Mezzanine 679,908 547,249 Subordinate 373,260 428,713 Total Mortgage-Backed Securities 1,219,352 1,161,069 Excess MSR 18,224 15,092 Total Investments in Third-Party Sponsored VIEs $ 1,237,576 $ 1,176,161 We determined that we are not the primary beneficiary of these 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.

Summary of Significant Accounti

Summary of Significant Accounting Policies	6 Months Ended
	Jun. 30, 2019
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 Annual Report on Form 10-K for the year ended December 31, 2018 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 six months ended June 30, 2019 . Business Combinations We use the acquisition method of accounting for business combinations, under which the purchase price is allocated to the fair values of the assets acquired and liabilities assumed at the acquisition date. The excess of the purchase price over the amount allocated to the assets acquired and liabilities assumed is recorded as goodwill. Adjustments to the values of the assets acquired and liabilities assumed that could be made during the measurement period, which could be up to one year after the acquisition date, are recorded in the period in which the adjustment is identified, with a corresponding offset to goodwill. Any adjustments made after the measurement period are recorded in the consolidated statements of income. Acquisition-related costs are expensed as incurred. Goodwill and Intangible Assets Significant judgment is required to estimate the fair value of intangible assets and in assigning their estimated useful lives. Accordingly, we typically seek the assistance of independent third-party valuation specialists for significant intangible assets. The fair value estimates are based on available historical information and on future expectations and assumptions we deem reasonable. We generally use an income-based valuation method to estimate the fair value of intangible assets, which discounts expected future cash flows to present value using estimates and assumptions we deem reasonable. Determining the estimated useful lives of intangible assets also requires judgment. Our assessment as to which intangible assets are deemed to have finite or indefinite lives is based on several factors including economic barriers of entry for the acquired business, retention trends, and our operating plans, among other factors. Finite-lived intangible assets are amortized over their estimated useful lives on a straight-line basis and reviewed for impairment if indicators are present. Additionally, useful lives are evaluated each reporting period to determine if revisions to the remaining periods of amortization are warranted. Goodwill is tested for impairment annually or more frequently if indicators of impairment exist. We have elected to make the first day of our fiscal fourth quarter the annual impairment assessment date for goodwill. We first assess qualitative factors to determine whether it is more likely than not that the fair value is less than the carrying value. If, based on that assessment, we believe it is more likely than not that the fair value is less than the carrying value, then a two-step quantitative goodwill impairment test is performed. Loan Originations Our wholly-owned subsidiary, 5 Arches, originates business purpose residential loans, including single-family rental and residential bridge loans. Single-family rental loans are mortgage loans secured by 1-4 unit residential real estate with a mortgage loan borrower that owns the real estate as an investment property and rents the property to residential tenants. Residential bridge loans are mortgage loans generally secured by unoccupied residential real estate that the borrower owns as an investment and that is being renovated, rehabilitated or constructed. Single-family rental loans are classified as held-for-sale at fair value, as we have originated these loans with the intent to sell to third parties or transfer to securitization entities. Residential bridge loans are classified as held-for-investment at fair value, if we intend to hold these loans to maturity, or held-for-sale at fair value, if we intend to sell the loans to a third party. Contingent Consideration In relation to our acquisition of 5 Arches, we recorded contingent consideration liabilities that represent the estimated fair value (at the date of acquisition) of our obligation to make certain earn-out payments that are contingent on 5 Arches loan origination volumes exceeding certain specified thresholds. These liabilities are carried at fair value and periodic changes in their estimated fair value are recorded through Other income, net on our consolidated statements of income. The estimate of the fair value of contingent consideration requires significant judgment regarding assumptions about future operating results, discount rates, and probabilities of projected operating result scenarios. Leases Upon adoption of ASU 2016-02, "Leases," in the first quarter of 2019, we recorded a lease liability and right-of-use asset on our consolidated balance sheets. The lease liability is equal to the present value of our remaining lease payments discounted at our incremental borrowing rate and the right-of-use asset is equal to the lease liability adjusted for our deferred rent liability at the adoption of this accounting standard. As lease payments are made, the lease liability is reduced to the present value of the remaining lease payments and the right-of-use asset is reduced by the difference between the lease expense (straight-lined over the lease term) and the theoretical interest expense amount (calculated using the incremental borrowing rate). See Note 16 for further discussion on leases. Recent Accounting Pronouncements Newly Adopted Accounting Standards Updates ("ASUs") 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 ("AOCI") 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. However, we did not elect to reclassify any income tax effects of the Tax Act from AOCI to retained earnings as we did not have any tax effects related to the Tax Act remaining in AOCI at December 31, 2018. Our policy is to release any stranded income tax effects from AOCI to income tax expense on an investment-by-investment basis. 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. Additionally, in October 2018, the FASB issued ASU 2018-16, "Derivatives and Hedging (Topic 815): Inclusion of the Secured Overnight Financing Rate (SOFR) Overnight Index Swap (OIS) Rate as a Benchmark Interest Rate for Hedge Accounting Purposes," which permits the use of the OIS rate based on SOFR as a U.S. benchmark interest rate for hedge accounting purposes under Topic 815. The amendments in this update are required to be adopted concurrently with the amendments in ASU 2017-12. We adopted this guidance, as required, in the first quarter of 2019, which did not 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. We adopted this guidance, as required, in the first quarter of 2019, which did not 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. We adopted this guidance, as required, in the first quarter of 2019, which did not have a material impact 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. 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. In March 2019, the FASB issued ASU 2019-01, "Leases (Topic 842): Codification Improvements," which is intended to clarify Codification guidance. We adopted this guidance, as required, in the first quarter of 2019, which did not have a material impact on our consolidated financial statements. We elected the package of practical expedients under the transition guidance within this standard, which allowed us to carry forward the classifications of each of our existing leases as operating leases. In connection with the adoption of this guidance, at June 30, 2019 , our lease liability was $13 million , which represented the present value of our remaining lease payments discounted at our incremental borrowing rate and was recorded in Accrued expenses and other liabilities on our consolidated balance sheets. At June 30, 2019 , our right-of-use asset was $12 million , which was equal to the lease liability adjusted for our deferred rent liability at adoption and was recorded in Other assets on our consolidated balance sheets. We will continue to record lease expense on a straight-line basis and have included required lease disclosures within Note 16. 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 January 2017, the FASB issued ASU 2017-04, "Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment." This new guidance simplifies the subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment test. This new guidance is effective for fiscal years beginning after December 15, 2019. Early adoption is permitted for interim and annual goodwill impairment tests performed on testing dates after January 1, 2017. 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. In November 2018, the FASB issued ASU 2018-19, "Codification Improvements to Topic 326, Financial Instruments - Credit Losses," which clarifies the scope of the amendments in ASU 2016-13. In April 2019, the FASB issued ASU 2019-04, "Codification Improvements to Topic 326, Financial Instruments - Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments," which is intended to clarify this guidance. Additionally, in May 2019, the FASB issued ASU 2019-05, "Financial Instruments - Credit Losses (Topic 326): Targeted Transition Relief," which provides an option to irrevocably elect the fair value option for certain financial assets previously measured at amortized cost. 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 do not anticipate that these updates will have a material impact on our consolidated financial statements as nearly all of our financial instruments are carried at fair value and changes in fair values of these instruments are recorded on our consolidated statements of income in the period in which the valuation change occurs. We will continue evaluating these new standards and caution that any changes in our business or additional amendments to these standards 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 June 30, 2019 and December 31, 2018 . 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 June 30, 2019 Financial Instruments Cash Collateral (Received) Pledged Assets (2) Interest rate agreements $ 19,258 $ — $ 19,258 $ (17,869 ) $ — $ 1,389 TBAs 1,784 — 1,784 (1,784 ) — — Total Assets $ 21,042 $ — $ 21,042 $ (19,653 ) $ — $ 1,389 Liabilities (2) Interest rate agreements $ (168,436 ) $ — $ (168,436 ) $ 17,869 $ 150,567 $ — TBAs (4,639 ) — (4,639 ) 1,784 1,600 (1,255 ) Loan warehouse debt (638,055 ) — (638,055 ) 638,055 — — Security repurchase agreements (1,213,920 ) — (1,213,920 ) 1,213,920 — — Total Liabilities $ (2,025,050 ) $ — $ (2,025,050 ) $ 1,871,628 $ 152,167 $ (1,255 ) 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, 2018 Financial Instruments Cash Collateral (Received) Pledged Assets (2) Interest rate agreements $ 28,211 $ — $ 28,211 $ (28,211 ) $ — $ — TBAs 4,665 — 4,665 (3,391 ) (835 ) 439 Total Assets $ 32,876 $ — $ 32,876 $ (31,602 ) $ (835 ) $ 439 Liabilities (2) Interest rate agreements $ (70,908 ) $ — $ (70,908 ) $ 28,211 $ 42,697 $ — TBAs (13,215 ) — (13,215 ) 3,391 5,620 (4,204 ) Loan warehouse debt (860,650 ) — (860,650 ) 860,650 — — Security repurchase agreements (988,890 ) — (988,890 ) 988,890 — — Total Liabilities $ (1,933,663 ) $ — $ (1,933,663 ) $ 1,881,142 $ 48,317 $ (4,204 ) (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 and TBAs 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.

Fair Value of Financial Instrum

Fair Value of Financial Instruments	6 Months Ended
	Jun. 30, 2019
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 June 30, 2019 and December 31, 2018 . Table 5.1 – Carrying Values and Fair Values of Assets and Liabilities June 30, 2019 December 31, 2018 Carrying Value Fair Value Carrying Value Fair Value (In Thousands) Assets Residential loans, held-for-sale At fair value $ 1,056,178 $ 1,056,178 $ 1,048,690 $ 1,048,690 At lower of cost or fair value 109 128 111 131 Residential loans, held-for-investment 6,227,078 6,227,078 6,205,941 6,205,941 Business purpose residential loans 250,854 250,854 141,258 141,258 Multifamily loans 3,749,657 3,749,657 2,144,598 2,144,598 Trading securities 1,205,389 1,205,389 1,118,612 1,118,612 Available-for-sale securities 272,097 272,097 333,882 333,882 Servicer advance investments (1) 259,222 259,222 300,468 300,468 MSRs (1) 47,396 47,396 60,281 60,281 Participation in loan warehouse facility (1) — — 39,703 39,703 Excess MSRs (1) 33,620 33,620 27,312 27,312 Cash and cash equivalents 218,145 218,145 175,764 175,764 Restricted cash 33,953 33,953 29,313 29,313 Accrued interest receivable 54,265 54,265 47,105 47,105 Derivative assets 26,609 26,609 35,789 35,789 REO (2) 6,305 6,509 3,943 4,396 Margin receivable (2) 211,199 211,199 100,773 100,773 FHLBC stock (2) 43,393 43,393 43,393 43,393 Guarantee asset (2) 1,999 1,999 2,618 2,618 Pledged collateral (2) 42,913 42,913 42,433 42,433 Liabilities Short-term debt facilities $ 2,026,418 $ 2,026,418 $ 1,937,920 $ 1,937,920 Short-term debt - servicer advance financing 236,231 236,231 262,740 262,740 Accrued interest payable 47,092 47,092 42,528 42,528 Margin payable (3) — — 835 835 Guarantee obligation (3) 15,744 15,456 16,711 16,774 Contingent consideration (3) 24,932 24,932 — — Derivative liabilities 173,847 173,847 84,855 84,855 ABS issued at fair value 6,913,129 6,913,129 5,410,073 5,410,073 FHLBC long-term borrowings 1,999,999 1,999,999 1,999,999 1,999,999 Convertible notes, net 634,805 639,849 633,196 618,271 Trust preferred securities and subordinated notes, net 138,605 97,650 138,582 102,533 (1) These investments are included in Other investments on our consolidated balance sheets. (2) These assets are included in Other assets on our consolidated balance sheets. (3) These liabilities are included in Accrued expenses and other liabilities on our consolidated balance sheets. During the three and six months ended June 30, 2019 , we elected the fair value option for $2 million and $34 million of residential senior securities, respectively, $86 million and $206 million of subordinate securities, respectively, $1.53 billion and $2.53 billion of residential loans (principal balance), respectively, $112 million and $177 million of business purpose residential loans (principal balance), respectively, zero and $69 million of servicer advance investments, respectively, and $5 million and $7 million of excess MSRs, respectively. We anticipate electing the fair value option for all future purchases of residential and business purpose residential loans that we intend to sell to third parties or transfer to securitizations, as well as 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 June 30, 2019 and December 31, 2018 , 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 June 30, 2019 Carrying Value Fair Value Measurements Using (In Thousands) Level 1 Level 2 Level 3 Assets Residential loans $ 7,283,256 $ — $ — $ 7,283,256 Business purpose residential loans 250,854 — — 250,854 Multifamily loans 3,749,657 — — 3,749,657 Trading securities 1,205,389 — — 1,205,389 Available-for-sale securities 272,097 — — 272,097 Servicer advance investments 259,222 — — 259,222 MSRs 47,396 — — 47,396 Excess MSRs 33,620 — — 33,620 Derivative assets 26,609 1,784 19,258 5,567 Pledged collateral 42,913 42,913 — — FHLBC stock 43,393 — 43,393 — Guarantee asset 1,999 — — 1,999 Liabilities Contingent consideration $ 24,932 $ — $ — $ 24,932 Derivative liabilities 173,847 4,639 168,436 772 ABS issued 6,913,129 — — 6,913,129 December 31, 2018 Carrying Value Fair Value Measurements Using (In Thousands) Level 1 Level 2 Level 3 Assets Residential loans $ 7,254,631 $ — $ — $ 7,254,631 Business purpose residential loans 141,258 — — 141,258 Multifamily loans 2,144,598 — — 2,144,598 Trading securities 1,118,612 — — 1,118,612 Available-for-sale securities 333,882 — — 333,882 Servicer advance investments 300,468 — — 300,468 MSRs 60,281 — — 60,281 Excess MSRs 27,312 — — 27,312 Derivative assets 35,789 4,665 28,211 2,913 Pledged collateral 42,433 42,433 — — FHLBC stock 43,393 — 43,393 — Guarantee asset 2,618 — — 2,618 Liabilities Derivative liabilities $ 84,855 $ 13,215 $ 70,908 $ 732 ABS issued 5,410,073 — — 5,410,073 The following table presents additional information about Level 3 assets and liabilities measured at fair value on a recurring basis for the six months ended June 30, 2019 . Table 5.3 – Changes in Level 3 Assets and Liabilities Measured at Fair Value on a Recurring Basis Assets Residential Loans Business Purpose Residential Loans Multifamily Loans Trading Securities AFS Securities Servicer Advance Investments MSRs Excess MSRs Guarantee Asset (In Thousands) Beginning balance - December 31, 2018 $ 7,254,631 $ 141,258 $ 2,144,598 $ 1,118,612 $ 333,882 $ 300,468 $ 60,281 $ 27,312 $ 2,618 Acquisitions 2,583,951 29,093 1,481,554 240,478 8,954 68,976 868 6,810 — Originations — 169,562 — — — — — — — Sales (2,088,273 ) (43,548 ) — (174,216 ) (67,001 ) — — — — Principal paydowns (614,975 ) (43,931 ) (7,516 ) (14,836 ) (24,207 ) (111,662 ) — — — Gains (losses) in net income, net 147,969 3,416 131,021 40,302 17,503 1,440 (13,753 ) (502 ) (619 ) Unrealized losses in OCI, net — — — — 2,966 — — — — Other settlements, net (1) (47 ) (4,996 ) — (4,951 ) — — — — — Ending Balance - June 30, 2019 $ 7,283,256 $ 250,854 $ 3,749,657 $ 1,205,389 $ 272,097 $ 259,222 $ 47,396 $ 33,620 $ 1,999 Table 5.3 – Changes in Level 3 Assets and Liabilities Measured at Fair Value on a Recurring Basis (continued) Liabilities Derivatives (2) Contingent Consideration ABS Issued (In Thousands) Beginning balance - December 31, 2018 $ 2,181 $ — $ 5,410,073 Acquisitions — 24,621 1,738,537 Principal paydowns — — (416,791 ) Gains (losses) in net income, net 28,908 311 181,310 Other settlements, net (1) (26,294 ) — — Ending Balance - June 30, 2019 $ 4,795 $ 24,932 $ 6,913,129 (1) Other settlements, net for residential and business purpose 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 trading securities relates to the consolidation of a Freddie Mac K-Series entity during the second quarter of 2019. (2) 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. 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 June 30, 2019 and 2018 . Gains or losses incurred on assets or liabilities sold, matured, called, or fully written down during the three and six months ended June 30, 2019 and 2018 are not included in this presentation. Table 5.4 – Portion of Net Gains (Losses) Attributable to Level 3 Assets and Liabilities Still Held at June 30, 2019 and 2018 Included in Net Income Included in Net Income Three Months Ended June 30, Six Months Ended June 30, (In Thousands) 2019 2018 2019 2018 Assets Residential loans at Redwood $ 48,575 $ (12,981 ) $ 80,615 $ (51,029 ) Residential loans at consolidated Sequoia entities 6,772 367 21,243 20,914 Residential loans at consolidated Freddie Mac SLST entity 31,477 — 55,005 — Business purpose residential loans 3,038 — 4,032 — Multifamily loans at consolidated Freddie Mac K-Series entities 96,649 — 131,020 — Trading securities 17,771 (1,989 ) 38,658 (6,011 ) Available-for-sale securities — (56 ) — (56 ) Servicer advance investments 432 — 1,440 — MSRs (7,334 ) 689 (11,518 ) 4,610 Excess MSRs (66 ) — (502 ) — Loan purchase commitments 5,534 2,835 5,567 2,901 Other assets - Guarantee asset (277 ) (120 ) (196 ) 66 Liabilities Loan purchase commitments $ (756 ) $ (4,646 ) $ (772 ) $ (4,687 ) ABS issued (121,127 ) (279 ) (181,310 ) (21,014 ) The following table presents information on assets recorded at fair value on a non-recurring basis at June 30, 2019 . 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 June 30, 2019 . Table 5.5 – Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis at June 30, 2019 Gain (Loss) for June 30, 2019 Carrying Value Fair Value Measurements Using Three Months Ended Six Months Ended (In Thousands) Level 1 Level 2 Level 3 June 30, 2019 June 30, 2019 Assets REO $ 5,732 $ — $ — $ 5,732 $ (150 ) $ (422 ) 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 six months ended June 30, 2019 and 2018 . Table 5.6 – Market Valuation Gains and Losses, Net Three Months Ended June 30, Six Months Ended June 30, (In Thousands) 2019 2018 2019 2018 Mortgage Banking Activities, Net Residential loans held-for-sale, at fair value $ 3,379 $ 6,122 $ 6,912 $ 10,896 Residential loan purchase and forward sale commitments 16,888 (2,758 ) 28,199 (9,726 ) Single-family rental loans held-for-sale, at fair value 1,313 — 2,917 — Single-family rental loan purchase commitments 569 — 709 — Residential bridge loans 1,012 — 1,098 — Risk management derivatives, net (7,431 ) 6,150 (12,415 ) 34,582 Total mortgage banking activities, net (1) $ 15,730 $ 9,514 $ 27,420 $ 35,752 Investment Fair Value Changes, Net Residential loans held-for-investment, at Redwood $ 35,548 $ (15,010 ) $ 63,656 $ (53,995 ) Residential bridge loans held-for-investment (318 ) — (621 ) — Trading securities 18,442 (930 ) 40,302 (3,885 ) Servicer advance investments 432 — 1,440 — Excess MSRs (65 ) — (502 ) — REO (139 ) — (139 ) — Net investments in Legacy Sequoia entities (2) (123 ) (720 ) (497 ) (728 ) Net investments in Sequoia Choice entities (2) 2,879 1,072 6,144 986 Net investment in Freddie Mac SLST entity (2) 8,037 — 14,402 — Net investments in Freddie Mac K-Series entities (2) 3,246 — 6,365 — Risk-sharing investments (61 ) (209 ) (138 ) (348 ) Risk management derivatives, net (64,740 ) 16,742 (107,115 ) 60,524 Impairments on AFS securities — (56 ) — (56 ) Total investment fair value changes, net $ 3,138 $ 889 $ 23,297 $ 2,498 Other Income (Expense), Net MSRs $ (8,653 ) $ (745 ) $ (13,753 ) $ 2,147 Risk management derivatives, net 6,517 (1,122 ) 8,768 (6,261 ) Gain on re-measurement of 5 Arches investment — — 2,440 — Total other expense, net (3) $ (2,136 ) $ (1,867 ) $ (2,545 ) $ (4,114 ) Total Market Valuation Gains, Net $ 16,732 $ 8,536 $ 48,172 $ 34,136 (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 investments at the consolidated VIEs. (3) Other income (expense), 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 June 30, 2019 , 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, 2018 . 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 June 30, 2019 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 $ 2,724,429 Prepayment rate (annual CPR) 20 - 20 % 20 % Whole loan spread to TBA price $ 1.55 - $ 1.55 $ 1.55 Whole loan spread to swap rate 80 - 365 bps 179 bps Jumbo hybrid loans 344,151 Prepayment rate (annual CPR) 15 - 15 % 15 % Whole loan spread to swap rate 65 - 360 bps 141 bps Jumbo loans committed to sell 374,481 Whole loan committed sales price $ 101.84 - $ 103.08 $ 102.12 Loans held by Legacy Sequoia (1) 457,750 Liability price N/A N/A Loans held by Sequoia Choice (1) 2,147,356 Liability price N/A N/A Loans held by Freddie Mac SLST (1) 1,235,089 Liability price N/A N/A Business purpose residential loans: Single-family rental loans 91,501 IO discount rate 12 - 12 % 12 % Prepayment rate (annual CPR) 2 - 10 % 5 % Senior credit spread 95 - 95 bps 95 bps Subordinate credit spread 140 - 1,200 bps 306 bps Senior credit support 35 - 35 % 35 % Residential bridge loans 159,353 Discount rate 7 - 8 % 7 % Multifamily loans held by Freddie Mac K-Series (1) 3,749,657 Liability price N/A N/A Trading and AFS securities 1,477,486 Discount rate 3 - 14 % 5 % Prepayment rate (annual CPR) — - 60 % 10 % Default rate — - 20 % 2 % Loss severity — - 40 % 21 % Servicer advance investments 259,222 Discount rate 4 - 4 % 4 % Prepayment rate (annual CPR) 8 - 15 % 14 % Expected remaining life (2) 2 - 2 years 2 years Mortgage servicing income 6 - 14 bps 10 bps MSRs 47,396 Discount rate 11 - 17 % 11 % Prepayment rate (annual CPR) 5 - 45 % 12 % Per loan annual cost to service $ 82 - $ 82 $ 82 Excess MSRs 33,620 Discount rate 11 - 16 % 14 % Prepayment rate (annual CPR) 8 - 14 % 11 % Excess mortgage servicing income 8 - 17 bps 12 bps Guarantee asset 1,999 Discount rate 11 - 11 % 11 % Prepayment rate (annual CPR) 15 - 15 % 15 % REO 5,732 Loss severity 3 - 52 % 7 % Loan purchase commitments, net 4,707 MSR multiple 0.7 - 4.6 x 2.2 x Pull-through rate 7 - 100 % 70 % Whole loan spread to TBA price $ 0.61 - $ 1.55 $ 1.54 Whole loan spread to swap rate - fixed rate 115 - 365 bps 228 bps Prepayment rate (annual CPR) 15 - 20 % 18 % Whole loan spread to swap rate - hybrid 90 - 345 bps 129 bps Table 5.7 – Fair Value Methodology for Level 3 Financial Instruments (continued) June 30, 2019 Fair Value Input Values (Dollars in Thousands, except Input Values) Unobservable Input Range Weighted Average Liabilities ABS issued (1) : At consolidated Sequoia entities 2,378,306 Discount rate 3 - 15 % 4 % Prepayment rate (annual CPR) 8 - 49 % 19 % Default rate — - 9 % 2 % Loss severity 20 - 22 % 21 % At consolidated Freddie Mac SLST entity 991,766 Discount rate 3 - 8 % 3 % Prepayment rate (annual CPR) 6 - 6 % 6 % Default rate 2 - 2 % 2 % Loss severity 30 - 30 % 30 % At consolidated Freddie Mac K-Series entities 3,543,057 Discount rate 2 - 9 % 3 % Prepayment rate (annual CPR) — - — % — % Default rate 1 - 1 % 1 % Loss severity 20 - 20 % 20 % Contingent consideration 24,932 Discount rate 23 - 23 % 23 % Probability of outcomes (3) — - 100 % 90 % (1) The fair value of the loans held by consolidated entities was based on the fair value of the ABS issued by these entities, including securities we own, which we determined were more readily observable, in accordance with accounting guidance for collateralized financing entities. (2) Represents the estimated average duration of outstanding servicer advances at a given point in time (not taking into account new advances made with respect to the pool). (3) Represents the probability of a full payout of contingent purchase consideration. 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 our 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 residential loans Business purpose residential loans include single-family rental loans and residential bridge 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 for senior and subordinate mortgage-backed securities ("MBS"), IO MBS discount rates, senior credit support levels, and assumed future prepayment rates (Level 3). These assets would generally decrease in value based upon an increase in the credit spread or prepayment speed assumptions. Prices for our residential bridge loans are determined using discounted cash flow modeling, which incorporates a primary significant unobservable input of discount rate. 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 discount rate, 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 June 30, 2019 , we received dealer price indications on 88% of our securities, representing 96% 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, 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 residential jumbo and single-family rental loans are estimated based on the estimated fair values of the underlying loans (as described in " Residential loans at Redwood " and " Business purpose residential loans " 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). Servicer advance investments Estimated fair values for servicer advance investments are determined through internal pricing models that estimate future cash flows and utilize certain significant inputs that are considered unobservable and are therefore Level 3 in nature. Our estimations of cash flows include the combined cash flows of all of the components that comprise the servicer advance investments: existing advances, the requirement to purchase future advances, the recovery of advances, and the right to a portion of the associated mortgage servicing fee ("mortgage servicing income"). The valuation technique is based on discounted cash flows. Significant inputs used in the valuations included prepayment rate (of the loans underlying the investments), mortgage servicing income, servicer advance WAL (the weighted-average expected remaining life of servicer advances), and discount rate. These assets would generally decrease in value based upon an increase in prepayment rates, an increase in servicer advance WAL, or an increase in discount rate, or a decrease in mortgage servicing income. 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. Excess MSRs Estimated fair values for excess MSRs are determined through internal pricing models that estimate future cash flows and utilize certain significant inputs that are considered unobservable and are therefore Level 3 in nature. The valuation technique is based on discounted cash flows. Significant inputs used in the valuations included prepayment rate (of the loans underlying the investments), the amount of excess servicing income expected to be received ("excess mortgage servicing income"), and discount rate. These assets would generally decrease in value based upon an increase in prepayment rates or discount rate, or a decrease in excess mortgage servicing income. 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, cash held at Servicing Investment entities, 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). Contingent consideration Contingent consideration is related to our acquisition of 5 Arches and is estimated and recorded at fair value as part of purchase consideration. Each reporting period we estimate the change in fair value of the contingent consideration, and such change is recognized in our consolidated statements of income, unless it is determined to be a measurement period adjustment. The estimate of the fair value of contingent consideration requires significant judgment and assumptions to be made about future operating results, discount rates, and probabilities of projected operating result scenarios (Level 3). Short-term debt Short-term debt includes our credit facilities for residential and business purpose residential loans and real estate securities as well as non-recourse short-term borrowings used to finance servicer advance investments. 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). 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 SLST and 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 rates, prepayment rate, default rate, loss severity and credit support. A decrease in cre

Residential Loans

Residential Loans	6 Months Ended
	Jun. 30, 2019
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 June 30, 2019 and December 31, 2018 . Table 6.1 – Classifications and Carrying Values of Residential Loans June 30, 2019 Legacy Sequoia Freddie Mac (In Thousands) Redwood Sequoia Choice SLST Total Held-for-sale At fair value $ 1,056,178 $ — $ — $ — $ 1,056,178 At lower of cost or fair value 109 — — — 109 Total held-for-sale 1,056,287 — — — 1,056,287 Held-for-investment at fair value 2,386,883 457,750 2,147,356 1,235,089 6,227,078 Total Residential Loans $ 3,443,170 $ 457,750 $ 2,147,356 $ 1,235,089 $ 7,283,365 December 31, 2018 Legacy Sequoia Freddie Mac (In Thousands) Redwood Sequoia Choice SLST Total Held-for-sale At fair value $ 1,048,690 $ — $ — $ — $ 1,048,690 At lower of cost or fair value 111 — — — 111 Total held-for-sale 1,048,801 — — — 1,048,801 Held-for-investment at fair value 2,383,932 519,958 2,079,382 1,222,669 6,205,941 Total Residential Loans $ 3,432,733 $ 519,958 $ 2,079,382 $ 1,222,669 $ 7,254,742 At June 30, 2019 , we owned mortgage servicing rights associated with $2.65 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 June 30, 2019 , we owned 1,417 loans held-for-sale at fair value with an aggregate unpaid principal balance of $1.03 billion and a fair value of $1.06 billion , compared to 1,484 loans with an aggregate unpaid principal balance of $1.03 billion and a fair value of $1.05 billion at December 31, 2018 . At both June 30, 2019 and December 31, 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. During the three and six months ended June 30, 2019 , we purchased $1.53 billion and $2.49 billion (principal balance) of loans, respectively, for which we elected the fair value option, and we sold $1.23 billion and $2.39 billion (principal balance) of loans, respectively, for which we recorded net market valuation gain s of $3 million and $7 million , respectively, through Mortgage banking activities, net on our consolidated statements of income. At June 30, 2019 , loans held-for-sale with a market value of $712 million were pledged as collateral under short-term borrowing agreements. During the three and six months ended June 30, 2018, we purchased $1.93 billion and $3.73 billion (principal balance) of loans, respectively, for which we elected the fair value option, and we sold $1.92 billion and $3.93 billion (principal balance) of loans, respectively, for which we recorded net market valuation gain s of $6 million and $11 million , respectively, through Mortgage banking activities, net on our consolidated statements of income. At Lower of Cost or Fair Value At both June 30, 2019 and December 31, 2018 , we held two residential loans at the lower of cost or fair value with $0.1 million in outstanding principal balance and carrying values of $0.1 million . At both June 30, 2019 and December 31, 2018, none of these loans were greater than 90 days delinquent or in foreclosure. Residential Loans Held-for-Investment at Fair Value At Redwood At June 30, 2019 , we owned 3,262 held-for-investment loans at Redwood with an aggregate unpaid principal balance of $2.32 billion and a fair value of $2.39 billion , compared to 3,296 loans with an aggregate unpaid principal balance of $2.39 billion and a fair value of $2.38 billion at December 31, 2018 . At June 30, 2019 , two of these loans with an aggregate fair value of $1 million were greater than 90 days delinquent and none of these loans were in foreclosure. At December 31, 2018, two of these loans with an aggregate fair value of $1 million were greater than 90 days delinquent and none of these loans were in foreclosure. During the three and six months ended June 30, 2019 , we purchased zero and $39 million (principal balance) of loans, respectively, for which we elected the fair value option, and did no t sell any loans. During the three and six months ended June 30, 2019 , we transferred loans with a fair value of $30 million and $69 million , respectively, from held-for-sale to held-for-investment. During the three and six months ended June 30, 2019 , we transferred loans with a fair value of zero and $23 million , respectively, from held-for-investment to held-for-sale. During the three and six months ended June 30, 2019 , we recorded net market valuation gain s of $36 million and $64 million , respectively, on residential loans held-for-investment at fair value through Investment fair value changes, net on our consolidated statements of income. At June 30, 2019 , loans with a fair value of $2.39 billion were pledged as collateral under a borrowing agreement with the FHLBC. During the three and six months ended June 30, 2018, we transferred loans with a fair value of $32 million and $88 million , respectively, from held-for-sale to held-for-investment. During both the three and six months ended June 30, 2018, we did no t transfer any loans from held-for-investment to held-for-sale. During the three and six months ended June 30, 2018, we recorded net market valuation loss es of $15 million and $54 million , respectively, on residential loans held-for-investment at fair value through Investment fair value changes, net on our consolidated statements of income. The outstanding loans held-for-investment at Redwood at June 30, 2019 were prime-quality, first lien loans, of which 90% were originated between 2013 and 2019, and 1% were originated in 2012 and prior years. The weighted average Fair Isaac Corporation ("FICO") score of borrowers backing these loans was 768 (at origination) and the weighted average loan-to-value ("LTV") ratio of these loans was 66% (at origination). At June 30, 2019 , these loans were comprised of 88% fixed-rate loans with a weighted average coupon of 4.16% , and the remainder were hybrid or ARM loans with a weighted average coupon of 4.20% . At Consolidated Legacy Sequoia Entities At June 30, 2019 , we consolidated 2,400 held-for-investment loans at consolidated Legacy Sequoia entities, with an aggregate unpaid principal balance of $475 million and a fair value of $458 million , as compared to 2,641 loans at December 31, 2018 , with an aggregate unpaid principal balance of $545 million and a fair value of $520 million . At origination, the weighted average FICO score of borrowers backing these loans was 727 , the weighted average LTV ratio of these loans was 66% , and the loans were nearly all first lien and prime-quality. At June 30, 2019 and December 31, 2018 , the aggregate unpaid principal balance of loans at consolidated Legacy Sequoia entities delinquent greater than 90 days was $13 million and $14 million , respectively, of which the aggregate unpaid principal balance of loans in foreclosure was $5 million and $5 million , respectively. During the three and six months ended June 30, 2019 , we recorded net market valuation gain s of $1 million and $5 million , respectively, on these loans through Investment fair value changes, net on our consolidated statements of income. During the three and six months ended June 30, 2018, we recorded net market valuation gain s of $4 million and $33 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 June 30, 2019 , we consolidated 2,912 held-for-investment loans at the consolidated Sequoia Choice entities, with an aggregate unpaid principal balance of $2.08 billion and a fair value of $2.15 billion , as compared to 2,800 loans at December 31, 2018 with an aggregate unpaid principal balance of $2.04 billion and a fair value of $2.08 billion . At origination, the weighted average FICO score of borrowers backing these loans was 745 , the weighted average LTV ratio of these loans was 75% , and the loans were all first lien and prime-quality. At June 30, 2019 , six of these loans with an aggregate unpaid principal balance of $3 million were greater than 90 days delinquent and none of these loans were in foreclosure. At December 31, 2018 , three of these loans with an aggregate unpaid principal balance of $2 million were greater than 90 days delinquent and none of these loans were in foreclosure. During the three and six months ended June 30, 2019 , we transferred loans with a fair value of zero and $350 million , respectively, from held-for-sale to held-for-investment associated with Choice securitizations. During the three and six months ended June 30, 2019 , we recorded net market valuation gain s of $6 million and $16 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. At Consolidated Freddie Mac SLST Entity During the fourth quarter of 2018, we invested in subordinate securities issued by a Freddie Mac SLST securitization trust and were required to consolidate the underlying seasoned re-performing and non-performing residential loans owned at this entity for financial reporting purposes in accordance with GAAP. At securitization, which occurred during the fourth quarter of 2018, each of these mortgage loans was a fully amortizing, fixed- or step-rate, first-lien loan that had been modified. At June 30, 2019 , we consolidated 7,744 held-for-investment loans at the consolidated Freddie Mac SLST entity, with an aggregate unpaid principal balance of $1.27 billion and a fair value of $1.24 billion , compared to 7,900 loans at December 31, 2018 with an aggregate unpaid principal balance of $1.31 billion and a fair value of $1.22 billion . At securitization, the weighted average FICO score of borrowers backing these loans was 597 and the weighted average LTV ratio of these loans was 69% . At June 30, 2019 , 301 of these loans with an aggregate unpaid principal balance of $78 million were greater than 90 days delinquent, and 101 of these loans with an aggregate unpaid principal balance of $15 million were in foreclosure. At December 31, 2018 , 306 of these loans with an aggregate unpaid principal balance of $51 million were greater than 90 days delinquent and none of these loans were in foreclosure. During the three and six months ended June 30, 2019 , we recorded net market valuation gain s of $31 million and $55 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 the Freddie Mac SLST securitization . The net impact to our income statement associated with our economic investment in the Freddie Mac SLST securitization entity is presented in We originate business purpose residential loans, including single-family rental loans and residential bridge loans. This origination activity commenced in connection with our acquisition of 5 Arches on March 1, 2019. Business Purpose Residential Loan Originations During the three months ended June 30, 2019 , we funded $134 million of business purpose residential loans, of which $23 million of residential bridge loans were sold to a third party. During the period from March 1, 2019 to June 30, 2019, we funded $170 million of business purpose residential loans, of which $44 million of residential bridge loans were sold to a third party. The remaining business purpose residential loans were transferred to our investment portfolio (residential bridge loans), or retained in our mortgage banking business (single-family rental loans). Prior to the transfer of residential bridge loans to our investment portfolio, we recorded net market valuation gains of $1 million on these loans through Mortgage banking activities, net on our consolidated statements of income for both the three months ended June 30, 2019 and for the period from March 1, 2019 to June 30, 2019. Market valuation adjustments on our single-family rental loans are also recorded in Mortgage banking activities, net on our consolidated statements of income. Additionally, during both the three months ended June 30, 2019 and during the period from March 1, 2019 to June 30, 2019, we recorded loan origination fee income of $3 million through Mortgage banking activities, net on our consolidated statements of income. The following table summarizes the classifications and carrying values of the business purpose residential loans owned at Redwood at June 30, 2019 and December 31, 2018 . Table 7.1 – Classifications and Carrying Values of Business Purpose Residential Loans (In Thousands) June 30, 2019 December 31, 2018 Single-family rental loans, held-for-sale at fair value $ 91,501 $ 28,460 Residential bridge loans, held-for-investment at fair value 159,353 112,798 Total Business Purpose Residential Loans $ 250,854 $ 141,258 Single-Family Rental Loans Held-for-Sale at Fair Value At June 30, 2019 , we owned 43 single-family rental loans with an aggregate unpaid principal balance of $87 million and a fair value of $92 million , compared to 11 loans at December 31, 2018 with an aggregate unpaid principal balance of $28 million and a fair value of $28 million . At both June 30, 2019 and December 31, 2018 , none of these loans were greater than 90 days delinquent or in foreclosure. During the three months ended June 30, 2019 and for the period from March 1, 2019 to June 30, 2019, $33 million and $41 million of newly originated single-family rental loans, respectively, were retained in our mortgage banking business, and we did no t sell any loans during either of these periods. Prior to our acquisition of 5 Arches on March 1, 2019, we purchased $19 million of single-family rental loans from 5 Arches. During the three and six months ended June 30, 2019 , we recorded net market valuation gain s of $1 million and $2 million , respectively, on single-family rental loans held-for-sale at fair value through Mortgage banking activities, net on our consolidated statements of income. At June 30, 2019 , loans held-for-sale with a market value of $71 million were pledged as collateral under short-term borrowing agreements. The outstanding single-family rental loans held-for-sale at June 30, 2019 were first lien, fixed-rate loans with maturities of five, seven, or ten years. At June 30, 2019 , the weighted average coupon of our single-family rental loans was 5.54% and the weighted average loan term was six years . At origination, the weighted average LTV ratio of these loans was 66% and the weighted average debt service coverage ratio ("DSCR") was 1.33 times. Residential Bridge Loans Held-for-Investment at Fair Value At June 30, 2019 , we owned 274 residential bridge loans held-for-investment with an aggregate unpaid principal balance of $158 million and a fair value of $159 million , compared to 157 loans at December 31, 2018 with an aggregate unpaid principal balance of $112 million and a fair value of $113 million . As part of our credit risk management practices, our residential bridge loans are subject to individual risk assessment using an internal borrower and collateral quality evaluation framework. At June 30, 2019 , 11 loans with an aggregate fair value of $12 million were greater than 90 days delinquent, and nine of these loans with an aggregate fair value of $7 million were in foreclosure. At December 31, 2018 , seven loans with an aggregate fair value of $12 million were greater than 90 days delinquent and four of these loans with an aggregate fair value of $11 million were in foreclosure. During the six months ended June 30, 2019, we transferred one loan with a fair value of $5 million to REO, which is included in Other assets on our consolidated balance sheets. We recognized losses of $0.1 million and $0.4 million related to this loan for the three and six months ended June 30, 2019, respectively, which was included in Investment fair value changes, net on our consolidated statements of income. During the three months ended June 30, 2019 and for the period from March 1, 2019 to June 30, 2019, $79 million and $86 million of newly originated residential bridge loans, respectively, were transferred to our investment portfolio. Prior to our acquisition of 5 Arches on March 1, 2019, we purchased $10 million of residential bridge loans from 5 Arches. During the three and six months ended June 30, 2019 , we recorded net market valuation loss es of $0.3 million and $0.6 million , respectively, on residential bridge loans held-for-investment at fair value through Investment fair value changes, net on our consolidated statements of income. At June 30, 2019 , loans with a market value of $144 million were pledged as collateral under short-term borrowing agreements. The outstanding residential bridge loans held-for-investment at June 30, 2019 were first lien, fixed-rate, interest-only loans with a weighted average coupon of 9.08% and original maturities of six to 24 months. At origination, the weighted average FICO score of borrowers backing these loans was 690 and the weighted average LTV ratio of these loans was 74% . At June 30, 2019 , we had a $33 million commitment to fund residential bridge loans. See Note 16 for additional information on this commitment. Beginning in the second half of 2018, we invested in multifamily subordinate securities issued by certain 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 June 30, 2019 , we consolidated 250 held-for-investment multifamily loans, with an aggregate unpaid principal balance of $3.55 billion and a fair value of $3.75 billion , compared to 162 loans at December 31, 2018 with an aggregate unpaid principal balance of $2.13 billion and a fair value of $2.14 billion . The outstanding multifamily loans held-for-investment at the Freddie Mac K-Series entities at June 30, 2019 were first lien, fixed-rate loans that were originated between 2015 and 2017 and had original loan terms of seven to ten years and an original weighted average LTV ratio of 69% . At June 30, 2019 , the weighted average coupon of these multifamily loans was 4.19% and the weighted average remaining loan term was six years . At both June 30, 2019 and December 31, 2018, none of these loans were greater than 90 days delinquent or in foreclosure. During the three and six months ended June 30, 2019 , we recorded net market valuation gain s of $97 million and $131 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 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

Business Purpose Residential Lo

Business Purpose Residential Loans	6 Months Ended
	Jun. 30, 2019
Receivables [Abstract]
Business Purpose 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 June 30, 2019 and December 31, 2018 . Table 6.1 – Classifications and Carrying Values of Residential Loans June 30, 2019 Legacy Sequoia Freddie Mac (In Thousands) Redwood Sequoia Choice SLST Total Held-for-sale At fair value $ 1,056,178 $ — $ — $ — $ 1,056,178 At lower of cost or fair value 109 — — — 109 Total held-for-sale 1,056,287 — — — 1,056,287 Held-for-investment at fair value 2,386,883 457,750 2,147,356 1,235,089 6,227,078 Total Residential Loans $ 3,443,170 $ 457,750 $ 2,147,356 $ 1,235,089 $ 7,283,365 December 31, 2018 Legacy Sequoia Freddie Mac (In Thousands) Redwood Sequoia Choice SLST Total Held-for-sale At fair value $ 1,048,690 $ — $ — $ — $ 1,048,690 At lower of cost or fair value 111 — — — 111 Total held-for-sale 1,048,801 — — — 1,048,801 Held-for-investment at fair value 2,383,932 519,958 2,079,382 1,222,669 6,205,941 Total Residential Loans $ 3,432,733 $ 519,958 $ 2,079,382 $ 1,222,669 $ 7,254,742 At June 30, 2019 , we owned mortgage servicing rights associated with $2.65 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 June 30, 2019 , we owned 1,417 loans held-for-sale at fair value with an aggregate unpaid principal balance of $1.03 billion and a fair value of $1.06 billion , compared to 1,484 loans with an aggregate unpaid principal balance of $1.03 billion and a fair value of $1.05 billion at December 31, 2018 . At both June 30, 2019 and December 31, 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. During the three and six months ended June 30, 2019 , we purchased $1.53 billion and $2.49 billion (principal balance) of loans, respectively, for which we elected the fair value option, and we sold $1.23 billion and $2.39 billion (principal balance) of loans, respectively, for which we recorded net market valuation gain s of $3 million and $7 million , respectively, through Mortgage banking activities, net on our consolidated statements of income. At June 30, 2019 , loans held-for-sale with a market value of $712 million were pledged as collateral under short-term borrowing agreements. During the three and six months ended June 30, 2018, we purchased $1.93 billion and $3.73 billion (principal balance) of loans, respectively, for which we elected the fair value option, and we sold $1.92 billion and $3.93 billion (principal balance) of loans, respectively, for which we recorded net market valuation gain s of $6 million and $11 million , respectively, through Mortgage banking activities, net on our consolidated statements of income. At Lower of Cost or Fair Value At both June 30, 2019 and December 31, 2018 , we held two residential loans at the lower of cost or fair value with $0.1 million in outstanding principal balance and carrying values of $0.1 million . At both June 30, 2019 and December 31, 2018, none of these loans were greater than 90 days delinquent or in foreclosure. Residential Loans Held-for-Investment at Fair Value At Redwood At June 30, 2019 , we owned 3,262 held-for-investment loans at Redwood with an aggregate unpaid principal balance of $2.32 billion and a fair value of $2.39 billion , compared to 3,296 loans with an aggregate unpaid principal balance of $2.39 billion and a fair value of $2.38 billion at December 31, 2018 . At June 30, 2019 , two of these loans with an aggregate fair value of $1 million were greater than 90 days delinquent and none of these loans were in foreclosure. At December 31, 2018, two of these loans with an aggregate fair value of $1 million were greater than 90 days delinquent and none of these loans were in foreclosure. During the three and six months ended June 30, 2019 , we purchased zero and $39 million (principal balance) of loans, respectively, for which we elected the fair value option, and did no t sell any loans. During the three and six months ended June 30, 2019 , we transferred loans with a fair value of $30 million and $69 million , respectively, from held-for-sale to held-for-investment. During the three and six months ended June 30, 2019 , we transferred loans with a fair value of zero and $23 million , respectively, from held-for-investment to held-for-sale. During the three and six months ended June 30, 2019 , we recorded net market valuation gain s of $36 million and $64 million , respectively, on residential loans held-for-investment at fair value through Investment fair value changes, net on our consolidated statements of income. At June 30, 2019 , loans with a fair value of $2.39 billion were pledged as collateral under a borrowing agreement with the FHLBC. During the three and six months ended June 30, 2018, we transferred loans with a fair value of $32 million and $88 million , respectively, from held-for-sale to held-for-investment. During both the three and six months ended June 30, 2018, we did no t transfer any loans from held-for-investment to held-for-sale. During the three and six months ended June 30, 2018, we recorded net market valuation loss es of $15 million and $54 million , respectively, on residential loans held-for-investment at fair value through Investment fair value changes, net on our consolidated statements of income. The outstanding loans held-for-investment at Redwood at June 30, 2019 were prime-quality, first lien loans, of which 90% were originated between 2013 and 2019, and 1% were originated in 2012 and prior years. The weighted average Fair Isaac Corporation ("FICO") score of borrowers backing these loans was 768 (at origination) and the weighted average loan-to-value ("LTV") ratio of these loans was 66% (at origination). At June 30, 2019 , these loans were comprised of 88% fixed-rate loans with a weighted average coupon of 4.16% , and the remainder were hybrid or ARM loans with a weighted average coupon of 4.20% . At Consolidated Legacy Sequoia Entities At June 30, 2019 , we consolidated 2,400 held-for-investment loans at consolidated Legacy Sequoia entities, with an aggregate unpaid principal balance of $475 million and a fair value of $458 million , as compared to 2,641 loans at December 31, 2018 , with an aggregate unpaid principal balance of $545 million and a fair value of $520 million . At origination, the weighted average FICO score of borrowers backing these loans was 727 , the weighted average LTV ratio of these loans was 66% , and the loans were nearly all first lien and prime-quality. At June 30, 2019 and December 31, 2018 , the aggregate unpaid principal balance of loans at consolidated Legacy Sequoia entities delinquent greater than 90 days was $13 million and $14 million , respectively, of which the aggregate unpaid principal balance of loans in foreclosure was $5 million and $5 million , respectively. During the three and six months ended June 30, 2019 , we recorded net market valuation gain s of $1 million and $5 million , respectively, on these loans through Investment fair value changes, net on our consolidated statements of income. During the three and six months ended June 30, 2018, we recorded net market valuation gain s of $4 million and $33 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 June 30, 2019 , we consolidated 2,912 held-for-investment loans at the consolidated Sequoia Choice entities, with an aggregate unpaid principal balance of $2.08 billion and a fair value of $2.15 billion , as compared to 2,800 loans at December 31, 2018 with an aggregate unpaid principal balance of $2.04 billion and a fair value of $2.08 billion . At origination, the weighted average FICO score of borrowers backing these loans was 745 , the weighted average LTV ratio of these loans was 75% , and the loans were all first lien and prime-quality. At June 30, 2019 , six of these loans with an aggregate unpaid principal balance of $3 million were greater than 90 days delinquent and none of these loans were in foreclosure. At December 31, 2018 , three of these loans with an aggregate unpaid principal balance of $2 million were greater than 90 days delinquent and none of these loans were in foreclosure. During the three and six months ended June 30, 2019 , we transferred loans with a fair value of zero and $350 million , respectively, from held-for-sale to held-for-investment associated with Choice securitizations. During the three and six months ended June 30, 2019 , we recorded net market valuation gain s of $6 million and $16 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. At Consolidated Freddie Mac SLST Entity During the fourth quarter of 2018, we invested in subordinate securities issued by a Freddie Mac SLST securitization trust and were required to consolidate the underlying seasoned re-performing and non-performing residential loans owned at this entity for financial reporting purposes in accordance with GAAP. At securitization, which occurred during the fourth quarter of 2018, each of these mortgage loans was a fully amortizing, fixed- or step-rate, first-lien loan that had been modified. At June 30, 2019 , we consolidated 7,744 held-for-investment loans at the consolidated Freddie Mac SLST entity, with an aggregate unpaid principal balance of $1.27 billion and a fair value of $1.24 billion , compared to 7,900 loans at December 31, 2018 with an aggregate unpaid principal balance of $1.31 billion and a fair value of $1.22 billion . At securitization, the weighted average FICO score of borrowers backing these loans was 597 and the weighted average LTV ratio of these loans was 69% . At June 30, 2019 , 301 of these loans with an aggregate unpaid principal balance of $78 million were greater than 90 days delinquent, and 101 of these loans with an aggregate unpaid principal balance of $15 million were in foreclosure. At December 31, 2018 , 306 of these loans with an aggregate unpaid principal balance of $51 million were greater than 90 days delinquent and none of these loans were in foreclosure. During the three and six months ended June 30, 2019 , we recorded net market valuation gain s of $31 million and $55 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 the Freddie Mac SLST securitization . The net impact to our income statement associated with our economic investment in the Freddie Mac SLST securitization entity is presented in We originate business purpose residential loans, including single-family rental loans and residential bridge loans. This origination activity commenced in connection with our acquisition of 5 Arches on March 1, 2019. Business Purpose Residential Loan Originations During the three months ended June 30, 2019 , we funded $134 million of business purpose residential loans, of which $23 million of residential bridge loans were sold to a third party. During the period from March 1, 2019 to June 30, 2019, we funded $170 million of business purpose residential loans, of which $44 million of residential bridge loans were sold to a third party. The remaining business purpose residential loans were transferred to our investment portfolio (residential bridge loans), or retained in our mortgage banking business (single-family rental loans). Prior to the transfer of residential bridge loans to our investment portfolio, we recorded net market valuation gains of $1 million on these loans through Mortgage banking activities, net on our consolidated statements of income for both the three months ended June 30, 2019 and for the period from March 1, 2019 to June 30, 2019. Market valuation adjustments on our single-family rental loans are also recorded in Mortgage banking activities, net on our consolidated statements of income. Additionally, during both the three months ended June 30, 2019 and during the period from March 1, 2019 to June 30, 2019, we recorded loan origination fee income of $3 million through Mortgage banking activities, net on our consolidated statements of income. The following table summarizes the classifications and carrying values of the business purpose residential loans owned at Redwood at June 30, 2019 and December 31, 2018 . Table 7.1 – Classifications and Carrying Values of Business Purpose Residential Loans (In Thousands) June 30, 2019 December 31, 2018 Single-family rental loans, held-for-sale at fair value $ 91,501 $ 28,460 Residential bridge loans, held-for-investment at fair value 159,353 112,798 Total Business Purpose Residential Loans $ 250,854 $ 141,258 Single-Family Rental Loans Held-for-Sale at Fair Value At June 30, 2019 , we owned 43 single-family rental loans with an aggregate unpaid principal balance of $87 million and a fair value of $92 million , compared to 11 loans at December 31, 2018 with an aggregate unpaid principal balance of $28 million and a fair value of $28 million . At both June 30, 2019 and December 31, 2018 , none of these loans were greater than 90 days delinquent or in foreclosure. During the three months ended June 30, 2019 and for the period from March 1, 2019 to June 30, 2019, $33 million and $41 million of newly originated single-family rental loans, respectively, were retained in our mortgage banking business, and we did no t sell any loans during either of these periods. Prior to our acquisition of 5 Arches on March 1, 2019, we purchased $19 million of single-family rental loans from 5 Arches. During the three and six months ended June 30, 2019 , we recorded net market valuation gain s of $1 million and $2 million , respectively, on single-family rental loans held-for-sale at fair value through Mortgage banking activities, net on our consolidated statements of income. At June 30, 2019 , loans held-for-sale with a market value of $71 million were pledged as collateral under short-term borrowing agreements. The outstanding single-family rental loans held-for-sale at June 30, 2019 were first lien, fixed-rate loans with maturities of five, seven, or ten years. At June 30, 2019 , the weighted average coupon of our single-family rental loans was 5.54% and the weighted average loan term was six years . At origination, the weighted average LTV ratio of these loans was 66% and the weighted average debt service coverage ratio ("DSCR") was 1.33 times. Residential Bridge Loans Held-for-Investment at Fair Value At June 30, 2019 , we owned 274 residential bridge loans held-for-investment with an aggregate unpaid principal balance of $158 million and a fair value of $159 million , compared to 157 loans at December 31, 2018 with an aggregate unpaid principal balance of $112 million and a fair value of $113 million . As part of our credit risk management practices, our residential bridge loans are subject to individual risk assessment using an internal borrower and collateral quality evaluation framework. At June 30, 2019 , 11 loans with an aggregate fair value of $12 million were greater than 90 days delinquent, and nine of these loans with an aggregate fair value of $7 million were in foreclosure. At December 31, 2018 , seven loans with an aggregate fair value of $12 million were greater than 90 days delinquent and four of these loans with an aggregate fair value of $11 million were in foreclosure. During the six months ended June 30, 2019, we transferred one loan with a fair value of $5 million to REO, which is included in Other assets on our consolidated balance sheets. We recognized losses of $0.1 million and $0.4 million related to this loan for the three and six months ended June 30, 2019, respectively, which was included in Investment fair value changes, net on our consolidated statements of income. During the three months ended June 30, 2019 and for the period from March 1, 2019 to June 30, 2019, $79 million and $86 million of newly originated residential bridge loans, respectively, were transferred to our investment portfolio. Prior to our acquisition of 5 Arches on March 1, 2019, we purchased $10 million of residential bridge loans from 5 Arches. During the three and six months ended June 30, 2019 , we recorded net market valuation loss es of $0.3 million and $0.6 million , respectively, on residential bridge loans held-for-investment at fair value through Investment fair value changes, net on our consolidated statements of income. At June 30, 2019 , loans with a market value of $144 million were pledged as collateral under short-term borrowing agreements. The outstanding residential bridge loans held-for-investment at June 30, 2019 were first lien, fixed-rate, interest-only loans with a weighted average coupon of 9.08% and original maturities of six to 24 months. At origination, the weighted average FICO score of borrowers backing these loans was 690 and the weighted average LTV ratio of these loans was 74% . At June 30, 2019 , we had a $33 million commitment to fund residential bridge loans. See Note 16 for additional information on this commitment. Beginning in the second half of 2018, we invested in multifamily subordinate securities issued by certain 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 June 30, 2019 , we consolidated 250 held-for-investment multifamily loans, with an aggregate unpaid principal balance of $3.55 billion and a fair value of $3.75 billion , compared to 162 loans at December 31, 2018 with an aggregate unpaid principal balance of $2.13 billion and a fair value of $2.14 billion . The outstanding multifamily loans held-for-investment at the Freddie Mac K-Series entities at June 30, 2019 were first lien, fixed-rate loans that were originated between 2015 and 2017 and had original loan terms of seven to ten years and an original weighted average LTV ratio of 69% . At June 30, 2019 , the weighted average coupon of these multifamily loans was 4.19% and the weighted average remaining loan term was six years . At both June 30, 2019 and December 31, 2018, none of these loans were greater than 90 days delinquent or in foreclosure. During the three and six months ended June 30, 2019 , we recorded net market valuation gain s of $97 million and $131 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 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

Multifamily Loans

Multifamily Loans	6 Months Ended
	Jun. 30, 2019
Receivables [Abstract]
Multifamily 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 June 30, 2019 and December 31, 2018 . Table 6.1 – Classifications and Carrying Values of Residential Loans June 30, 2019 Legacy Sequoia Freddie Mac (In Thousands) Redwood Sequoia Choice SLST Total Held-for-sale At fair value $ 1,056,178 $ — $ — $ — $ 1,056,178 At lower of cost or fair value 109 — — — 109 Total held-for-sale 1,056,287 — — — 1,056,287 Held-for-investment at fair value 2,386,883 457,750 2,147,356 1,235,089 6,227,078 Total Residential Loans $ 3,443,170 $ 457,750 $ 2,147,356 $ 1,235,089 $ 7,283,365 December 31, 2018 Legacy Sequoia Freddie Mac (In Thousands) Redwood Sequoia Choice SLST Total Held-for-sale At fair value $ 1,048,690 $ — $ — $ — $ 1,048,690 At lower of cost or fair value 111 — — — 111 Total held-for-sale 1,048,801 — — — 1,048,801 Held-for-investment at fair value 2,383,932 519,958 2,079,382 1,222,669 6,205,941 Total Residential Loans $ 3,432,733 $ 519,958 $ 2,079,382 $ 1,222,669 $ 7,254,742 At June 30, 2019 , we owned mortgage servicing rights associated with $2.65 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 June 30, 2019 , we owned 1,417 loans held-for-sale at fair value with an aggregate unpaid principal balance of $1.03 billion and a fair value of $1.06 billion , compared to 1,484 loans with an aggregate unpaid principal balance of $1.03 billion and a fair value of $1.05 billion at December 31, 2018 . At both June 30, 2019 and December 31, 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. During the three and six months ended June 30, 2019 , we purchased $1.53 billion and $2.49 billion (principal balance) of loans, respectively, for which we elected the fair value option, and we sold $1.23 billion and $2.39 billion (principal balance) of loans, respectively, for which we recorded net market valuation gain s of $3 million and $7 million , respectively, through Mortgage banking activities, net on our consolidated statements of income. At June 30, 2019 , loans held-for-sale with a market value of $712 million were pledged as collateral under short-term borrowing agreements. During the three and six months ended June 30, 2018, we purchased $1.93 billion and $3.73 billion (principal balance) of loans, respectively, for which we elected the fair value option, and we sold $1.92 billion and $3.93 billion (principal balance) of loans, respectively, for which we recorded net market valuation gain s of $6 million and $11 million , respectively, through Mortgage banking activities, net on our consolidated statements of income. At Lower of Cost or Fair Value At both June 30, 2019 and December 31, 2018 , we held two residential loans at the lower of cost or fair value with $0.1 million in outstanding principal balance and carrying values of $0.1 million . At both June 30, 2019 and December 31, 2018, none of these loans were greater than 90 days delinquent or in foreclosure. Residential Loans Held-for-Investment at Fair Value At Redwood At June 30, 2019 , we owned 3,262 held-for-investment loans at Redwood with an aggregate unpaid principal balance of $2.32 billion and a fair value of $2.39 billion , compared to 3,296 loans with an aggregate unpaid principal balance of $2.39 billion and a fair value of $2.38 billion at December 31, 2018 . At June 30, 2019 , two of these loans with an aggregate fair value of $1 million were greater than 90 days delinquent and none of these loans were in foreclosure. At December 31, 2018, two of these loans with an aggregate fair value of $1 million were greater than 90 days delinquent and none of these loans were in foreclosure. During the three and six months ended June 30, 2019 , we purchased zero and $39 million (principal balance) of loans, respectively, for which we elected the fair value option, and did no t sell any loans. During the three and six months ended June 30, 2019 , we transferred loans with a fair value of $30 million and $69 million , respectively, from held-for-sale to held-for-investment. During the three and six months ended June 30, 2019 , we transferred loans with a fair value of zero and $23 million , respectively, from held-for-investment to held-for-sale. During the three and six months ended June 30, 2019 , we recorded net market valuation gain s of $36 million and $64 million , respectively, on residential loans held-for-investment at fair value through Investment fair value changes, net on our consolidated statements of income. At June 30, 2019 , loans with a fair value of $2.39 billion were pledged as collateral under a borrowing agreement with the FHLBC. During the three and six months ended June 30, 2018, we transferred loans with a fair value of $32 million and $88 million , respectively, from held-for-sale to held-for-investment. During both the three and six months ended June 30, 2018, we did no t transfer any loans from held-for-investment to held-for-sale. During the three and six months ended June 30, 2018, we recorded net market valuation loss es of $15 million and $54 million , respectively, on residential loans held-for-investment at fair value through Investment fair value changes, net on our consolidated statements of income. The outstanding loans held-for-investment at Redwood at June 30, 2019 were prime-quality, first lien loans, of which 90% were originated between 2013 and 2019, and 1% were originated in 2012 and prior years. The weighted average Fair Isaac Corporation ("FICO") score of borrowers backing these loans was 768 (at origination) and the weighted average loan-to-value ("LTV") ratio of these loans was 66% (at origination). At June 30, 2019 , these loans were comprised of 88% fixed-rate loans with a weighted average coupon of 4.16% , and the remainder were hybrid or ARM loans with a weighted average coupon of 4.20% . At Consolidated Legacy Sequoia Entities At June 30, 2019 , we consolidated 2,400 held-for-investment loans at consolidated Legacy Sequoia entities, with an aggregate unpaid principal balance of $475 million and a fair value of $458 million , as compared to 2,641 loans at December 31, 2018 , with an aggregate unpaid principal balance of $545 million and a fair value of $520 million . At origination, the weighted average FICO score of borrowers backing these loans was 727 , the weighted average LTV ratio of these loans was 66% , and the loans were nearly all first lien and prime-quality. At June 30, 2019 and December 31, 2018 , the aggregate unpaid principal balance of loans at consolidated Legacy Sequoia entities delinquent greater than 90 days was $13 million and $14 million , respectively, of which the aggregate unpaid principal balance of loans in foreclosure was $5 million and $5 million , respectively. During the three and six months ended June 30, 2019 , we recorded net market valuation gain s of $1 million and $5 million , respectively, on these loans through Investment fair value changes, net on our consolidated statements of income. During the three and six months ended June 30, 2018, we recorded net market valuation gain s of $4 million and $33 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 June 30, 2019 , we consolidated 2,912 held-for-investment loans at the consolidated Sequoia Choice entities, with an aggregate unpaid principal balance of $2.08 billion and a fair value of $2.15 billion , as compared to 2,800 loans at December 31, 2018 with an aggregate unpaid principal balance of $2.04 billion and a fair value of $2.08 billion . At origination, the weighted average FICO score of borrowers backing these loans was 745 , the weighted average LTV ratio of these loans was 75% , and the loans were all first lien and prime-quality. At June 30, 2019 , six of these loans with an aggregate unpaid principal balance of $3 million were greater than 90 days delinquent and none of these loans were in foreclosure. At December 31, 2018 , three of these loans with an aggregate unpaid principal balance of $2 million were greater than 90 days delinquent and none of these loans were in foreclosure. During the three and six months ended June 30, 2019 , we transferred loans with a fair value of zero and $350 million , respectively, from held-for-sale to held-for-investment associated with Choice securitizations. During the three and six months ended June 30, 2019 , we recorded net market valuation gain s of $6 million and $16 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. At Consolidated Freddie Mac SLST Entity During the fourth quarter of 2018, we invested in subordinate securities issued by a Freddie Mac SLST securitization trust and were required to consolidate the underlying seasoned re-performing and non-performing residential loans owned at this entity for financial reporting purposes in accordance with GAAP. At securitization, which occurred during the fourth quarter of 2018, each of these mortgage loans was a fully amortizing, fixed- or step-rate, first-lien loan that had been modified. At June 30, 2019 , we consolidated 7,744 held-for-investment loans at the consolidated Freddie Mac SLST entity, with an aggregate unpaid principal balance of $1.27 billion and a fair value of $1.24 billion , compared to 7,900 loans at December 31, 2018 with an aggregate unpaid principal balance of $1.31 billion and a fair value of $1.22 billion . At securitization, the weighted average FICO score of borrowers backing these loans was 597 and the weighted average LTV ratio of these loans was 69% . At June 30, 2019 , 301 of these loans with an aggregate unpaid principal balance of $78 million were greater than 90 days delinquent, and 101 of these loans with an aggregate unpaid principal balance of $15 million were in foreclosure. At December 31, 2018 , 306 of these loans with an aggregate unpaid principal balance of $51 million were greater than 90 days delinquent and none of these loans were in foreclosure. During the three and six months ended June 30, 2019 , we recorded net market valuation gain s of $31 million and $55 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 the Freddie Mac SLST securitization . The net impact to our income statement associated with our economic investment in the Freddie Mac SLST securitization entity is presented in We originate business purpose residential loans, including single-family rental loans and residential bridge loans. This origination activity commenced in connection with our acquisition of 5 Arches on March 1, 2019. Business Purpose Residential Loan Originations During the three months ended June 30, 2019 , we funded $134 million of business purpose residential loans, of which $23 million of residential bridge loans were sold to a third party. During the period from March 1, 2019 to June 30, 2019, we funded $170 million of business purpose residential loans, of which $44 million of residential bridge loans were sold to a third party. The remaining business purpose residential loans were transferred to our investment portfolio (residential bridge loans), or retained in our mortgage banking business (single-family rental loans). Prior to the transfer of residential bridge loans to our investment portfolio, we recorded net market valuation gains of $1 million on these loans through Mortgage banking activities, net on our consolidated statements of income for both the three months ended June 30, 2019 and for the period from March 1, 2019 to June 30, 2019. Market valuation adjustments on our single-family rental loans are also recorded in Mortgage banking activities, net on our consolidated statements of income. Additionally, during both the three months ended June 30, 2019 and during the period from March 1, 2019 to June 30, 2019, we recorded loan origination fee income of $3 million through Mortgage banking activities, net on our consolidated statements of income. The following table summarizes the classifications and carrying values of the business purpose residential loans owned at Redwood at June 30, 2019 and December 31, 2018 . Table 7.1 – Classifications and Carrying Values of Business Purpose Residential Loans (In Thousands) June 30, 2019 December 31, 2018 Single-family rental loans, held-for-sale at fair value $ 91,501 $ 28,460 Residential bridge loans, held-for-investment at fair value 159,353 112,798 Total Business Purpose Residential Loans $ 250,854 $ 141,258 Single-Family Rental Loans Held-for-Sale at Fair Value At June 30, 2019 , we owned 43 single-family rental loans with an aggregate unpaid principal balance of $87 million and a fair value of $92 million , compared to 11 loans at December 31, 2018 with an aggregate unpaid principal balance of $28 million and a fair value of $28 million . At both June 30, 2019 and December 31, 2018 , none of these loans were greater than 90 days delinquent or in foreclosure. During the three months ended June 30, 2019 and for the period from March 1, 2019 to June 30, 2019, $33 million and $41 million of newly originated single-family rental loans, respectively, were retained in our mortgage banking business, and we did no t sell any loans during either of these periods. Prior to our acquisition of 5 Arches on March 1, 2019, we purchased $19 million of single-family rental loans from 5 Arches. During the three and six months ended June 30, 2019 , we recorded net market valuation gain s of $1 million and $2 million , respectively, on single-family rental loans held-for-sale at fair value through Mortgage banking activities, net on our consolidated statements of income. At June 30, 2019 , loans held-for-sale with a market value of $71 million were pledged as collateral under short-term borrowing agreements. The outstanding single-family rental loans held-for-sale at June 30, 2019 were first lien, fixed-rate loans with maturities of five, seven, or ten years. At June 30, 2019 , the weighted average coupon of our single-family rental loans was 5.54% and the weighted average loan term was six years . At origination, the weighted average LTV ratio of these loans was 66% and the weighted average debt service coverage ratio ("DSCR") was 1.33 times. Residential Bridge Loans Held-for-Investment at Fair Value At June 30, 2019 , we owned 274 residential bridge loans held-for-investment with an aggregate unpaid principal balance of $158 million and a fair value of $159 million , compared to 157 loans at December 31, 2018 with an aggregate unpaid principal balance of $112 million and a fair value of $113 million . As part of our credit risk management practices, our residential bridge loans are subject to individual risk assessment using an internal borrower and collateral quality evaluation framework. At June 30, 2019 , 11 loans with an aggregate fair value of $12 million were greater than 90 days delinquent, and nine of these loans with an aggregate fair value of $7 million were in foreclosure. At December 31, 2018 , seven loans with an aggregate fair value of $12 million were greater than 90 days delinquent and four of these loans with an aggregate fair value of $11 million were in foreclosure. During the six months ended June 30, 2019, we transferred one loan with a fair value of $5 million to REO, which is included in Other assets on our consolidated balance sheets. We recognized losses of $0.1 million and $0.4 million related to this loan for the three and six months ended June 30, 2019, respectively, which was included in Investment fair value changes, net on our consolidated statements of income. During the three months ended June 30, 2019 and for the period from March 1, 2019 to June 30, 2019, $79 million and $86 million of newly originated residential bridge loans, respectively, were transferred to our investment portfolio. Prior to our acquisition of 5 Arches on March 1, 2019, we purchased $10 million of residential bridge loans from 5 Arches. During the three and six months ended June 30, 2019 , we recorded net market valuation loss es of $0.3 million and $0.6 million , respectively, on residential bridge loans held-for-investment at fair value through Investment fair value changes, net on our consolidated statements of income. At June 30, 2019 , loans with a market value of $144 million were pledged as collateral under short-term borrowing agreements. The outstanding residential bridge loans held-for-investment at June 30, 2019 were first lien, fixed-rate, interest-only loans with a weighted average coupon of 9.08% and original maturities of six to 24 months. At origination, the weighted average FICO score of borrowers backing these loans was 690 and the weighted average LTV ratio of these loans was 74% . At June 30, 2019 , we had a $33 million commitment to fund residential bridge loans. See Note 16 for additional information on this commitment. Beginning in the second half of 2018, we invested in multifamily subordinate securities issued by certain 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 June 30, 2019 , we consolidated 250 held-for-investment multifamily loans, with an aggregate unpaid principal balance of $3.55 billion and a fair value of $3.75 billion , compared to 162 loans at December 31, 2018 with an aggregate unpaid principal balance of $2.13 billion and a fair value of $2.14 billion . The outstanding multifamily loans held-for-investment at the Freddie Mac K-Series entities at June 30, 2019 were first lien, fixed-rate loans that were originated between 2015 and 2017 and had original loan terms of seven to ten years and an original weighted average LTV ratio of 69% . At June 30, 2019 , the weighted average coupon of these multifamily loans was 4.19% and the weighted average remaining loan term was six years . At both June 30, 2019 and December 31, 2018, none of these loans were greater than 90 days delinquent or in foreclosure. During the three and six months ended June 30, 2019 , we recorded net market valuation gain s of $97 million and $131 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 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

Real Estate Securities

Real Estate Securities	6 Months Ended
	Jun. 30, 2019
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 June 30, 2019 and December 31, 2018 . Table 9.1 – Fair Values of Real Estate Securities by Type (In Thousands) June 30, 2019 December 31, 2018 Trading $ 1,205,389 $ 1,118,612 Available-for-sale 272,097 333,882 Total Real Estate Securities $ 1,477,486 $ 1,452,494 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 June 30, 2019 and December 31, 2018 . Table 9.2 – Trading Securities by Position (In Thousands) June 30, 2019 December 31, 2018 Senior $ 170,731 $ 158,670 Mezzanine 748,282 610,819 Subordinate 286,376 349,123 Total Trading Securities $ 1,205,389 $ 1,118,612 We elected the fair value option for certain securities and classify them as trading securities. Our trading securities include both residential and multifamily mortgage-backed securities. At June 30, 2019 , trading securities with a carrying value of $874 million as well as $148 million , $203 million , and $207 million of securities we owned that were issued by consolidated Sequoia Choice, Freddie Mac SLST, and Freddie Mac K-Series securitizations, respectively, were pledged as collateral under short-term borrowing agreements. See Note 13 for additional information on short-term debt. At June 30, 2019 and December 31, 2018 , our senior trading securities included $66 million and $82 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 $102 million and $78 million , respectively. Our interest-only securities included $35 million and $43 million of A-IO-S securities at June 30, 2019 and December 31, 2018 , respectively, which are securities we retained from certain of our Sequoia securitizations that represent certificated servicing strips. At June 30, 2019 and December 31, 2018 , our mezzanine and subordinate trading securities had an unpaid principal balance of $1.19 billion and $1.12 billion , respectively. At June 30, 2019 and December 31, 2018 , the fair value of our mezzanine and subordinate securities was $1.03 billion and $960 million , respectively, and included $201 million and $277 million , respectively, of Agency residential mortgage credit risk transfer (or "CRT") securities, $73 million and $68 million , respectively, of Sequoia securities, $233 million and $186 million , respectively, of other third-party residential securities, and $528 million and $429 million , respectively, of third-party commercial/multifamily securities. During the three and six months ended June 30, 2019 , we acquired $115 million and $269 million (principal balance), respectively, of securities for which we elected the fair value option and classified as trading, and sold $132 million and $161 million , respectively, of such securities. During the three and six months ended June 30, 2018, we acquired $233 million and $378 million (principal balance), respectively, of securities for which we elected the fair value option and classified as trading, and sold $62 million and $244 million , respectively, of such securities. During the three and six months ended June 30, 2019 , we recorded net market valuation gain s of $18 million and $40 million , respectively, on trading securities, included in Investment fair value changes, net on our consolidated statements of income. During the three and six months ended June 30, 2018, we recorded net market valuation loss es of $1 million and $4 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 June 30, 2019 and December 31, 2018 . Table 9.3 – Available-for-Sale Securities by Position (In Thousands) June 30, 2019 December 31, 2018 Senior $ 44,467 $ 87,615 Mezzanine 8,976 36,407 Subordinate 218,654 209,860 Total AFS Securities $ 272,097 $ 333,882 At June 30, 2019 and December 31, 2018 , all of our available-for-sale securities were comprised of residential mortgage-backed securities. At June 30, 2019 , AFS securities with a carrying value of $70 million were pledged as collateral under short-term borrowing agreements. See Note 13 for additional information on short-term debt. During the three and six months ended June 30, 2019 , we purchased $4 million and $9 million of AFS securities, respectively, and sold $25 million and $67 million of AFS securities, respectively, which resulted in net realized gains of $3 million and $9 million , respectively. During the three and six months ended June 30, 2018, we purchased $2 million and $6 million of AFS securities, respectively, and sold $41 million and $92 million of AFS securities, respectively, which resulted in net realized gains of $5 million and $14 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 June 30, 2019 , there were no AFS securities with contractual maturities less than five years , $3 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 June 30, 2019 and December 31, 2018 . Table 9.4 – Carrying Value of AFS Securities June 30, 2019 (In Thousands) Senior Mezzanine Subordinate Total Principal balance $ 45,147 $ 8,778 $ 291,997 $ 345,922 Credit reserve (1,323 ) — (33,526 ) (34,849 ) Unamortized discount, net (15,009 ) (576 ) (121,697 ) (137,282 ) Amortized cost 28,815 8,202 136,774 173,791 Gross unrealized gains 15,664 774 81,880 98,318 Gross unrealized losses (12 ) — — (12 ) Carrying Value $ 44,467 $ 8,976 $ 218,654 $ 272,097 December 31, 2018 (In Thousands) Senior Mezzanine Subordinate Total Principal balance $ 91,736 $ 36,852 $ 302,524 $ 431,112 Credit reserve (7,790 ) — (33,580 ) (41,370 ) Unamortized discount, net (18,460 ) (3,697 ) (129,043 ) (151,200 ) Amortized cost 65,486 33,155 139,901 238,542 Gross unrealized gains 22,178 3,252 70,458 95,888 Gross unrealized losses (49 ) — (499 ) (548 ) Carrying Value $ 87,615 $ 36,407 $ 209,860 $ 333,882 The following table presents the changes for the three and six months ended June 30, 2019 , 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 June 30, 2019 Six Months Ended June 30, 2019 Credit Reserve Unamortized Discount, Net Credit Unamortized (In Thousands) Beginning balance $ 34,834 $ 142,013 $ 41,370 $ 151,200 Amortization of net discount — (2,059 ) — (3,989 ) Realized credit losses (1,014 ) — (1,180 ) — Acquisitions 787 350 1,464 704 Sales, calls, other (5 ) (2,775 ) (6,397 ) (11,041 ) (Release of) transfers to credit reserves, net 247 (247 ) (408 ) 408 Ending Balance $ 34,849 $ 137,282 $ 34,849 $ 137,282 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 June 30, 2019 and December 31, 2018 . 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) June 30, 2019 $ — $ — $ — $ 6,445 $ (12 ) $ 6,433 December 31, 2018 12,923 (499 ) 12,424 7,464 (49 ) 7,415 At June 30, 2019 , after giving effect to purchases, sales, and extinguishment due to credit losses, our consolidated balance sheet included 114 AFS securities, of which one was in an unrealized loss position and one was in a continuous unrealized loss position for 12 consecutive months or longer. At December 31, 2018 , our consolidated balance sheet included 128 AFS securities, of which seven 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 less than $0.1 million at June 30, 2019 . 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 June 30, 2019 , 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 both the three and six months ended June 30, 2019 , there were no other-than-temporary impairments related to our AFS securities. 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 June 30, 2019 . Table 9.7 – Significant Valuation Assumptions June 30, 2019 Range for Securities Prepayment rates 15% - 15% Projected losses 1% - 1% 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 June 30, 2019 and 2018 , 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 June 30, Six Months Ended June 30, (In Thousands) 2019 2018 2019 2018 Balance at beginning of period $ 18,652 $ 20,924 $ 18,652 $ 21,037 Additions Initial credit impairments — 43 — 43 Reductions Securities sold, or expected to sell (14 ) — (14 ) (99 ) Securities with no outstanding principal at period end (58 ) — (58 ) (14 ) Balance at End of Period $ 18,580 $ 20,967 $ 18,580 $ 20,967 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 six months ended June 30, 2019 and 2018 . Table 9.9 – Gross Realized Gains and Losses on AFS Securities Three Months Ended June 30, Six Months Ended June 30, (In Thousands) 2019 2018 2019 2018 Gross realized gains - sales $ 2,827 $ 4,674 $ 9,487 $ 14,037 Gross realized gains - calls — 43 4,026 43 Gross realized losses - sales — (3 ) — (3 ) Total Realized Gains on Sales and Calls of AFS Securities, net $ 2,827 $ 4,714 $ 13,513 $ 14,077

Other Investments

Other Investments	6 Months Ended
	Jun. 30, 2019
Investments, All Other Investments [Abstract]
Other Investments	Other Investments Other investments at June 30, 2019 and December 31, 2018 are summarized in the following table. Table 10.1 – Components of Other Investments (In Thousands) June 30, 2019 December 31, 2018 Servicer advance investments $ 259,222 $ 300,468 Mortgage servicing rights 47,396 60,281 Excess MSRs 33,620 27,312 Investment in multifamily loan fund 28,678 — Other notes receivable 3,214 — Participation in loan warehouse facility — 39,703 Investment in 5 Arches — 10,754 Total Other Investments $ 372,130 $ 438,518 Servicer advance investments In 2018, we and a third-party co-investor, through two partnerships (“SA Buyers”) consolidated by us, purchased the outstanding servicer advances and excess MSRs related to a portfolio of legacy residential mortgage-backed securitizations serviced by the co-investor (See Note 4 for additional information regarding the transaction). At June 30, 2019 , we had funded $66 million of capital to the SA Buyers and funded the remaining $6 million of capital in July 2019 (see Note 16 for additional detail). Our servicer advance investments (owned by the consolidated SA Buyers) are comprised of outstanding servicer advance receivables, the requirement to purchase all future servicer advances made with respect to a specified pool of residential mortgage loans, and a portion of the mortgage servicing fees from the underlying loan pool. A portion of the remaining mortgage servicing fees from the underlying loan pool are paid directly to the third-party servicer for the performance of servicing duties and a portion is paid to excess MSRs that we own as a separate investment. We hold our servicer advance investments at our taxable REIT subsidiary. Servicer advances are non-interest bearing and are a customary feature of residential mortgage securitization transactions. Servicer advances are generally reimbursable cash payments made by a servicer when the borrower fails to make scheduled payments due on a residential mortgage loan or to support the value of the collateral property. Servicer advances typically fall into three categories: • Principal and Interest Advances: cash payments made by the servicer to cover scheduled principal and interest payments on a residential mortgage loan that have not been paid on a timely basis by the borrower. • Escrow Advances (Taxes and Insurance Advances): Cash payments made by the servicer to third parties on behalf of the borrower for real estate taxes and insurance premiums on the property that have not been paid on a timely basis by the borrower. • Corporate Advances: Cash payments made by the servicer to third parties for the reimbursable costs and expenses incurred in connection with the foreclosure, preservation and sale of the mortgaged property, including attorneys’ and other professional fees. Servicer advances are generally permitted to be repaid from amounts received with respect to the related residential mortgage loan, including payments from the borrower or amounts received from the liquidation of the property securing the loan. Residential mortgage servicing agreements generally require a servicer to make advances in respect of serviced residential mortgage loans unless the servicer determines in good faith that the advance would not be ultimately recoverable from the proceeds of the related residential mortgage loan or the mortgaged property. At June 30, 2019 , our servicer advance investments had a carrying value of $259 million and were associated with a portfolio of residential mortgage loans with an unpaid principal balance of $8.34 billion . The outstanding servicer advance receivables associated with this investment were $237 million at June 30, 2019 , which were financed with short-term non-recourse securitization debt (see Note 13 for additional detail on this debt). The servicer advance receivables were comprised of the following types of advances at June 30, 2019 and December 31, 2018 : Table 10.2 – Components of Servicer Advance Receivables (In Thousands) June 30, 2019 December 31, 2018 Principal and interest advances $ 91,707 $ 144,336 Escrow advances (taxes and insurance advances) 95,071 94,828 Corporate advances 49,854 47,614 Total Servicer Advance Receivables $ 236,632 $ 286,778 We account for our servicer advance investments at fair value and during the three and six months ended June 30, 2019 , we recorded $3 million and $5 million of interest income associated with these investments, respectively, and recorded net market valuation gain s of $0.4 million and $1 million , respectively, through Investment fair value changes, net in our consolidated statements of income. 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 June 30, 2019 and December 31, 2018 , our MSRs had a fair value of $47 million and $60 million , respectively, and were associated with loans with an aggregate principal balance of $4.83 billion and $4.93 billion , respectively. The following table presents activity for MSRs for the three and six months ended June 30, 2019 and 2018 . Table 10.3 – Activity for MSRs Three Months Ended June 30, Six Months Ended June 30, (In Thousands) 2019 2018 2019 2018 Balance at beginning of period $ 55,284 $ 66,496 $ 60,281 $ 63,598 Additions 764 — 868 — Sales — (1,077 ) — (1,077 ) Changes in fair value due to: Changes in assumptions (1) (6,555 ) 943 (10,141 ) 5,289 Other changes (2) (2,097 ) (1,688 ) (3,612 ) (3,136 ) Balance at End of Period $ 47,396 $ 64,674 $ 47,396 $ 64,674 (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 six months ended June 30, 2019 and 2018 . Table 10.4 – Components of MSR Income, net Three Months Ended June 30, Six Months Ended June 30, (In Thousands) 2019 2018 2019 2018 Servicing income $ 3,850 $ 3,802 $ 7,460 $ 7,597 Cost of sub-servicer (268 ) (338 ) (771 ) (930 ) Net servicing fee income 3,582 3,464 6,689 6,667 Market valuation changes of MSRs (8,652 ) (745 ) (13,753 ) 2,147 Market valuation changes of associated derivatives 6,517 (1,122 ) 8,768 (6,261 ) MSR reversal of provision for repurchases 207 277 207 277 MSR Income, Net (1) $ 1,654 $ 1,874 $ 1,911 $ 2,830 (1) MSR income, net is included in Other income, net on our consolidated statements of income. Excess MSRs In association with our servicer advance investments described above, in the fourth quarter of 2018, we (through our consolidated SA Buyers) also invested in excess MSRs associated with the same portfolio of legacy residential mortgage-backed securitizations. Additionally, beginning in 2018, we invested in excess MSRs associated with specified pools of multifamily loans. We account for our excess MSRs at fair value and during the three and six months ended June 30, 2019 , we recognized $2 million and $4 million of interest income, respectively, through Other interest income, and recorded net market valuation loss es of $0.1 million and $0.5 million , respectively, through Investment fair value changes, net on our consolidated statements of income. Investment in Multifamily Loan Fund In January 2019, we invested in a limited partnership created to acquire floating rate, light-renovation multifamily loans from Freddie Mac. We committed to fund an aggregate of $78 million to the partnership, and have funded approximately $29 million at June 30, 2019 . Freddie Mac is providing a debt facility to finance loans purchased by the partnership. After the partnership's acquisitions have reached a specific threshold, the partnership and Freddie Mac may agree to include the related loans in a Freddie Mac-sponsored securitization and the limited partners may acquire the subordinate securities issued in any such securitization. We account for our ownership interest in this partnership 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 June 30, 2019 , the carrying amount of our investment in the partnership was $29 million . We have elected to record our share of earnings or losses from this investment on a one-quarter lag. During the three months ended June 30, 2019 , we recorded $0.1 million of losses associated with this investment in Other income, net on our consolidated statements of income. 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. We accounted for this subordinated participation interest as a loan receivable at amortized cost, and all associated interest income was recorded as a component of Other interest income in our consolidated statements of income. During the first quarter of 2019, our agreement associated with this investment was terminated and the balance outstanding under this agreement was repaid. Investment in 5 Arches In May 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 . In March 2019, we closed on our option to acquire the remaining 80% interest in 5 Arches. See Note 2 for discussion of this acquisition. During 2018 and through February 28, 2019, we accounted for our minority ownership interest in 5 Arches using the equity method of accounting as we were able to exert significant influence over but did not control the activities of the investee. During the period from January 1, 2019 to February 28, 2019, we recorded $0.3 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.

Derivative Financial Instrument

Derivative Financial Instruments	6 Months Ended
	Jun. 30, 2019
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 June 30, 2019 and December 31, 2018 . Table 11.1 – Fair Value and Notional Amount of Derivative Financial Instruments June 30, 2019 December 31, 2018 Fair Value Notional Amount Fair Value Notional Amount (In Thousands) Assets - Risk Management Derivatives Interest rate swaps $ 18,576 $ 1,053,000 $ 28,211 $ 2,106,500 TBAs 1,784 950,000 4,665 520,000 Swaptions 682 200,000 — — Assets - Other Derivatives Loan purchase commitments 5,567 775,831 2,913 331,161 Total Assets $ 26,609 $ 2,978,831 $ 35,789 $ 2,957,661 Liabilities - Cash Flow Hedges Interest rate swaps $ (49,827 ) $ 139,500 $ (34,492 ) $ 139,500 Liabilities - Risk Management Derivatives Interest rate swaps (118,609 ) 3,084,300 (36,416 ) 1,742,000 TBAs (4,639 ) 1,150,000 (13,215 ) 935,000 Liabilities - Other Derivatives Loan purchase commitments (772 ) 245,111 (732 ) 137,224 Total Liabilities $ (173,847 ) $ 4,618,911 $ (84,855 ) $ 2,953,724 Total Derivative Financial Instruments, Net $ (147,238 ) $ 7,597,742 $ (49,066 ) $ 5,911,385 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 June 30, 2019 , we were party to swaps and swaptions with an aggregate notional amount of $4.34 billion and TBA agreements sold with an aggregate notional amount of $2.10 billion . At December 31, 2018 , we were party to swaps with an aggregate notional amount of $3.85 billion and TBA agreements sold with an aggregate notional amount of $1.46 billion . During the three and six months ended June 30, 2019 , risk management derivatives had net market valuation loss es of $66 million and $111 million , respectively. During the three and six months ended June 30, 2018, risk management derivatives had net market valuation gain s of $22 million and $89 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 six months ended June 30, 2019 , LPCs and FSCs had net market valuation gain s of $17 million and $29 million , respectively, that were recorded in Mortgage banking activities, net on our consolidated statements of income. For the three and six months ended June 30, 2018, LPCs and FSCs had net market valuation loss es of $3 million and $10 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 and certain adjustable-rate securitization entity liabilities 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 six months ended June 30, 2019 , changes in the values of designated cash flow hedges were negative $10 million and negative $15 million , respectively, and were recorded in Accumulated other comprehensive income, a component of equity. For the three and six months ended June 30, 2018, changes in the values of designated cash flow hedges were positive $3 million and positive $12 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 $49 million and $34 million at June 30, 2019 and December 31, 2018 , 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 six months ended June 30, 2019 and 2018 . Table 11.2 – Impact on Interest Expense of Interest Rate Agreements Accounted for as Cash Flow Hedges Three Months Ended June 30, Six Months Ended June 30, (In Thousands) 2019 2018 2019 2018 Net interest expense on cash flows hedges $ (640 ) $ (804 ) $ (1,277 ) $ (1,802 ) Total Interest Expense $ (640 ) $ (804 ) $ (1,277 ) $ (1,802 ) Derivative Counterparty Credit Risk As discussed in our Annual Report on Form 10-K for the year ended December 31, 2018 , we consider counterparty risk as part of our fair value assessments of all derivative financial instruments at each quarter-end. At June 30, 2019 , we assessed this risk as remote and did not record a specific valuation adjustment. At June 30, 2019 , we had outstanding derivative agreements with three counterparties (other than clearinghouses) and were in compliance with ISDA agreements governing our open derivative positions.

Other Assets and Liabilities

Other Assets and Liabilities	6 Months Ended
	Jun. 30, 2019
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]
Other Assets and Liabilities	Other Assets and Liabilities Other assets at June 30, 2019 and December 31, 2018 , are summarized in the following table. Table 12.1 – Components of Other Assets (In Thousands) June 30, 2019 December 31, 2018 Margin receivable $ 211,199 $ 100,773 FHLBC stock 43,393 43,393 Pledged collateral 42,913 42,433 Right-of-use asset 11,573 — REO 6,305 3,943 Fixed assets and leasehold improvements (1) 5,093 5,106 Investment receivable 1,697 6,959 Other 11,950 15,218 Total Other Assets $ 334,123 $ 217,825 (1) Fixed assets and leasehold improvements had a basis of $11 million and accumulated depreciation of $6 million at June 30, 2019 . Accrued expenses and other liabilities at June 30, 2019 and December 31, 2018 are summarized in the following table. Table 12.2 – Components of Accrued Expenses and Other Liabilities (In Thousands) June 30, 2019 December 31, 2018 Contingent consideration $ 24,932 $ — Payable to minority partner 16,937 14,331 Guarantee obligations 15,744 16,711 Accrued compensation 13,671 19,769 Lease liability 13,082 — Deferred tax liabilities 11,986 9,022 Residential bridge loan holdbacks 6,016 — Residential loan and MSR repurchase reserve 3,769 4,189 Accrued operating expenses 3,149 3,122 Legal reserve 2,000 2,000 Accrued income taxes payable 764 423 Margin payable — 835 Other 5,378 8,317 Total Accrued Expenses and Other Liabilities $ 117,428 $ 78,719 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 15 for additional information on this borrowing agreement. Pledged Collateral and Guarantee Obligations The pledged collateral 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 3 and Note 16 for additional information on our risk-sharing arrangements. Contingent Consideration The contingent consideration presented in the table above is related to our acquisition of 5 Arches in the first quarter of 2019. See Note 16 for additional information on our contingent consideration liabilities. Lease Liability and Right-of-Use Asset The lease liability and right-of-use asset presented in the tables above resulted from our adoption of ASU 2016-02, "Leases," in the first quarter of 2019. The lease liability is equal to the present value of our remaining lease payments discounted at our incremental borrowing rate and the right-of-use asset is equal to the lease liability adjusted for our deferred rent liability. These balances are reduced as lease payments are made. See Note 16 for additional information on leases. Residential Bridge Loan Holdbacks Residential bridge loan holdbacks represent loan amounts payable to residential bridge loan borrowers subject to the completion of various phases of property rehabilitation. Investment Receivable At June 30, 2019 , investment receivable primarily consisted of unsettled 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 June 30, 2019 was $6 million , which included $1 million of REO from our Legacy Sequoia entities and $5 million from our residential bridge loan portfolio. During the six months ended June 30, 2019 , transfers into REO included $0.1 million from Legacy Sequoia entities and a $5 million residential bridge loan. During the six months ended June 30, 2019 , there were Legacy Sequoia REO liquidations of $3 million , resulting in $0.5 million of unrealized gains which were recorded in Investment fair value changes, net, on our consolidated statements of income. At June 30, 2019 , there were seven REO properties at our Legacy Sequoia entities and one residential bridge loan REO property recorded on our consolidated balance sheets. At December 31, 2018 , there were 13 REO properties recorded, all of which were owned at consolidated Legacy Sequoia entities. Legal and Repurchase Reserves See Note 16 for additional information on the legal and residential repurchase reserves. Payable to Minority Partner In 2018, Redwood and a third-party co-investor, through two partnership entities consolidated by Redwood, purchased servicer advances and excess MSRs related to a portfolio of residential mortgage loans serviced by the co-investor (see Note 4 and Note 10 for additional information on the partnership entities and associated investments). We account for the co-investor’s interests in the entities as liabilities and at June 30, 2019 , the carrying value of their interests was $17 million , representing their current economic interest in the entities. Earnings from the partnership entities are allocated to the co-investors on a proportional basis and during the three and six months ended June 30, 2019 , we allocated $0.2 million and $0.5 million of gains to the co-investors, respectively, which were recorded in Other income, net on our consolidated statements of income.

Short-Term Debt

Short-Term Debt	6 Months Ended
	Jun. 30, 2019
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 June 30, 2019 , 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, 2018 . 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 June 30, 2019 and December 31, 2018 . Table 13.1 – Short-Term Debt June 30, 2019 (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 $ 638,055 $ 1,425,000 3.90 % 8/2019-3/2020 166 Real estate securities repo (1) 10 1,213,920 — 3.48 % 7/2019-8/2019 27 Single-family rental loan warehouse (2) 2 53,998 400,000 4.67 % 6/2020-6/2021 426 Residential bridge loan warehouse (2) 4 120,445 330,000 4.93 % 11/2019-5/2022 821 Business purpose loan working capital (2) 1 — 15,000 5.00 % 12/2020 N/A Total Short-Term Debt Facilities 21 2,026,418 Servicer advance financing 1 236,231 350,000 4.23 % 11/2019 152 Convertible notes, net N/A 200,236 — 5.63 % 11/2019 138 Total Short-Term Debt $ 2,462,885 December 31, 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 $ 860,650 $ 1,425,000 4.10 % 2/2019-12/2019 178 Real estate securities repo (1) 9 988,890 — 3.47 % 1/2019-3/2019 26 Single-family rental loan warehouse (2) 2 22,053 400,000 4.77 % 6/2020-6/2021 560 Residential bridge loan warehouse (2) 2 66,327 80,000 5.20 % 11/2019-4/2021 629 Total Short-Term Debt Facilities 17 1,937,920 Servicer advance financing 1 262,740 350,000 4.32 % 11/2019 333 Convertible notes, net N/A 199,619 5.63 % 11/2019 319 Total Short-Term Debt $ 2,400,279 (1) Borrowings under our facilities are generally charged interest based on a specified margin over the one-month LIBOR interest rate. At June 30, 2019 , 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 June 30, 2019 . Borrowings under these facilities will be repaid as the underlying loans mature or are sold to third parties or transferred to securitizations. At June 30, 2019 and December 31, 2018 , the fair value of held-for-sale residential loans pledged as collateral under our short-term debt facilities was $712 million and $935 million , respectively. At June 30, 2019 , the fair value of real estate securities pledged as collateral under our short-term debt facilities was $945 million , and also included $148 million of securities retained from our consolidated Sequoia Choice securitizations as well as $203 million and $207 million of securities we owned that were issued by consolidated Freddie Mac SLST and Freddie Mac K-series securitizations, respectively. At December 31, 2018 , the fair value of real estate securities pledged as collateral under our short-term debt facilities was $844 million , and also included $130 million of securities retained from our consolidated Sequoia Choice securitizations as well as $229 million and $18 million of securities we owned that were issued by consolidated Freddie Mac SLST and Freddie Mac K-series securitizations, respectively. The fair value of single-family rental and residential bridge loans pledged as collateral under our warehouse facilities was $71 million and $144 million , respectively, at June 30, 2019 and $28 million and $98 million , respectively, at December 31, 2018 . For the three and six months ended June 30, 2019 , the average balances of our short-term debt facilities were $1.86 billion and $1.73 billion , respectively. At June 30, 2019 and December 31, 2018 , accrued interest payable on our short-term debt facilities was $5 million and $4 million , respectively. Servicer advance financing consists of non-recourse short-term securitization debt used to finance servicer advance investments. We consolidate the securitization entity that issued the debt, but the entity is independent of Redwood and the assets and liabilities are not owned by and are not legal obligations of Redwood. At June 30, 2019 , the fair value of servicer advances, cash and restricted cash collateralizing the securitization financing was $265 million . At June 30, 2019 , the accrued interest payable balance on this financing was $0.3 million and the unamortized capitalized commitment costs were $1 million . During the fourth quarter of 2018, $201 million principal amount of 5.625% exchangeable senior notes and $1 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 November 2018. At June 30, 2019 , the accrued interest payable balance on this debt was $1 million . See Note 15 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 June 30, 2019 . At both June 30, 2019 and December 31, 2018 , 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 as well as our convertible notes at June 30, 2019 . Table 13.2 – Short-Term Debt by Collateral Type and Remaining Maturities June 30, 2019 (In Thousands) Within 30 days 31 to 90 days Over 90 days Total Collateral Type Held-for-sale residential loans $ — $ 189,798 $ 448,257 $ 638,055 Real estate securities 871,520 342,400 — 1,213,920 Single-family rental loans — — 53,998 53,998 Residential bridge loans — — 120,445 120,445 Total Secured Short-Term Debt 871,520 532,198 622,700 2,026,418 Servicer advance financing — — 236,231 236,231 Convertible notes, net — — 200,236 200,236 Total Short-Term Debt $ 871,520 $ 532,198 $ 1,059,167 $ 2,462,885

Asset-Backed Securities Issued

Asset-Backed Securities Issued	6 Months Ended
	Jun. 30, 2019
Debt Disclosure [Abstract]
Asset-Backed Securities Issued	Asset-Backed Securities Issued Through our Sequoia securitization program, we sponsor securitization transactions in which securities backed by residential mortgage loans (ABS) are issued by Sequoia entities. We consolidated the Legacy Sequoia and Sequoia Choice securitization entities, and beginning in 2018, certain third-party Freddie Mac K-Series and SLST 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 basis. All ABS issued by the Sequoia Choice and Freddie Mac K-Series, and Freddie Mac SLST 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 June 30, 2019 and December 31, 2018 , along with other selected information, are summarized in the following table. Table 14.1 – Asset-Backed Securities Issued June 30, 2019 Legacy Sequoia Sequoia Freddie Mac SLST Freddie Mac K-Series Total (Dollars in Thousands) Certificates with principal balance $ 468,193 $ 1,862,408 $ 951,074 $ 3,244,398 $ 6,526,073 Interest-only certificates 1,637 17,713 — 207,278 226,628 Market valuation adjustments (20,968 ) 49,323 40,692 91,381 160,428 ABS Issued, Net $ 448,862 $ 1,929,444 $ 991,766 $ 3,543,057 $ 6,913,129 Range of weighted average interest rates, by series 2.55% to 3.68% 4.42% to 5.08% 3.50 % 3.39% to 4.20% Stated maturities 2024 - 2036 2047 - 2049 2028 2025 - 2049 Number of series 20 7 1 4 December 31, 2018 Legacy Sequoia Sequoia Freddie Mac SLST Freddie Mac K-Series Total (Dollars in Thousands) Certificates with principal balance $ 540,456 $ 1,838,758 $ 993,659 $ 1,936,691 $ 5,309,564 Interest-only certificates 1,537 25,662 — 131,600 158,799 Market valuation adjustments (29,753 ) 20,590 89 (49,216 ) (58,290 ) ABS Issued, Net $ 512,240 $ 1,885,010 $ 993,748 $ 2,019,075 $ 5,410,073 Range of weighted average interest rates, by series 1.36% to 3.60% 4.46% to 4.97% 3.51 % 3.39% to 4.08% Stated maturities 2024 - 2036 2047 - 2048 2028 2025 - 2049 Number of series 20 6 1 3 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 June 30, 2019 , 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 June 30, 2019 and December 31, 2018 . Interest due on consolidated ABS issued is payable monthly. Table 14.2 – Accrued Interest Payable on Asset-Backed Securities Issued (In Thousands) June 30, 2019 December 31, 2018 Legacy Sequoia $ 519 $ 571 Sequoia Choice 7,322 7,180 Freddie Mac SLST 2,774 2,907 Freddie Mac K-Series 10,822 6,239 Total Accrued Interest Payable on ABS Issued $ 21,437 $ 16,897 The following table summarizes the carrying value components of the collateral for ABS issued and outstanding at June 30, 2019 and December 31, 2018 . Table 14.3 – Collateral for Asset-Backed Securities Issued June 30, 2019 Legacy Sequoia Sequoia Choice Freddie Mac SLST Freddie Mac K-Series Total (In Thousands) Residential loans $ 457,750 $ 2,147,356 $ 1,235,089 $ — $ 3,840,195 Multifamily loans — — — 3,749,657 3,749,657 Restricted cash 144 14 — — 158 Accrued interest receivable 771 8,946 3,786 11,317 24,820 REO 1,448 — — — 1,448 Total Collateral for ABS Issued $ 460,113 $ 2,156,316 $ 1,238,875 $ 3,760,974 $ 7,616,278 December 31, 2018 Legacy Sequoia Sequoia Freddie Mac SLST Freddie Mac K-Series Total (In Thousands) Residential loans $ 519,958 $ 2,079,382 $ 1,222,669 $ — $ 3,822,009 Multifamily loans — — — 2,144,598 2,144,598 Restricted cash 146 1,022 — — 1,168 Accrued interest receivable 822 8,988 3,926 6,595 20,331 REO 3,943 — — — 3,943 Total Collateral for ABS Issued $ 524,869 $ 2,089,392 $ 1,226,595 $ 2,151,193 $ 5,992,049

Long-Term Debt

Long-Term Debt	6 Months Ended
	Jun. 30, 2019
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 June 30, 2019 , 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 six months ended June 30, 2019 , 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 June 30, 2019 , $2.00 billion of advances were outstanding under this agreement, which were classified as long-term debt, with a weighted average interest rate of 2.57% and a weighted average maturity of approximately six years . At December 31, 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 2.52% and a weighted average maturity of seven 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 June 30, 2019 , total advances under this agreement were secured by residential mortgage loans with a fair value of $2.39 billion . 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 June 30, 2019 , 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 June 30, 2019 . Table 15.1 – Maturities of FHLBC Borrowings by Year (In Thousands) June 30, 2019 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 June 30, 2019 , the outstanding principal amount of these notes was $200 million and the accrued interest payable on this debt was $5 million . At June 30, 2019 , the unamortized deferred issuance costs and debt discount were $4 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 June 30, 2019 , 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 June 30, 2019 , the outstanding principal amount of these notes was $245 million . At June 30, 2019 , the accrued interest payable balance on this debt was $4 million and the unamortized deferred issuance costs were $5 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 June 30, 2019 , these notes were exchangeable at the option of the holder at an exchange rate of 46.2370 common shares per $1,000 principal amount of exchangeable senior notes (equivalent to an exchange 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. Additionally, during the fourth quarter of 2018, $201 million principal amount of these notes and $1 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 November 2018. At June 30, 2019 , the outstanding principal amount of these notes was $201 million . At June 30, 2019 , the accrued interest payable balance on this debt was $1 million and the unamortized deferred issuance costs were $1 million . Trust Preferred Securities and Subordinated Notes At June 30, 2019 , 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 June 30, 2019 and December 31, 2018 , the accrued interest payable balance on our trust preferred securities and subordinated notes was $1 million .

Commitments and Contingencies

Commitments and Contingencies	6 Months Ended
	Jun. 30, 2019
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	Commitments and Contingencies Lease Commitments At June 30, 2019 , we were obligated under five non-cancelable operating leases with expiration dates through 2028 for $16 million of cumulative lease payments. Our principal executive and administrative office is located in Mill Valley, California and we have several additional offices, as disclosed in Part I, Item 2 of our Annual Report on Form 10-K for the year ended December 31, 2018. Additionally, with our acquisition of 5 Arches in the first quarter of 2019, we added an office located in Irvine, California. Our operating lease expense was $1 million for both six -month periods ended June 30, 2019 and 2018. The following table presents our future lease commitments and a reconciliation to our lease liability at June 30, 2019 . Table 16.1 – Future Lease Commitments by Year (In Thousands) June 30, 2019 2019 (6 months) $ 1,376 2020 2,721 2021 1,864 2022 1,468 2023 and thereafter 8,749 Total Lease Commitments 16,178 Less: Imputed interest (3,096 ) Lease Liability $ 13,082 During the three months ended March 31, 2019, we adopted ASU 2016-02, "Leases," which required us to recognize a lease liability that was equal to the present value of our remaining lease payments of $16 million discounted at various incremental borrowing rates, and a right-of-use asset, which was equal to our lease liability adjusted for our deferred rent liability. We elected to apply the new guidance using the optional transition method, which permits lessees to measure the lease liability and right-of-use asset at January 1, 2019, without adjusting the comparative periods presented. We elected the package of practical expedients under the transition guidance within this standard, which allowed us to carry forward the classifications of each of our four existing leases as operating leases and to continue to expense lease payments on a straight-line basis. As one of our operating leases qualifies for the short-term lease exception under this guidance, we will continue to account for this lease under legacy GAAP and did not include this lease in our calculation of the lease liability and right-of-use asset. At June 30, 2019 , our lease liability was $13 million , which was a component of Accrued expenses and other liabilities, and our right-of-use asset was $12 million , which was a component of Other assets. We determined that the four remaining leases did not contain an implicit interest rate and used a discount rate equal to our incremental borrowing rate on a collateralized basis to determine the present value of our total lease payments. As such, we determined the applicable discount rate for each of our leases using a swap rate plus an applicable spread for borrowing arrangements secured by our real estate loans and securities for a length of time equal to the remaining lease term on the date of adoption. At June 30, 2019 , the weighted-average remaining lease term and weighted-average discount rate for our leases was 8 years and 5.3% , respectively. Commitment to Fund Residential Bridge Loans As of June 30, 2019 , we had commitments to fund $33 million of residential bridge loans. These commitments are generally subject to loan agreements with covenants regarding the financial performance of the customer and other terms regarding advances that must be met before we fund the commitment. We may also advance funds related to loans sold under a separate loan sale agreement that are generally repaid immediately by the loan purchaser and do not generally expose us to loss (outstanding commitments related to these loans that we may temporarily fund totaled approximately $80 million at June 30, 2019 ). Commitment to Fund Partnerships In the fourth quarter of 2018, we invested in two partnerships created to acquire and manage certain mortgage servicing related assets (see Note 10 for additional detail). At June 30, 2019 , we had an outstanding commitment to fund an additional $6 million to these partnerships to acquire additional outstanding servicer advances and excess MSRs. We funded this remaining commitment in July 2019. In connection with this investment, we are also required to fund future net servicer advances related to the underlying mortgage loans. The actual amount of net servicer advances we may fund in the future is subject to significant uncertainty and will be based on the credit and prepayment performance of the underlying loans. In the first quarter of 2019, we invested in a partnership created to acquire floating rate, light-renovation multifamily loans from Freddie Mac (see Note 10 for additional detail). At June 30, 2019 , we had an outstanding commitment to fund an additional $49 million to the partnership. Additionally, in connection with this transaction, we have made a guarantee to Freddie Mac in the event of losses incurred on the loans that exceed the equity available in the partnership to absorb such losses. At June 30, 2019 , the carrying value of this guarantee was $0.1 million . We believe the likelihood of performance under the guarantee is remote. Our maximum loss exposure from this guarantee arrangement is $135 million . 5 Arches Contingent Consideration As part of the consideration for our acquisition of 5 Arches, we are committed to make earn-out payments up to $27 million , payable in a mix of cash and Redwood common stock, which will be calculated following each of the first two anniversaries of the option closing date based on loan origination volumes exceeding certain specified thresholds. These contingent earn-out payments are classified as a contingent consideration liability and carried at fair value. At June 30, 2019 , our estimated fair value of this contingent liability was $25 million . 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 included a commitment to participate in (and an obligation to fund) a designated amount of the loan seller's borrowings under this warehouse credit facility. Our commitment to participate in this facility was terminated in the first quarter of 2019. See Note 10 for additional detail on our participation in a loan warehouse 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 June 30, 2019 , 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 June 30, 2019 , we had not incurred any losses under these arrangements. For the three and six months ended June 30, 2019 , other income related to these arrangements was $1 million for each of these periods, and net market valuation losses related to these investments were $0.1 million for each of these periods. For the three and six months ended June 30, 2018, other income related to these arrangements was $1 million and $2 million , respectively, and net market valuation losses related to these investments were $0.2 million and $0.3 million , respectively. All of the loans in the reference pools subject to these risk-sharing arrangements were originated in 2014 and 2015, and at June 30, 2019 , the loans had an unpaid principal balance of $1.74 billion and a weighted average FICO score of 759 (at origination) and LTV ratio of 76% (at origination). At June 30, 2019 , $6 million of the loans were 90 days or more delinquent, of which $2 million were in foreclosure. At June 30, 2019 , the carrying value of our guarantee obligation was $16 million and included $5 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 June 30, 2019 and December 31, 2018 , assets of such SPEs totaled $48 million and $47 million , respectively, and liabilities of such SPEs totaled $16 million and $17 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 June 30, 2019 and December 31, 2018 , our repurchase reserve associated with our residential loans and MSRs was $4 million and was recorded in Accrued expenses and other liabilities on our consolidated balance sheets. We received seven repurchase requests during the six months ended June 30, 2019 , and did no t repurchase any loans during this period. During the six months ended June 30, 2019 and 2018, we recorded reversals of repurchase provisions of $0.4 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. The Seattle Certificate was issued with an original principal amount of approximately $133 million , and, at June 30, 2019 , approximately $127 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. The Schwab Certificate was issued with an original principal amount of approximately $15 million , and, at June 30, 2019 , 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. We believe this matter was subsequently resolved and the plaintiffs withdrew their remaining claims. 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 resolution 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 June 30, 2019 , 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	6 Months Ended
	Jun. 30, 2019
Equity [Abstract]
Equity	Equity The following table provides a summary of changes to accumulated other comprehensive income by component for the three and six months ended June 30, 2019 and 2018 . Table 17.1 – Changes in Accumulated Other Comprehensive Income by Component Three Months Ended June 30, 2019 Three Months Ended June 30, 2018 (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 $ 92,567 $ (39,883 ) $ 114,577 $ (34,522 ) Other comprehensive income (loss) before reclassifications (1) 8,562 (9,501 ) (3,104 ) 3,417 Amounts reclassified from other accumulated comprehensive income (2,822 ) — (4,748 ) — Net current-period other comprehensive income (loss) 5,740 (9,501 ) (7,852 ) 3,417 Balance at End of Period $ 98,307 $ (49,384 ) $ 106,725 $ (31,105 ) Six Months Ended June 30, 2019 Six Months Ended June 30, 2018 (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 $ 95,342 $ (34,045 ) $ 128,201 $ (42,953 ) Other comprehensive income (loss) (1) 15,280 (15,339 ) (7,341 ) 11,848 Amounts reclassified from other (12,315 ) — (14,135 ) — Net current-period other comprehensive income (loss) 2,965 (15,339 ) (21,476 ) 11,848 Balance at End of Period $ 98,307 $ (49,384 ) $ 106,725 $ (31,105 ) (1) Amounts presented for net unrealized gains on available-for-sale securities are net of tax benefit (provision) of $0.2 million and $0.1 million for the three and six months ended June 30, 2018 , respectively. The following table provides a summary of reclassifications out of accumulated other comprehensive income for the three and six months ended June 30, 2019 and 2018 . Table 17.2 – Reclassifications Out of Accumulated Other Comprehensive Income Amount Reclassified From Accumulated Other Comprehensive Income Affected Line Item in the Three Months Ended June 30, (In Thousands) Income Statement 2019 2018 Net Realized (Gain) Loss on AFS Securities Other than temporary impairment (1) Investment fair value changes, net $ — $ 56 Gain on sale of AFS securities Realized gains, net (2,822 ) (4,804 ) $ (2,822 ) $ (4,748 ) Amount Reclassified From Accumulated Other Comprehensive Income Affected Line Item in the Six Months Ended June 30, (In Thousands) Income Statement 2019 2018 Net Realized (Gain) Loss on AFS Securities Other than temporary impairment (1) Investment fair value changes, net $ — $ 56 Gain on sale of AFS securities Realized gains, net (12,315 ) (14,191 ) $ (12,315 ) $ (14,135 ) (1) For both the three and six months ended June 30, 2019 , there were no other-than-temporary impairments. For both the three and six months ended June 30, 2018 , other-than-temporary impairments were $0.3 million , of which $0.1 million were recognized through our consolidated statements of income and $0.2 million were recognized in Accumulated other comprehensive income, a component of our consolidated balance sheet. Issuance of Common Stock In the fourth quarter of 2018, we established a program to sell up to an aggregate of $150 million of common stock from time to time in at-the-market ("ATM") offerings. During the fourth quarter of 2018, we issued 1,550,819 common shares for net proceeds of approximately $25 million through ATM offerings. During both the three and six months ended June 30, 2019, we issued 791,191 common shares for net proceeds of approximately $13 million through ATM offerings. At June 30, 2019 , approximately $112 million remained outstanding for future offerings under this program. On January 29, 2019, we sold 11,500,000 shares of common stock in an underwritten public offering, resulting in net proceeds of approximately $177 million . Direct Stock Purchase and Dividend Reinvestment Plan During the six months ended June 30, 2019 , we issued 399,838 shares of common stock through our Direct Stock Purchase and Dividend Reinvestment Plan, resulting in net proceeds of approximately $6 million . Earnings per Common Share The following table provides the basic and diluted earnings per common share computations for the three and six months ended June 30, 2019 and 2018 . Table 17.3 – Basic and Diluted Earnings per Common Share Three Months Ended June 30, Six Months Ended June 30, (In Thousands, except Share Data) 2019 2018 2019 2018 Basic Earnings per Common Share: Net income attributable to Redwood $ 31,266 $ 32,747 $ 85,730 $ 79,592 Less: Dividends and undistributed earnings allocated to participating securities (877 ) (1,074 ) (2,417 ) (2,535 ) Net income allocated to common shareholders $ 30,389 $ 31,673 $ 83,313 $ 77,057 Basic weighted average common shares outstanding 96,983,764 75,380,715 94,846,431 75,388,638 Basic Earnings per Common Share $ 0.31 $ 0.42 $ 0.88 $ 1.02 Diluted Earnings per Common Share: Net income attributable to Redwood $ 31,266 $ 32,747 $ 85,730 $ 79,592 Less: Dividends and undistributed earnings allocated to participating securities (1,053 ) (1,156 ) (2,595 ) (2,584 ) Add back: Interest expense on convertible notes for the period, net of tax 8,698 6,335 17,385 14,976 Net income allocated to common shareholders $ 38,911 $ 37,926 $ 100,520 $ 91,984 Weighted average common shares outstanding 96,983,764 75,380,715 94,846,431 75,388,638 Net effect of dilutive equity awards 270,550 277,788 210,360 156,307 Net effect of assumed convertible notes conversion to common shares 33,442,640 24,773,490 33,442,640 28,746,235 Diluted weighted average common shares outstanding 130,696,954 100,431,993 128,499,431 104,291,180 Diluted Earnings per Common Share $ 0.30 $ 0.38 $ 0.78 $ 0.88 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 six months ended June 30, 2019 and 2018 , 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 six months ended June 30, 2019 , the number of outstanding equity awards that were antidilutive totaled 8,996 and 8,186 , respectively. For the three and six months ended June 30, 2018, the number of outstanding equity awards that were antidilutive totaled 7,091 and 6,965 , respectively. Stock Repurchases In February 2018, our Board of Directors approved an authorization for the repurchase 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. T his 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 June 30, 2019 , $100 million of the current authorization remained available for the repurchase of shares of our common stock.

Equity Compensation Plans

Equity Compensation Plans	6 Months Ended
	Jun. 30, 2019
Share-based Payment Arrangement [Abstract]
Equity Compensation Plans	Equity Compensation Plans At June 30, 2019 and December 31, 2018 , 4,202,935 and 4,616,776 shares of common stock, respectively, were available for grant under our Incentive Plan. The unamortized compensation cost of awards issued under the Incentive Plan and purchases under the Employee Stock Purchase Plan totaled $27 million at June 30, 2019 , as shown in the following table. Table 18.1 – Activities of Equity Compensation Costs by Award Type Six Months Ended June 30, 2019 (In Thousands) Restricted Stock Awards Restricted Stock Units Deferred Stock Units Performance Stock Units Employee Stock Purchase Plan Total Unrecognized compensation cost at beginning of period $ 3,498 $ 74 $ 14,489 $ 7,061 $ — $ 25,122 Equity grants — 3,483 4,831 — 160 8,474 Equity grant forfeitures — — — — — — Equity compensation expense (766 ) (277 ) (4,184 ) (1,670 ) (80 ) (6,977 ) Unrecognized Compensation Cost at End of Period $ 2,732 $ 3,280 $ 15,136 $ 5,391 $ 80 $ 26,619 At June 30, 2019 , the weighted average amortization period remaining for all of our equity awards was two years . Restricted Stock Awards ("RSAs") At June 30, 2019 and December 31, 2018 , there were 218,022 and 334,606 shares, respectively, of RSAs outstanding. Restrictions on these shares lapse through 2022 . During the six months ended June 30, 2019 , there were no RSAs granted, restrictions on 116,584 RSAs lapsed and those shares were distributed, and no RSAs forfeited. Restricted Stock Units ("RSUs") At June 30, 2019 and December 31, 2018 , there were 229,943 and 4,876 shares, respectively, of RSUs outstanding. Restrictions on these shares lapse through 2023 . During the six months ended June 30, 2019 , there were 225,067 RSUs granted, no RSUs distributed, and no RSUs forfeited. Deferred Stock Units (“DSUs”) At June 30, 2019 and December 31, 2018 , there were 2,405,497 and 2,336,720 DSUs, respectively, outstanding of which 1,249,606 and 1,181,622 , respectively, had vested. During the six months ended June 30, 2019 , there were 329,228 DSUs granted, 260,451 DSUs distributed, and no DSUs forfeited. Unvested DSUs at June 30, 2019 vest through 2023 . Performance Stock Units (“PSUs”) At both June 30, 2019 and December 31, 2018 , the target number of PSUs that were unvested was 725,616 . 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, 2018 . Employee Stock Purchase Plan ("ESPP") The ESPP allows a maximum of 600,000 shares of common stock to be purchased in aggregate for all employees. As of June 30, 2019 and December 31, 2018 , 406,941 and 390,569 shares had been purchased, respectively, and there remained a negligible amount of uninvested employee contributions in the ESPP at June 30, 2019 .

Mortgage Banking Activities, Ne

Mortgage Banking Activities, Net	6 Months Ended
	Jun. 30, 2019
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 six months ended June 30, 2019 and 2018 . Table 19.1 – Mortgage Banking Activities Three Months Ended June 30, Six Months Ended June 30, (In Thousands) 2019 2018 2019 2018 Residential Mortgage Banking Activities, Net Changes in fair value of: Residential loans, at fair value (1) $ 20,267 $ 3,364 $ 35,111 $ 1,170 Risk management derivatives (2) (5,760 ) 6,150 (9,898 ) 34,582 Other income, net (3) 852 1,082 973 1,420 Total residential mortgage banking activities, net 15,359 10,596 26,186 37,172 Business Purpose Mortgage Banking Activities, Net: Changes in fair value of: Single-family rental loans, at fair value (1) 1,882 — 3,626 — Risk management derivatives (2) (1,671 ) — (2,517 ) — Residential bridge loans, at fair value 1,012 — 1,098 — Other income, net (4) 2,578 — 3,076 — Total business purpose mortgage banking activities, net 3,801 — 5,283 — Mortgage Banking Activities, Net $ 19,160 $ 10,596 $ 31,469 $ 37,172 (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 loans. (3) Amounts in this line item include other fee income from loan acquisitions and the provision for repurchases expense, presented net. (4) Amounts in this line item include other fee income from loan originations.

Investment Fair Value Changes,

Investment Fair Value Changes, Net	6 Months Ended
	Jun. 30, 2019
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 six months ended June 30, 2019 and 2018 . Table 20.1 – Investment Fair Value Changes Three Months Ended June 30, Six Months Ended June 30, (In Thousands) 2019 2018 2019 2018 Investment Fair Value Changes, Net Changes in fair value of: Residential loans held-for-investment, at Redwood $ 35,548 $ (15,010 ) $ 63,656 $ (53,995 ) Residential bridge loans held-for-investment (318 ) — (621 ) — Trading securities 18,442 (930 ) 40,302 (3,885 ) Servicer advance investments 432 — 1,440 — Excess MSRs (65 ) — (502 ) — REO (139 ) — (139 ) — Net investments in Legacy Sequoia entities (1) (123 ) (720 ) (497 ) (728 ) Net investments in Sequoia Choice entities (1) 2,879 1,072 6,144 986 Net investment in Freddie Mac SLST entity (1) 8,037 — 14,402 — Net investments in Freddie Mac K-Series entities (1) 3,246 — 6,365 — Risk-sharing investments (61 ) (209 ) (138 ) (348 ) Risk management derivatives, net (64,740 ) 16,742 (107,115 ) 60,524 Impairments on AFS securities — (56 ) — (56 ) Investment Fair Value Changes, Net $ 3,138 $ 889 $ 23,297 $ 2,498 (1) Includes changes in fair value of the loans held-for-investment, REO and the ABS issued at the entities, which netted together represent the change in value of our investments at the consolidated VIEs.

Other Income, Net

Other Income, Net	6 Months Ended
	Jun. 30, 2019
Other Income and Expenses [Abstract]
Other Income, Net	Other Income, Net The following table presents the components of Other income, net, recorded in our consolidated statements of income for the three and six months ended June 30, 2019 and 2018 . Table 21.1 – Other Income Three Months Ended June 30, Six Months Ended June 30, (In Thousands) 2019 2018 2019 2018 MSR income, net $ 1,654 $ 1,874 $ 1,911 $ 2,830 Risk share income 800 1,020 1,446 1,799 FHLBC capital stock dividend 535 428 1,082 811 Equity investment losses (96 ) — (5 ) — 5 Arches management fee income 1,488 — 1,954 — Amortization of intangible assets (1,900 ) — (2,532 ) — Gain on re-measurement of investment in 5 Arches — — 2,441 — Other (74 ) — (303 ) — Other Income, Net $ 2,407 $ 3,322 $ 5,994 $ 5,440

Operating Expenses

Operating Expenses	6 Months Ended
	Jun. 30, 2019
Other Income and Expenses [Abstract]
Operating Expenses	Operating Expenses Components of our operating expenses for the three and six months ended June 30, 2019 and 2018 are presented in the following table. Table 22.1 – Components of Operating Expenses Three Months Ended June 30, Six Months Ended June 30, (In Thousands) 2019 2018 2019 2018 Fixed compensation expense $ 9,252 $ 5,775 $ 17,457 $ 12,214 Variable compensation expense 4,021 1,825 8,423 8,732 Equity compensation expense 4,024 3,835 6,977 6,532 Total compensation expense 17,297 11,435 32,857 27,478 Systems and consulting 2,536 1,774 4,364 3,640 Loan acquisition costs (1) 1,516 2,155 2,993 3,973 Office costs 1,585 1,084 2,889 2,224 Accounting and legal 960 1,074 2,085 1,908 Corporate costs 545 496 1,219 1,000 Other operating expenses 1,816 991 3,007 1,816 Total Operating Expenses $ 26,255 $ 19,009 $ 49,414 $ 42,039 (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	6 Months Ended
	Jun. 30, 2019
Income Tax Disclosure [Abstract]
Taxes	Taxes For the six months ended June 30, 2019 and 2018 , we recognized a provision for income taxes of $3 million and $7 million , respectively. The following is a reconciliation of the statutory federal and state tax rates to our effective tax rate at June 30, 2019 and 2018 . Table 23.1 – Reconciliation of Statutory Tax Rate to Effective Tax Rate June 30, 2019 June 30, 2018 Federal statutory rate 21.0 % 21.0 % State statutory rate, net of Federal tax effect 8.6 % 8.6 % Differences in taxable (loss) income from GAAP income (4.7 )% (2.9 )% Change in valuation allowance (3.6 )% (3.3 )% Dividends paid deduction (17.7 )% (14.9 )% Effective Tax Rate 3.6 % 8.5 % We assessed our tax positions for all open tax years (i.e., Federal, 2015 to 2019, and State, 2014 to 2019) at June 30, 2019 and December 31, 2018 , and concluded that we had no uncertain tax positions that resulted in material unrecognized tax benefits.

Segment Information

Segment Information	6 Months Ended
	Jun. 30, 2019
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 Part I, Item 1—Business in our Annual Report on Form 10-K for the year ended December 31, 2018 . Our Mortgage Banking segment includes activity from both our residential and business purpose mortgage banking operations. Our business purpose mortgage banking operations includes activity from our wholly-owned subsidiary 5 Arches and our single-family rental loans that we are aggregating for subsequent sale or securitization. In connection with our acquisition of 5 Arches on March 1, 2019, the goodwill, intangible assets, and contingent consideration we recorded on our consolidated balance sheets were included in our Mortgage Banking segment. The gain on re-measurement of our initial minority investment and purchase option in 5 Arches during the three months ended March 31, 2019 was included in Corporate/Other. 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 six months ended June 30, 2019 and 2018 . Table 24.1 – Business Segment Financial Information Three Months Ended June 30, 2019 (In Thousands) Investment Portfolio Mortgage Banking Corporate/ Other Total Interest income $ 132,048 $ 11,352 $ 5,142 $ 148,542 Interest expense (93,912 ) (6,595 ) (15,713 ) (116,220 ) Net interest income (loss) 38,136 4,757 (10,571 ) 32,322 Non-interest income Mortgage banking activities, net — 19,160 — 19,160 Investment fair value changes, net 3,297 — (159 ) 3,138 Other income (expense), net 2,874 (156 ) (311 ) 2,407 Realized gains, net 2,827 — — 2,827 Total non-interest income, net 8,998 19,004 (470 ) 27,532 Direct operating expenses (2,258 ) (11,571 ) (12,426 ) (26,255 ) Provision for income taxes (896 ) (1,437 ) — (2,333 ) Segment Contribution $ 43,980 $ 10,753 $ (23,467 ) Net Income $ 31,266 Non-cash amortization income (expense), net $ 2,622 $ (2,014 ) $ (1,125 ) $ (517 ) Three Months Ended June 30, 2018 (In Thousands) Investment Portfolio Mortgage Banking Corporate/ Total Interest income $ 64,569 $ 13,084 $ 5,323 $ 82,976 Interest expense (27,004 ) (7,629 ) (13,580 ) (48,213 ) Net interest income (loss) 37,565 5,455 (8,257 ) 34,763 Non-interest income Mortgage banking activities, net — 10,596 — 10,596 Investment fair value changes, net 1,600 — (711 ) 889 Other income, net 3,322 — — 3,322 Realized gains, net 4,714 — — 4,714 Total non-interest income, net 9,636 10,596 (711 ) 19,521 Direct operating expenses (1,858 ) (5,739 ) (11,412 ) (19,009 ) Provision for income taxes (1,130 ) (1,398 ) — (2,528 ) Segment Contribution $ 44,213 $ 8,914 $ (20,380 ) Net Income $ 32,747 Non-cash amortization income (expense), net $ 4,654 $ (22 ) $ (891 ) $ 3,741 Six Months Ended June 30, 2019 (In Thousands) Investment Portfolio Mortgage Banking Corporate/ Total Interest income $ 247,500 $ 21,729 $ 10,354 $ 279,583 Interest expense (171,799 ) (12,159 ) (31,538 ) (215,496 ) Net interest income (loss) 75,701 9,570 (21,184 ) 64,087 Non-interest income Mortgage banking activities, net — 31,469 — 31,469 Investment fair value changes, net 23,853 — (556 ) 23,297 Other income, net 4,095 (323 ) 2,222 5,994 Realized gains, net 13,513 — — 13,513 Total non-interest income, net 41,461 31,146 1,666 74,273 Direct operating expenses (4,919 ) (19,675 ) (24,820 ) (49,414 ) Provision for income taxes (1,238 ) (1,978 ) — (3,216 ) Segment Contribution $ 111,005 $ 19,063 $ (44,338 ) Net Income $ 85,730 Non-cash amortization income (expense), net $ 4,990 $ (2,737 ) $ (2,425 ) $ (172 ) Six Months Ended June 30, 2018 (In Thousands) Investment Portfolio Mortgage Banking Corporate/ Total Interest income $ 123,326 $ 25,981 $ 10,288 $ 159,595 Interest expense (46,867 ) (13,766 ) (29,094 ) (89,727 ) Net interest income (loss) 76,459 12,215 (18,806 ) 69,868 Non-interest income Mortgage banking activities, net — 37,172 — 37,172 Investment fair value changes, net 3,190 — (692 ) 2,498 Other income, net 5,440 — — 5,440 Realized gains, net 14,077 — — 14,077 Total non-interest income, net 22,707 37,172 (692 ) 59,187 Direct operating expenses (3,865 ) (14,371 ) (23,803 ) (42,039 ) Provision for income taxes (2,018 ) (5,406 ) — (7,424 ) Segment Contribution $ 93,283 $ 29,610 $ (43,301 ) Net Income $ 79,592 Non-cash amortization income (expense), net $ 9,271 $ (44 ) $ (1,845 ) $ 7,382 The following table presents the components of Corporate/Other for the three and six months ended June 30, 2019 and 2018 . Table 24.2 – Components of Corporate/Other Three Months Ended June 30, 2019 2018 (In Thousands) Legacy Consolidated VIEs (1) Other Total Legacy Consolidated VIEs (1) Other Total Interest income $ 4,776 $ 366 $ 5,142 $ 5,017 $ 306 $ 5,323 Interest expense (3,981 ) (11,732 ) (15,713 ) (4,215 ) (9,365 ) (13,580 ) Net interest income (loss) 795 (11,366 ) (10,571 ) 802 (9,059 ) (8,257 ) Non-interest income Investment fair value changes, net (123 ) (36 ) (159 ) (720 ) 9 (711 ) Other income — (311 ) (311 ) — — — Total non-interest income, net (123 ) (347 ) (470 ) (720 ) 9 (711 ) Direct operating expenses — (12,426 ) (12,426 ) — (11,412 ) (11,412 ) Total $ 672 $ (24,139 ) $ (23,467 ) $ 82 $ (20,462 ) $ (20,380 ) Six Months Ended June 30, 2019 2018 (In Thousands) Legacy Consolidated VIEs (1) Other Total Legacy Consolidated VIEs (1) Other Total Interest income $ 9,629 $ 725 $ 10,354 $ 9,829 $ 459 $ 10,288 Interest expense (8,096 ) (23,442 ) (31,538 ) (8,067 ) (21,027 ) (29,094 ) Net interest income (loss) 1,533 (22,717 ) (21,184 ) 1,762 (20,568 ) (18,806 ) Non-interest income Investment fair value changes, net (497 ) (59 ) (556 ) (728 ) 36 (692 ) Other income — 2,222 2,222 — — — Total non-interest income, net (497 ) 2,163 1,666 (728 ) 36 (692 ) Direct operating expenses — (24,820 ) (24,820 ) — (23,803 ) (23,803 ) Total $ 1,036 $ (45,374 ) $ (44,338 ) $ 1,034 $ (44,335 ) $ (43,301 ) (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 June 30, 2019 and December 31, 2018 . Table 24.3 – Supplemental Segment Information (In Thousands) Investment Portfolio Mortgage Banking Corporate/ Other Total June 30, 2019 Residential loans $ 5,777,759 $ 1,047,856 $ 457,750 $ 7,283,365 Business purpose residential loans 159,353 91,501 — 250,854 Multifamily loans 3,749,657 — — 3,749,657 Real estate securities 1,477,486 — — 1,477,486 Other investments 369,900 2,230 — 372,130 Goodwill and intangible assets — 50,999 — 50,999 Total assets 11,790,419 1,225,117 836,050 13,851,586 December 31, 2018 Residential loans $ 5,685,983 $ 1,048,801 $ 519,958 $ 7,254,742 Business purpose residential loans 112,798 28,460 — 141,258 Multifamily loans 2,144,598 — — 2,144,598 Real estate securities 1,452,494 — — 1,452,494 Other investments 427,764 — 10,754 438,518 Total assets 10,093,993 1,103,090 740,323 11,937,406

Subsequent Events

Subsequent Events	6 Months Ended
	Jun. 30, 2019
Subsequent Events [Abstract]
Subsequent Events	Subsequent Events In July 2019, 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 and, to a lesser extent, non-performing residential first lien mortgage loans. We deposited $60 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 $150 million , upon the closing of this transaction in the third quarter of 2019, which we expect will be partially financed by a third-party financial institution under a securities repurchase facility. We anticipate consolidating the assets and liabilities of the securitization trust resulting from this transaction as we expect to maintain certain discretionary rights associated with the ownership of this investment.

Summary of Significant Accoun_2

Summary of Significant Accounting Policies (Policies)	6 Months Ended
	Jun. 30, 2019
Accounting Policies [Abstract]
Basis of Presentation	Basis of Presentation The consolidated financial statements presented herein are at June 30, 2019 and December 31, 2018 , and for the three and six months ended June 30, 2019 and 2018 . 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, 2018 . In the opinion of management, all normal and recurring adjustments to present fairly the financial condition of the company at June 30, 2019 and results of operations for all periods presented have been made. The results of operations for the three and six months ended June 30, 2019 should not be construed as indicative of the results to be expected for the full year.
Principles of Consolidation	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 Freddie Mac K-Series securitizations beginning in the third quarter of 2018, and the assets and liabilities of one Freddie Mac SLST securitization beginning in the fourth 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 purchased or 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.
Use of Estimates	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.
Business Combinations and Contingent Consideration	Business Combinations We use the acquisition method of accounting for business combinations, under which the purchase price is allocated to the fair values of the assets acquired and liabilities assumed at the acquisition date. The excess of the purchase price over the amount allocated to the assets acquired and liabilities assumed is recorded as goodwill. Adjustments to the values of the assets acquired and liabilities assumed that could be made during the measurement period, which could be up to one year after the acquisition date, are recorded in the period in which the adjustment is identified, with a corresponding offset to goodwill. Any adjustments made after the measurement period are recorded in the consolidated statements of income. Acquisition-related costs are expensed as incurred. Contingent Consideration In relation to our acquisition of 5 Arches, we recorded contingent consideration liabilities that represent the estimated fair value (at the date of acquisition) of our obligation to make certain earn-out payments that are contingent on 5 Arches loan origination volumes exceeding certain specified thresholds. These liabilities are carried at fair value and periodic changes in their estimated fair value are recorded through Other income, net on our consolidated statements of income. The estimate of the fair value of contingent consideration requires significant judgment regarding assumptions about future operating results, discount rates, and probabilities of projected operating result scenarios.
Goodwill and Intangible Assets	Goodwill and Intangible Assets Significant judgment is required to estimate the fair value of intangible assets and in assigning their estimated useful lives. Accordingly, we typically seek the assistance of independent third-party valuation specialists for significant intangible assets. The fair value estimates are based on available historical information and on future expectations and assumptions we deem reasonable. We generally use an income-based valuation method to estimate the fair value of intangible assets, which discounts expected future cash flows to present value using estimates and assumptions we deem reasonable. Determining the estimated useful lives of intangible assets also requires judgment. Our assessment as to which intangible assets are deemed to have finite or indefinite lives is based on several factors including economic barriers of entry for the acquired business, retention trends, and our operating plans, among other factors. Finite-lived intangible assets are amortized over their estimated useful lives on a straight-line basis and reviewed for impairment if indicators are present. Additionally, useful lives are evaluated each reporting period to determine if revisions to the remaining periods of amortization are warranted. Goodwill is tested for impairment annually or more frequently if indicators of impairment exist. We have elected to make the first day of our fiscal fourth quarter the annual impairment assessment date for goodwill. We first assess qualitative factors to determine whether it is more likely than not that the fair value is less than the carrying value. If, based on that assessment, we believe it is more likely than not that the fair value is less than the carrying value, then a two-step quantitative goodwill impairment test is performed.
Loan Originations	Loan Originations Our wholly-owned subsidiary, 5 Arches, originates business purpose residential loans, including single-family rental and residential bridge loans. Single-family rental loans are mortgage loans secured by 1-4 unit residential real estate with a mortgage loan borrower that owns the real estate as an investment property and rents the property to residential tenants. Residential bridge loans are mortgage loans generally secured by unoccupied residential real estate that the borrower owns as an investment and that is being renovated, rehabilitated or constructed. Single-family rental loans are classified as held-for-sale at fair value, as we have originated these loans with the intent to sell to third parties or transfer to securitization entities. Residential bridge loans are classified as held-for-investment at fair value, if we intend to hold these loans to maturity, or held-for-sale at fair value, if we intend to sell the loans to a third party.
Leases	Leases Upon adoption of ASU 2016-02, "Leases," in the first quarter of 2019, we recorded a lease liability and right-of-use asset on our consolidated balance sheets. The lease liability is equal to the present value of our remaining lease payments discounted at our incremental borrowing rate and the right-of-use asset is equal to the lease liability adjusted for our deferred rent liability at the adoption of this accounting standard. As lease payments are made, the lease liability is reduced to the present value of the remaining lease payments and the right-of-use asset is reduced by the difference between the lease expense (straight-lined over the lease term) and the theoretical interest expense amount (calculated using the incremental borrowing rate). See Note 16 for further discussion on leases.
Recent Accounting Pronouncements	Recent Accounting Pronouncements Newly Adopted Accounting Standards Updates ("ASUs") 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 ("AOCI") 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. However, we did not elect to reclassify any income tax effects of the Tax Act from AOCI to retained earnings as we did not have any tax effects related to the Tax Act remaining in AOCI at December 31, 2018. Our policy is to release any stranded income tax effects from AOCI to income tax expense on an investment-by-investment basis. 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. Additionally, in October 2018, the FASB issued ASU 2018-16, "Derivatives and Hedging (Topic 815): Inclusion of the Secured Overnight Financing Rate (SOFR) Overnight Index Swap (OIS) Rate as a Benchmark Interest Rate for Hedge Accounting Purposes," which permits the use of the OIS rate based on SOFR as a U.S. benchmark interest rate for hedge accounting purposes under Topic 815. The amendments in this update are required to be adopted concurrently with the amendments in ASU 2017-12. We adopted this guidance, as required, in the first quarter of 2019, which did not 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. We adopted this guidance, as required, in the first quarter of 2019, which did not 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. We adopted this guidance, as required, in the first quarter of 2019, which did not have a material impact 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. 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. In March 2019, the FASB issued ASU 2019-01, "Leases (Topic 842): Codification Improvements," which is intended to clarify Codification guidance. We adopted this guidance, as required, in the first quarter of 2019, which did not have a material impact on our consolidated financial statements. We elected the package of practical expedients under the transition guidance within this standard, which allowed us to carry forward the classifications of each of our existing leases as operating leases. In connection with the adoption of this guidance, at June 30, 2019 , our lease liability was $13 million , which represented the present value of our remaining lease payments discounted at our incremental borrowing rate and was recorded in Accrued expenses and other liabilities on our consolidated balance sheets. At June 30, 2019 , our right-of-use asset was $12 million , which was equal to the lease liability adjusted for our deferred rent liability at adoption and was recorded in Other assets on our consolidated balance sheets. We will continue to record lease expense on a straight-line basis and have included required lease disclosures within Note 16. 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 January 2017, the FASB issued ASU 2017-04, "Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment." This new guidance simplifies the subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment test. This new guidance is effective for fiscal years beginning after December 15, 2019. Early adoption is permitted for interim and annual goodwill impairment tests performed on testing dates after January 1, 2017. 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. In November 2018, the FASB issued ASU 2018-19, "Codification Improvements to Topic 326, Financial Instruments - Credit Losses," which clarifies the scope of the amendments in ASU 2016-13. In April 2019, the FASB issued ASU 2019-04, "Codification Improvements to Topic 326, Financial Instruments - Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments," which is intended to clarify this guidance. Additionally, in May 2019, the FASB issued ASU 2019-05, "Financial Instruments - Credit Losses (Topic 326): Targeted Transition Relief," which provides an option to irrevocably elect the fair value option for certain financial assets previously measured at amortized cost. 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 do not anticipate that these updates will have a material impact on our consolidated financial statements as nearly all of our financial instruments are carried at fair value and changes in fair values of these instruments are recorded on our consolidated statements of income in the period in which the valuation change occurs. We will continue evaluating these new standards and caution that any changes in our business or additional amendments to these standards could change our initial assessment.
Balance Sheet Netting	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. 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.

Basis of Presentation (Tables)

Basis of Presentation (Tables)	6 Months Ended
	Jun. 30, 2019
Accounting Policies [Abstract]
Schedule of Assets Acquired and Liabilities Assumed	We accounted for the acquisition of 5 Arches under the acquisition method of accounting pursuant to ASC 805. We performed the preliminary purchase price allocation and recorded underlying assets acquired and liabilities assumed based on their estimated fair values using the information available as of the acquisition date, with the excess of the purchase price allocated to goodwill. Through June 30, 2019, there have been no changes to our preliminary purchase price allocation, which is summarized in the following table. Table 2.1 – 5 Arches Purchase Price Allocation (In Thousands) March 1, 2019 Purchase price: Cash $ 12,575 Contingent consideration, at fair value 24,621 Purchase option, at fair value 5,082 Equity method investment, at fair value 8,052 Total consideration $ 50,330 Allocated to: Tangible net assets acquired (1) $ 1,004 Goodwill 28,728 Intangible assets 24,800 Deferred tax liability (4,202 ) Total net assets acquired $ 50,330 (1) 5 Arches net assets acquired consisted of assets of $19 million and liabilities of $18 million as of March 1, 2019.
Schedule of Finite-Lived Intangible Assets	The amortization period for each of these assets and the activity for the period from March 1, 2019 to June 30, 2019 is summarized in the table below. Table 2.2 – Intangible Assets – Activity (Dollars in Thousands) Carrying Value at December 31, 2018 Additions Amortization Expense Carrying Value at June 30, 2019 Weighted Average Amortization Period (in years) Finite-lived intangible assets: Broker network $ — $ 18,100 $ (1,207 ) $ 16,893 5 Non-compete agreements — 2,900 (322 ) 2,578 3 Management fee on existing assets under management — 2,600 (867 ) 1,733 1 Tradename — 1,200 (133 ) 1,067 3 Total $ — $ 24,800 $ (2,529 ) $ 22,271 4
Finite-lived Intangible Assets Amortization Expense	All of our intangible assets are amortized on a straight-line basis. Estimated amortization expense for the remainder of 2019 and the following years is summarized in the table below. Table 2.3 – Intangible Asset Amortization Expense by Year (In Thousands) June 30, 2019 2019 (6 months) $ 3,794 2020 5,420 2021 4,987 2022 3,848 2023 and thereafter 4,222 Total Future Intangible Asset Amortization $ 22,271
Schedule of Goodwill	Goodwill – Activity (In Thousands) Six Months Ended June 30, 2019 Beginning balance $ — Goodwill recognized from 5 Arches acquisition 28,728 Impairment — Ending Balance $ 28,728
Pro Forma Information	Unaudited Pro Forma Financial Information Three Months Ended June 30, Six Months Ended June 30, (In Thousands) 2019 2018 2019 2018 Supplementary pro forma information: Net interest income $ 32,322 $ 35,099 $ 64,588 $ 70,430 Non-interest income 27,532 21,321 71,282 62,404 Net income 31,266 32,310 81,499 78,436

Principles of Consolidation (Ta

Principles of Consolidation (Tables)	6 Months Ended
	Jun. 30, 2019
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 June 30, 2019 Legacy Sequoia Sequoia Choice Freddie Mac SLST Freddie Mac K-Series Servicing Investment Total Consolidated VIEs (Dollars in Thousands) Residential loans, held-for-investment $ 457,750 $ 2,147,356 $ 1,235,089 $ — $ — $ 3,840,195 Multifamily loans, held-for-investment — — — 3,749,657 — 3,749,657 Other investments — — — — 274,617 274,617 Cash and cash equivalents — — — — 19,393 19,393 Restricted cash 144 14 — — 23,650 23,808 Accrued interest receivable 771 8,946 3,786 11,317 3,747 28,567 REO 1,448 — — — — 1,448 Total Assets $ 460,113 $ 2,156,316 $ 1,238,875 $ 3,760,974 $ 321,407 $ 7,937,685 Short-term debt $ — $ — $ — $ — $ 236,231 $ 236,231 Accrued interest payable 519 7,322 2,774 10,822 321 21,758 Accrued expenses and other liabilities — 14 — — 17,954 17,968 Asset-backed securities issued 448,862 1,929,444 991,766 3,543,057 — 6,913,129 Total Liabilities $ 449,381 $ 1,936,780 $ 994,540 $ 3,553,879 $ 254,506 $ 7,189,086 Number of VIEs 20 7 1 4 3 35 December 31, 2018 Legacy Sequoia Sequoia Freddie Mac SLST Freddie Mac K-Series Servicing Investment Total Consolidated VIEs (Dollars in Thousands) Residential loans, held-for-investment $ 519,958 $ 2,079,382 $ 1,222,669 $ — $ — $ 3,822,009 Multifamily loans, held-for-investment — — — 2,144,598 — 2,144,598 Other investments — — — — 312,688 312,688 Restricted cash 146 1,022 — — 25,363 26,531 Accrued interest receivable 822 8,988 3,926 6,595 1,091 21,422 REO 3,943 — — — — 3,943 Total Assets $ 524,869 $ 2,089,392 $ 1,226,595 $ 2,151,193 $ 339,142 $ 6,331,191 Short-term debt $ — $ — $ — $ — $ 262,740 $ 262,740 Accrued interest payable 571 7,180 2,907 6,239 483 17,380 Accrued expenses and other liabilities — 1,022 — — 18,592 19,614 Asset-backed securities issued 512,240 1,885,010 993,748 2,019,075 — 5,410,073 Total Liabilities $ 512,811 $ 1,893,212 $ 996,655 $ 2,025,314 $ 281,815 $ 5,709,807 Number of VIEs 20 6 1 3 3 33
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 six months ended June 30, 2019 and 2018 . Table 4.2 – Securitization Activity Related to Unconsolidated VIEs Sponsored by Redwood Three Months Ended June 30, Six Months Ended June 30, (In Thousands) 2019 2018 2019 2018 Principal balance of loans transferred $ 400,836 $ 1,127,665 $ 749,093 $ 2,408,133 Trading securities retained, at fair value 1,792 33,757 3,508 46,248 AFS securities retained, at fair value 1,069 2,047 1,954 5,952
Cash Flows Related to Unconsolidated Variable Interest Entity's Sponsored by Redwood	The following table summarizes the cash flows during the three and six months ended June 30, 2019 and 2018 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 June 30, Six Months Ended June 30, (In Thousands) 2019 2018 2019 2018 Proceeds from new transfers $ 410,281 $ 1,104,094 $ 762,652 $ 2,393,781 MSR fees received 3,105 3,397 6,165 6,811 Funding of compensating interest, net (47 ) (31 ) (137 ) (56 ) Cash flows received on retained securities 6,743 7,410 14,289 14,453
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 six months ended June 30, 2019 and 2018 . Table 4.4 – Assumptions Related to Assets Retained from Unconsolidated VIEs Sponsored by Redwood Three Months Ended June 30, 2019 Three Months Ended June 30, 2018 At Date of Securitization Senior IO Securities Subordinate Securities Senior IO Securities Subordinate Securities Prepayment rates 16 % 15 % 10 % 10 % Discount rates 14 % 7 % 14 % 5 % Credit loss assumptions 0.20 % 0.20 % 0.20 % 0.20 % Six Months Ended June 30, 2019 Six Months Ended June 30, 2018 At Date of Securitization Senior IO Securities Subordinate Securities Senior IO Securities Subordinate Securities Prepayment rates 16 % 15 % 9 % 10 % Discount rates 14 % 7 % 14 % 5 % Credit loss assumptions 0.20 % 0.20 % 0.20 % 0.20 %
Unconsolidated Variable Interest Entity's Sponsored by Redwood	The following table presents additional information at June 30, 2019 and December 31, 2018 , related to unconsolidated VIEs sponsored by Redwood and accounted for as sales since 2012. Table 4.5 – Unconsolidated VIEs Sponsored by Redwood (In Thousands) June 30, 2019 December 31, 2018 On-balance sheet assets, at fair value: Interest-only, senior and subordinate securities, classified as trading $ 121,825 $ 129,111 Subordinate securities, classified as AFS 136,310 162,314 Mortgage servicing rights 45,010 58,572 Maximum loss exposure (1) $ 303,145 $ 349,997 Assets transferred: Principal balance of loans outstanding $ 10,586,480 $ 10,580,216 Principal balance of loans 30+ days delinquent 24,749 21,805 (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 June 30, 2019 and December 31, 2018 . Table 4.6 – Key Assumptions and Sensitivity Analysis for Assets Retained from Unconsolidated VIEs Sponsored by Redwood June 30, 2019 MSRs Senior Securities (1) Subordinate Securities (Dollars in Thousands) Fair value at June 30, 2019 $ 45,010 $ 49,014 $ 209,121 Expected life (in years) (2) 6 6 14 Prepayment speed assumption (annual CPR) (2) 11 % 12 % 13 % Decrease in fair value from: 10% adverse change $ 1,898 $ 1,905 $ 158 25% adverse change 4,513 4,857 1,124 Discount rate assumption (2) 11 % 13 % 5 % Decrease in fair value from: 100 basis point increase $ 1,624 $ 1,310 $ 20,756 200 basis point increase 3,135 2,758 38,452 Credit loss assumption (2) N/A 0.21 % 0.21 % Decrease in fair value from: 10% higher losses N/A $ — $ 1,645 25% higher losses N/A — 4,112 December 31, 2018 MSRs Senior Securities (1) Subordinate Securities (Dollars in Thousands) Fair value at December 31, 2018 $ 58,572 $ 61,178 $ 230,247 Expected life (in years) (2) 8 7 15 Prepayment speed assumption (annual CPR) (2) 7 % 10 % 9 % Decrease in fair value from: 10% adverse change $ 1,668 $ 2,151 $ 201 25% adverse change 4,027 5,127 1,372 Discount rate assumption (2) 11 % 12 % 6 % Decrease in fair value from: 100 basis point increase $ 2,323 $ 2,190 $ 21,982 200 basis point increase 4,493 4,226 40,641 Credit loss assumption (2) N/A 0.20 % 0.20 % Decrease in fair value from: 10% higher losses N/A $ — $ 1,387 25% higher losses N/A — 3,471 (1) Senior securities included $49 million and $61 million of interest-only securities at June 30, 2019 and December 31, 2018 , 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 June 30, 2019 and December 31, 2018, grouped by asset type. Table 4.7 – Third-Party Sponsored VIE Summary (In Thousands) June 30, 2019 December 31, 2018 Mortgage-Backed Securities Senior $ 166,184 $ 185,107 Mezzanine 679,908 547,249 Subordinate 373,260 428,713 Total Mortgage-Backed Securities 1,219,352 1,161,069 Excess MSR 18,224 15,092 Total Investments in Third-Party Sponsored VIEs $ 1,237,576 $ 1,176,161

Summary of Significant Accoun_3

Summary of Significant Accounting Policies (Tables)	6 Months Ended
	Jun. 30, 2019
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 June 30, 2019 and December 31, 2018 . 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 June 30, 2019 Financial Instruments Cash Collateral (Received) Pledged Assets (2) Interest rate agreements $ 19,258 $ — $ 19,258 $ (17,869 ) $ — $ 1,389 TBAs 1,784 — 1,784 (1,784 ) — — Total Assets $ 21,042 $ — $ 21,042 $ (19,653 ) $ — $ 1,389 Liabilities (2) Interest rate agreements $ (168,436 ) $ — $ (168,436 ) $ 17,869 $ 150,567 $ — TBAs (4,639 ) — (4,639 ) 1,784 1,600 (1,255 ) Loan warehouse debt (638,055 ) — (638,055 ) 638,055 — — Security repurchase agreements (1,213,920 ) — (1,213,920 ) 1,213,920 — — Total Liabilities $ (2,025,050 ) $ — $ (2,025,050 ) $ 1,871,628 $ 152,167 $ (1,255 ) 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, 2018 Financial Instruments Cash Collateral (Received) Pledged Assets (2) Interest rate agreements $ 28,211 $ — $ 28,211 $ (28,211 ) $ — $ — TBAs 4,665 — 4,665 (3,391 ) (835 ) 439 Total Assets $ 32,876 $ — $ 32,876 $ (31,602 ) $ (835 ) $ 439 Liabilities (2) Interest rate agreements $ (70,908 ) $ — $ (70,908 ) $ 28,211 $ 42,697 $ — TBAs (13,215 ) — (13,215 ) 3,391 5,620 (4,204 ) Loan warehouse debt (860,650 ) — (860,650 ) 860,650 — — Security repurchase agreements (988,890 ) — (988,890 ) 988,890 — — Total Liabilities $ (1,933,663 ) $ — $ (1,933,663 ) $ 1,881,142 $ 48,317 $ (4,204 ) (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 and TBAs 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.

Fair Value of Financial Instr_2

Fair Value of Financial Instruments (Tables)	6 Months Ended
	Jun. 30, 2019
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 June 30, 2019 and December 31, 2018 . Table 5.1 – Carrying Values and Fair Values of Assets and Liabilities June 30, 2019 December 31, 2018 Carrying Value Fair Value Carrying Value Fair Value (In Thousands) Assets Residential loans, held-for-sale At fair value $ 1,056,178 $ 1,056,178 $ 1,048,690 $ 1,048,690 At lower of cost or fair value 109 128 111 131 Residential loans, held-for-investment 6,227,078 6,227,078 6,205,941 6,205,941 Business purpose residential loans 250,854 250,854 141,258 141,258 Multifamily loans 3,749,657 3,749,657 2,144,598 2,144,598 Trading securities 1,205,389 1,205,389 1,118,612 1,118,612 Available-for-sale securities 272,097 272,097 333,882 333,882 Servicer advance investments (1) 259,222 259,222 300,468 300,468 MSRs (1) 47,396 47,396 60,281 60,281 Participation in loan warehouse facility (1) — — 39,703 39,703 Excess MSRs (1) 33,620 33,620 27,312 27,312 Cash and cash equivalents 218,145 218,145 175,764 175,764 Restricted cash 33,953 33,953 29,313 29,313 Accrued interest receivable 54,265 54,265 47,105 47,105 Derivative assets 26,609 26,609 35,789 35,789 REO (2) 6,305 6,509 3,943 4,396 Margin receivable (2) 211,199 211,199 100,773 100,773 FHLBC stock (2) 43,393 43,393 43,393 43,393 Guarantee asset (2) 1,999 1,999 2,618 2,618 Pledged collateral (2) 42,913 42,913 42,433 42,433 Liabilities Short-term debt facilities $ 2,026,418 $ 2,026,418 $ 1,937,920 $ 1,937,920 Short-term debt - servicer advance financing 236,231 236,231 262,740 262,740 Accrued interest payable 47,092 47,092 42,528 42,528 Margin payable (3) — — 835 835 Guarantee obligation (3) 15,744 15,456 16,711 16,774 Contingent consideration (3) 24,932 24,932 — — Derivative liabilities 173,847 173,847 84,855 84,855 ABS issued at fair value 6,913,129 6,913,129 5,410,073 5,410,073 FHLBC long-term borrowings 1,999,999 1,999,999 1,999,999 1,999,999 Convertible notes, net 634,805 639,849 633,196 618,271 Trust preferred securities and subordinated notes, net 138,605 97,650 138,582 102,533 (1) These investments are included in Other investments on our consolidated balance sheets. (2) These assets are included in Other assets on our consolidated balance sheets. (3) 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 June 30, 2019 and December 31, 2018 , 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 June 30, 2019 Carrying Value Fair Value Measurements Using (In Thousands) Level 1 Level 2 Level 3 Assets Residential loans $ 7,283,256 $ — $ — $ 7,283,256 Business purpose residential loans 250,854 — — 250,854 Multifamily loans 3,749,657 — — 3,749,657 Trading securities 1,205,389 — — 1,205,389 Available-for-sale securities 272,097 — — 272,097 Servicer advance investments 259,222 — — 259,222 MSRs 47,396 — — 47,396 Excess MSRs 33,620 — — 33,620 Derivative assets 26,609 1,784 19,258 5,567 Pledged collateral 42,913 42,913 — — FHLBC stock 43,393 — 43,393 — Guarantee asset 1,999 — — 1,999 Liabilities Contingent consideration $ 24,932 $ — $ — $ 24,932 Derivative liabilities 173,847 4,639 168,436 772 ABS issued 6,913,129 — — 6,913,129 December 31, 2018 Carrying Value Fair Value Measurements Using (In Thousands) Level 1 Level 2 Level 3 Assets Residential loans $ 7,254,631 $ — $ — $ 7,254,631 Business purpose residential loans 141,258 — — 141,258 Multifamily loans 2,144,598 — — 2,144,598 Trading securities 1,118,612 — — 1,118,612 Available-for-sale securities 333,882 — — 333,882 Servicer advance investments 300,468 — — 300,468 MSRs 60,281 — — 60,281 Excess MSRs 27,312 — — 27,312 Derivative assets 35,789 4,665 28,211 2,913 Pledged collateral 42,433 42,433 — — FHLBC stock 43,393 — 43,393 — Guarantee asset 2,618 — — 2,618 Liabilities Derivative liabilities $ 84,855 $ 13,215 $ 70,908 $ 732 ABS issued 5,410,073 — — 5,410,073
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 six months ended June 30, 2019 . Table 5.3 – Changes in Level 3 Assets and Liabilities Measured at Fair Value on a Recurring Basis Assets Residential Loans Business Purpose Residential Loans Multifamily Loans Trading Securities AFS Securities Servicer Advance Investments MSRs Excess MSRs Guarantee Asset (In Thousands) Beginning balance - December 31, 2018 $ 7,254,631 $ 141,258 $ 2,144,598 $ 1,118,612 $ 333,882 $ 300,468 $ 60,281 $ 27,312 $ 2,618 Acquisitions 2,583,951 29,093 1,481,554 240,478 8,954 68,976 868 6,810 — Originations — 169,562 — — — — — — — Sales (2,088,273 ) (43,548 ) — (174,216 ) (67,001 ) — — — — Principal paydowns (614,975 ) (43,931 ) (7,516 ) (14,836 ) (24,207 ) (111,662 ) — — — Gains (losses) in net income, net 147,969 3,416 131,021 40,302 17,503 1,440 (13,753 ) (502 ) (619 ) Unrealized losses in OCI, net — — — — 2,966 — — — — Other settlements, net (1) (47 ) (4,996 ) — (4,951 ) — — — — — Ending Balance - June 30, 2019 $ 7,283,256 $ 250,854 $ 3,749,657 $ 1,205,389 $ 272,097 $ 259,222 $ 47,396 $ 33,620 $ 1,999 Table 5.3 – Changes in Level 3 Assets and Liabilities Measured at Fair Value on a Recurring Basis (continued) Liabilities Derivatives (2) Contingent Consideration ABS Issued (In Thousands) Beginning balance - December 31, 2018 $ 2,181 $ — $ 5,410,073 Acquisitions — 24,621 1,738,537 Principal paydowns — — (416,791 ) Gains (losses) in net income, net 28,908 311 181,310 Other settlements, net (1) (26,294 ) — — Ending Balance - June 30, 2019 $ 4,795 $ 24,932 $ 6,913,129 (1) Other settlements, net for residential and business purpose 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 trading securities relates to the consolidation of a Freddie Mac K-Series entity during the second quarter of 2019. (2) 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.
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 June 30, 2019 and 2018 . Gains or losses incurred on assets or liabilities sold, matured, called, or fully written down during the three and six months ended June 30, 2019 and 2018 are not included in this presentation. Table 5.4 – Portion of Net Gains (Losses) Attributable to Level 3 Assets and Liabilities Still Held at June 30, 2019 and 2018 Included in Net Income Included in Net Income Three Months Ended June 30, Six Months Ended June 30, (In Thousands) 2019 2018 2019 2018 Assets Residential loans at Redwood $ 48,575 $ (12,981 ) $ 80,615 $ (51,029 ) Residential loans at consolidated Sequoia entities 6,772 367 21,243 20,914 Residential loans at consolidated Freddie Mac SLST entity 31,477 — 55,005 — Business purpose residential loans 3,038 — 4,032 — Multifamily loans at consolidated Freddie Mac K-Series entities 96,649 — 131,020 — Trading securities 17,771 (1,989 ) 38,658 (6,011 ) Available-for-sale securities — (56 ) — (56 ) Servicer advance investments 432 — 1,440 — MSRs (7,334 ) 689 (11,518 ) 4,610 Excess MSRs (66 ) — (502 ) — Loan purchase commitments 5,534 2,835 5,567 2,901 Other assets - Guarantee asset (277 ) (120 ) (196 ) 66 Liabilities Loan purchase commitments $ (756 ) $ (4,646 ) $ (772 ) $ (4,687 ) ABS issued (121,127 ) (279 ) (181,310 ) (21,014 )
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 June 30, 2019 . 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 June 30, 2019 . Table 5.5 – Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis at June 30, 2019 Gain (Loss) for June 30, 2019 Carrying Value Fair Value Measurements Using Three Months Ended Six Months Ended (In Thousands) Level 1 Level 2 Level 3 June 30, 2019 June 30, 2019 Assets REO $ 5,732 $ — $ — $ 5,732 $ (150 ) $ (422 )
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 six months ended June 30, 2019 and 2018 . Table 5.6 – Market Valuation Gains and Losses, Net Three Months Ended June 30, Six Months Ended June 30, (In Thousands) 2019 2018 2019 2018 Mortgage Banking Activities, Net Residential loans held-for-sale, at fair value $ 3,379 $ 6,122 $ 6,912 $ 10,896 Residential loan purchase and forward sale commitments 16,888 (2,758 ) 28,199 (9,726 ) Single-family rental loans held-for-sale, at fair value 1,313 — 2,917 — Single-family rental loan purchase commitments 569 — 709 — Residential bridge loans 1,012 — 1,098 — Risk management derivatives, net (7,431 ) 6,150 (12,415 ) 34,582 Total mortgage banking activities, net (1) $ 15,730 $ 9,514 $ 27,420 $ 35,752 Investment Fair Value Changes, Net Residential loans held-for-investment, at Redwood $ 35,548 $ (15,010 ) $ 63,656 $ (53,995 ) Residential bridge loans held-for-investment (318 ) — (621 ) — Trading securities 18,442 (930 ) 40,302 (3,885 ) Servicer advance investments 432 — 1,440 — Excess MSRs (65 ) — (502 ) — REO (139 ) — (139 ) — Net investments in Legacy Sequoia entities (2) (123 ) (720 ) (497 ) (728 ) Net investments in Sequoia Choice entities (2) 2,879 1,072 6,144 986 Net investment in Freddie Mac SLST entity (2) 8,037 — 14,402 — Net investments in Freddie Mac K-Series entities (2) 3,246 — 6,365 — Risk-sharing investments (61 ) (209 ) (138 ) (348 ) Risk management derivatives, net (64,740 ) 16,742 (107,115 ) 60,524 Impairments on AFS securities — (56 ) — (56 ) Total investment fair value changes, net $ 3,138 $ 889 $ 23,297 $ 2,498 Other Income (Expense), Net MSRs $ (8,653 ) $ (745 ) $ (13,753 ) $ 2,147 Risk management derivatives, net 6,517 (1,122 ) 8,768 (6,261 ) Gain on re-measurement of 5 Arches investment — — 2,440 — Total other expense, net (3) $ (2,136 ) $ (1,867 ) $ (2,545 ) $ (4,114 ) Total Market Valuation Gains, Net $ 16,732 $ 8,536 $ 48,172 $ 34,136 (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 investments at the consolidated VIEs. (3) Other income (expense), 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 June 30, 2019 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 $ 2,724,429 Prepayment rate (annual CPR) 20 - 20 % 20 % Whole loan spread to TBA price $ 1.55 - $ 1.55 $ 1.55 Whole loan spread to swap rate 80 - 365 bps 179 bps Jumbo hybrid loans 344,151 Prepayment rate (annual CPR) 15 - 15 % 15 % Whole loan spread to swap rate 65 - 360 bps 141 bps Jumbo loans committed to sell 374,481 Whole loan committed sales price $ 101.84 - $ 103.08 $ 102.12 Loans held by Legacy Sequoia (1) 457,750 Liability price N/A N/A Loans held by Sequoia Choice (1) 2,147,356 Liability price N/A N/A Loans held by Freddie Mac SLST (1) 1,235,089 Liability price N/A N/A Business purpose residential loans: Single-family rental loans 91,501 IO discount rate 12 - 12 % 12 % Prepayment rate (annual CPR) 2 - 10 % 5 % Senior credit spread 95 - 95 bps 95 bps Subordinate credit spread 140 - 1,200 bps 306 bps Senior credit support 35 - 35 % 35 % Residential bridge loans 159,353 Discount rate 7 - 8 % 7 % Multifamily loans held by Freddie Mac K-Series (1) 3,749,657 Liability price N/A N/A Trading and AFS securities 1,477,486 Discount rate 3 - 14 % 5 % Prepayment rate (annual CPR) — - 60 % 10 % Default rate — - 20 % 2 % Loss severity — - 40 % 21 % Servicer advance investments 259,222 Discount rate 4 - 4 % 4 % Prepayment rate (annual CPR) 8 - 15 % 14 % Expected remaining life (2) 2 - 2 years 2 years Mortgage servicing income 6 - 14 bps 10 bps MSRs 47,396 Discount rate 11 - 17 % 11 % Prepayment rate (annual CPR) 5 - 45 % 12 % Per loan annual cost to service $ 82 - $ 82 $ 82 Excess MSRs 33,620 Discount rate 11 - 16 % 14 % Prepayment rate (annual CPR) 8 - 14 % 11 % Excess mortgage servicing income 8 - 17 bps 12 bps Guarantee asset 1,999 Discount rate 11 - 11 % 11 % Prepayment rate (annual CPR) 15 - 15 % 15 % REO 5,732 Loss severity 3 - 52 % 7 % Loan purchase commitments, net 4,707 MSR multiple 0.7 - 4.6 x 2.2 x Pull-through rate 7 - 100 % 70 % Whole loan spread to TBA price $ 0.61 - $ 1.55 $ 1.54 Whole loan spread to swap rate - fixed rate 115 - 365 bps 228 bps Prepayment rate (annual CPR) 15 - 20 % 18 % Whole loan spread to swap rate - hybrid 90 - 345 bps 129 bps Table 5.7 – Fair Value Methodology for Level 3 Financial Instruments (continued) June 30, 2019 Fair Value Input Values (Dollars in Thousands, except Input Values) Unobservable Input Range Weighted Average Liabilities ABS issued (1) : At consolidated Sequoia entities 2,378,306 Discount rate 3 - 15 % 4 % Prepayment rate (annual CPR) 8 - 49 % 19 % Default rate — - 9 % 2 % Loss severity 20 - 22 % 21 % At consolidated Freddie Mac SLST entity 991,766 Discount rate 3 - 8 % 3 % Prepayment rate (annual CPR) 6 - 6 % 6 % Default rate 2 - 2 % 2 % Loss severity 30 - 30 % 30 % At consolidated Freddie Mac K-Series entities 3,543,057 Discount rate 2 - 9 % 3 % Prepayment rate (annual CPR) — - — % — % Default rate 1 - 1 % 1 % Loss severity 20 - 20 % 20 % Contingent consideration 24,932 Discount rate 23 - 23 % 23 % Probability of outcomes (3) — - 100 % 90 % (1) The fair value of the loans held by consolidated entities was based on the fair value of the ABS issued by these entities, including securities we own, which we determined were more readily observable, in accordance with accounting guidance for collateralized financing entities. (2) Represents the estimated average duration of outstanding servicer advances at a given point in time (not taking into account new advances made with respect to the pool). (3) Represents the probability of a full payout of contingent purchase consideration.

Residential Loans (Tables)

Residential Loans (Tables)	6 Months Ended
	Jun. 30, 2019
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 June 30, 2019 and December 31, 2018 . Table 6.1 – Classifications and Carrying Values of Residential Loans June 30, 2019 Legacy Sequoia Freddie Mac (In Thousands) Redwood Sequoia Choice SLST Total Held-for-sale At fair value $ 1,056,178 $ — $ — $ — $ 1,056,178 At lower of cost or fair value 109 — — — 109 Total held-for-sale 1,056,287 — — — 1,056,287 Held-for-investment at fair value 2,386,883 457,750 2,147,356 1,235,089 6,227,078 Total Residential Loans $ 3,443,170 $ 457,750 $ 2,147,356 $ 1,235,089 $ 7,283,365 December 31, 2018 Legacy Sequoia Freddie Mac (In Thousands) Redwood Sequoia Choice SLST Total Held-for-sale At fair value $ 1,048,690 $ — $ — $ — $ 1,048,690 At lower of cost or fair value 111 — — — 111 Total held-for-sale 1,048,801 — — — 1,048,801 Held-for-investment at fair value 2,383,932 519,958 2,079,382 1,222,669 6,205,941 Total Residential Loans $ 3,432,733 $ 519,958 $ 2,079,382 $ 1,222,669 $ 7,254,742 The following table summarizes the classifications and carrying values of the business purpose residential loans owned at Redwood at June 30, 2019 and December 31, 2018 . Table 7.1 – Classifications and Carrying Values of Business Purpose Residential Loans (In Thousands) June 30, 2019 December 31, 2018 Single-family rental loans, held-for-sale at fair value $ 91,501 $ 28,460 Residential bridge loans, held-for-investment at fair value 159,353 112,798 Total Business Purpose Residential Loans $ 250,854 $ 141,258

Business Purpose Residential _2

Business Purpose Residential Loans (Tables)	6 Months Ended
	Jun. 30, 2019
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 June 30, 2019 and December 31, 2018 . Table 6.1 – Classifications and Carrying Values of Residential Loans June 30, 2019 Legacy Sequoia Freddie Mac (In Thousands) Redwood Sequoia Choice SLST Total Held-for-sale At fair value $ 1,056,178 $ — $ — $ — $ 1,056,178 At lower of cost or fair value 109 — — — 109 Total held-for-sale 1,056,287 — — — 1,056,287 Held-for-investment at fair value 2,386,883 457,750 2,147,356 1,235,089 6,227,078 Total Residential Loans $ 3,443,170 $ 457,750 $ 2,147,356 $ 1,235,089 $ 7,283,365 December 31, 2018 Legacy Sequoia Freddie Mac (In Thousands) Redwood Sequoia Choice SLST Total Held-for-sale At fair value $ 1,048,690 $ — $ — $ — $ 1,048,690 At lower of cost or fair value 111 — — — 111 Total held-for-sale 1,048,801 — — — 1,048,801 Held-for-investment at fair value 2,383,932 519,958 2,079,382 1,222,669 6,205,941 Total Residential Loans $ 3,432,733 $ 519,958 $ 2,079,382 $ 1,222,669 $ 7,254,742 The following table summarizes the classifications and carrying values of the business purpose residential loans owned at Redwood at June 30, 2019 and December 31, 2018 . Table 7.1 – Classifications and Carrying Values of Business Purpose Residential Loans (In Thousands) June 30, 2019 December 31, 2018 Single-family rental loans, held-for-sale at fair value $ 91,501 $ 28,460 Residential bridge loans, held-for-investment at fair value 159,353 112,798 Total Business Purpose Residential Loans $ 250,854 $ 141,258

Real Estate Securities (Tables)

Real Estate Securities (Tables)	6 Months Ended
	Jun. 30, 2019
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 June 30, 2019 and December 31, 2018 . Table 9.1 – Fair Values of Real Estate Securities by Type (In Thousands) June 30, 2019 December 31, 2018 Trading $ 1,205,389 $ 1,118,612 Available-for-sale 272,097 333,882 Total Real Estate Securities $ 1,477,486 $ 1,452,494
Trading Securities by Collateral Type	The following table presents the fair value of trading securities by position and collateral type at June 30, 2019 and December 31, 2018 . Table 9.2 – Trading Securities by Position (In Thousands) June 30, 2019 December 31, 2018 Senior $ 170,731 $ 158,670 Mezzanine 748,282 610,819 Subordinate 286,376 349,123 Total Trading Securities $ 1,205,389 $ 1,118,612
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 June 30, 2019 and December 31, 2018 . Table 9.3 – Available-for-Sale Securities by Position (In Thousands) June 30, 2019 December 31, 2018 Senior $ 44,467 $ 87,615 Mezzanine 8,976 36,407 Subordinate 218,654 209,860 Total AFS Securities $ 272,097 $ 333,882
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 June 30, 2019 and December 31, 2018 . Table 9.4 – Carrying Value of AFS Securities June 30, 2019 (In Thousands) Senior Mezzanine Subordinate Total Principal balance $ 45,147 $ 8,778 $ 291,997 $ 345,922 Credit reserve (1,323 ) — (33,526 ) (34,849 ) Unamortized discount, net (15,009 ) (576 ) (121,697 ) (137,282 ) Amortized cost 28,815 8,202 136,774 173,791 Gross unrealized gains 15,664 774 81,880 98,318 Gross unrealized losses (12 ) — — (12 ) Carrying Value $ 44,467 $ 8,976 $ 218,654 $ 272,097 December 31, 2018 (In Thousands) Senior Mezzanine Subordinate Total Principal balance $ 91,736 $ 36,852 $ 302,524 $ 431,112 Credit reserve (7,790 ) — (33,580 ) (41,370 ) Unamortized discount, net (18,460 ) (3,697 ) (129,043 ) (151,200 ) Amortized cost 65,486 33,155 139,901 238,542 Gross unrealized gains 22,178 3,252 70,458 95,888 Gross unrealized losses (49 ) — (499 ) (548 ) Carrying Value $ 87,615 $ 36,407 $ 209,860 $ 333,882
Changes of Unamortized Discount and Designated Credit Reserves on Residential Available for Sale Securities	The following table presents the changes for the three and six months ended June 30, 2019 , 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 June 30, 2019 Six Months Ended June 30, 2019 Credit Reserve Unamortized Discount, Net Credit Unamortized (In Thousands) Beginning balance $ 34,834 $ 142,013 $ 41,370 $ 151,200 Amortization of net discount — (2,059 ) — (3,989 ) Realized credit losses (1,014 ) — (1,180 ) — Acquisitions 787 350 1,464 704 Sales, calls, other (5 ) (2,775 ) (6,397 ) (11,041 ) (Release of) transfers to credit reserves, net 247 (247 ) (408 ) 408 Ending Balance $ 34,849 $ 137,282 $ 34,849 $ 137,282
Components of Fair Value of Available for Sale 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 June 30, 2019 and December 31, 2018 . 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) June 30, 2019 $ — $ — $ — $ 6,445 $ (12 ) $ 6,433 December 31, 2018 12,923 (499 ) 12,424 7,464 (49 ) 7,415
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 June 30, 2019 . Table 9.7 – Significant Valuation Assumptions June 30, 2019 Range for Securities Prepayment rates 15% - 15% Projected losses 1% - 1%
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 June 30, 2019 and 2018 , 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 June 30, Six Months Ended June 30, (In Thousands) 2019 2018 2019 2018 Balance at beginning of period $ 18,652 $ 20,924 $ 18,652 $ 21,037 Additions Initial credit impairments — 43 — 43 Reductions Securities sold, or expected to sell (14 ) — (14 ) (99 ) Securities with no outstanding principal at period end (58 ) — (58 ) (14 ) Balance at End of Period $ 18,580 $ 20,967 $ 18,580 $ 20,967
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 six months ended June 30, 2019 and 2018 . Table 9.9 – Gross Realized Gains and Losses on AFS Securities Three Months Ended June 30, Six Months Ended June 30, (In Thousands) 2019 2018 2019 2018 Gross realized gains - sales $ 2,827 $ 4,674 $ 9,487 $ 14,037 Gross realized gains - calls — 43 4,026 43 Gross realized losses - sales — (3 ) — (3 ) Total Realized Gains on Sales and Calls of AFS Securities, net $ 2,827 $ 4,714 $ 13,513 $ 14,077

Other Investments (Tables)

Other Investments (Tables)	6 Months Ended
	Jun. 30, 2019
Investments, All Other Investments [Abstract]
Summary of Other Investments	Other investments at June 30, 2019 and December 31, 2018 are summarized in the following table. Table 10.1 – Components of Other Investments (In Thousands) June 30, 2019 December 31, 2018 Servicer advance investments $ 259,222 $ 300,468 Mortgage servicing rights 47,396 60,281 Excess MSRs 33,620 27,312 Investment in multifamily loan fund 28,678 — Other notes receivable 3,214 — Participation in loan warehouse facility — 39,703 Investment in 5 Arches — 10,754 Total Other Investments $ 372,130 $ 438,518
Components of Servicer Advance Investments	Components of Servicer Advance Receivables (In Thousands) June 30, 2019 December 31, 2018 Principal and interest advances $ 91,707 $ 144,336 Escrow advances (taxes and insurance advances) 95,071 94,828 Corporate advances 49,854 47,614 Total Servicer Advance Receivables $ 236,632 $ 286,778
Income from Mortgage Servicing Rights, Net	Activity for MSRs Three Months Ended June 30, Six Months Ended June 30, (In Thousands) 2019 2018 2019 2018 Balance at beginning of period $ 55,284 $ 66,496 $ 60,281 $ 63,598 Additions 764 — 868 — Sales — (1,077 ) — (1,077 ) Changes in fair value due to: Changes in assumptions (1) (6,555 ) 943 (10,141 ) 5,289 Other changes (2) (2,097 ) (1,688 ) (3,612 ) (3,136 ) Balance at End of Period $ 47,396 $ 64,674 $ 47,396 $ 64,674 (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 six months ended June 30, 2019 and 2018 . Table 10.4 – Components of MSR Income, net Three Months Ended June 30, Six Months Ended June 30, (In Thousands) 2019 2018 2019 2018 Servicing income $ 3,850 $ 3,802 $ 7,460 $ 7,597 Cost of sub-servicer (268 ) (338 ) (771 ) (930 ) Net servicing fee income 3,582 3,464 6,689 6,667 Market valuation changes of MSRs (8,652 ) (745 ) (13,753 ) 2,147 Market valuation changes of associated derivatives 6,517 (1,122 ) 8,768 (6,261 ) MSR reversal of provision for repurchases 207 277 207 277 MSR Income, Net (1) $ 1,654 $ 1,874 $ 1,911 $ 2,830 (1) MSR income, net is included in Other income, net on our consolidated statements of income.

Derivative Financial Instrume_2

Derivative Financial Instruments (Tables)	6 Months Ended
	Jun. 30, 2019
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 June 30, 2019 and December 31, 2018 . Table 11.1 – Fair Value and Notional Amount of Derivative Financial Instruments June 30, 2019 December 31, 2018 Fair Value Notional Amount Fair Value Notional Amount (In Thousands) Assets - Risk Management Derivatives Interest rate swaps $ 18,576 $ 1,053,000 $ 28,211 $ 2,106,500 TBAs 1,784 950,000 4,665 520,000 Swaptions 682 200,000 — — Assets - Other Derivatives Loan purchase commitments 5,567 775,831 2,913 331,161 Total Assets $ 26,609 $ 2,978,831 $ 35,789 $ 2,957,661 Liabilities - Cash Flow Hedges Interest rate swaps $ (49,827 ) $ 139,500 $ (34,492 ) $ 139,500 Liabilities - Risk Management Derivatives Interest rate swaps (118,609 ) 3,084,300 (36,416 ) 1,742,000 TBAs (4,639 ) 1,150,000 (13,215 ) 935,000 Liabilities - Other Derivatives Loan purchase commitments (772 ) 245,111 (732 ) 137,224 Total Liabilities $ (173,847 ) $ 4,618,911 $ (84,855 ) $ 2,953,724 Total Derivative Financial Instruments, Net $ (147,238 ) $ 7,597,742 $ (49,066 ) $ 5,911,385
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 six months ended June 30, 2019 and 2018 . Table 11.2 – Impact on Interest Expense of Interest Rate Agreements Accounted for as Cash Flow Hedges Three Months Ended June 30, Six Months Ended June 30, (In Thousands) 2019 2018 2019 2018 Net interest expense on cash flows hedges $ (640 ) $ (804 ) $ (1,277 ) $ (1,802 ) Total Interest Expense $ (640 ) $ (804 ) $ (1,277 ) $ (1,802 )

Other Assets and Liabilities (T

Other Assets and Liabilities (Tables)	6 Months Ended
	Jun. 30, 2019
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]
Components of Other Assets	Other assets at June 30, 2019 and December 31, 2018 , are summarized in the following table. Table 12.1 – Components of Other Assets (In Thousands) June 30, 2019 December 31, 2018 Margin receivable $ 211,199 $ 100,773 FHLBC stock 43,393 43,393 Pledged collateral 42,913 42,433 Right-of-use asset 11,573 — REO 6,305 3,943 Fixed assets and leasehold improvements (1) 5,093 5,106 Investment receivable 1,697 6,959 Other 11,950 15,218 Total Other Assets $ 334,123 $ 217,825 (1) Fixed assets and leasehold improvements had a basis of $11 million and accumulated depreciation of $6 million at June 30, 2019 .
Components of Accrued Expenses and Other Liabilities	Accrued expenses and other liabilities at June 30, 2019 and December 31, 2018 are summarized in the following table. Table 12.2 – Components of Accrued Expenses and Other Liabilities (In Thousands) June 30, 2019 December 31, 2018 Contingent consideration $ 24,932 $ — Payable to minority partner 16,937 14,331 Guarantee obligations 15,744 16,711 Accrued compensation 13,671 19,769 Lease liability 13,082 — Deferred tax liabilities 11,986 9,022 Residential bridge loan holdbacks 6,016 — Residential loan and MSR repurchase reserve 3,769 4,189 Accrued operating expenses 3,149 3,122 Legal reserve 2,000 2,000 Accrued income taxes payable 764 423 Margin payable — 835 Other 5,378 8,317 Total Accrued Expenses and Other Liabilities $ 117,428 $ 78,719

Short-Term Debt (Tables)

Short-Term Debt (Tables)	6 Months Ended
	Jun. 30, 2019
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 June 30, 2019 and December 31, 2018 . Table 13.1 – Short-Term Debt June 30, 2019 (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 $ 638,055 $ 1,425,000 3.90 % 8/2019-3/2020 166 Real estate securities repo (1) 10 1,213,920 — 3.48 % 7/2019-8/2019 27 Single-family rental loan warehouse (2) 2 53,998 400,000 4.67 % 6/2020-6/2021 426 Residential bridge loan warehouse (2) 4 120,445 330,000 4.93 % 11/2019-5/2022 821 Business purpose loan working capital (2) 1 — 15,000 5.00 % 12/2020 N/A Total Short-Term Debt Facilities 21 2,026,418 Servicer advance financing 1 236,231 350,000 4.23 % 11/2019 152 Convertible notes, net N/A 200,236 — 5.63 % 11/2019 138 Total Short-Term Debt $ 2,462,885 December 31, 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 $ 860,650 $ 1,425,000 4.10 % 2/2019-12/2019 178 Real estate securities repo (1) 9 988,890 — 3.47 % 1/2019-3/2019 26 Single-family rental loan warehouse (2) 2 22,053 400,000 4.77 % 6/2020-6/2021 560 Residential bridge loan warehouse (2) 2 66,327 80,000 5.20 % 11/2019-4/2021 629 Total Short-Term Debt Facilities 17 1,937,920 Servicer advance financing 1 262,740 350,000 4.32 % 11/2019 333 Convertible notes, net N/A 199,619 5.63 % 11/2019 319 Total Short-Term Debt $ 2,400,279 (1) Borrowings under our facilities are generally charged interest based on a specified margin over the one-month LIBOR interest rate. At June 30, 2019 , 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 June 30, 2019 . 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 as well as our convertible notes at June 30, 2019 . Table 13.2 – Short-Term Debt by Collateral Type and Remaining Maturities June 30, 2019 (In Thousands) Within 30 days 31 to 90 days Over 90 days Total Collateral Type Held-for-sale residential loans $ — $ 189,798 $ 448,257 $ 638,055 Real estate securities 871,520 342,400 — 1,213,920 Single-family rental loans — — 53,998 53,998 Residential bridge loans — — 120,445 120,445 Total Secured Short-Term Debt 871,520 532,198 622,700 2,026,418 Servicer advance financing — — 236,231 236,231 Convertible notes, net — — 200,236 200,236 Total Short-Term Debt $ 871,520 $ 532,198 $ 1,059,167 $ 2,462,885

Asset-Backed Securities Issued

Asset-Backed Securities Issued (Tables)	6 Months Ended
	Jun. 30, 2019
Debt Disclosure [Abstract]
Asset-Backed Securities Issued	The carrying values of ABS issued by Sequoia securitization entities we sponsored at June 30, 2019 and December 31, 2018 , along with other selected information, are summarized in the following table. Table 14.1 – Asset-Backed Securities Issued June 30, 2019 Legacy Sequoia Sequoia Freddie Mac SLST Freddie Mac K-Series Total (Dollars in Thousands) Certificates with principal balance $ 468,193 $ 1,862,408 $ 951,074 $ 3,244,398 $ 6,526,073 Interest-only certificates 1,637 17,713 — 207,278 226,628 Market valuation adjustments (20,968 ) 49,323 40,692 91,381 160,428 ABS Issued, Net $ 448,862 $ 1,929,444 $ 991,766 $ 3,543,057 $ 6,913,129 Range of weighted average interest rates, by series 2.55% to 3.68% 4.42% to 5.08% 3.50 % 3.39% to 4.20% Stated maturities 2024 - 2036 2047 - 2049 2028 2025 - 2049 Number of series 20 7 1 4 December 31, 2018 Legacy Sequoia Sequoia Freddie Mac SLST Freddie Mac K-Series Total (Dollars in Thousands) Certificates with principal balance $ 540,456 $ 1,838,758 $ 993,659 $ 1,936,691 $ 5,309,564 Interest-only certificates 1,537 25,662 — 131,600 158,799 Market valuation adjustments (29,753 ) 20,590 89 (49,216 ) (58,290 ) ABS Issued, Net $ 512,240 $ 1,885,010 $ 993,748 $ 2,019,075 $ 5,410,073 Range of weighted average interest rates, by series 1.36% to 3.60% 4.46% to 4.97% 3.51 % 3.39% to 4.08% Stated maturities 2024 - 2036 2047 - 2048 2028 2025 - 2049 Number of series 20 6 1 3
Accrued Interest Payable on Asset-Backed Securities Issued	Accrued Interest Payable on Asset-Backed Securities Issued (In Thousands) June 30, 2019 December 31, 2018 Legacy Sequoia $ 519 $ 571 Sequoia Choice 7,322 7,180 Freddie Mac SLST 2,774 2,907 Freddie Mac K-Series 10,822 6,239 Total Accrued Interest Payable on ABS Issued $ 21,437 $ 16,897
Collateral for ABS Issued	The following table summarizes the carrying value components of the collateral for ABS issued and outstanding at June 30, 2019 and December 31, 2018 . Table 14.3 – Collateral for Asset-Backed Securities Issued June 30, 2019 Legacy Sequoia Sequoia Choice Freddie Mac SLST Freddie Mac K-Series Total (In Thousands) Residential loans $ 457,750 $ 2,147,356 $ 1,235,089 $ — $ 3,840,195 Multifamily loans — — — 3,749,657 3,749,657 Restricted cash 144 14 — — 158 Accrued interest receivable 771 8,946 3,786 11,317 24,820 REO 1,448 — — — 1,448 Total Collateral for ABS Issued $ 460,113 $ 2,156,316 $ 1,238,875 $ 3,760,974 $ 7,616,278 December 31, 2018 Legacy Sequoia Sequoia Freddie Mac SLST Freddie Mac K-Series Total (In Thousands) Residential loans $ 519,958 $ 2,079,382 $ 1,222,669 $ — $ 3,822,009 Multifamily loans — — — 2,144,598 2,144,598 Restricted cash 146 1,022 — — 1,168 Accrued interest receivable 822 8,988 3,926 6,595 20,331 REO 3,943 — — — 3,943 Total Collateral for ABS Issued $ 524,869 $ 2,089,392 $ 1,226,595 $ 2,151,193 $ 5,992,049

Long-Term Debt (Tables)

Long-Term Debt (Tables)	6 Months Ended
	Jun. 30, 2019
Debt Disclosure [Abstract]
Maturities of FHLBC Borrowings by Year	The following table presents maturities of our FHLBC borrowings by year at June 30, 2019 . Table 15.1 – Maturities of FHLBC Borrowings by Year (In Thousands) June 30, 2019 2024 $ 470,171 2025 887,639 2026 642,189 Total FHLBC Borrowings $ 1,999,999

Commitments and Contingencies (

Commitments and Contingencies (Tables)	6 Months Ended
	Jun. 30, 2019
Commitments and Contingencies Disclosure [Abstract]
Future Lease Commitments by Year	The following table presents our future lease commitments and a reconciliation to our lease liability at June 30, 2019 . Table 16.1 – Future Lease Commitments by Year (In Thousands) June 30, 2019 2019 (6 months) $ 1,376 2020 2,721 2021 1,864 2022 1,468 2023 and thereafter 8,749 Total Lease Commitments 16,178 Less: Imputed interest (3,096 ) Lease Liability $ 13,082

Equity (Tables)

Equity (Tables)	6 Months Ended
	Jun. 30, 2019
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 six months ended June 30, 2019 and 2018 . Table 17.1 – Changes in Accumulated Other Comprehensive Income by Component Three Months Ended June 30, 2019 Three Months Ended June 30, 2018 (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 $ 92,567 $ (39,883 ) $ 114,577 $ (34,522 ) Other comprehensive income (loss) before reclassifications (1) 8,562 (9,501 ) (3,104 ) 3,417 Amounts reclassified from other accumulated comprehensive income (2,822 ) — (4,748 ) — Net current-period other comprehensive income (loss) 5,740 (9,501 ) (7,852 ) 3,417 Balance at End of Period $ 98,307 $ (49,384 ) $ 106,725 $ (31,105 ) Six Months Ended June 30, 2019 Six Months Ended June 30, 2018 (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 $ 95,342 $ (34,045 ) $ 128,201 $ (42,953 ) Other comprehensive income (loss) (1) 15,280 (15,339 ) (7,341 ) 11,848 Amounts reclassified from other (12,315 ) — (14,135 ) — Net current-period other comprehensive income (loss) 2,965 (15,339 ) (21,476 ) 11,848 Balance at End of Period $ 98,307 $ (49,384 ) $ 106,725 $ (31,105 ) (1) Amounts presented for net unrealized gains on available-for-sale securities are net of tax benefit (provision) of $0.2 million and $0.1 million for the three and six months ended June 30, 2018 , respectively.
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 six months ended June 30, 2019 and 2018 . Table 17.2 – Reclassifications Out of Accumulated Other Comprehensive Income Amount Reclassified From Accumulated Other Comprehensive Income Affected Line Item in the Three Months Ended June 30, (In Thousands) Income Statement 2019 2018 Net Realized (Gain) Loss on AFS Securities Other than temporary impairment (1) Investment fair value changes, net $ — $ 56 Gain on sale of AFS securities Realized gains, net (2,822 ) (4,804 ) $ (2,822 ) $ (4,748 ) Amount Reclassified From Accumulated Other Comprehensive Income Affected Line Item in the Six Months Ended June 30, (In Thousands) Income Statement 2019 2018 Net Realized (Gain) Loss on AFS Securities Other than temporary impairment (1) Investment fair value changes, net $ — $ 56 Gain on sale of AFS securities Realized gains, net (12,315 ) (14,191 ) $ (12,315 ) $ (14,135 ) (1) For both the three and six months ended June 30, 2019 , there were no other-than-temporary impairments. For both the three and six months ended June 30, 2018 , other-than-temporary impairments were $0.3 million , of which $0.1 million were recognized through our consolidated statements of income and $0.2 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 six months ended June 30, 2019 and 2018 . Table 17.3 – Basic and Diluted Earnings per Common Share Three Months Ended June 30, Six Months Ended June 30, (In Thousands, except Share Data) 2019 2018 2019 2018 Basic Earnings per Common Share: Net income attributable to Redwood $ 31,266 $ 32,747 $ 85,730 $ 79,592 Less: Dividends and undistributed earnings allocated to participating securities (877 ) (1,074 ) (2,417 ) (2,535 ) Net income allocated to common shareholders $ 30,389 $ 31,673 $ 83,313 $ 77,057 Basic weighted average common shares outstanding 96,983,764 75,380,715 94,846,431 75,388,638 Basic Earnings per Common Share $ 0.31 $ 0.42 $ 0.88 $ 1.02 Diluted Earnings per Common Share: Net income attributable to Redwood $ 31,266 $ 32,747 $ 85,730 $ 79,592 Less: Dividends and undistributed earnings allocated to participating securities (1,053 ) (1,156 ) (2,595 ) (2,584 ) Add back: Interest expense on convertible notes for the period, net of tax 8,698 6,335 17,385 14,976 Net income allocated to common shareholders $ 38,911 $ 37,926 $ 100,520 $ 91,984 Weighted average common shares outstanding 96,983,764 75,380,715 94,846,431 75,388,638 Net effect of dilutive equity awards 270,550 277,788 210,360 156,307 Net effect of assumed convertible notes conversion to common shares 33,442,640 24,773,490 33,442,640 28,746,235 Diluted weighted average common shares outstanding 130,696,954 100,431,993 128,499,431 104,291,180 Diluted Earnings per Common Share $ 0.30 $ 0.38 $ 0.78 $ 0.88

Equity Compensation Plans (Tabl

Equity Compensation Plans (Tables)	6 Months Ended
	Jun. 30, 2019
Share-based Payment Arrangement [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 $27 million at June 30, 2019 , as shown in the following table. Table 18.1 – Activities of Equity Compensation Costs by Award Type Six Months Ended June 30, 2019 (In Thousands) Restricted Stock Awards Restricted Stock Units Deferred Stock Units Performance Stock Units Employee Stock Purchase Plan Total Unrecognized compensation cost at beginning of period $ 3,498 $ 74 $ 14,489 $ 7,061 $ — $ 25,122 Equity grants — 3,483 4,831 — 160 8,474 Equity grant forfeitures — — — — — — Equity compensation expense (766 ) (277 ) (4,184 ) (1,670 ) (80 ) (6,977 ) Unrecognized Compensation Cost at End of Period $ 2,732 $ 3,280 $ 15,136 $ 5,391 $ 80 $ 26,619

Mortgage Banking Activities, _2

Mortgage Banking Activities, Net (Tables)	6 Months Ended
	Jun. 30, 2019
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 six months ended June 30, 2019 and 2018 . Table 19.1 – Mortgage Banking Activities Three Months Ended June 30, Six Months Ended June 30, (In Thousands) 2019 2018 2019 2018 Residential Mortgage Banking Activities, Net Changes in fair value of: Residential loans, at fair value (1) $ 20,267 $ 3,364 $ 35,111 $ 1,170 Risk management derivatives (2) (5,760 ) 6,150 (9,898 ) 34,582 Other income, net (3) 852 1,082 973 1,420 Total residential mortgage banking activities, net 15,359 10,596 26,186 37,172 Business Purpose Mortgage Banking Activities, Net: Changes in fair value of: Single-family rental loans, at fair value (1) 1,882 — 3,626 — Risk management derivatives (2) (1,671 ) — (2,517 ) — Residential bridge loans, at fair value 1,012 — 1,098 — Other income, net (4) 2,578 — 3,076 — Total business purpose mortgage banking activities, net 3,801 — 5,283 — Mortgage Banking Activities, Net $ 19,160 $ 10,596 $ 31,469 $ 37,172 (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 loans. (3) Amounts in this line item include other fee income from loan acquisitions and the provision for repurchases expense, presented net. (4) Amounts in this line item include other fee income from loan originations.

Investment Fair Value Changes_2

Investment Fair Value Changes, Net (Tables)	6 Months Ended
	Jun. 30, 2019
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 six months ended June 30, 2019 and 2018 . Table 20.1 – Investment Fair Value Changes Three Months Ended June 30, Six Months Ended June 30, (In Thousands) 2019 2018 2019 2018 Investment Fair Value Changes, Net Changes in fair value of: Residential loans held-for-investment, at Redwood $ 35,548 $ (15,010 ) $ 63,656 $ (53,995 ) Residential bridge loans held-for-investment (318 ) — (621 ) — Trading securities 18,442 (930 ) 40,302 (3,885 ) Servicer advance investments 432 — 1,440 — Excess MSRs (65 ) — (502 ) — REO (139 ) — (139 ) — Net investments in Legacy Sequoia entities (1) (123 ) (720 ) (497 ) (728 ) Net investments in Sequoia Choice entities (1) 2,879 1,072 6,144 986 Net investment in Freddie Mac SLST entity (1) 8,037 — 14,402 — Net investments in Freddie Mac K-Series entities (1) 3,246 — 6,365 — Risk-sharing investments (61 ) (209 ) (138 ) (348 ) Risk management derivatives, net (64,740 ) 16,742 (107,115 ) 60,524 Impairments on AFS securities — (56 ) — (56 ) Investment Fair Value Changes, Net $ 3,138 $ 889 $ 23,297 $ 2,498 (1) Includes changes in fair value of the loans held-for-investment, REO and the ABS issued at the entities, which netted together represent the change in value of our investments at the consolidated VIEs.

Other Income, Net (Tables)

Other Income, Net (Tables)	6 Months Ended
	Jun. 30, 2019
Other Income and Expenses [Abstract]
Schedule of other income	Other Income Three Months Ended June 30, Six Months Ended June 30, (In Thousands) 2019 2018 2019 2018 MSR income, net $ 1,654 $ 1,874 $ 1,911 $ 2,830 Risk share income 800 1,020 1,446 1,799 FHLBC capital stock dividend 535 428 1,082 811 Equity investment losses (96 ) — (5 ) — 5 Arches management fee income 1,488 — 1,954 — Amortization of intangible assets (1,900 ) — (2,532 ) — Gain on re-measurement of investment in 5 Arches — — 2,441 — Other (74 ) — (303 ) — Other Income, Net $ 2,407 $ 3,322 $ 5,994 $ 5,440

Operating Expenses (Tables)

Operating Expenses (Tables)	6 Months Ended
	Jun. 30, 2019
Other Income and Expenses [Abstract]
Components of Operating Expenses	Components of our operating expenses for the three and six months ended June 30, 2019 and 2018 are presented in the following table. Table 22.1 – Components of Operating Expenses Three Months Ended June 30, Six Months Ended June 30, (In Thousands) 2019 2018 2019 2018 Fixed compensation expense $ 9,252 $ 5,775 $ 17,457 $ 12,214 Variable compensation expense 4,021 1,825 8,423 8,732 Equity compensation expense 4,024 3,835 6,977 6,532 Total compensation expense 17,297 11,435 32,857 27,478 Systems and consulting 2,536 1,774 4,364 3,640 Loan acquisition costs (1) 1,516 2,155 2,993 3,973 Office costs 1,585 1,084 2,889 2,224 Accounting and legal 960 1,074 2,085 1,908 Corporate costs 545 496 1,219 1,000 Other operating expenses 1,816 991 3,007 1,816 Total Operating Expenses $ 26,255 $ 19,009 $ 49,414 $ 42,039 (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)	6 Months Ended
	Jun. 30, 2019
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 June 30, 2019 and 2018 . Table 23.1 – Reconciliation of Statutory Tax Rate to Effective Tax Rate June 30, 2019 June 30, 2018 Federal statutory rate 21.0 % 21.0 % State statutory rate, net of Federal tax effect 8.6 % 8.6 % Differences in taxable (loss) income from GAAP income (4.7 )% (2.9 )% Change in valuation allowance (3.6 )% (3.3 )% Dividends paid deduction (17.7 )% (14.9 )% Effective Tax Rate 3.6 % 8.5 %

Segment Information (Tables)

Segment Information (Tables)	6 Months Ended
	Jun. 30, 2019
Segment Reporting [Abstract]
Business Segment Financial Information	The following tables present financial information by segment for the three and six months ended June 30, 2019 and 2018 . Table 24.1 – Business Segment Financial Information Three Months Ended June 30, 2019 (In Thousands) Investment Portfolio Mortgage Banking Corporate/ Other Total Interest income $ 132,048 $ 11,352 $ 5,142 $ 148,542 Interest expense (93,912 ) (6,595 ) (15,713 ) (116,220 ) Net interest income (loss) 38,136 4,757 (10,571 ) 32,322 Non-interest income Mortgage banking activities, net — 19,160 — 19,160 Investment fair value changes, net 3,297 — (159 ) 3,138 Other income (expense), net 2,874 (156 ) (311 ) 2,407 Realized gains, net 2,827 — — 2,827 Total non-interest income, net 8,998 19,004 (470 ) 27,532 Direct operating expenses (2,258 ) (11,571 ) (12,426 ) (26,255 ) Provision for income taxes (896 ) (1,437 ) — (2,333 ) Segment Contribution $ 43,980 $ 10,753 $ (23,467 ) Net Income $ 31,266 Non-cash amortization income (expense), net $ 2,622 $ (2,014 ) $ (1,125 ) $ (517 ) Three Months Ended June 30, 2018 (In Thousands) Investment Portfolio Mortgage Banking Corporate/ Total Interest income $ 64,569 $ 13,084 $ 5,323 $ 82,976 Interest expense (27,004 ) (7,629 ) (13,580 ) (48,213 ) Net interest income (loss) 37,565 5,455 (8,257 ) 34,763 Non-interest income Mortgage banking activities, net — 10,596 — 10,596 Investment fair value changes, net 1,600 — (711 ) 889 Other income, net 3,322 — — 3,322 Realized gains, net 4,714 — — 4,714 Total non-interest income, net 9,636 10,596 (711 ) 19,521 Direct operating expenses (1,858 ) (5,739 ) (11,412 ) (19,009 ) Provision for income taxes (1,130 ) (1,398 ) — (2,528 ) Segment Contribution $ 44,213 $ 8,914 $ (20,380 ) Net Income $ 32,747 Non-cash amortization income (expense), net $ 4,654 $ (22 ) $ (891 ) $ 3,741 Six Months Ended June 30, 2019 (In Thousands) Investment Portfolio Mortgage Banking Corporate/ Total Interest income $ 247,500 $ 21,729 $ 10,354 $ 279,583 Interest expense (171,799 ) (12,159 ) (31,538 ) (215,496 ) Net interest income (loss) 75,701 9,570 (21,184 ) 64,087 Non-interest income Mortgage banking activities, net — 31,469 — 31,469 Investment fair value changes, net 23,853 — (556 ) 23,297 Other income, net 4,095 (323 ) 2,222 5,994 Realized gains, net 13,513 — — 13,513 Total non-interest income, net 41,461 31,146 1,666 74,273 Direct operating expenses (4,919 ) (19,675 ) (24,820 ) (49,414 ) Provision for income taxes (1,238 ) (1,978 ) — (3,216 ) Segment Contribution $ 111,005 $ 19,063 $ (44,338 ) Net Income $ 85,730 Non-cash amortization income (expense), net $ 4,990 $ (2,737 ) $ (2,425 ) $ (172 ) Six Months Ended June 30, 2018 (In Thousands) Investment Portfolio Mortgage Banking Corporate/ Total Interest income $ 123,326 $ 25,981 $ 10,288 $ 159,595 Interest expense (46,867 ) (13,766 ) (29,094 ) (89,727 ) Net interest income (loss) 76,459 12,215 (18,806 ) 69,868 Non-interest income Mortgage banking activities, net — 37,172 — 37,172 Investment fair value changes, net 3,190 — (692 ) 2,498 Other income, net 5,440 — — 5,440 Realized gains, net 14,077 — — 14,077 Total non-interest income, net 22,707 37,172 (692 ) 59,187 Direct operating expenses (3,865 ) (14,371 ) (23,803 ) (42,039 ) Provision for income taxes (2,018 ) (5,406 ) — (7,424 ) Segment Contribution $ 93,283 $ 29,610 $ (43,301 ) Net Income $ 79,592 Non-cash amortization income (expense), net $ 9,271 $ (44 ) $ (1,845 ) $ 7,382
Components of Corporate and Other	The following table presents the components of Corporate/Other for the three and six months ended June 30, 2019 and 2018 . Table 24.2 – Components of Corporate/Other Three Months Ended June 30, 2019 2018 (In Thousands) Legacy Consolidated VIEs (1) Other Total Legacy Consolidated VIEs (1) Other Total Interest income $ 4,776 $ 366 $ 5,142 $ 5,017 $ 306 $ 5,323 Interest expense (3,981 ) (11,732 ) (15,713 ) (4,215 ) (9,365 ) (13,580 ) Net interest income (loss) 795 (11,366 ) (10,571 ) 802 (9,059 ) (8,257 ) Non-interest income Investment fair value changes, net (123 ) (36 ) (159 ) (720 ) 9 (711 ) Other income — (311 ) (311 ) — — — Total non-interest income, net (123 ) (347 ) (470 ) (720 ) 9 (711 ) Direct operating expenses — (12,426 ) (12,426 ) — (11,412 ) (11,412 ) Total $ 672 $ (24,139 ) $ (23,467 ) $ 82 $ (20,462 ) $ (20,380 ) Six Months Ended June 30, 2019 2018 (In Thousands) Legacy Consolidated VIEs (1) Other Total Legacy Consolidated VIEs (1) Other Total Interest income $ 9,629 $ 725 $ 10,354 $ 9,829 $ 459 $ 10,288 Interest expense (8,096 ) (23,442 ) (31,538 ) (8,067 ) (21,027 ) (29,094 ) Net interest income (loss) 1,533 (22,717 ) (21,184 ) 1,762 (20,568 ) (18,806 ) Non-interest income Investment fair value changes, net (497 ) (59 ) (556 ) (728 ) 36 (692 ) Other income — 2,222 2,222 — — — Total non-interest income, net (497 ) 2,163 1,666 (728 ) 36 (692 ) Direct operating expenses — (24,820 ) (24,820 ) — (23,803 ) (23,803 ) Total $ 1,036 $ (45,374 ) $ (44,338 ) $ 1,034 $ (44,335 ) $ (43,301 ) (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 June 30, 2019 and December 31, 2018 . Table 24.3 – Supplemental Segment Information (In Thousands) Investment Portfolio Mortgage Banking Corporate/ Other Total June 30, 2019 Residential loans $ 5,777,759 $ 1,047,856 $ 457,750 $ 7,283,365 Business purpose residential loans 159,353 91,501 — 250,854 Multifamily loans 3,749,657 — — 3,749,657 Real estate securities 1,477,486 — — 1,477,486 Other investments 369,900 2,230 — 372,130 Goodwill and intangible assets — 50,999 — 50,999 Total assets 11,790,419 1,225,117 836,050 13,851,586 December 31, 2018 Residential loans $ 5,685,983 $ 1,048,801 $ 519,958 $ 7,254,742 Business purpose residential loans 112,798 28,460 — 141,258 Multifamily loans 2,144,598 — — 2,144,598 Real estate securities 1,452,494 — — 1,452,494 Other investments 427,764 — 10,754 438,518 Total assets 10,093,993 1,103,090 740,323 11,937,406

Organization (Details)

Organization (Details)	6 Months Ended
	Jun. 30, 2019segment
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Number of operating segments	2

Basis of Presentation (Details)

Basis of Presentation (Details) - partnership	Jun. 30, 2019	Dec. 31, 2018	Dec. 31, 2018
Variable Interest Entity [Line Items]
Number of partnerships consolidated		2	2
Variable Interest Entity, Primary Beneficiary
Variable Interest Entity [Line Items]
VIE, ownership interest rate	80.00%

Basis of Presentation - Assets

Basis of Presentation - Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands	Mar. 01, 2019	Jun. 30, 2019	Dec. 31, 2018
Purchase price:
Contingent consideration		$ 24,932	$ 0
5 Arches, LLC
Purchase price:
Cash	$ 12,575
Contingent consideration	24,621
Purchase option, at fair value	5,082
Equity method investment, at fair value	8,052
Total consideration	50,330
Allocated to:
Tangible net assets acquired	1,004
Goodwill	28,728	$ 28,728	$ 0
Intangibles	24,800
Deferred tax liability	(4,202)
Net assets acquired	50,330
Assets	19,000
Liabilities	$ 18,000

Basis of Presentation - Acquisi

Basis of Presentation - Acquisition of 5 Arches (Details) - USD ($) $ in Thousands	Mar. 01, 2019	May 31, 2018	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018	Dec. 31, 2018
Business Acquisition [Line Items]
Remeasurement gain			$ 0	$ 0	$ 2,441	$ 0
Contingent consideration			24,932		24,932		$ 0
Mortgage banking activities, net			19,160	$ 10,596	31,469	$ 37,172
5 Arches, LLC
Business Acquisition [Line Items]
Percent acquired	80.00%
Minority interest, percentage		20.00%
Payment of cash to acquire business	$ 13,000
Contingent consideration maximum amount	27,000
Contingent consideration performance term		2 years
Remeasurement gain					2,000
Intangibles	24,800
Goodwill	28,728		$ 28,728		28,728		$ 0
Goodwill deductible for tax purposes	3,000
Contingent consideration	$ 24,621
Revenue					6,000
Net loss					2,000
Intangible assets amortization expense					$ 3,000
5 Arches, LLC
Business Acquisition [Line Items]
Payments to acquire equity method investment		$ 10,000
Option to purchase additional equity, term		1 year

Basis of Presentation - Intangi

Basis of Presentation - Intangible Assets – Activity (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Finite-lived Intangible Assets [Roll Forward]
Amortization Expense	$ 1,900	$ 0	$ 2,532	$ 0
5 Arches, LLC
Finite-lived Intangible Assets [Roll Forward]
Carrying Value at December 31, 2018			0
Additions			24,800
Amortization Expense			(2,529)
Carrying Value at June 30, 2019	22,271		$ 22,271
Weighted Average Amortization Period (in years)			4 years
5 Arches, LLC | Broker network
Finite-lived Intangible Assets [Roll Forward]
Carrying Value at December 31, 2018			$ 0
Additions			18,100
Amortization Expense			(1,207)
Carrying Value at June 30, 2019	16,893		$ 16,893
Weighted Average Amortization Period (in years)			5 years
5 Arches, LLC | Non-compete agreements
Finite-lived Intangible Assets [Roll Forward]
Carrying Value at December 31, 2018			$ 0
Additions			2,900
Amortization Expense			(322)
Carrying Value at June 30, 2019	2,578		$ 2,578
Weighted Average Amortization Period (in years)			3 years
5 Arches, LLC | Management fee on existing assets under management
Finite-lived Intangible Assets [Roll Forward]
Carrying Value at December 31, 2018			$ 0
Additions			2,600
Amortization Expense			(867)
Carrying Value at June 30, 2019	1,733		$ 1,733
Weighted Average Amortization Period (in years)			1 year
5 Arches, LLC | Tradename
Finite-lived Intangible Assets [Roll Forward]
Carrying Value at December 31, 2018			$ 0
Additions			1,200
Amortization Expense			(133)
Carrying Value at June 30, 2019	$ 1,067		$ 1,067
Weighted Average Amortization Period (in years)			3 years

Basis of Presentation - Intan_2

Basis of Presentation - Intangible Asset Amortization Expense by Year (Details) - 5 Arches, LLC - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Finite-Lived Intangible Assets [Line Items]
2019 (6 months)	$ 3,794
2020	5,420
2021	4,987
2022	3,848
2023 and thereafter	4,222
Total Future Intangible Asset Amortization	$ 22,271	$ 0

Basis of Presentation - Goodwil

Basis of Presentation - Goodwill – Activity (Details) - 5 Arches, LLC $ in Thousands	6 Months Ended
	Jun. 30, 2019USD ($)
Goodwill [Roll Forward]
Beginning balance	$ 0
Goodwill recognized from 5 Arches acquisition	28,728
Impairment	0
Ending Balance	$ 28,728

Basis of Presentation - Pro For

Basis of Presentation - Pro Forma Information (Details) - 5 Arches, LLC - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Business Acquisition [Line Items]
Net interest income	$ 32,322	$ 35,099	$ 64,588	$ 70,430
Non-interest income	27,532	21,321	71,282	62,404
Net income	$ 31,266	$ 32,310	$ 81,499	$ 78,436

Principles of Consolidation - A

Principles of Consolidation - Additional Information (Details) $ in Thousands	Jun. 30, 2019USD ($)	Dec. 31, 2018USD ($)partnership	Dec. 31, 2018USD ($)partnership	Jun. 30, 2019USD ($)entity
Variable Interest Entity [Line Items]
Number of partnerships consolidated | partnership		2	2
MSRs	$ 236,632	$ 286,778	$ 286,778	$ 236,632
Variable Interest Entity, Primary Beneficiary
Variable Interest Entity [Line Items]
VIE, ownership interest rate	80.00%
Variable Interest Entity, Not Primary Beneficiary
Variable Interest Entity [Line Items]
Number of securitization entities to which asset transferred (in entities) | entity				44
Gain (loss) on securitization of financial assets				$ 4,000
Loan acquisition, aggregate amount acquired				39,000
Legacy Sequoia | Variable Interest Entity, Primary Beneficiary
Variable Interest Entity [Line Items]
Estimated fair value of investments	$ 11,000			11,000
Sequoia Choice | Variable Interest Entity, Primary Beneficiary
Variable Interest Entity [Line Items]
Estimated fair value of investments	220,000			220,000
Freddie Mac SLST | Variable Interest Entity, Primary Beneficiary
Variable Interest Entity [Line Items]
Estimated fair value of investments	244,000			244,000
Freddie Mac K-Series | Variable Interest Entity, Primary Beneficiary
Variable Interest Entity [Line Items]
Estimated fair value of investments	207,000			207,000
Servicing Investment | Variable Interest Entity, Primary Beneficiary
Variable Interest Entity [Line Items]
MSRs	$ 67,000			$ 67,000

Principles of Consolidation -_2

Principles of Consolidation - Assets and Liabilities of Consolidated Variable Interest Entity's (Details) $ in Thousands	Jun. 30, 2019USD ($)investment	Dec. 31, 2018USD ($)investment
Variable Interest Entity [Line Items]
Assets	$ 7,937,685	$ 6,331,191
Liabilities	$ 7,189,086	$ 5,709,807
Number of VIEs | investment	35	33
Residential loans, held-for-investment
Variable Interest Entity [Line Items]
Assets	$ 3,840,195	$ 3,822,009
Multifamily loans, held-for-investment
Variable Interest Entity [Line Items]
Assets	3,749,657	2,144,598
Other investments
Variable Interest Entity [Line Items]
Assets	274,617	312,688
Cash and cash equivalents
Variable Interest Entity [Line Items]
Assets	19,393
Restricted cash
Variable Interest Entity [Line Items]
Assets	23,808	26,531
Accrued interest receivable
Variable Interest Entity [Line Items]
Assets	28,567	21,422
REO
Variable Interest Entity [Line Items]
Assets	1,448	3,943
Short-term debt
Variable Interest Entity [Line Items]
Liabilities	236,231	262,740
Accrued interest payable
Variable Interest Entity [Line Items]
Liabilities	21,758	17,380
Accrued expenses and other liabilities
Variable Interest Entity [Line Items]
Liabilities	17,968	19,614
Asset-backed securities issued
Variable Interest Entity [Line Items]
Liabilities	6,913,129	5,410,073
Legacy Sequoia
Variable Interest Entity [Line Items]
Assets	460,113	524,869
Liabilities	$ 449,381	$ 512,811
Number of VIEs | investment	20	20
Legacy Sequoia | Residential loans, held-for-investment
Variable Interest Entity [Line Items]
Assets	$ 457,750	$ 519,958
Legacy Sequoia | Multifamily loans, held-for-investment
Variable Interest Entity [Line Items]
Assets	0	0
Legacy Sequoia | Other investments
Variable Interest Entity [Line Items]
Assets	0	0
Legacy Sequoia | Cash and cash equivalents
Variable Interest Entity [Line Items]
Assets	0
Legacy Sequoia | Restricted cash
Variable Interest Entity [Line Items]
Assets	144	146
Legacy Sequoia | Accrued interest receivable
Variable Interest Entity [Line Items]
Assets	771	822
Legacy Sequoia | REO
Variable Interest Entity [Line Items]
Assets	1,448	3,943
Legacy Sequoia | Short-term debt
Variable Interest Entity [Line Items]
Liabilities	0	0
Legacy Sequoia | Accrued interest payable
Variable Interest Entity [Line Items]
Liabilities	519	571
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	448,862	512,240
Sequoia Choice
Variable Interest Entity [Line Items]
Assets	2,156,316	2,089,392
Liabilities	$ 1,936,780	$ 1,893,212
Number of VIEs | investment	7	6
Sequoia Choice | Residential loans, held-for-investment
Variable Interest Entity [Line Items]
Assets	$ 2,147,356	$ 2,079,382
Sequoia Choice | Multifamily loans, held-for-investment
Variable Interest Entity [Line Items]
Assets	0	0
Sequoia Choice | Other investments
Variable Interest Entity [Line Items]
Assets	0	0
Sequoia Choice | Cash and cash equivalents
Variable Interest Entity [Line Items]
Assets	0
Sequoia Choice | Restricted cash
Variable Interest Entity [Line Items]
Assets	14	1,022
Sequoia Choice | Accrued interest receivable
Variable Interest Entity [Line Items]
Assets	8,946	8,988
Sequoia Choice | REO
Variable Interest Entity [Line Items]
Assets	0	0
Sequoia Choice | Short-term debt
Variable Interest Entity [Line Items]
Liabilities	0	0
Sequoia Choice | Accrued interest payable
Variable Interest Entity [Line Items]
Liabilities	7,322	7,180
Sequoia Choice | Accrued expenses and other liabilities
Variable Interest Entity [Line Items]
Liabilities	14	1,022
Sequoia Choice | Asset-backed securities issued
Variable Interest Entity [Line Items]
Liabilities	1,929,444	1,885,010
Freddie Mac SLST
Variable Interest Entity [Line Items]
Assets	1,238,875	1,226,595
Liabilities	$ 994,540	$ 996,655
Number of VIEs | investment	1	1
Freddie Mac SLST | Residential loans, held-for-investment
Variable Interest Entity [Line Items]
Assets	$ 1,235,089	$ 1,222,669
Freddie Mac SLST | Multifamily loans, held-for-investment
Variable Interest Entity [Line Items]
Assets	0	0
Freddie Mac SLST | Other investments
Variable Interest Entity [Line Items]
Assets	0	0
Freddie Mac SLST | Cash and cash equivalents
Variable Interest Entity [Line Items]
Assets	0
Freddie Mac SLST | Restricted cash
Variable Interest Entity [Line Items]
Assets	0	0
Freddie Mac SLST | Accrued interest receivable
Variable Interest Entity [Line Items]
Assets	3,786	3,926
Freddie Mac SLST | REO
Variable Interest Entity [Line Items]
Assets	0	0
Freddie Mac SLST | Short-term debt
Variable Interest Entity [Line Items]
Liabilities	0	0
Freddie Mac SLST | Accrued interest payable
Variable Interest Entity [Line Items]
Liabilities	2,774	2,907
Freddie Mac SLST | Accrued expenses and other liabilities
Variable Interest Entity [Line Items]
Liabilities	0	0
Freddie Mac SLST | Asset-backed securities issued
Variable Interest Entity [Line Items]
Liabilities	991,766	993,748
Freddie Mac K-Series
Variable Interest Entity [Line Items]
Assets	3,760,974	2,151,193
Liabilities	$ 3,553,879	$ 2,025,314
Number of VIEs | investment	4	3
Freddie Mac K-Series | Residential loans, held-for-investment
Variable Interest Entity [Line Items]
Assets	$ 0	$ 0
Freddie Mac K-Series | Multifamily loans, held-for-investment
Variable Interest Entity [Line Items]
Assets	3,749,657	2,144,598
Freddie Mac K-Series | Other investments
Variable Interest Entity [Line Items]
Assets	0	0
Freddie Mac K-Series | Cash and cash equivalents
Variable Interest Entity [Line Items]
Assets	0
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	11,317	6,595
Freddie Mac K-Series | REO
Variable Interest Entity [Line Items]
Assets	0	0
Freddie Mac K-Series | Short-term debt
Variable Interest Entity [Line Items]
Liabilities	0	0
Freddie Mac K-Series | Accrued interest payable
Variable Interest Entity [Line Items]
Liabilities	10,822	6,239
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	3,543,057	2,019,075
Servicing Investment
Variable Interest Entity [Line Items]
Assets	321,407	339,142
Liabilities	$ 254,506	$ 281,815
Number of VIEs | investment	3	3
Servicing Investment | Residential loans, held-for-investment
Variable Interest Entity [Line Items]
Assets	$ 0	$ 0
Servicing Investment | Multifamily loans, held-for-investment
Variable Interest Entity [Line Items]
Assets	0	0
Servicing Investment | Other investments
Variable Interest Entity [Line Items]
Assets	274,617	312,688
Servicing Investment | Cash and cash equivalents
Variable Interest Entity [Line Items]
Assets	19,393
Servicing Investment | Restricted cash
Variable Interest Entity [Line Items]
Assets	23,650	25,363
Servicing Investment | Accrued interest receivable
Variable Interest Entity [Line Items]
Assets	3,747	1,091
Servicing Investment | REO
Variable Interest Entity [Line Items]
Assets	0	0
Servicing Investment | Short-term debt
Variable Interest Entity [Line Items]
Liabilities	236,231	262,740
Servicing Investment | Accrued interest payable
Variable Interest Entity [Line Items]
Liabilities	321	483
Servicing Investment | Accrued expenses and other liabilities
Variable Interest Entity [Line Items]
Liabilities	17,954	18,592
Servicing Investment | Asset-backed securities issued
Variable Interest Entity [Line Items]
Liabilities	$ 0	$ 0

Summary of Significant Accoun_4

Summary of Significant Accounting Policies - Narrative (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Present value of remaining lease payments	$ 16,178
Lease liability	13,082	$ 0
Right-of-use asset	11,573	$ 0
ASU 2016-02
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Lease liability	13,000
Right-of-use asset	$ 12,000

Principles of Consolidation - S

Principles of Consolidation - Securitization Activity Related to Unconsolidated Variable Interest Entity's Sponsored by Redwood (Details) - Variable Interest Entity, Not Primary Beneficiary - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Variable Interest Entity [Line Items]
Principal balance of loans transferred	$ 400,836	$ 1,127,665	$ 749,093	$ 2,408,133
Trading securities retained, at fair value
Variable Interest Entity [Line Items]
Securities retained, at fair value	1,792	33,757	3,508	46,248
AFS securities retained, at fair value
Variable Interest Entity [Line Items]
Securities retained, at fair value	$ 1,069	$ 2,047	$ 1,954	$ 5,952

Summary of Significant Accoun_5

Summary of Significant Accounting Policies - Offsetting of Financial Assets, Liabilities, and Collateral (Details) - USD ($) $ in Thousands		Jun. 30, 2019	Dec. 31, 2018
Assets
Net Amounts of Assets (Liabilities) Presented in Consolidated Balance Sheet	[1]	$ 26,609	$ 35,789
Liabilities
Net Amounts of Assets (Liabilities) Presented in Consolidated Balance Sheet	[1]	(173,847)	(84,855)
Total Liabilities
Gross Amounts of Recognized Assets (Liabilities)		(2,025,050)	(1,933,663)
Gross Amounts Offset in Consolidated Balance Sheet		0	0
Net Amounts of Assets (Liabilities) Presented in Consolidated Balance Sheet		(2,025,050)	(1,933,663)
Gross Amounts Not Offset in Consolidated Balance Sheet, Financial Instruments		1,871,628	1,881,142
Gross Amounts Not Offset in Consolidated Balance Sheet, Cash Collateral (Received) Pledged		152,167	48,317
Net Amount		(1,255)	(4,204)
Interest rate agreements
Assets
Gross Amounts of Recognized Assets (Liabilities)		19,258	28,211
Gross Amounts Offset in Consolidated Balance Sheet		0	0
Net Amounts of Assets (Liabilities) Presented in Consolidated Balance Sheet		19,258	28,211
Gross Amounts Not Offset in Consolidated Balance Sheet, Financial Instruments		(17,869)	(28,211)
Gross Amounts Not Offset in Consolidated Balance Sheet, Cash Collateral (Received) Pledged		0	0
Net Amount		1,389	0
Liabilities
Gross Amounts of Recognized Assets (Liabilities)		(168,436)	(70,908)
Gross Amounts Offset in Consolidated Balance Sheet		0	0
Net Amounts of Assets (Liabilities) Presented in Consolidated Balance Sheet		(168,436)	(70,908)
Gross Amounts Not Offset in Consolidated Balance Sheet, Financial Instruments		17,869	28,211
Gross Amounts Not Offset in Consolidated Balance Sheet, Cash Collateral (Received) Pledged		150,567	42,697
Net Amount		0	0
TBAs
Assets
Gross Amounts of Recognized Assets (Liabilities)		1,784	4,665
Gross Amounts Offset in Consolidated Balance Sheet		0	0
Net Amounts of Assets (Liabilities) Presented in Consolidated Balance Sheet		1,784	4,665
Gross Amounts Not Offset in Consolidated Balance Sheet, Financial Instruments		(1,784)	(3,391)
Gross Amounts Not Offset in Consolidated Balance Sheet, Cash Collateral (Received) Pledged		0	(835)
Net Amount		0	439
Liabilities
Gross Amounts of Recognized Assets (Liabilities)		(4,639)	(13,215)
Gross Amounts Offset in Consolidated Balance Sheet		0	0
Net Amounts of Assets (Liabilities) Presented in Consolidated Balance Sheet		(4,639)	(13,215)
Gross Amounts Not Offset in Consolidated Balance Sheet, Financial Instruments		1,784	3,391
Gross Amounts Not Offset in Consolidated Balance Sheet, Cash Collateral (Received) Pledged		1,600	5,620
Net Amount		(1,255)	(4,204)
Interest Rate Agreement, TBAs, And Futures
Assets
Gross Amounts of Recognized Assets (Liabilities)		21,042	32,876
Net Amounts of Assets (Liabilities) Presented in Consolidated Balance Sheet		21,042	32,876
Gross Amounts Not Offset in Consolidated Balance Sheet, Financial Instruments		(19,653)	(31,602)
Gross Amounts Not Offset in Consolidated Balance Sheet, Cash Collateral (Received) Pledged		0	(835)
Net Amount		1,389	439
Loan warehouse debt
Loan warehouse debt and Security repurchase agreement
Gross Amounts of Recognized Assets (Liabilities)		(638,055)	(860,650)
Gross Amounts Offset in Consolidated Balance Sheet		0	0
Net Amounts of Assets (Liabilities) Presented in Consolidated Balance Sheet		(638,055)	(860,650)
Gross Amounts Not Offset in Consolidated Balance Sheet, Financial Instruments		638,055	860,650
Gross Amounts Not Offset in Consolidated Balance Sheet, Cash Collateral (Received) Pledged		0	0
Security repurchase agreements
Loan warehouse debt and Security repurchase agreement
Gross Amounts of Recognized Assets (Liabilities)		(1,213,920)	(988,890)
Gross Amounts Offset in Consolidated Balance Sheet		0	0
Net Amounts of Assets (Liabilities) Presented in Consolidated Balance Sheet		(1,213,920)	(988,890)
Gross Amounts Not Offset in Consolidated Balance Sheet, Financial Instruments		1,213,920	988,890
Gross Amounts Not Offset in Consolidated Balance Sheet, Cash Collateral (Received) Pledged		0	0
Net Amount		$ 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 June 30, 2019 and December 31, 2018 , assets of consolidated VIEs totaled $7,937,685 and $6,331,191 , respectively. At June 30, 2019 and December 31, 2018 , liabilities of consolidated VIEs totaled $7,189,086 and $5,709,807 , respectively. See Note 4 for further discussion.

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		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Variable Interest Entity [Line Items]
Proceeds from new transfers	$ 410,281	$ 1,104,094	$ 762,652	$ 2,393,781
MSR fees received	3,105	3,397	6,165	6,811
Funding of compensating interest, net	(47)	(31)	(137)	(56)
Cash flows received on retained securities	$ 6,743	$ 7,410	$ 14,289	$ 14,453

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		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
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	16.00%	10.00%	16.00%	9.00%
Discount rates	14.00%	14.00%	14.00%	14.00%
Credit loss assumptions	0.20%	0.20%	0.20%	0.20%
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	15.00%	10.00%	15.00%	10.00%
Discount rates	7.00%	5.00%	7.00%	5.00%
Credit loss assumptions	0.20%	0.20%	0.20%	0.20%

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	Jun. 30, 2019	Dec. 31, 2018
On-balance sheet assets, at fair value:
Maximum loss exposure	$ 303,145	$ 349,997
Assets transferred:
Principal balance of loans outstanding	10,586,480	10,580,216
Principal balance of loans 30 days delinquent	24,749	21,805
Interest-only, senior and subordinate securities, classified as trading
On-balance sheet assets, at fair value:
Securities	121,825	129,111
Subordinate securities, classified as AFS
On-balance sheet assets, at fair value:
Securities	136,310	162,314
Mortgage servicing rights
On-balance sheet assets, at fair value:
Securities	$ 45,010	$ 58,572

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	Dec. 31, 2018	Jun. 30, 2019
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	$ 58,572	$ 45,010
Expected life (in years)	8 years	6 years
Prepayment speed assumption (annual CPR)	7.00%	11.00%
Decrease in fair value from:
10% adverse change	$ 1,668	$ 1,898
25% adverse change	$ 4,027	$ 4,513
Discount rate assumption	11.00%	11.00%
Decrease in fair value from:
100 basis point increase	$ 2,323	$ 1,624
200 basis point increase	4,493	$ 3,135
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 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	$ 61,178	$ 49,014
Expected life (in years)	7 years	6 years
Prepayment speed assumption (annual CPR)	10.00%	12.00%
Decrease in fair value from:
10% adverse change	$ 2,151	$ 1,905
25% adverse change	$ 5,127	$ 4,857
Discount rate assumption	12.00%	13.00%
Decrease in fair value from:
100 basis point increase	$ 2,190	$ 1,310
200 basis point increase	$ 4,226	$ 2,758
Credit loss assumption	0.20%	0.21%
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	$ 230,247	$ 209,121
Expected life (in years)	15 years	14 years
Prepayment speed assumption (annual CPR)	9.00%	13.00%
Decrease in fair value from:
10% adverse change	$ 201	$ 158
25% adverse change	$ 1,372	$ 1,124
Discount rate assumption	6.00%	5.00%
Decrease in fair value from:
100 basis point increase	$ 21,982	$ 20,756
200 basis point increase	$ 40,641	$ 38,452
Credit loss assumption	0.20%	0.21%
Decrease in fair value from:
10% higher losses	$ 1,387	$ 1,645
25% higher losses	$ 3,471	$ 4,112
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	Jun. 30, 2019	Dec. 31, 2018
Variable Interest Entity [Line Items]
Assets	$ 1,237,576	$ 1,176,161
Senior
Variable Interest Entity [Line Items]
Assets	166,184	185,107
Mezzanine
Variable Interest Entity [Line Items]
Assets	679,908	547,249
Subordinate
Variable Interest Entity [Line Items]
Assets	373,260	428,713
Total Mortgage-Backed Securities
Variable Interest Entity [Line Items]
Assets	1,219,352	1,161,069
Excess MSR
Variable Interest Entity [Line Items]
Assets	$ 18,224	$ 15,092

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		Jun. 30, 2019	Dec. 31, 2018
Assets
Trading securities		$ 1,205,389	$ 1,118,612
Available-for-sale securities		272,097	333,882
MSRs		236,632	286,778
Derivative assets	[1]	26,609	35,789
Pledged collateral		42,913	42,433
Liabilities
Contingent consideration		24,932	0
Derivative liabilities	[1]	173,847	84,855
Residential Loans
Assets
MSRs		259,222	300,468
Carrying Value
Assets
Trading securities		1,205,389	1,118,612
Available-for-sale securities		272,097	333,882
Cash and cash equivalents		218,145	175,764
Restricted cash		33,953	29,313
Accrued interest receivable		54,265	47,105
Derivative assets		26,609	35,789
Margin receivable		211,199	100,773
FHLBC stock		43,393	43,393
Guarantee asset		1,999	2,618
Pledged collateral		42,913	42,433
Liabilities
Accrued interest payable		47,092	42,528
Margin payable		0	835
Guarantee obligation		15,744	16,711
Contingent consideration		24,932	0
Derivative liabilities		173,847	84,855
ABS issued at fair value		6,913,129	5,410,073
FHLBC long-term borrowings		1,999,999	1,999,999
Convertible notes, net		634,805	633,196
Trust preferred securities and subordinated notes, net		138,605	138,582
Carrying Value | Servicer advance investments
Assets
MSRs		259,222	300,468
Carrying Value | MSRs
Assets
MSRs		47,396	60,281
Carrying Value | Participation in loan warehouse facility
Assets
Loans receivable, fair value		0	39,703
Carrying Value | Excess MSRs
Assets
REO		33,620	27,312
Carrying Value | REO
Assets
REO		6,305	3,943
Carrying Value | Short-term debt facilities
Liabilities
Short-term debt facilities		2,026,418	1,937,920
Carrying Value | Short-term debt - servicer advance financing
Liabilities
Short-term debt facilities		236,231	262,740
Carrying Value | Residential Loans | Residential loans, at fair value
Assets
Loans, held-for-sale		1,056,178	1,048,690
Carrying Value | Residential Loans | Residential loans, held-for-sale, At lower of cost or fair value
Assets
Loans, held-for-sale		109	111
Carrying Value | Residential Loans | Residential loans, held-for-investment
Assets
Loans receivable, fair value		6,227,078	6,205,941
Carrying Value | Residential Loans | Business purpose residential loans
Assets
Loans receivable, fair value		250,854	141,258
Carrying Value | Residential Loans | Multifamily loans
Assets
Loans receivable, fair value		3,749,657	2,144,598
Fair Value
Assets
Trading securities		1,205,389	1,118,612
Available-for-sale securities		272,097	333,882
Cash and cash equivalents		218,145	175,764
Restricted cash		33,953	29,313
Accrued interest receivable		54,265	47,105
Derivative assets		26,609	35,789
Margin receivable		211,199	100,773
FHLBC stock		43,393	43,393
Guarantee asset		1,999	2,618
Pledged collateral		42,913	42,433
Liabilities
Accrued interest payable		47,092	42,528
Margin payable		0	835
Guarantee obligation		15,456	16,774
Contingent consideration		24,932	0
Derivative liabilities		173,847	84,855
ABS issued at fair value		6,913,129	5,410,073
FHLBC long-term borrowings		1,999,999	1,999,999
Convertible notes, net		639,849	618,271
Trust preferred securities and subordinated notes, net		97,650	102,533
Fair Value | Servicer advance investments
Assets
MSRs		259,222	300,468
Fair Value | MSRs
Assets
MSRs		47,396	60,281
Fair Value | Participation in loan warehouse facility
Assets
Loans receivable, fair value		0	39,703
Fair Value | Excess MSRs
Assets
REO		33,620	27,312
Fair Value | REO
Assets
REO		6,509	4,396
Fair Value | Short-term debt facilities
Liabilities
Short-term debt facilities		2,026,418	1,937,920
Fair Value | Short-term debt - servicer advance financing
Liabilities
Short-term debt facilities		236,231	262,740
Fair Value | Residential Loans | Residential loans, at fair value
Assets
Loans, held-for-sale		1,056,178	1,048,690
Fair Value | Residential Loans | Residential loans, held-for-sale, At lower of cost or fair value
Assets
Loans, held-for-sale		128	131
Fair Value | Residential Loans | Residential loans, held-for-investment
Assets
Loans receivable, fair value		6,227,078	6,205,941
Fair Value | Residential Loans | Business purpose residential loans
Assets
Loans receivable, fair value		250,854	141,258
Fair Value | Residential Loans | Multifamily loans
Assets
Loans receivable, fair value		$ 3,749,657	$ 2,144,598
[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 June 30, 2019 and December 31, 2018 , assets of consolidated VIEs totaled $7,937,685 and $6,331,191 , respectively. At June 30, 2019 and December 31, 2018 , liabilities of consolidated VIEs totaled $7,189,086 and $5,709,807 , respectively. See Note 4 for further discussion.

Fair Value of Financial Instr_4

Fair Value of Financial Instruments - Additional Information (Details)	3 Months Ended	6 Months Ended
	Jun. 30, 2019USD ($)	Jun. 30, 2019USD ($)
Residential loans
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Fair value option elected aggregate carrying amount, asset	$ 1,530,000,000	$ 2,530,000,000
Business purpose residential loans, at fair value
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Fair value option elected aggregate carrying amount, asset	$ 112,000,000	$ 177,000,000
Real estate securities | Maximum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Dealer marks of securities (as a percent)	88.00%	88.00%
Carrying value for which dealer quotes have been received (as a percent)	96.00%	96.00%
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	$ 2,000,000	$ 34,000,000
Residential Subordinate Securities | Subordinate Securities
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Fair value option elected aggregate carrying amount, asset	86,000,000	206,000,000
Servicer advance investments
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Fair value option elected aggregate carrying amount, asset	0	69,000,000
Excess MSR
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Fair value option elected aggregate carrying amount, asset	$ 5,000,000	$ 7,000,000
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		Jun. 30, 2019	Dec. 31, 2018
Assets
Trading securities		$ 1,205,389	$ 1,118,612
Available-for-sale securities		272,097	333,882
MSRs		236,632	286,778
Derivative assets	[1]	26,609	35,789
Pledged collateral		42,913	42,433
Liabilities
Contingent consideration		24,932	0
Derivative liabilities	[1]	173,847	84,855
Fair Value, Measurements, Recurring
Assets
Business purpose residential loans		250,854	141,258
Multifamily loans		3,749,657	2,144,598
Trading securities		1,205,389	1,118,612
Available-for-sale securities		272,097	333,882
Servicer advance investments		259,222	300,468
MSRs		47,396	60,281
Excess MSRs		33,620	27,312
Derivative assets		26,609	35,789
Pledged collateral		42,913	42,433
FHLBC stock		43,393	43,393
Guarantee asset		1,999	2,618
Liabilities
Contingent consideration		24,932
Derivative liabilities		173,847	84,855
ABS issued		6,913,129	5,410,073
Fair Value, Measurements, Recurring | Residential Loans
Assets
Residential loans		7,283,256	7,254,631
Fair Value, Measurements, Recurring | Level 1
Assets
Business purpose residential loans		0	0
Multifamily loans		0	0
Trading securities		0	0
Available-for-sale securities		0	0
Servicer advance investments		0	0
MSRs		0	0
Excess MSRs		0	0
Derivative assets		1,784	4,665
Pledged collateral		42,913	42,433
FHLBC stock		0	0
Guarantee asset		0	0
Liabilities
Contingent consideration		0
Derivative liabilities		4,639	13,215
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 residential loans		0	0
Multifamily loans		0	0
Trading securities		0	0
Available-for-sale securities		0	0
Servicer advance investments		0	0
MSRs		0	0
Excess MSRs		0	0
Derivative assets		19,258	28,211
Pledged collateral		0	0
FHLBC stock		43,393	43,393
Guarantee asset		0	0
Liabilities
Contingent consideration		0
Derivative liabilities		168,436	70,908
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 residential loans		250,854	141,258
Multifamily loans		3,749,657	2,144,598
Trading securities		1,205,389	1,118,612
Available-for-sale securities		272,097	333,882
Servicer advance investments		259,222	300,468
MSRs		47,396	60,281
Excess MSRs		33,620	27,312
Derivative assets		5,567	2,913
Pledged collateral		0	0
FHLBC stock		0	0
Guarantee asset		1,999	2,618
Liabilities
Contingent consideration		24,932
Derivative liabilities		772	732
ABS issued		6,913,129	5,410,073
Fair Value, Measurements, Recurring | Level 3 | Residential Loans
Assets
Residential loans		$ 7,283,256	$ 7,254,631
[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 June 30, 2019 and December 31, 2018 , assets of consolidated VIEs totaled $7,937,685 and $6,331,191 , respectively. At June 30, 2019 and December 31, 2018 , liabilities of consolidated VIEs totaled $7,189,086 and $5,709,807 , 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	6 Months Ended
	Jun. 30, 2019USD ($)
Contingent Consideration
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Beginning balance - December 31, 2018	$ 0
Acquisitions	24,621
Principal paydowns	0
Gains (losses) in net income, net	311
Other settlements, net	0
Ending Balance - June 30, 2019	24,932
ABS Issued
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Beginning balance - December 31, 2018	5,410,073
Acquisitions	1,738,537
Principal paydowns	(416,791)
Gains (losses) in net income, net	181,310
Other settlements, net	0
Ending Balance - June 30, 2019	6,913,129
Residential Loans
Assets
Beginning balance	7,254,631
Acquisitions	2,583,951
Originations	0
Sales	(2,088,273)
Principal paydowns	(614,975)
Gains (losses) in net income, net	147,969
Unrealized losses in OCI, net	0
Other settlements, net	(47)
Ending balance	7,283,256
Business purpose residential loans, at fair value
Assets
Beginning balance	141,258
Acquisitions	29,093
Originations	169,562
Sales	(43,548)
Principal paydowns	(43,931)
Gains (losses) in net income, net	3,416
Unrealized losses in OCI, net	0
Other settlements, net	(4,996)
Ending balance	250,854
Multifamily loans, held-for-investment, at fair value
Assets
Beginning balance	2,144,598
Acquisitions	1,481,554
Originations	0
Sales	0
Principal paydowns	(7,516)
Gains (losses) in net income, net	131,021
Unrealized losses in OCI, net	0
Other settlements, net	0
Ending balance	3,749,657
Trading securities
Assets
Beginning balance	1,118,612
Acquisitions	240,478
Originations	0
Sales	(174,216)
Principal paydowns	(14,836)
Gains (losses) in net income, net	40,302
Unrealized losses in OCI, net	0
Other settlements, net	(4,951)
Ending balance	1,205,389
AFS Securities
Assets
Beginning balance	333,882
Acquisitions	8,954
Originations	0
Sales	(67,001)
Principal paydowns	(24,207)
Gains (losses) in net income, net	17,503
Unrealized losses in OCI, net	2,966
Other settlements, net	0
Ending balance	272,097
Servicer Advance Investments
Assets
Beginning balance	300,468
Acquisitions	68,976
Originations	0
Sales	0
Principal paydowns	(111,662)
Gains (losses) in net income, net	1,440
Unrealized losses in OCI, net	0
Other settlements, net	0
Ending balance	259,222
MSRs
Assets
Beginning balance	60,281
Acquisitions	868
Originations	0
Sales	0
Principal paydowns	0
Gains (losses) in net income, net	(13,753)
Unrealized losses in OCI, net	0
Other settlements, net	0
Ending balance	47,396
Excess MSRs
Assets
Beginning balance	27,312
Acquisitions	6,810
Originations	0
Sales	0
Principal paydowns	0
Gains (losses) in net income, net	(502)
Unrealized losses in OCI, net	0
Other settlements, net	0
Ending balance	33,620
Guarantee Asset
Assets
Beginning balance	2,618
Acquisitions	0
Originations	0
Sales	0
Principal paydowns	0
Gains (losses) in net income, net	(619)
Unrealized losses in OCI, net	0
Other settlements, net	0
Ending balance	1,999
Derivatives
Assets
Beginning balance	2,181
Acquisitions	0
Principal paydowns	0
Gains (losses) in net income, net	28,908
Other settlements, net	(26,294)
Ending balance	$ 4,795

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		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
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	$ (756)	$ (4,646)	$ (772)	$ (4,687)
ABS 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	(121,127)	(279)	(181,310)	(21,014)
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	48,575	(12,981)	80,615	(51,029)
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	6,772	367	21,243	20,914
Freddie Mac SLST
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	31,477	0	55,005	0
Business purpose residential loans
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	3,038	0	4,032	0
Multifamily loans | 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	96,649	0	131,020	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	17,771	(1,989)	38,658	(6,011)
Available-for-sale 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	0	(56)	0	(56)
Servicer advance investments
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	432	0	1,440	0
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	(7,334)	689	(11,518)	4,610
Excess 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	(66)	0	(502)	0
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	5,534	2,835	5,567	2,901
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	$ (277)	$ (120)	$ (196)	$ 66

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	6 Months Ended
	Jun. 30, 2019USD ($)	Jun. 30, 2019USD ($)
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
REO	$ 5,732	$ 5,732
Gain (Loss) on assets measured at fair value on a non-recurring basis	(150)	(422)
Level 1
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
REO	0	0
Level 2
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
REO	0	0
Level 3
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
REO	$ 5,732	$ 5,732

Fair Value of Financial Instr_9

Fair Value of Financial Instruments - Market Valuation Adjustments, Net (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total other income, net	$ 1,654	$ 1,874	$ 1,911	$ 2,830
Gain on re-measurement of 5 Arches investment	0	0	2,441	0
Total Market Valuation Gains, Net	16,732	8,536	48,172	34,136
Mortgage Banking Activities, Net
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Market valuations gains and losses, net	15,730	9,514	27,420	35,752
Mortgage Banking Activities, Net | Residential loans, at fair value
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Market valuations gains and losses, net	3,379	6,122	6,912	10,896
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	16,888	(2,758)	28,199	(9,726)
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	1,313	0	2,917	0
Mortgage Banking Activities, Net | Single-family rental loan purchase commitments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Market valuations gains and losses, net	569	0	709	0
Mortgage Banking Activities, Net | Residential bridge loans
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Market valuations gains and losses, net	1,012	0	1,098	0
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	(7,431)	6,150	(12,415)	34,582
Investment Fair Value Changes, Net
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Market valuations gains and losses, net	3,138	889	23,297	2,498
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	(64,740)	16,742	(107,115)	60,524
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	35,548	(15,010)	63,656	(53,995)
Investment Fair Value Changes, Net | Residential bridge loans held-for-investment
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Market valuations gains and losses, net	(318)	0	(621)	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	18,442	(930)	40,302	(3,885)
Investment Fair Value Changes, Net | Servicer advance investments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Market valuations gains and losses, net	432	0	1,440	0
Investment Fair Value Changes, Net | Excess MSRs
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Market valuations gains and losses, net	(65)	0	(502)	0
Investment Fair Value Changes, Net | REO
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Market valuations gains and losses, net	(139)	0	(139)	0
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	(123)	(720)	(497)	(728)
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	2,879	1,072	6,144	986
Investment Fair Value Changes, Net | Freddie Mac SLST
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Market valuations gains and losses, net	8,037	0	14,402	0
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	3,246	0	6,365	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	(61)	(209)	(138)	(348)
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	0	(56)	0	(56)
Other Income (Expense), Net
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total other income, net	(2,136)	(1,867)	(2,545)	(4,114)
Other Income (Expense), Net | Risk management derivatives, net
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total other income, net	6,517	(1,122)	8,768	(6,261)
Gain on re-measurement of 5 Arches investment	0	0	2,440	0
Other Income (Expense), Net | MSRs
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total other income, net	$ (8,653)	$ (745)	$ (13,753)	$ 2,147

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	6 Months Ended
	Jun. 30, 2019USD ($)	Jun. 30, 2019	Jun. 30, 2019$ / loan	Dec. 31, 2018USD ($)
Liabilities
Contingent consideration | $	$ 24,932			$ 0
ABS Issued
Liabilities
ABS issued | $	2,378,306
ABS Issued | Prepayment rate (annual CPR) | Minimum
Liabilities
ABS issued, measurement input		0.08
ABS Issued | Prepayment rate (annual CPR) | Maximum
Liabilities
ABS issued, measurement input		0.49
ABS Issued | Prepayment rate (annual CPR) | Weighted Average
Liabilities
ABS issued, measurement input		0.19
ABS Issued | Discount rate | Minimum
Liabilities
ABS issued, measurement input		0.03
ABS Issued | Discount rate | Maximum
Liabilities
ABS issued, measurement input		0.15
ABS Issued | Discount rate | Weighted Average
Liabilities
ABS issued, measurement input		0.04
ABS Issued | Default rate | Minimum
Liabilities
ABS issued, measurement input		0
ABS Issued | Default rate | Maximum
Liabilities
ABS issued, measurement input		0.09
ABS Issued | Default rate | Weighted Average
Liabilities
ABS issued, measurement input		0.02
ABS Issued | Loss severity | Minimum
Liabilities
ABS issued, measurement input		0.20
ABS Issued | Loss severity | Maximum
Liabilities
ABS issued, measurement input		0.22
ABS Issued | Loss severity | Weighted Average
Liabilities
ABS issued, measurement input		0.21
Freddie Mac SLST
Liabilities
ABS issued | $	991,766
Freddie Mac SLST | Prepayment rate (annual CPR) | Minimum
Liabilities
ABS issued, measurement input		0.06
Freddie Mac SLST | Prepayment rate (annual CPR) | Maximum
Liabilities
ABS issued, measurement input		0.06
Freddie Mac SLST | Prepayment rate (annual CPR) | Weighted Average
Liabilities
ABS issued, measurement input		0.06
Freddie Mac SLST | Discount rate | Minimum
Liabilities
ABS issued, measurement input		0.03
Freddie Mac SLST | Discount rate | Maximum
Liabilities
ABS issued, measurement input		0.08
Freddie Mac SLST | Discount rate | Weighted Average
Liabilities
ABS issued, measurement input		0.03
Freddie Mac SLST | Default rate | Minimum
Liabilities
ABS issued, measurement input		0.02
Freddie Mac SLST | Default rate | Maximum
Liabilities
ABS issued, measurement input		0.02
Freddie Mac SLST | Default rate | Weighted Average
Liabilities
ABS issued, measurement input		0.02
Freddie Mac SLST | Loss severity | Minimum
Liabilities
ABS issued, measurement input		0.30
Freddie Mac SLST | Loss severity | Maximum
Liabilities
ABS issued, measurement input		0.30
Freddie Mac SLST | Loss severity | Weighted Average
Liabilities
ABS issued, measurement input		0.30
Freddie Mac K-Series
Liabilities
ABS issued | $	3,543,057
Freddie Mac K-Series | Prepayment rate (annual CPR) | Minimum
Liabilities
ABS issued, measurement input		0
Freddie Mac K-Series | Prepayment rate (annual CPR) | Maximum
Liabilities
ABS issued, measurement input		0
Freddie Mac K-Series | Prepayment rate (annual CPR) | Weighted Average
Liabilities
ABS issued, measurement input		0
Freddie Mac K-Series | Discount rate | Minimum
Liabilities
ABS issued, measurement input		0.02
Freddie Mac K-Series | Discount rate | Maximum
Liabilities
ABS issued, measurement input		0.09
Freddie Mac K-Series | Discount rate | Weighted Average
Liabilities
ABS issued, measurement input		0.03
Freddie Mac K-Series | Default rate | Minimum
Liabilities
ABS issued, measurement input		0.01
Freddie Mac K-Series | Default rate | Maximum
Liabilities
ABS issued, measurement input		0.01
Freddie Mac K-Series | Default rate | Weighted Average
Liabilities
ABS issued, measurement input		0.01
Freddie Mac K-Series | Loss severity | Minimum
Liabilities
ABS issued, measurement input		0.20
Freddie Mac K-Series | Loss severity | Maximum
Liabilities
ABS issued, measurement input		0.20
Freddie Mac K-Series | Loss severity | Weighted Average
Liabilities
ABS issued, measurement input		0.20
Loan purchase commitments
Assets
Loan purchase commitments, net | $	4,707
Loan purchase commitments | Prepayment rate (annual CPR) | Minimum
Assets
Loan purchase commitments, net, measurement input		0.15
Loan purchase commitments | Prepayment rate (annual CPR) | Maximum
Assets
Loan purchase commitments, net, measurement input		0.20
Loan purchase commitments | Prepayment rate (annual CPR) | Weighted Average
Assets
Loan purchase commitments, net, measurement input		0.18
Loan purchase commitments | Whole loan spread to TBA price | Minimum
Assets
Loan purchase commitments, net, measurement input			0.61
Loan purchase commitments | Whole loan spread to TBA price | Maximum
Assets
Loan purchase commitments, net, measurement input			1.55
Loan purchase commitments | Whole loan spread to TBA price | Weighted Average
Assets
Loan purchase commitments, net, measurement input			1.54
Loan purchase commitments | MSR multiple | Minimum
Assets
Loan purchase commitments, net, measurement input		0.7
Loan purchase commitments | MSR multiple | Maximum
Assets
Loan purchase commitments, net, measurement input		4.6
Loan purchase commitments | MSR multiple | Weighted Average
Assets
Loan purchase commitments, net, measurement input		2.2
Loan purchase commitments | Pull-through rate | Minimum
Assets
Loan purchase commitments, net, measurement input		0.07
Loan purchase commitments | Pull-through rate | Maximum
Assets
Loan purchase commitments, net, measurement input		1
Loan purchase commitments | Pull-through rate | Weighted Average
Assets
Loan purchase commitments, net, measurement input		0.70
Loan purchase commitments | Mortgage servicing amount | Minimum
Assets
Loan purchase commitments, net, measurement input		0.0095	0.0006
Loan purchase commitments | Mortgage servicing amount | Maximum
Assets
Loan purchase commitments, net, measurement input		0.0365	0.0014
Loan purchase commitments | Mortgage servicing amount | Weighted Average
Assets
Loan purchase commitments, net, measurement input		0.0228	0.001
Loan purchase commitments | Whole loan spread to swap - hybrid | Minimum
Assets
Loan purchase commitments, net, measurement input		0.0085
Loan purchase commitments | Whole loan spread to swap - hybrid | Maximum
Assets
Loan purchase commitments, net, measurement input		0.0345
Loan purchase commitments | Whole loan spread to swap - hybrid | Weighted Average
Assets
Loan purchase commitments, net, measurement input		0.0129
Contingent consideration
Liabilities
Contingent consideration | $	24,932
Contingent consideration | Discount rate | Minimum
Liabilities
Contingent consideration, measurement input			0.23
Contingent consideration | Discount rate | Maximum
Liabilities
Contingent consideration, measurement input			0.23
Contingent consideration | Discount rate | Weighted Average
Liabilities
Contingent consideration, measurement input			0.23
Contingent consideration | Probability of outcomes | Minimum
Liabilities
Contingent consideration, measurement input			0
Contingent consideration | Probability of outcomes | Maximum
Liabilities
Contingent consideration, measurement input			1
Contingent consideration | Probability of outcomes | Weighted Average
Liabilities
Contingent consideration, measurement input			0.90
Jumbo fixed-rate loans
Assets
Residential loans, at fair value | $	2,724,429
Jumbo fixed-rate loans | Prepayment rate (annual CPR) | Minimum
Assets
Residential loans, measurement input		0.20
Jumbo fixed-rate loans | Prepayment rate (annual CPR) | Maximum
Assets
Residential loans, measurement input		0.20
Jumbo fixed-rate loans | Prepayment rate (annual CPR) | Weighted Average
Assets
Residential loans, measurement input		0.20
Jumbo fixed-rate loans | Whole loan spread to TBA price | Minimum
Assets
Residential loans, measurement input			1.55
Jumbo fixed-rate loans | Whole loan spread to TBA price | Maximum
Assets
Residential loans, measurement input			1.55
Jumbo fixed-rate loans | Whole loan spread to TBA price | Weighted Average
Assets
Residential loans, measurement input			1.55
Jumbo fixed-rate loans | Whole loan spread to swap rate | Minimum
Assets
Residential loans, measurement input			0.0080
Jumbo fixed-rate loans | Whole loan spread to swap rate | Maximum
Assets
Residential loans, measurement input			0.0365
Jumbo fixed-rate loans | Whole loan spread to swap rate | Weighted Average
Assets
Residential loans, measurement input			0.0180
Jumbo hybrid loans
Assets
Residential loans, at fair value | $	344,151
Jumbo hybrid loans | Prepayment rate (annual CPR) | Minimum
Assets
Residential loans, measurement input		0.15
Jumbo hybrid loans | Prepayment rate (annual CPR) | Maximum
Assets
Residential loans, measurement input		0.15
Jumbo hybrid loans | Prepayment rate (annual CPR) | Weighted Average
Assets
Residential loans, measurement input		0.15
Jumbo hybrid loans | Whole loan spread to swap rate | Minimum
Assets
Residential loans, measurement input			0.0065
Jumbo hybrid loans | Whole loan spread to swap rate | Maximum
Assets
Residential loans, measurement input			0.0360
Jumbo hybrid loans | Whole loan spread to swap rate | Weighted Average
Assets
Residential loans, measurement input			0.0141
Jumbo loans committed to sell
Assets
Residential loans, at fair value | $	374,481
Jumbo loans committed to sell | Whole loan committed sales price | Minimum
Assets
Residential loans, measurement input			101.84
Jumbo loans committed to sell | Whole loan committed sales price | Maximum
Assets
Residential loans, measurement input			103.08
Jumbo loans committed to sell | Whole loan committed sales price | Weighted Average
Assets
Residential loans, measurement input			102.12
Legacy Sequoia
Assets
Residential loans, at fair value | $	457,750
Sequoia Choice
Assets
Residential loans, at fair value | $	2,147,356
Freddie Mac SLST
Assets
Residential loans, at fair value | $	1,235,089
Business purpose residential loans, at fair value
Assets
Residential loans, at fair value | $	91,501
Business purpose residential loans, at fair value | Prepayment rate (annual CPR) | Minimum
Assets
Residential loans, measurement input		0.02
Business purpose residential loans, at fair value | Prepayment rate (annual CPR) | Maximum
Assets
Residential loans, measurement input		0.10
Business purpose residential loans, at fair value | Prepayment rate (annual CPR) | Weighted Average
Assets
Residential loans, measurement input		0.05
Business purpose residential loans, at fair value | Discount rate | Minimum
Assets
Residential loans, measurement input		0.12
Business purpose residential loans, at fair value | Discount rate | Maximum
Assets
Residential loans, measurement input		0.12
Business purpose residential loans, at fair value | Discount rate | Weighted Average
Assets
Residential loans, measurement input		0.12
Business purpose residential loans, at fair value | Senior credit spread | Minimum
Assets
Residential loans, measurement input			0.0095
Business purpose residential loans, at fair value | Senior credit spread | Maximum
Assets
Residential loans, measurement input			0.0095
Business purpose residential loans, at fair value | Senior credit spread | Weighted Average
Assets
Residential loans, measurement input			0.0095
Business purpose residential loans, at fair value | Subordinate credit spread | Minimum
Assets
Residential loans, measurement input			0.0140
Business purpose residential loans, at fair value | Subordinate credit spread | Maximum
Assets
Residential loans, measurement input			0.1200
Business purpose residential loans, at fair value | Subordinate credit spread | Weighted Average
Assets
Residential loans, measurement input			0.0306
Business purpose residential loans, at fair value | Senior credit support | Minimum
Assets
MSR, measurement input		0.35
Business purpose residential loans, at fair value | Senior credit support | Maximum
Assets
MSR, measurement input		0.35
Business purpose residential loans, at fair value | Senior credit support | Weighted Average
Assets
MSR, measurement input		0.35
Residential bridge loans
Assets
Residential loans, at fair value | $	159,353
Residential bridge loans | Discount rate | Minimum
Assets
Residential loans, measurement input		0.07
Residential bridge loans | Discount rate | Maximum
Assets
Residential loans, measurement input		0.08
Residential bridge loans | Discount rate | Weighted Average
Assets
Residential loans, measurement input		0.07
Freddie Mac K-Series
Assets
Residential loans, at fair value | $	3,749,657
Trading and AFS securities
Assets
Trading and AFS securities | $	1,477,486
Trading and AFS securities | Prepayment rate (annual CPR) | Minimum
Assets
Trading and AFS securities		0
Trading and AFS securities | Prepayment rate (annual CPR) | Maximum
Assets
Trading and AFS securities		0.60
Trading and AFS securities | Prepayment rate (annual CPR) | Weighted Average
Assets
Trading and AFS securities		0.10
Trading and AFS securities | Discount rate | Minimum
Assets
Trading and AFS securities		0.03
Trading and AFS securities | Discount rate | Maximum
Assets
Trading and AFS securities		0.14
Trading and AFS securities | Discount rate | Weighted Average
Assets
Trading and AFS securities		0.05
Trading and AFS securities | Default rate | Minimum
Assets
Trading and AFS securities		0
Trading and AFS securities | Default rate | Maximum
Assets
Trading and AFS securities		0.20
Trading and AFS securities | Default rate | Weighted Average
Assets
Trading and AFS securities		0.02
Trading and AFS securities | Loss severity | Minimum
Assets
Trading and AFS securities		0
Trading and AFS securities | Loss severity | Maximum
Assets
Trading and AFS securities		0.40
Trading and AFS securities | Loss severity | Weighted Average
Assets
Trading and AFS securities		0.21
Servicer advance investments
Assets
Mortgage servicing rights | $	$ 259,222
Servicer advance investments | Minimum
Assets
Expected remaining life	2 years
Servicer advance investments | Maximum
Assets
Expected remaining life	2 years
Servicer advance investments | Weighted Average
Assets
Expected remaining life	2 years
Servicer advance investments | Prepayment rate (annual CPR) | Minimum
Assets
MSR, measurement input		0.08
Servicer advance investments | Prepayment rate (annual CPR) | Maximum
Assets
MSR, measurement input		0.15
Servicer advance investments | Prepayment rate (annual CPR) | Weighted Average
Assets
MSR, measurement input		0.14
Servicer advance investments | Discount rate | Minimum
Assets
MSR, measurement input		0.04
Servicer advance investments | Discount rate | Maximum
Assets
MSR, measurement input		0.04
Servicer advance investments | Discount rate | Weighted Average
Assets
MSR, measurement input		0.04
MSRs
Assets
Mortgage servicing rights | $	$ 47,396
MSRs | Prepayment rate (annual CPR) | Minimum
Assets
MSR, measurement input		0.05
MSRs | Prepayment rate (annual CPR) | Maximum
Assets
MSR, measurement input		0.45
MSRs | Prepayment rate (annual CPR) | Weighted Average
Assets
MSR, measurement input		0.12
MSRs | Discount rate | Minimum
Assets
MSR, measurement input		0.11
MSRs | Discount rate | Maximum
Assets
MSR, measurement input		0.17
MSRs | Discount rate | Weighted Average
Assets
MSR, measurement input		0.11
MSRs | Per loan annual cost to service | Minimum
Assets
MSR, measurement input			82
MSRs | Per loan annual cost to service | Maximum
Assets
MSR, measurement input			82
MSRs | Per loan annual cost to service | Weighted Average
Assets
MSR, measurement input			82
Excess MSRs
Assets
Mortgage servicing rights | $	33,620
Excess MSRs | Prepayment rate (annual CPR) | Minimum
Assets
MSR, measurement input		0.08
Excess MSRs | Prepayment rate (annual CPR) | Maximum
Assets
MSR, measurement input		0.14
Excess MSRs | Prepayment rate (annual CPR) | Weighted Average
Assets
MSR, measurement input		0.11
Excess MSRs | Discount rate | Minimum
Assets
MSR, measurement input		0.11
Excess MSRs | Discount rate | Maximum
Assets
MSR, measurement input		0.16
Excess MSRs | Discount rate | Weighted Average
Assets
MSR, measurement input		0.14
Excess MSRs | Excess mortgage servicing income | Minimum
Assets
MSR, measurement input			0.0007
Excess MSRs | Excess mortgage servicing income | Maximum
Assets
MSR, measurement input			0.0017
Excess MSRs | Excess mortgage servicing income | Weighted Average
Assets
MSR, measurement input			0.0012
Guarantee asset
Assets
Guarantee asset | $	1,999
Guarantee asset | Prepayment rate (annual CPR) | Minimum
Assets
Guarantee asset		0.15
Guarantee asset | Prepayment rate (annual CPR) | Maximum
Assets
Guarantee asset		0.15
Guarantee asset | Prepayment rate (annual CPR) | Weighted Average
Assets
Guarantee asset		0.15
Guarantee asset | Discount rate | Minimum
Assets
Guarantee asset		0.11
Guarantee asset | Discount rate | Maximum
Assets
Guarantee asset		0.11
Guarantee asset | Discount rate | Weighted Average
Assets
Guarantee asset		0.11
REO
Assets
REO | $	$ 5,732
REO | Loss severity | Minimum
Assets
REO, measurement input		0.03
REO | Loss severity | Maximum
Assets
REO, measurement input		0.52
REO | Loss severity | Weighted Average
Assets
REO, measurement input		0.07

Residential Loans - Summary of

Residential Loans - Summary of Classifications and Carrying Value of Residential Loans (Details) - USD ($) $ in Thousands		Jun. 30, 2019	Dec. 31, 2018
At fair value
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Residential loans		$ 1,060,000	$ 1,050,000
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	100
Total held-for-sale
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Residential loans	[1]	1,056,287	1,048,801
Legacy Sequoia | Held-for-investment at fair value
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Residential loans		458,000	520,000
Sequoia Choice | Held-for-investment at fair value
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Residential loans		2,150,000	2,080,000
Freddie Mac SLST | Held-for-investment at fair value
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Residential loans		1,240,000	1,220,000
Redwood | Held-for-investment at fair value
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Residential loans			2,380,000
Residential Loans
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Residential loans		7,283,365	7,254,742
Residential Loans | At fair value | Jumbo Loans
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Residential loans		1,056,178	1,048,690
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		109	111
Residential Loans | Total held-for-sale
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Residential loans		1,056,287	1,048,801
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		6,227,078	6,205,941
Residential Loans | Legacy Sequoia
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Residential loans		457,750	519,958
Residential Loans | Legacy Sequoia | At fair value | 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 | 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 | Total 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 | 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		457,750	519,958
Residential Loans | Sequoia Choice
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Residential loans		2,147,356	2,079,382
Residential Loans | Sequoia Choice | At fair value | 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 | 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 | Total 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 | 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		2,147,356	2,079,382
Residential Loans | Freddie Mac SLST
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Residential loans		1,235,089	1,222,669
Residential Loans | Freddie Mac SLST | At fair value | Jumbo Loans
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Residential loans		0	0
Residential Loans | Freddie Mac SLST | 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 | Freddie Mac SLST | Total 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 | Freddie Mac SLST | 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		1,235,089	1,222,669
Residential Loans | Redwood
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Residential loans		3,443,170	3,432,733
Residential Loans | Redwood | At fair value | Jumbo Loans
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Residential loans		1,056,178	1,048,690
Residential Loans | Redwood | 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		109	111
Residential Loans | Redwood | Total held-for-sale
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Residential loans		1,056,287	1,048,801
Residential Loans | Redwood | 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		$ 2,386,883	$ 2,383,932
[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 June 30, 2019 and December 31, 2018 , assets of consolidated VIEs totaled $7,937,685 and $6,331,191 , respectively. At June 30, 2019 and December 31, 2018 , liabilities of consolidated VIEs totaled $7,189,086 and $5,709,807 , respectively. See Note 4 for further discussion.

Residential Loans - Additional

Residential Loans - Additional Information (Details)	Jun. 30, 2019USD ($)loan	Dec. 31, 2018USD ($)loan	Jun. 30, 2019USD ($)loan	Jun. 30, 2018USD ($)	Jun. 30, 2019USD ($)loan	Jun. 30, 2018USD ($)
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					$ 518,521,000	$ 1,069,326,000
Transfers from loans held-for-investment to loans held-for-sale					22,808,000	0
Held-for-sale residential loans
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Residential loans	$ 7,283,365,000	$ 7,254,742,000	$ 7,283,365,000		7,283,365,000
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	457,750,000	519,958,000	457,750,000		457,750,000
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	2,147,356,000	2,079,382,000	2,147,356,000		2,147,356,000
Held-for-sale residential loans | Freddie Mac SLST
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Residential loans	1,235,089,000	1,222,669,000	1,235,089,000		1,235,089,000
Redwood | Held-for-sale residential loans
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Residential loans	$ 3,443,170,000	$ 3,432,733,000	$ 3,443,170,000		$ 3,443,170,000
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	4.16%		4.16%		4.16%
Residential Loans
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Number of loans | loan		1,484			1,417
Loan principal	$ 1,030,000,000	$ 1,030,000,000	$ 1,030,000,000		$ 1,030,000,000
Residential loans	$ 1,060,000,000	$ 1,050,000,000	$ 1,060,000,000		$ 1,060,000,000
Number of loans in foreclosure | loan	0	0	0		0
Principal value of loans purchased			$ 1,530,000,000	$ 1,930,000,000	$ 2,490,000,000	3,730,000,000
Principal balance of loans sold during period			1,230,000,000	1,920,000,000	2,390,000,000	3,930,000,000
Gain (loss) on assets measured at fair value on a non-recurring basis			3,000,000	6,000,000	7,000,000	11,000,000
Loan pledged as collateral	$ 712,000,000	$ 935,000,000	712,000,000		712,000,000
Loans held-for-investment, in foreclosure	2,000,000		2,000,000		2,000,000
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	1,056,178,000	1,048,690,000	1,056,178,000		1,056,178,000
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		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		0
Residential Loans | Jumbo Loans | Held-for-sale residential loans | Freddie Mac SLST
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Residential loans	0	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	$ 1,056,178,000	$ 1,048,690,000	$ 1,056,178,000		$ 1,056,178,000
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		1
Loans held-for-investment, delinquent greater than 90 days	$ 600,000	$ 600,000	$ 600,000		$ 600,000
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			2
Loan principal	100,000	$ 100,000	100,000		$ 100,000
Residential loans	100,000	100,000	100,000		100,000
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	109,000	111,000	109,000		109,000
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		0
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		0
At lower of cost or fair value | Held-for-sale residential loans | Freddie Mac SLST
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Residential loans	0	0	0		0
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	$ 109,000	$ 111,000	$ 109,000		$ 109,000
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	0		0
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)			$ 1,000,000	4,000,000	$ 5,000,000	33,000,000
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			0		350,000,000
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	2,400	2,641
Loan principal	$ 475,000,000	$ 545,000,000	475,000,000		475,000,000
Residential loans	458,000,000	520,000,000	458,000,000		458,000,000
Loans held-for-investment, delinquent greater than 90 days	$ 13,000,000	14,000,000	$ 13,000,000		$ 13,000,000
Weighted average original Fair Isaac Corporation (FICO) score	727		727		727
Weighted average original loan-to-value (LTV)	66.00%		66.00%		66.00%
Loans held-for-investment, in foreclosure	$ 5,000,000	$ 5,000,000	$ 5,000,000		$ 5,000,000
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	2,912	2,800
Loan principal	$ 2,080,000,000	$ 2,040,000,000	2,080,000,000		2,080,000,000
Residential loans	$ 2,150,000,000	$ 2,080,000,000	$ 2,150,000,000		$ 2,150,000,000
Number of loans past due | loan	6	3	6		6
Loans held-for-investment, delinquent greater than 90 days	$ 3,000,000	$ 2,000,000	$ 3,000,000		$ 3,000,000
Number of loans in foreclosure | loan	0	0	0		0
Weighted average original Fair Isaac Corporation (FICO) score	745		745		745
Weighted average original loan-to-value (LTV)	75.00%		75.00%		75.00%
Valuation adjustment gain (loss)			$ 6,000,000		$ 16,000,000
Held-for-investment at fair value | Freddie Mac SLST
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Number of loans | loan		7,900			7,744
Loan principal	$ 1,270,000,000	$ 1,310,000,000	1,270,000,000		$ 1,270,000,000
Residential loans	$ 1,240,000,000	$ 1,220,000,000	$ 1,240,000,000		$ 1,240,000,000
Number of loans past due | loan	301	306	301		301
Loans held-for-investment, delinquent greater than 90 days	$ 78,000,000	$ 51,000,000	$ 78,000,000		$ 78,000,000
Number of loans in foreclosure | loan	101	0	101		101
Weighted average original Fair Isaac Corporation (FICO) score	597		597		597
Weighted average original loan-to-value (LTV)	69.00%		69.00%		69.00%
Valuation adjustment gain (loss)			$ 31,000,000		$ 55,000,000
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	3,262	3,296
Loan principal	$ 2,320,000,000	$ 2,390,000,000	$ 2,320,000,000		$ 2,320,000,000
Residential loans		$ 2,380,000,000
Number of loans in foreclosure | loan	0	0	0		0
Principal value of loans purchased			$ 0		$ 39,000,000
Gain (loss) on assets measured at fair value on a non-recurring basis			36,000,000	(15,000,000)	64,000,000	(54,000,000)
Transfers from loans held-for-sale to loans held-for-investment			30,000,000	32,000,000	69,000,000	88,000,000
Transfers from loans held-for-investment to loans held-for-sale			$ 0	$ 0	$ 23,000,000	$ 0
Weighted average original Fair Isaac Corporation (FICO) score	768		768		768
Weighted average original loan-to-value (LTV)	66.00%		66.00%		66.00%
Percentage of fixed-rate loans	88.00%		88.00%		88.00%
Held-for-investment at fair value | Redwood | Originated Between 2013 and 2019
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Percentage of loan portfolio originated in year	90.00%		90.00%		90.00%
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	1.00%		1.00%		1.00%
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%		4.20%
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	$ 6,227,078,000	$ 6,205,941,000	$ 6,227,078,000		$ 6,227,078,000
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	457,750,000	519,958,000	457,750,000		457,750,000
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	2,147,356,000	2,079,382,000	2,147,356,000		2,147,356,000
Held-for-investment at fair value | Jumbo Loans | Held-for-sale residential loans | Freddie Mac SLST
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Residential loans	1,235,089,000	1,222,669,000	1,235,089,000		1,235,089,000
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	2,386,883,000	2,383,932,000	2,386,883,000		2,386,883,000
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	$ 1,000,000		$ 1,000,000
Number of loans past due | loan	2	2	2		2
MSRs
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Mortgage servicing rights, at amortized cost	$ 2,650,000,000		$ 2,650,000,000		$ 2,650,000,000
Residential Real Estate | Redwood | Held-for-sale residential loans | FHLB Chicago
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Loans pledged as collateral under borrowing agreement with FHLBC	$ 2,390,000,000		$ 2,390,000,000		$ 2,390,000,000

Business Purpose Residential _3

Business Purpose Residential Loans (Details)	Jun. 30, 2019USD ($)loan	Dec. 31, 2018USD ($)loan	Feb. 28, 2019USD ($)	Jun. 30, 2019USD ($)loan	Jun. 30, 2019USD ($)loan	Jun. 30, 2019USD ($)loan	Jun. 30, 2018USD ($)
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Purchases of held-for-sale loans						$ 2,534,886,000	$ 3,772,494,000
Proceeds from sales of held-for-sale loans						2,123,794,000	2,966,508,000
Transfer to REO						5,098,000	$ 1,835,000
Total Business Purpose Residential Loans
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Proceeds from loan originations				$ 134,000,000
Proceeds from loan originations to third parties				23,000,000
Market valuations gains and losses, net					$ 1,000,000
Fee income					3,000,000
Residential loans	$ 250,854,000	$ 141,258,000		250,854,000	250,854,000	250,854,000
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]
Residential loans	$ 91,501,000	$ 28,460,000		91,501,000	91,501,000	91,501,000
Number of loans | loan	43	11
Loan principal	$ 87,000,000	$ 28,000,000		$ 87,000,000	$ 87,000,000	$ 87,000,000
Number of loans past due | loan	0			0	0	0
Purchases of held-for-sale loans			$ 19,000,000	$ 33,000,000	$ 41,000,000
Proceeds from sales of held-for-sale loans				0
Gain (loss) on investments				1,000,000		$ 2,000,000
Collateral amounts	$ 71,000,000	$ 28,000,000		$ 71,000,000	$ 71,000,000	$ 71,000,000
Weighted average coupon rate	5.54%			5.54%	5.54%	5.54%
Contract maturities						6 years
Weighted average original loan-to-value (LTV)	66.00%			66.00%	66.00%	66.00%
Weighted-average debt service coverage ratio						1.33
Number of loans in foreclosure | loan		0
Residential bridge 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	$ 159,353,000	$ 112,798,000		$ 159,353,000	$ 159,353,000	$ 159,353,000
Number of loans | loan	274	157
Loan principal	$ 158,000,000	$ 112,000,000		$ 158,000,000	$ 158,000,000	$ 158,000,000
Number of loans past due | loan	11	7		11	11	11
Purchases of held-for-sale loans			$ 10,000,000	$ 79,000,000	$ 86,000,000
Gain (loss) on investments				(300,000)		$ (600,000)
Collateral amounts	$ 144,000,000	$ 98,000,000		$ 144,000,000	$ 144,000,000	$ 144,000,000
Weighted average coupon rate	9.08%			9.08%	9.08%	9.08%
Weighted average original loan-to-value (LTV)	74.00%			74.00%	74.00%	74.00%
Unpaid principal balance on delinquent or foreclosure loans	$ 12,000,000	$ 12,000,000		$ 12,000,000	$ 12,000,000	$ 12,000,000
Number of loans in foreclosure | loan	9	4		9	9	9
Loans in foreclosure amount	$ 7,000,000	$ 11,000,000		$ 7,000,000	$ 7,000,000	$ 7,000,000
Number of loans transferred | loan						1
Transfer to REO						$ 5,000,000
Weighted average original Fair Isaac Corporation (FICO) score	690			690	690	690
Residential bridge loans, held-for-investment at fair value | Minimum
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Contract maturities						6 months
Residential bridge loans, held-for-investment at fair value | Maximum
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Contract maturities						24 months
Residential Bridge Loans Held-for-investment Transferred To REO
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Gain (loss) on investments				$ (100,000)		$ (400,000)
Commitment To Fund Residential Bridge Loan
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Commitment to fund loan	$ 33,000,000			$ 33,000,000	$ 33,000,000	$ 33,000,000
Total Business Purpose Residential Loans
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Proceeds from loan originations					170,000,000
Proceeds from loan originations to third parties					$ 44,000,000

Multifamily Loans (Details)

Multifamily Loans (Details) - Multifamily loans, held-for-investment, at fair value $ in Millions	3 Months Ended	6 Months Ended	12 Months Ended
	Jun. 30, 2019USD ($)loan	Jun. 30, 2019USD ($)loan	Dec. 31, 2018USD ($)loan
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Number of loans | loan		250	162
Loan principal | $	$ 3,550	$ 3,550	$ 2,130
Residential loans | $	$ 3,750	$ 3,750	$ 2,140
Weighted average original loan-to-value (LTV)	69.00%	69.00%
Weighted average coupon rate	4.19%	4.19%
Contract maturities		6 years
Number of loans past due | loan	0	0	0
Number of loans in foreclosure | loan	0	0	0
Valuation adjustment gain (loss) | $	$ 97	$ 131
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		Jun. 30, 2019	Dec. 31, 2018
Investments, Debt and Equity Securities [Abstract]
Trading		$ 1,205,389	$ 1,118,612
Available-for-sale		272,097	333,882
Total Real Estate Securities	[1]	$ 1,477,486	$ 1,452,494
[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 June 30, 2019 and December 31, 2018 , assets of consolidated VIEs totaled $7,937,685 and $6,331,191 , respectively. At June 30, 2019 and December 31, 2018 , liabilities of consolidated VIEs totaled $7,189,086 and $5,709,807 , respectively. See Note 4 for further discussion.

Real Estate Securities - Tradin

Real Estate Securities - Trading Securities by Collateral Type (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Investment Holdings [Line Items]
Trading securities	$ 1,205,389	$ 1,118,612
Senior IO Securities
Investment Holdings [Line Items]
Trading securities	170,731	158,670
Subordinate Securities | Mezzanine
Investment Holdings [Line Items]
Trading securities	748,282	610,819
Subordinate Securities | Subordinate
Investment Holdings [Line Items]
Trading securities	$ 286,376	$ 349,123

Real Estate Securities - Additi

Real Estate Securities - Additional Information (Details)	3 Months Ended		6 Months Ended
	Jun. 30, 2019USD ($)investment	Jun. 30, 2018USD ($)	Jun. 30, 2019USD ($)investment	Jun. 30, 2018USD ($)	Dec. 31, 2018USD ($)investment
Investment Holdings [Line Items]
Trading securities pledged as collateral	$ 874,000,000		$ 874,000,000
Trading securities	1,205,389,000		1,205,389,000		$ 1,118,612,000
Trading securities acquired	115,000,000	$ 233,000,000	269,000,000	$ 378,000,000
Trading securities sold	132,000,000	62,000,000	161,000,000	244,000,000
Increase (decrease) in valuation of trading securities	18,000,000	(1,000,000)	40,000,000	(4,000,000)
Available-for-sale securities purchased	4,000,000	2,000,000	9,000,000	6,000,000
Available-for-sale securities sold	25,000,000	41,000,000	67,000,000	92,000,000
Net realized gains on AFS securities	$ 3,000,000	5,000,000	$ 9,000,000	14,000,000
Number of AFS securities (in investments) | investment	114		114		128
Number of securities in unrealized loss position | investment	1		1		7
Number of securities in a continuous unrealized loss position for twelve consecutive months or longer (in investments) | investment	1		1		3
Other than temporary impairment		$ 200,000		$ 200,000
Reclassification out of Accumulated Other Comprehensive Income | Net Unrealized Gains on Available-for-Sale Securities
Investment Holdings [Line Items]
Other than temporary impairment	$ 0		$ 0
Residential
Investment Holdings [Line Items]
Securities pledged as collateral	945,000,000		945,000,000		$ 844,000,000
Gross unrealized losses (less than)	(12,000)		(12,000)		(548,000)
Subordinate Securities | Residential
Investment Holdings [Line Items]
Gross unrealized losses (less than)	0		0		(499,000)
Sequoia securities | Subordinate Securities
Investment Holdings [Line Items]
Trading securities	73,000,000		73,000,000		68,000,000
Sequoia securities | Sequoia Choice
Investment Holdings [Line Items]
Trading securities pledged as collateral	148,000,000		148,000,000		130,000,000
Sequoia securities | Freddie Mac SLST
Investment Holdings [Line Items]
Trading securities pledged as collateral	203,000,000		203,000,000		229,000,000
Sequoia securities | Freddie Mac K-Series
Investment Holdings [Line Items]
Trading securities pledged as collateral	207,000,000		207,000,000		18,000,000
Interest-only Senior Trading Securities
Investment Holdings [Line Items]
Debt securities, trading	66,000,000		66,000,000		82,000,000
Unpaid principal balance	102,000,000		102,000,000		78,000,000
Interest-only Senior Trading Securities | Certificated Servicing Strips
Investment Holdings [Line Items]
Debt securities, trading	35,000,000		35,000,000		43,000,000
Trading securities | Residential Subordinate Securities
Investment Holdings [Line Items]
Unpaid principal balance	1,190,000,000		1,190,000,000		1,120,000,000
CRT securities | Mezzanine Securities
Investment Holdings [Line Items]
Trading securities	1,030,000,000		1,030,000,000		960,000,000
CRT securities | Subordinate Securities
Investment Holdings [Line Items]
Trading securities	201,000,000		201,000,000		277,000,000
Other third party securities | Subordinate Securities
Investment Holdings [Line Items]
Trading securities	233,000,000		233,000,000		186,000,000
Third-party multifamily mortgage-backed securities | Subordinate Securities
Investment Holdings [Line Items]
Trading securities	528,000,000		528,000,000		$ 429,000,000
Residential
Investment Holdings [Line Items]
Marketable securities, due from five to ten years	3,000,000		3,000,000
Residential | AFS securities retained, at fair value
Investment Holdings [Line Items]
Securities pledged as collateral	$ 70,000,000		$ 70,000,000

Real Estate Securities - Availa

Real Estate Securities - Available for Sale Securities by Collateral Type (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Investment Holdings [Line Items]
Available-for-sale	$ 272,097	$ 333,882
Senior IO Securities
Investment Holdings [Line Items]
Available-for-sale	44,467	87,615
Subordinate Securities | Mezzanine
Investment Holdings [Line Items]
Available-for-sale	8,976	36,407
Subordinate Securities | Subordinate
Investment Holdings [Line Items]
Available-for-sale	$ 218,654	$ 209,860

Real Estate Securities - Compon

Real Estate Securities - Components of Carrying Value (Which Equals Fair Value) of Residential Available for Sale Securities (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Debt Securities, Available-for-sale [Line Items]
Carrying Value	$ 272,097	$ 333,882
Senior
Debt Securities, Available-for-sale [Line Items]
Carrying Value	44,467	87,615
Residential
Debt Securities, Available-for-sale [Line Items]
Principal balance	345,922	431,112
Credit reserve	(34,849)	(41,370)
Unamortized discount, net	(137,282)	(151,200)
Amortized cost	173,791	238,542
Gross unrealized gains	98,318	95,888
Gross unrealized losses	(12)	(548)
Carrying Value	272,097	333,882
Residential | Senior
Debt Securities, Available-for-sale [Line Items]
Principal balance	45,147	91,736
Credit reserve	(1,323)	(7,790)
Unamortized discount, net	(15,009)	(18,460)
Amortized cost	28,815	65,486
Gross unrealized gains	15,664	22,178
Gross unrealized losses	(12)	(49)
Carrying Value	44,467	87,615
Residential | Mezzanine
Debt Securities, Available-for-sale [Line Items]
Principal balance	8,778	36,852
Credit reserve	0	0
Unamortized discount, net	(576)	(3,697)
Amortized cost	8,202	33,155
Gross unrealized gains	774	3,252
Gross unrealized losses	0	0
Carrying Value	8,976	36,407
Residential | Subordinate Securities
Debt Securities, Available-for-sale [Line Items]
Principal balance	291,997	302,524
Credit reserve	(33,526)	(33,580)
Unamortized discount, net	(121,697)	(129,043)
Amortized cost	136,774	139,901
Gross unrealized gains	81,880	70,458
Gross unrealized losses	0	(499)
Carrying Value	$ 218,654	$ 209,860

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	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2019
Credit Reserve
Beginning balance	$ 34,834	$ 41,370
Amortization of net discount	0	0
Realized credit losses	(1,014)	(1,180)
Acquisitions	787	1,464
Sales, calls, other	(5)	(6,397)
(Release of) transfers to credit reserves, net	247	(408)
Ending Balance	34,849	34,849
Unamortized Discount, Net
Beginning balance	142,013	151,200
Amortization of net discount	(2,059)	(3,989)
Realized credit losses	0	0
Acquisitions	350	704
Sales, calls, other	(2,775)	(11,041)
(Release of) transfers to credit reserves, net	(247)	408
Ending Balance	$ 137,282	$ 137,282

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	Jun. 30, 2019	Dec. 31, 2018
Debt Securities, Available-for-sale [Line Items]
Less Than 12 Consecutive Months, Amortized Cost	$ 0	$ 12,923
Less Than 12 Consecutive Months, Unrealized Losses	0	(499)
Less Than 12 Consecutive Months, Fair Value	0	12,424
12 Consecutive Months or Longer, Amortized Cost	6,445	7,464
12 Consecutive Months or Longer, Unrealized Losses	(12)	(49)
12 Consecutive Months or Longer, Fair Value	$ 6,433	$ 7,415

Real Estate Securities - Summar

Real Estate Securities - Summary of Significant Valuation Assumptions for Available for Sale Securities (Details) - Prime	6 Months Ended
	Jun. 30, 2019
Minimum
Debt Securities, Available-for-sale [Line Items]
Prepayment rates	15.00%
Projected losses	1.00%
Maximum
Debt Securities, Available-for-sale [Line Items]
Prepayment rates	15.00%
Projected losses	1.00%

Real Estate Securities - Activi

Real Estate Securities - Activity of Credit Component of Other-than-Temporary Impairments (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Activity of the Credit Component of Other-than-Temporary Impairments
Balance at beginning of period	$ 18,652	$ 20,924	$ 18,652	$ 21,037
Additions
Initial credit impairments	0	43	0	43
Reductions
Securities sold, or expected to sell	(14)	0	(14)	(99)
Securities with no outstanding principal at period end	(58)	0	(58)	(14)
Balance at End of Period	$ 18,580	$ 20,967	$ 18,580	$ 20,967

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		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Debt Securities, Available-for-sale [Line Items]
Gross realized losses	$ 3,000	$ 5,000	$ 9,000	$ 14,000
Total Realized Gains on Sales and Calls of AFS Securities, net	2,827	4,714	13,513	14,077
Sales
Debt Securities, Available-for-sale [Line Items]
Gross realized losses	2,827	4,674	9,487	14,037
Gross realized losses - sales	0	(3)	0	(3)
Calls
Debt Securities, Available-for-sale [Line Items]
Gross realized losses	$ 0	$ 43	$ 4,026	$ 43

Other Investments - Summary of

Other Investments - Summary of Other Investments (Details) - USD ($) $ in Thousands		Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2017
Investment [Line Items]
Servicing asset, fair value		$ 236,632		$ 286,778
Loan held-for-investment, amount		0		39,703
Other Investments	[1]	372,130		438,518
5 Arches, LLC
Investment [Line Items]
Investment in 5 Arches		0		10,754
Mortgage servicing rights
Investment [Line Items]
Servicing asset, fair value		47,396	$ 55,284	60,281	$ 64,674	$ 66,496	$ 63,598
Multifamily loans, held-for-investment, at fair value
Investment [Line Items]
Loan held-for-investment, amount		28,678		0
Other notes receivable
Investment [Line Items]
Loan held-for-investment, amount		3,214		0
Residential Loans
Investment [Line Items]
Servicing asset, fair value		259,222		300,468
Excess MSRs
Investment [Line Items]
Servicing asset, fair value		$ 33,620		$ 27,312
[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 June 30, 2019 and December 31, 2018 , assets of consolidated VIEs totaled $7,937,685 and $6,331,191 , respectively. At June 30, 2019 and December 31, 2018 , liabilities of consolidated VIEs totaled $7,189,086 and $5,709,807 , respectively. See Note 4 for further discussion.

Other Investments - Additional

Other Investments - Additional Information (Details) - USD ($) $ in Thousands	1 Months Ended			2 Months Ended	3 Months Ended		6 Months Ended
	Mar. 31, 2019	Jan. 31, 2019	May 31, 2018	Feb. 28, 2019	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018	Dec. 31, 2018	Mar. 31, 2018	Dec. 31, 2017
Investment [Line Items]
Commitment to fund partnership							$ 66,000
Commitment to fund partnership, funded amount					$ 6,000		6,000
Servicing asset, fair value					236,632		236,632		$ 286,778
Equity method investment earnings					3,000		5,000
Investment fair value changes, net					3,138	$ 889	23,297	$ 2,498
Interest income					148,542	82,976	279,583	159,595
Equity investment loss					96	0	5	0
Other income, net					2,407	3,322	5,994	5,440
Light-Renovation Multifamily Loans
Investment [Line Items]
Commitment to fund partnership		$ 78,000
Commitment to fund partnership, funded amount					29,000		29,000
Equity method investments, carrying value					29,000		29,000
Equity investment loss					100
5 Arches, LLC
Investment [Line Items]
Equity method investment earnings				$ 300
Payments to acquire equity method investment			$ 10,000
Option to purchase additional equity, term			1 year
Option to purchase additional equity, amount			$ 40,000
Option to purchase additional equity, percent	80.00%
Amortization of certain intangibles				$ 100
MSRs
Investment [Line Items]
Servicing asset, fair value	$ 55,284				47,396	$ 64,674	47,396	64,674	60,281	$ 66,496	$ 63,598
Servicing asset					4,830,000		4,830,000		4,930,000
Servicer advance financing
Investment [Line Items]
Collateral amounts					237,000		237,000
Investment fair value changes, net					400		1,000
Residential Loans
Investment [Line Items]
Servicing asset, fair value					259,222		259,222		300,468
Servicing asset, unpaid principal balance on underlying loan					8,340,000		8,340,000
Excess MSRs
Investment [Line Items]
Servicing asset, fair value					33,620		33,620		$ 27,312
Investment fair value changes, net					(100)			$ (500)
Interest income					$ 2,000		$ 4,000
5 Arches, LLC
Investment [Line Items]
Minority interest, percentage			20.00%

Other Investments - Servicing A

Other Investments - Servicing Advance Investments (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Investment [Line Items]
Total Servicer Advance Receivables	$ 236,632	$ 286,778
Residential Loans
Investment [Line Items]
Principal and interest advances	91,707	144,336
Escrow advances (taxes and insurance advances)	95,071	94,828
Corporate advances	$ 49,854	$ 47,614

Other Investments - Mortgage Se

Other Investments - Mortgage Servicing Rights (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Servicing Asset at Fair Value, Amount [Roll Forward]
Balance at beginning of period			$ 286,778
Additions			868	$ 0
Changes in fair value due to:
Balance at End of Period	$ 236,632		236,632
Mortgage servicing rights
Servicing Asset at Fair Value, Amount [Roll Forward]
Balance at beginning of period	55,284	$ 66,496	60,281	63,598
Additions	764	0	868	0
Sales	0	(1,077)	0	(1,077)
Changes in fair value due to:
Changes in assumptions	(6,555)	943	(10,141)	5,289
Other changes	(2,097)	(1,688)	(3,612)	(3,136)
Balance at End of Period	47,396	64,674	47,396	64,674
Servicing income	3,850	3,802	7,460	7,597
Cost of sub-servicer	(268)	(338)	(771)	(930)
Net servicing fee income	3,582	3,464	6,689	6,667
Market valuation changes of MSRs	(8,652)	(745)	(13,753)	2,147
Market valuation changes of associated derivatives	6,517	(1,122)	8,768	(6,261)
MSR reversal of provision for repurchases	207	277	207	277
MSR Income, Net	$ 1,654	$ 1,874	$ 1,911	$ 2,830

Derivative Financial Instrume_3

Derivative Financial Instruments - Aggregate Fair Value and Notional Amount of Derivative Financial Instruments (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Derivative [Line Items]
Fair Value	$ (147,238)	$ (49,066)
Notional Amount	7,597,742	5,911,385
TBAs
Derivative [Line Items]
Notional Amount	2,100,000	1,460,000
Derivative Liabilities
Derivative [Line Items]
Fair Value	(173,847)	(84,855)
Notional Amount	4,618,911	2,953,724
Derivative Liabilities | Interest rate swaps
Derivative [Line Items]
Fair Value	(118,609)	(36,416)
Notional Amount	3,084,300	1,742,000
Derivative Liabilities | Interest rate swaps | Cash Flow Hedging
Derivative [Line Items]
Fair Value	(49,827)	(34,492)
Notional Amount	139,500	139,500
Derivative Liabilities | TBAs
Derivative [Line Items]
Fair Value	(4,639)	(13,215)
Notional Amount	1,150,000	935,000
Derivative Liabilities | Loan purchase commitments
Derivative [Line Items]
Fair Value	(772)	(732)
Notional Amount	245,111	137,224
Derivative Assets
Derivative [Line Items]
Fair Value	26,609	35,789
Notional Amount	2,978,831	2,957,661
Derivative Assets | Interest rate swaps
Derivative [Line Items]
Fair Value	18,576	28,211
Notional Amount	1,053,000	2,106,500
Derivative Assets | TBAs
Derivative [Line Items]
Fair Value	1,784	4,665
Notional Amount	950,000	520,000
Derivative Assets | Swaptions
Derivative [Line Items]
Fair Value	682	0
Notional Amount	200,000	0
Derivative Assets | Loan purchase commitments
Derivative [Line Items]
Fair Value	5,567	2,913
Notional Amount	$ 775,831	$ 331,161

Derivative Financial Instrume_4

Derivative Financial Instruments - Additional Information (Details) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019USD ($)counterparty	Jun. 30, 2018USD ($)	Jun. 30, 2019USD ($)counterparty	Jun. 30, 2018USD ($)	Mar. 31, 2019USD ($)	Dec. 31, 2018USD ($)	Mar. 31, 2018USD ($)	Dec. 31, 2017USD ($)
Derivative [Line Items]
Notional amount	$ 7,597,742		$ 7,597,742			$ 5,911,385
Accumulated other comprehensive income (loss)	$ 1,564,032	$ 1,228,955	$ 1,564,032	$ 1,228,955	$ 1,549,927	1,348,794	$ 1,219,983	$ 1,212,287
Number of counterparties | counterparty	3		3
Net Unrealized Losses on Interest Rate Agreements Accounted for as Cash Flow Hedges
Derivative [Line Items]
Accumulated other comprehensive income (loss)	$ (49,384)		$ (49,384)		$ (39,883)	(34,045)
Net Unrealized Losses on Interest Rate Agreements Accounted for as Cash Flow Hedges
Derivative [Line Items]
Accumulated other comprehensive income (loss)		(31,105)		(31,105)		(34,000)	$ (34,522)	$ (42,953)
Derivative Liabilities
Derivative [Line Items]
Notional amount	4,618,911		4,618,911			2,953,724
Mortgage Banking Activities, Net
Derivative [Line Items]
Market valuations gains (losses), net	15,730	9,514	27,420	35,752
Loan purchase commitments and forward sales commitments | Mortgage Banking Activities, Net
Derivative [Line Items]
Market valuations gains (losses), net	17,000	(3,000)	29,000	(10,000)
Interest rate contract
Derivative [Line Items]
Notional amount	4,340,000		4,340,000			3,850,000
TBAs
Derivative [Line Items]
Notional amount	2,100,000		2,100,000			1,460,000
TBAs | Derivative Liabilities
Derivative [Line Items]
Notional amount	1,150,000		1,150,000			935,000
Unsecuritized Residential and Commercial Loans
Derivative [Line Items]
Derivative gain (loss)	(66,000)	22,000	(111,000)	89,000
Interest rate swaps | Cash Flow Hedging
Derivative [Line Items]
Derivative gain (loss)	(10,000)	$ 3,000	(15,000)	$ 12,000
Interest rate swaps | Derivative Liabilities
Derivative [Line Items]
Notional amount	3,084,300		3,084,300			1,742,000
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		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Derivative [Line Items]
Interest expense	$ (116,220)	$ (48,213)	$ (215,496)	$ (89,727)
Cash Flow Hedging | Interest rate contract
Derivative [Line Items]
Net interest expense on cash flows hedges	(640)	(804)	(1,277)	(1,802)
Interest expense	$ (640)	$ (804)	$ (1,277)	$ (1,802)

Other Assets and Liabilities -

Other Assets and Liabilities - Components of Other Assets (Details) - USD ($) $ in Thousands		Jun. 30, 2019	Dec. 31, 2018
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]
Margin receivable		$ 211,199	$ 100,773
FHLBC stock		43,393	43,393
Pledged collateral		42,913	42,433
Right-of-use asset		11,573	0
REO		6,305	3,943
Fixed assets and leasehold improvements		5,093	5,106
Investment receivable		1,697	6,959
Other		11,950	15,218
Total Other Assets	[1]	334,123	$ 217,825
Fixed assets		11,000
Accumulated depreciation		$ 6,000
[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 June 30, 2019 and December 31, 2018 , assets of consolidated VIEs totaled $7,937,685 and $6,331,191 , respectively. At June 30, 2019 and December 31, 2018 , liabilities of consolidated VIEs totaled $7,189,086 and $5,709,807 , 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		Jun. 30, 2019	Dec. 31, 2018
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]
Contingent consideration		$ 24,932	$ 0
Payable to minority partner		16,937	14,331
Guarantee obligations		15,744	16,711
Accrued compensation		13,671	19,769
Lease liability		13,082	0
Deferred tax liabilities		11,986	9,022
Residential bridge loan holdbacks		6,016	0
Residential loan and MSR repurchase reserve		3,769	4,189
Accrued operating expenses		3,149	3,122
Legal reserve		2,000	2,000
Accrued income taxes payable		764	423
Margin payable		0	835
Other		5,378	8,317
Total Accrued Expenses and Other Liabilities	[1]	$ 117,428	$ 78,719
[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 June 30, 2019 and December 31, 2018 , assets of consolidated VIEs totaled $7,937,685 and $6,331,191 , respectively. At June 30, 2019 and December 31, 2018 , liabilities of consolidated VIEs totaled $7,189,086 and $5,709,807 , respectively. See Note 4 for further discussion.

Other Assets and Liabilities _3

Other Assets and Liabilities - Additional Information (Details) $ in Thousands	3 Months Ended		6 Months Ended	12 Months Ended
	Jun. 30, 2019USD ($)property	Dec. 31, 2018USD ($)partnershipproperty	Jun. 30, 2019USD ($)property	Dec. 31, 2018USD ($)partnershipproperty
Other Assets and Other Liabilities [Line Items]
Real estate owned (REO)	$ 6,305	$ 3,943	$ 6,305	$ 3,943
REO liquidations			3,000
Unrealized gain resulting from market valuation adjustments on REO			500
Number of partnerships consolidated | partnership		2		2
Payable to minority partner	16,937	$ 14,331	16,937	$ 14,331
Net income (loss) allocated to Limited Partners	(200)		(500)
Legacy Sequoia
Other Assets and Other Liabilities [Line Items]
Real estate owned (REO)	$ 1,000		1,000
Amount related to transfers into REO (less than)			$ 100
Number of REO properties recorded on balance sheet (in properties) | property	7	13	7	13
Bridge Loan | Debt Securities
Other Assets and Other Liabilities [Line Items]
Real estate owned (REO)	$ 5,000		$ 5,000
Amount related to transfers into REO (less than)			$ 5,000
Number of REO properties recorded on balance sheet (in properties) | property	1		1

Short-Term Debt - Outstanding B

Short-Term Debt - Outstanding Balances of Short-Term Debt by Type of Collateral Securing Debt (Details)		6 Months Ended	12 Months Ended
		Jun. 30, 2019USD ($)facility	Dec. 31, 2018USD ($)facility
Short-term Debt [Line Items]
Outstanding Balance	[1],[2]	$ 2,462,885,000	$ 2,400,279,000
Facilities
Short-term Debt [Line Items]
Number of Facilities | facility		21	17
Outstanding Balance		$ 2,026,418,000	$ 1,937,920,000
Facilities | Residential loan warehouse
Short-term Debt [Line Items]
Number of Facilities | facility		4	4
Outstanding Balance		$ 638,055,000	$ 860,650,000
Limit		$ 1,425,000,000	$ 1,425,000,000
Weighted Average Interest Rate		3.90%	4.10%
Weighted Average Days Until Maturity		166 days	178 days
Facilities | Real estate securities repo
Short-term Debt [Line Items]
Number of Facilities | facility		10	9
Outstanding Balance		$ 1,213,920,000	$ 988,890,000
Limit		$ 0	$ 0
Weighted Average Interest Rate		3.48%	3.47%
Weighted Average Days Until Maturity		27 days	26 days
Facilities | Single-family rental loan warehouse
Short-term Debt [Line Items]
Number of Facilities | facility		2	2
Outstanding Balance		$ 53,998,000	$ 22,053,000
Limit		$ 400,000,000	$ 400,000,000
Weighted Average Interest Rate		4.67%	4.77%
Weighted Average Days Until Maturity		426 days	560 days
Facilities | Residential bridge loan warehouse
Short-term Debt [Line Items]
Number of Facilities | facility		4	2
Outstanding Balance		$ 120,445,000	$ 66,327,000
Limit		$ 330,000,000	$ 80,000,000
Weighted Average Interest Rate		4.93%	5.20%
Weighted Average Days Until Maturity		821 days	629 days
Facilities | Business purpose loan working capital
Short-term Debt [Line Items]
Number of Facilities | facility		1
Outstanding Balance		$ 0
Limit		$ 15,000,000
Weighted Average Interest Rate		5.00%
Servicer advance financing
Short-term Debt [Line Items]
Number of Facilities | facility		1	1
Outstanding Balance		$ 236,231,000	$ 262,740,000
Limit		$ 350,000,000	$ 350,000,000
Weighted Average Interest Rate		4.23%	4.32%
Weighted Average Days Until Maturity		152 days	333 days
Convertible notes, net
Short-term Debt [Line Items]
Outstanding Balance		$ 200,236,000	$ 199,619,000
Weighted Average Interest Rate		5.63%	5.63%
Weighted Average Days Until Maturity		138 days	319 days
Servicer advance financing
Short-term Debt [Line Items]
Outstanding Balance		$ 236,231,000
[1]	Includes $201 million of convertible notes, which were reclassified from Long-term debt, net to Short-term debt as the maturity of the notes was less than one year as of November 15, 2018. See Note 13 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 June 30, 2019 and December 31, 2018 , assets of consolidated VIEs totaled $7,937,685 and $6,331,191 , respectively. At June 30, 2019 and December 31, 2018 , liabilities of consolidated VIEs totaled $7,189,086 and $5,709,807 , respectively. See Note 4 for further discussion.

Short-Term Debt - Additional In

Short-Term Debt - Additional Information (Details) - USD ($)	3 Months Ended	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2019	Dec. 31, 2018	Nov. 15, 2018	Nov. 30, 2014
Short-term Debt [Line Items]
Trading securities pledged as collateral	$ 874,000,000	$ 874,000,000
Average balance of short-term debt	1,860,000,000	1,730,000,000
Accrued interest payable on short-term debt	5,000,000	5,000,000	$ 4,000,000
Convertible notes				$ 201,000,000
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
Convertible Debt | Exchangeable Senior Notes Due 2019
Short-term Debt [Line Items]
Accrued interest payable on short-term debt	1,000,000	1,000,000
Debt Instrument interest rate			5.625%		5.625%
Unamortized deferred issuance costs			$ 1,000,000
Sequoia securities | Sequoia Choice
Short-term Debt [Line Items]
Trading securities pledged as collateral	148,000,000	148,000,000	130,000,000
Sequoia securities | Freddie Mac SLST
Short-term Debt [Line Items]
Trading securities pledged as collateral	203,000,000	203,000,000	229,000,000
Sequoia securities | Freddie Mac K-Series
Short-term Debt [Line Items]
Trading securities pledged as collateral	207,000,000	207,000,000	18,000,000
Residential
Short-term Debt [Line Items]
Securities pledged as collateral	945,000,000	945,000,000	844,000,000
Single-family rental loans, held-for-sale at fair value
Short-term Debt [Line Items]
Collateral amounts	71,000,000	71,000,000	28,000,000
Residential bridge loans, held-for-investment at fair value
Short-term Debt [Line Items]
Collateral amounts	144,000,000	144,000,000	98,000,000
Residential Loans
Short-term Debt [Line Items]
Servicing Asset at Fair Value, Amount	265,000,000	265,000,000
Residential Loans
Short-term Debt [Line Items]
Loan pledged as collateral	712,000,000	712,000,000	$ 935,000,000
Servicer advance financing
Short-term Debt [Line Items]
Collateral amounts	237,000,000	237,000,000
Accrued interest payable on short-term debt	300,000	300,000
Unamortized capitalized commitment costs	$ 1,000,000	$ 1,000,000

Short-Term Debt - Remaining Mat

Short-Term Debt - Remaining Maturities of Short Term Debt (Details) - USD ($) $ in Thousands		Jun. 30, 2019	Dec. 31, 2018
Short-term Debt [Line Items]
Short-term debt	[1],[2]	$ 2,462,885	$ 2,400,279
Within 30 days
Short-term Debt [Line Items]
Short-term debt		871,520
31 to 90 days
Short-term Debt [Line Items]
Short-term debt		532,198
Over 90 days
Short-term Debt [Line Items]
Short-term debt		1,059,167
Facilities
Short-term Debt [Line Items]
Short-term debt		2,026,418	1,937,920
Facilities | Within 30 days
Short-term Debt [Line Items]
Short-term debt		871,520
Facilities | 31 to 90 days
Short-term Debt [Line Items]
Short-term debt		532,198
Facilities | Over 90 days
Short-term Debt [Line Items]
Short-term debt		622,700
Facilities | Held-for-sale residential loans
Short-term Debt [Line Items]
Short-term debt		638,055	860,650
Facilities | Held-for-sale residential loans | Within 30 days
Short-term Debt [Line Items]
Short-term debt		0
Facilities | Held-for-sale residential loans | 31 to 90 days
Short-term Debt [Line Items]
Short-term debt		189,798
Facilities | Held-for-sale residential loans | Over 90 days
Short-term Debt [Line Items]
Short-term debt		448,257
Facilities | Real estate securities
Short-term Debt [Line Items]
Short-term debt		1,213,920
Facilities | Real estate securities | Within 30 days
Short-term Debt [Line Items]
Short-term debt		871,520
Facilities | Real estate securities | 31 to 90 days
Short-term Debt [Line Items]
Short-term debt		342,400
Facilities | Real estate securities | Over 90 days
Short-term Debt [Line Items]
Short-term debt		0
Facilities | Single-family rental loans
Short-term Debt [Line Items]
Short-term debt		53,998	22,053
Facilities | Single-family rental loans | Within 30 days
Short-term Debt [Line Items]
Short-term debt		0
Facilities | Single-family rental loans | 31 to 90 days
Short-term Debt [Line Items]
Short-term debt		0
Facilities | Single-family rental loans | Over 90 days
Short-term Debt [Line Items]
Short-term debt		53,998
Facilities | Residential bridge loans
Short-term Debt [Line Items]
Short-term debt		120,445	66,327
Facilities | Residential bridge loans | Within 30 days
Short-term Debt [Line Items]
Short-term debt		0
Facilities | Residential bridge loans | 31 to 90 days
Short-term Debt [Line Items]
Short-term debt		0
Facilities | Residential bridge loans | Over 90 days
Short-term Debt [Line Items]
Short-term debt		120,445
Servicer advance financing
Short-term Debt [Line Items]
Short-term debt		236,231	262,740
Servicer advance financing | Within 30 days
Short-term Debt [Line Items]
Short-term debt		0
Servicer advance financing | 31 to 90 days
Short-term Debt [Line Items]
Short-term debt		0
Servicer advance financing | Over 90 days
Short-term Debt [Line Items]
Short-term debt		236,231
Convertible notes, net
Short-term Debt [Line Items]
Short-term debt		200,236	$ 199,619
Convertible notes, net | Within 30 days
Short-term Debt [Line Items]
Short-term debt		0
Convertible notes, net | 31 to 90 days
Short-term Debt [Line Items]
Short-term debt		0
Convertible notes, net | Over 90 days
Short-term Debt [Line Items]
Short-term debt		$ 200,236
[1]	Includes $201 million of convertible notes, which were reclassified from Long-term debt, net to Short-term debt as the maturity of the notes was less than one year as of November 15, 2018. See Note 13 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 June 30, 2019 and December 31, 2018 , assets of consolidated VIEs totaled $7,937,685 and $6,331,191 , respectively. At June 30, 2019 and December 31, 2018 , liabilities of consolidated VIEs totaled $7,189,086 and $5,709,807 , 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		Jun. 30, 2019USD ($)series	Dec. 31, 2018USD ($)series
Debt Instrument [Line Items]
Total FHLBC Borrowings	[1]	$ 2,573,173	$ 2,572,158
Asset-backed securities issued
Debt Instrument [Line Items]
Market valuation adjustments		160,428	(58,290)
Total FHLBC Borrowings		6,913,129	5,410,073
Asset-backed securities issued | Certificates with principal balance
Debt Instrument [Line Items]
Certificates with principal balance		6,526,073	5,309,564
Asset-backed securities issued | Interest-only certificates
Debt Instrument [Line Items]
Certificates with principal balance		226,628	158,799
Asset-backed securities issued | Legacy Sequoia
Debt Instrument [Line Items]
Market valuation adjustments		(20,968)	(29,753)
Total FHLBC Borrowings		$ 448,862	$ 512,240
Number of series | series		20	20
Asset-backed securities issued | Legacy Sequoia | Minimum
Debt Instrument [Line Items]
Weighted average interest rates, by series		2.55%	1.36%
Asset-backed securities issued | Legacy Sequoia | Maximum
Debt Instrument [Line Items]
Weighted average interest rates, by series		3.68%	3.60%
Asset-backed securities issued | Legacy Sequoia | Certificates with principal balance
Debt Instrument [Line Items]
Certificates with principal balance		$ 468,193	$ 540,456
Asset-backed securities issued | Legacy Sequoia | Interest-only certificates
Debt Instrument [Line Items]
Certificates with principal balance		1,637	1,537
Asset-backed securities issued | Sequoia Choice
Debt Instrument [Line Items]
Market valuation adjustments		49,323	20,590
Total FHLBC Borrowings		$ 1,929,444	$ 1,885,010
Number of series | series		7	6
Asset-backed securities issued | Sequoia Choice | Minimum
Debt Instrument [Line Items]
Weighted average interest rates, by series		4.42%	4.46%
Asset-backed securities issued | Sequoia Choice | Maximum
Debt Instrument [Line Items]
Weighted average interest rates, by series		5.08%	4.97%
Asset-backed securities issued | Sequoia Choice | Certificates with principal balance
Debt Instrument [Line Items]
Certificates with principal balance		$ 1,862,408	$ 1,838,758
Asset-backed securities issued | Sequoia Choice | Interest-only certificates
Debt Instrument [Line Items]
Certificates with principal balance		17,713	25,662
Asset-backed securities issued | Freddie Mac SLST
Debt Instrument [Line Items]
Market valuation adjustments		91,381	89
Total FHLBC Borrowings		$ 991,766	$ 993,748
Weighted average interest rates, by series		3.50%	3.51%
Number of series | series		1	1
Asset-backed securities issued | Freddie Mac SLST | Certificates with principal balance
Debt Instrument [Line Items]
Certificates with principal balance		$ 3,244,398	$ 993,659
Asset-backed securities issued | Freddie Mac SLST | Interest-only certificates
Debt Instrument [Line Items]
Certificates with principal balance		207,278	0
Asset-backed securities issued | Freddie Mac K-Series
Debt Instrument [Line Items]
Market valuation adjustments		40,692	(49,216)
Total FHLBC Borrowings		$ 3,543,057	$ 2,019,075
Number of series | series		4	3
Asset-backed securities issued | Freddie Mac K-Series | Minimum
Debt Instrument [Line Items]
Weighted average interest rates, by series		3.39%	3.39%
Asset-backed securities issued | Freddie Mac K-Series | Maximum
Debt Instrument [Line Items]
Weighted average interest rates, by series		4.20%	4.08%
Asset-backed securities issued | Freddie Mac K-Series | Certificates with principal balance
Debt Instrument [Line Items]
Certificates with principal balance		$ 951,074	$ 1,936,691
Asset-backed securities issued | Freddie Mac K-Series | Interest-only certificates
Debt Instrument [Line Items]
Certificates with principal balance		$ 0	$ 131,600
[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 June 30, 2019 and December 31, 2018 , assets of consolidated VIEs totaled $7,937,685 and $6,331,191 , respectively. At June 30, 2019 and December 31, 2018 , liabilities of consolidated VIEs totaled $7,189,086 and $5,709,807 , respectively. See Note 4 for further discussion.

Asset-Backed Securities Issue_3

Asset-Backed Securities Issued - Additional Information (Details)	6 Months Ended
	Jun. 30, 2019
Asset-backed securities issued | Contractual maturities of over five years
Debt Instrument [Line Items]
Contractual maturities of securities (in years)	5 years

Asset-Backed Securities Issue_4

Asset-Backed Securities Issued - Accrued Interest Payable (Details) - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2019	Dec. 31, 2018
Debt Instrument [Line Items]
Amortization of debt issuance costs	$ 21,437	$ 16,897
Freddie Mac SLST
Debt Instrument [Line Items]
Amortization of debt issuance costs	2,774	2,907
Freddie Mac K-Series
Debt Instrument [Line Items]
Amortization of debt issuance costs	10,822	6,239
Asset-backed securities issued | Legacy Sequoia
Debt Instrument [Line Items]
Amortization of debt issuance costs	519	571
Asset-backed securities issued | Sequoia Choice
Debt Instrument [Line Items]
Amortization of debt issuance costs	$ 7,322	$ 7,180

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	Jun. 30, 2019	Dec. 31, 2018
Financial Instruments Owned and Pledged as Collateral [Line Items]
Collateral for ABS Issued	$ 7,616,278	$ 5,992,049
Residential loans
Financial Instruments Owned and Pledged as Collateral [Line Items]
Collateral for ABS Issued	3,840,195	3,822,009
Multifamily loans
Financial Instruments Owned and Pledged as Collateral [Line Items]
Collateral for ABS Issued	3,749,657	2,144,598
Restricted cash
Financial Instruments Owned and Pledged as Collateral [Line Items]
Collateral for ABS Issued	158	1,168
Accrued interest receivable
Financial Instruments Owned and Pledged as Collateral [Line Items]
Collateral for ABS Issued	24,820	20,331
REO
Financial Instruments Owned and Pledged as Collateral [Line Items]
Collateral for ABS Issued	1,448	3,943
Legacy Sequoia
Financial Instruments Owned and Pledged as Collateral [Line Items]
Collateral for ABS Issued	460,113	524,869
Legacy Sequoia | Residential loans
Financial Instruments Owned and Pledged as Collateral [Line Items]
Collateral for ABS Issued	457,750	519,958
Legacy Sequoia | Multifamily loans
Financial Instruments Owned and Pledged as Collateral [Line Items]
Collateral for ABS Issued	0	0
Legacy Sequoia | Restricted cash
Financial Instruments Owned and Pledged as Collateral [Line Items]
Collateral for ABS Issued	144	146
Legacy Sequoia | Accrued interest receivable
Financial Instruments Owned and Pledged as Collateral [Line Items]
Collateral for ABS Issued	771	822
Legacy Sequoia | REO
Financial Instruments Owned and Pledged as Collateral [Line Items]
Collateral for ABS Issued	1,448	3,943
Sequoia Choice
Financial Instruments Owned and Pledged as Collateral [Line Items]
Collateral for ABS Issued	2,156,316	2,089,392
Sequoia Choice | Residential loans
Financial Instruments Owned and Pledged as Collateral [Line Items]
Collateral for ABS Issued	2,147,356	2,079,382
Sequoia Choice | Multifamily loans
Financial Instruments Owned and Pledged as Collateral [Line Items]
Collateral for ABS Issued	0	0
Sequoia Choice | Restricted cash
Financial Instruments Owned and Pledged as Collateral [Line Items]
Collateral for ABS Issued	14	1,022
Sequoia Choice | Accrued interest receivable
Financial Instruments Owned and Pledged as Collateral [Line Items]
Collateral for ABS Issued	8,946	8,988
Sequoia Choice | REO
Financial Instruments Owned and Pledged as Collateral [Line Items]
Collateral for ABS Issued	0	0
Freddie Mac SLST
Financial Instruments Owned and Pledged as Collateral [Line Items]
Collateral for ABS Issued	1,238,875	1,226,595
Freddie Mac SLST | Residential loans
Financial Instruments Owned and Pledged as Collateral [Line Items]
Collateral for ABS Issued	1,235,089	1,222,669
Freddie Mac SLST | Multifamily loans
Financial Instruments Owned and Pledged as Collateral [Line Items]
Collateral for ABS Issued	0	0
Freddie Mac SLST | Restricted cash
Financial Instruments Owned and Pledged as Collateral [Line Items]
Collateral for ABS Issued	0	0
Freddie Mac SLST | Accrued interest receivable
Financial Instruments Owned and Pledged as Collateral [Line Items]
Collateral for ABS Issued	3,786	3,926
Freddie Mac SLST | 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	3,760,974	2,151,193
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
Financial Instruments Owned and Pledged as Collateral [Line Items]
Collateral for ABS Issued	3,749,657	2,144,598
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	11,317	6,595
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)		Dec. 31, 2018USD ($)	Jun. 30, 2018USD ($)$ / shares	Aug. 31, 2017USD ($)$ / shares	Jan. 31, 2016	Nov. 30, 2014USD ($)$ / shares	Jun. 30, 2019USD ($)	Jun. 30, 2019USD ($)	Dec. 31, 2016USD ($)	Nov. 15, 2018USD ($)	Dec. 31, 2013USD ($)
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		4,000,000					5,000,000	5,000,000
Convertible notes										$ 201,000,000
Debt instrument face amount	[1]	2,572,158,000					2,573,173,000	2,573,173,000
Notional amount		5,911,385,000					7,597,742,000	7,597,742,000
Accrued interest payable	[1]	42,528,000					47,092,000	47,092,000
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
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
Trust Preferred Securities And Subordinated Notes | LIBOR
Debt Instrument [Line Items]
Basis spread on variable rate								2.25%
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) | $ / shares			$ 18.26
Accrued interest payable							5,000,000	$ 5,000,000
Unamortized debt issuance costs							4,000,000	4,000,000
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) | $ / shares				$ 18.55
Accrued interest payable							4,000,000	$ 4,000,000
Unamortized debt issuance costs							5,000,000	5,000,000
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%				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) | $ / shares						$ 21.63
Accrued interest payable							1,000,000	$ 1,000,000
Unamortized debt issuance costs							1,000,000	$ 1,000,000
Amount of debt repurchased									$ 4,000,000
Unamortized deferred issuance costs		$ 1,000,000
Exchangeable Senior Notes Due 2019 | Convertible Debt | Gain (loss) on investments
Debt Instrument [Line Items]
Gain on extinguishment of debt									$ 300,000
FHLB Chicago
Debt Instrument [Line Items]
Interest rate margin reset period								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		2.52%					2.57%	2.57%
Weighted average maturity (in years)		7 years						6 years
Debt instrument face amount							$ 1,999,999,000	$ 1,999,999,000
FHLB Chicago | Redwood | Held-for-sale residential loans | Residential Real Estate
Debt Instrument [Line Items]
Loans pledged as collateral under borrowing agreement with FHLBC							$ 2,390,000,000	$ 2,390,000,000
[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 June 30, 2019 and December 31, 2018 , assets of consolidated VIEs totaled $7,937,685 and $6,331,191 , respectively. At June 30, 2019 and December 31, 2018 , liabilities of consolidated VIEs totaled $7,189,086 and $5,709,807 , respectively. See Note 4 for further discussion.

Long-Term Debt - FHLBC Borrowin

Long-Term Debt - FHLBC Borrowings (Details) - USD ($) $ in Thousands		Jun. 30, 2019	Dec. 31, 2018
Debt Instrument [Line Items]
Total FHLBC Borrowings	[1]	$ 2,573,173	$ 2,572,158
FHLB Chicago | FHLB Member Subsidiary
Debt Instrument [Line Items]
2024		470,171
2025		887,639
2026		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 June 30, 2019 and December 31, 2018 , assets of consolidated VIEs totaled $7,937,685 and $6,331,191 , respectively. At June 30, 2019 and December 31, 2018 , liabilities of consolidated VIEs totaled $7,189,086 and $5,709,807 , respectively. See Note 4 for further discussion.

Commitments and Contingencies -

Commitments and Contingencies - Additional Information (Details) $ in Thousands	Jun. 30, 2019USD ($)lease	Jul. 15, 2010plaintiff	Jun. 30, 2019USD ($)lease	Dec. 31, 2018USD ($)partnership	Jun. 30, 2018USD ($)	Jun. 30, 2019USD ($)loanleasecertificaterepurchase_request	Jun. 30, 2018USD ($)	Dec. 31, 2007certificate	Dec. 31, 2004certificate	Dec. 31, 2007certificate	Mar. 01, 2019USD ($)	Dec. 31, 2016USD ($)	Dec. 31, 2015USD ($)
Loss Contingencies [Line Items]
Lessee, number of leases | lease	5		5			5
Present value of remaining lease payments	$ 16,178		$ 16,178			$ 16,178
Operating lease expense						$ 1,000	$ 1,000
Number of noncancelable leases | lease	4		4			4
Number of leases qualified as short-term lease | lease						1
Lease liability	$ 13,082		$ 13,082	$ 0		$ 13,082
Right-of-use asset	$ 11,573		$ 11,573	$ 0		$ 11,573
Number of leases without implicit interest rate | lease						4
Weighted average remaining lease term	8 years		8 years			8 years
Discount rate	5.30%		5.30%			5.30%
Number of partnerships, committed to fund | partnership				2
Commitment to fund partnership, funded amount	$ 6,000		$ 6,000			$ 6,000
Commitment to fund partnership						66,000
Contingent consideration	24,932		24,932	$ 0		24,932
Other income related to risk sharing agreement			800		$ 1,020	1,446	1,799
Guarantee obligations	15,744		15,744	16,711		15,744
Guarantee obligations, credit reserve	5,000		5,000			5,000
Special Purpose Entities (SPEs) assets	48,000		48,000	47,000		48,000
Special Purpose Entities (SPEs) liabilities	16,000		16,000	17,000		16,000
Residential repurchase reserve	3,769		3,769	4,189		$ 3,769
Number of residential repurchase requests (in repurchase requests) | repurchase_request						7
Number of loans repurchased | loan						0
Residential repurchase provisions recorded						$ (400)
Reversal of repurchase provision							(500)
Aggregate amount of loss contingency reserves	2,000		2,000	2,000		$ 2,000
Morgan Stanley And Company
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
Number of certificated withdrawn | certificate									1	8
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	1,030,000		1,030,000	$ 1,030,000		$ 1,030,000
Loans held-for-investment, in foreclosure	2,000		2,000			2,000
Other income
Loss Contingencies [Line Items]
Other income related to risk sharing agreement			1,000		1,000	1,000	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)		$ (200)	100	$ (300)
Guarantee Obligations
Loss Contingencies [Line Items]
Original unpaid balance of loans subject to risk sharing agreements												$ 3,190,000	$ 3,190,000
Potential future payments on loans	44,000		44,000			44,000
Loan principal	$ 1,740,000		$ 1,740,000			$ 1,740,000
Weighted average original Fair Isaac Corporation (FICO) score	759		759			759
Weighted average original loan-to-value (LTV)	76.00%		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	$ 6,000		$ 6,000			$ 6,000
Residential | Sequoia | FHLB Seattle
Loss Contingencies [Line Items]
Principal value	133,000		133,000			133,000
Debt instrument principal payment amount						127,000
Debt instrument interest payment amount						12,000
Residential | Sequoia | Schwab
Loss Contingencies [Line Items]
Principal value	15,000		15,000			15,000
Principal balance of securities	14,000		14,000			14,000
Debt instrument interest amount	1,000		1,000			1,000
Financial Guarantee
Loss Contingencies [Line Items]
Commitment to fund partnership	49,000
Guarantor obligations, current carrying value	100		100			100
Guarantor obligations, maximum exposure, undiscounted	135,000		135,000			135,000
ASU 2016-02
Loss Contingencies [Line Items]
Lease liability	13,000		13,000			13,000
Right-of-use asset	12,000		12,000			12,000
Commitment To Fund Residential Bridge Loan
Loss Contingencies [Line Items]
Commitments to fund temporary advances	33,000		33,000			33,000
Commitment To Fund Temporary Advances On Residential Bridge Loans
Loss Contingencies [Line Items]
Commitments to fund temporary advances	$ 80,000		$ 80,000			$ 80,000
5 Arches, LLC
Loss Contingencies [Line Items]
Contingent consideration maximum amount											$ 27,000
Contingent consideration											$ 24,621

Commitments and Contingencies_2

Commitments and Contingencies - Future Lease Commitments (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Commitments and Contingencies Disclosure [Abstract]
2019 (6 months)	$ 1,376
2020	2,721
2021	1,864
2022	1,468
2023 and thereafter	8,749
Total Lease Commitments	16,178
Less: Imputed interest	(3,096)
Lease liability	$ 13,082	$ 0

Equity - Changes to Accumulated

Equity - Changes to Accumulated Other Comprehensive Income (Loss) by Component (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Balance at beginning of period	$ 1,549,927	$ 1,219,983	$ 1,348,794	$ 1,212,287
Total other comprehensive loss	(3,761)	(4,435)	(12,374)	(9,628)
Balance at End of Period	1,564,032	1,228,955	1,564,032	1,228,955
Net Unrealized Gains on Available-for-Sale Securities
Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Balance at beginning of period	92,567	114,577	95,342	128,201
Other comprehensive income (loss) before reclassifications	8,562	(3,104)	15,280	(7,341)
Amounts reclassified from other accumulated comprehensive income	(2,822)	(4,748)	(12,315)	(14,135)
Total other comprehensive loss	5,740	(7,852)	2,965	(21,476)
Balance at End of Period	98,307	106,725	98,307	106,725
Other comprehensive income (loss) before reclassifications, tax		200		100
Net Unrealized Losses on Interest Rate Agreements Accounted for as Cash Flow Hedges
Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Balance at beginning of period	(39,883)		(34,045)
Other comprehensive income (loss) before reclassifications	(9,501)		(15,339)
Amounts reclassified from other accumulated comprehensive income	0		0
Total other comprehensive loss	(9,501)		(15,339)
Balance at End of Period	$ (49,384)		(49,384)
Net Unrealized Losses on Interest Rate Agreements Accounted for as Cash Flow Hedges
Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Balance at beginning of period		(34,522)	$ (34,000)	(42,953)
Other comprehensive income (loss) before reclassifications		3,417		11,848
Amounts reclassified from other accumulated comprehensive income		0		0
Total other comprehensive loss		3,417		11,848
Balance at End of Period		$ (31,105)		$ (31,105)

Equity - Reclassifications out

Equity - Reclassifications out of Accumulated Other Comprehensive Income (Loss) (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Investment fair value changes, net	$ (3,138,000)	$ (889,000)	$ (23,297,000)	$ (2,498,000)
Realized gains, net	(2,827,000)	(4,714,000)	(13,513,000)	(14,077,000)
Net Income before Provision for Income Taxes	(33,599,000)	(35,275,000)	(88,946,000)	(87,016,000)
Other than temporary impairments	0	300,000	0	300,000
Other than temporary impairments recognized in income				100,000
Other than temporary impairments recognized in Accumulated other comprehensive income		200,000		200,000
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	0	56,000	0	56,000
Realized gains, net	(2,822,000)	(4,804,000)	(12,315,000)	(14,191,000)
Net Income before Provision for Income Taxes	(2,822,000)	$ (4,748,000)	(12,315,000)	(14,135,000)
Other than temporary impairments recognized in income				$ (100,000)
Other than temporary impairments recognized in Accumulated other comprehensive income	$ 0		$ 0

Equity - Additional Information

Equity - Additional Information (Details) - USD ($)	Jan. 29, 2019	Jun. 30, 2019	Dec. 31, 2018	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018	Feb. 28, 2018
Stockholders Equity Note [Line Items]
Issuance of common stock (in shares)	11,500,000
Net proceeds from issuance of common stock					$ 198,333,000	$ 177,000
Issuance of common stock	$ 177,000,000	$ 12,511,000			190,108,000
Direct stock purchase and dividend reinvestment plan		0			6,307,000
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
Equity awards
Stockholders Equity Note [Line Items]
Securities excluded in the calculation of diluted earnings per share (in shares)		8,996		7,091	8,186	6,965
At The Market Offerings | Common Stock
Stockholders Equity Note [Line Items]
Stock issuance program, authorized amount			$ 150,000,000
Issuance of common stock (in shares)		791,191	1,550,819		791,191
Net proceeds from issuance of common stock		$ 13,000,000	$ 25,000,000		$ 13,000,000
Remaining outstanding		$ 112,000,000			$ 112,000,000
Common Stock
Stockholders Equity Note [Line Items]
Issuance of common stock (in shares)		791,191			12,291,191
Issuance of common stock		$ 8,000			$ 123,000
Direct stock purchase and dividend reinvestment plan (in shares)		0			399,838
Direct stock purchase and dividend reinvestment plan		$ 0			$ 4,000

Equity - Basic and Diluted Earn

Equity - Basic and Diluted Earnings Per Common Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Basic Earnings per Common Share:
Net income attributable to Redwood	$ 31,266	$ 32,747	$ 85,730	$ 79,592
Less: Dividends and undistributed earnings allocated to participating securities	(877)	(1,074)	(2,417)	(2,535)
Net income allocated to common shareholders	$ 30,389	$ 31,673	$ 83,313	$ 77,057
Basic weighted average common shares outstanding (in shares)	96,983,764	75,380,715	94,846,431	75,388,638
Basic Earnings per Common Share (in dollars per share)	$ 0.31	$ 0.42	$ 0.88	$ 1.02
Diluted Earnings per Common Share:
Net income attributable to Redwood	$ 31,266	$ 32,747	$ 85,730	$ 79,592
Less: Dividends and undistributed earnings allocated to participating securities	(1,053)	(1,156)	(2,595)	(2,584)
Add back: Interest expense on convertible notes for the period, net of tax	8,698	6,335	17,385	14,976
Net income allocated to common shareholders	$ 38,911	$ 37,926	$ 100,520	$ 91,984
Weighted average common shares outstanding (in shares)	96,983,764	75,380,715	94,846,431	75,388,638
Net effect of dilutive equity awards (in shares)	270,550	277,788	210,360	156,307
Net effect of assumed convertible notes conversion to common shares (in shares)	33,442,640	24,773,490	33,442,640	28,746,235
Diluted weighted average common shares outstanding (in shares)	130,696,954	100,431,993	128,499,431	104,291,180
Diluted Earnings per Common Share (in dollars per share)	$ 0.30	$ 0.38	$ 0.78	$ 0.88

Equity Compensation Plans - Add

Equity Compensation Plans - Additional Information (Details) - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2019	Dec. 31, 2018
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)	4,202,935	4,616,776
Unrecognized compensation cost	$ 26,619	$ 25,122
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)	600,000
Number of shares purchased by employees (in shares)	406,941	390,569
Restricted Stock Awards
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unvested outstanding stock awards (in shares)	218,022	334,606
Number of stock awards granted (in shares)	0
Number of stock awards vested (in shares)	116,584
Number of stock awards forfeited (in shares)	0
Restricted Stock Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unvested outstanding stock awards (in shares)	229,943	4,876
Number of stock awards granted (in shares)	225,067
Number of stock awards vested (in shares)	0
Number of stock awards forfeited (in shares)	0
Deferred Stock Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unvested outstanding stock awards (in shares)	2,405,497	2,336,720
Number of stock awards granted (in shares)	329,228
Number of stock awards vested (in shares)	1,249,606	1,181,622
Number of stock awards forfeited (in shares)	0
Stock units distributed (in shares)	260,451
Performance Stock Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unvested outstanding stock awards (in shares)	725,616	725,616
Share-based compensation, vesting period (in years)	3 years

Equity Compensation Plans - Unr

Equity Compensation Plans - Unrecognized Compensation Cost (Details) $ in Thousands	6 Months Ended
	Jun. 30, 2019USD ($)
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized [Roll Forward]
Unrecognized compensation cost at beginning of period	$ 25,122
Equity grants	8,474
Equity grant forfeitures	0
Equity compensation expense	(6,977)
Unrecognized Compensation Cost at End of Period	26,619
Incentive Plans | Restricted Stock Awards
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized [Roll Forward]
Unrecognized compensation cost at beginning of period	3,498
Equity grants	0
Equity grant forfeitures	0
Equity compensation expense	(766)
Unrecognized Compensation Cost at End of Period	2,732
Incentive Plans | Restricted Stock Units
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized [Roll Forward]
Unrecognized compensation cost at beginning of period	74
Equity grants	3,483
Equity grant forfeitures	0
Equity compensation expense	(277)
Unrecognized Compensation Cost at End of Period	3,280
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	14,489
Equity grants	4,831
Equity grant forfeitures	0
Equity compensation expense	(4,184)
Unrecognized Compensation Cost at End of Period	15,136
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	7,061
Equity grants	0
Equity grant forfeitures	0
Equity compensation expense	(1,670)
Unrecognized Compensation Cost at End of Period	5,391
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	160
Equity grant forfeitures	0
Equity compensation expense	(80)
Unrecognized Compensation Cost at End of Period	$ 80

Mortgage Banking Activities, _3

Mortgage Banking Activities, Net - Components of Mortgage Banking Activities (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Other income, net	$ 2,407	$ 3,322	$ 5,994	$ 5,440
Mortgage banking activities, net	19,160	10,596	31,469	37,172
Residential Mortgage Banking Activities
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Other income, net	852	1,082	973	1,420
Mortgage banking activities, net	15,359	10,596	26,186	37,172
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	20,267	3,364	35,111	1,170
Residential Mortgage Banking Activities | Risk management derivatives
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Risk management derivatives	(5,760)	6,150	(9,898)	34,582
Business Purpose Mortgage Banking Activities, Net:
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Changes in fair value of assets	1,012	0	1,098	0
Other income, net	2,578	0	3,076	0
Mortgage banking activities, net	3,801	0	5,283	0
Business Purpose Mortgage Banking Activities, Net: | Risk management derivatives
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Risk management derivatives	(1,671)	0	(2,517)	0
Business Purpose Mortgage Banking Activities, Net: | Single-family rental 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	$ 1,882	$ 0	$ 3,626	$ 0

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		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Investment Holdings [Line Items]
Changes in fair value of assets	$ 3,138	$ 889	$ 23,297	$ 2,498
Residential loans held-for-investment, at Redwood
Investment Holdings [Line Items]
Changes in fair value of assets	35,548	(15,010)	63,656	(53,995)
Residential bridge loans, held-for-investment at fair value
Investment Holdings [Line Items]
Changes in fair value of assets	(318)	0	(621)	0
Trading securities
Investment Holdings [Line Items]
Changes in fair value of assets	18,442	(930)	40,302	(3,885)
Servicer advance investments
Investment Holdings [Line Items]
Changes in fair value of assets	432	0	1,440	0
Excess MSRs
Investment Holdings [Line Items]
Changes in fair value of assets	(65)	0	(502)	0
REO
Investment Holdings [Line Items]
Changes in fair value of assets	(139)	0	(139)	0
Legacy Sequoia
Investment Holdings [Line Items]
Changes in fair value of assets	(123)	(720)	(497)	(728)
Sequoia Choice
Investment Holdings [Line Items]
Changes in fair value of assets	2,879	1,072	6,144	986
Freddie Mac SLST
Investment Holdings [Line Items]
Changes in fair value of assets	8,037	0	14,402	0
Freddie Mac K-Series
Investment Holdings [Line Items]
Changes in fair value of assets	3,246	0	6,365	0
Risk-sharing investments
Investment Holdings [Line Items]
Changes in fair value of assets	(61)	(209)	(138)	(348)
Risk management derivatives, net
Investment Holdings [Line Items]
Changes in fair value of assets	$ (64,740)	$ 16,742	$ (107,115)	$ 60,524

Other Income, Net (Details)

Other Income, Net (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Other Income and Expenses [Abstract]
MSR income, net	$ 1,654	$ 1,874	$ 1,911	$ 2,830
Risk share income	800	1,020	1,446	1,799
FHLBC capital stock dividend	535	428	1,082	811
Equity investment losses	(96)	0	(5)	0
5 Arches management fee income	1,488	0	1,954	0
Amortization of intangible assets	(1,900)	0	(2,532)	0
Gain on re-measurement of investment in 5 Arches	0	0	2,441	0
Other	(74)	0	(303)	0
Other Income, Net	$ 2,407	$ 3,322	$ 5,994	$ 5,440

Operating Expenses - Components

Operating Expenses - Components of Operating Expenses (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Other Income and Expenses [Abstract]
Fixed compensation expense	$ 9,252	$ 5,775	$ 17,457	$ 12,214
Variable compensation expense	4,021	1,825	8,423	8,732
Equity compensation expense	4,024	3,835	6,977	6,532
Total compensation expense	17,297	11,435	32,857	27,478
Systems and consulting	2,536	1,774	4,364	3,640
Loan acquisition costs	1,516	2,155	2,993	3,973
Office costs	1,585	1,084	2,889	2,224
Accounting and legal	960	1,074	2,085	1,908
Corporate costs	545	496	1,219	1,000
Other operating expenses	1,816	991	3,007	1,816
Total Operating Expenses	$ 26,255	$ 19,009	$ 49,414	$ 42,039

Taxes - Additional Information

Taxes - Additional Information (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Income Tax Disclosure [Abstract]
Provision for income taxes	$ 2,333	$ 2,528	$ 3,216	$ 7,424

Taxes - Reconciliation of Statu

Taxes - Reconciliation of Statutory Tax Rate to Effective Tax Rate (Details)	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018
Income Tax Disclosure [Abstract]
Federal statutory rate	21.00%	21.00%
State statutory rate, net of Federal tax effect	8.60%	8.60%
Differences in taxable (loss) income from GAAP income	(4.70%)	(2.90%)
Change in valuation allowance	(3.60%)	(3.30%)
Dividends paid deduction	(17.70%)	(14.90%)
Effective Tax Rate	3.60%	8.50%

Segment Information - Additiona

Segment Information - Additional Information (Details)	6 Months Ended
	Jun. 30, 2019segment
Segment Reporting [Abstract]
Number of operating segments	2

Segment Information - Financial

Segment Information - Financial Information by Segment (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Segment Reporting Information [Line Items]
Interest income	$ 148,542	$ 82,976	$ 279,583	$ 159,595
Interest expense	(116,220)	(48,213)	(215,496)	(89,727)
Net Interest Income	32,322	34,763	64,087	69,868
Non-interest Income
Mortgage banking activities, net	19,160	10,596	31,469	37,172
Investment fair value changes, net	3,138	889	23,297	2,498
Other income (expense), net	2,407	3,322	5,994	5,440
Realized gains, net	2,827	4,714	13,513	14,077
Total non-interest income, net	27,532	19,521	74,273	59,187
Direct operating expenses	(26,255)	(19,009)	(49,414)	(42,039)
Provision for income taxes	(2,333)	(2,528)	(3,216)	(7,424)
Net Income	31,266	32,747	85,730	79,592
Non-cash amortization income (expense), net	(517)	3,741	(172)	7,382
Operating Segments | Investment Portfolio
Segment Reporting Information [Line Items]
Interest income	132,048	64,569	247,500	123,326
Interest expense	(93,912)	(27,004)	(171,799)	(46,867)
Net Interest Income	38,136	37,565	75,701	76,459
Non-interest Income
Mortgage banking activities, net	0	0	0	0
Investment fair value changes, net	3,297	1,600	23,853	3,190
Other income (expense), net	2,874	3,322	4,095	5,440
Realized gains, net	2,827	4,714	13,513	14,077
Total non-interest income, net	8,998	9,636	41,461	22,707
Direct operating expenses	(2,258)	(1,858)	(4,919)	(3,865)
Provision for income taxes	(896)	(1,130)	(1,238)	(2,018)
Net Income	43,980	44,213	111,005	93,283
Non-cash amortization income (expense), net	2,622	4,654	4,990	9,271
Operating Segments | Mortgage Banking
Segment Reporting Information [Line Items]
Interest income	11,352	13,084	21,729	25,981
Interest expense	(6,595)	(7,629)	(12,159)	(13,766)
Net Interest Income	4,757	5,455	9,570	12,215
Non-interest Income
Mortgage banking activities, net	19,160	10,596	31,469	37,172
Investment fair value changes, net	0	0	0	0
Other income (expense), net	(156)	0	(323)	0
Realized gains, net	0	0	0	0
Total non-interest income, net	19,004	10,596	31,146	37,172
Direct operating expenses	(11,571)	(5,739)	(19,675)	(14,371)
Provision for income taxes	(1,437)	(1,398)	(1,978)	(5,406)
Net Income	10,753	8,914	19,063	29,610
Non-cash amortization income (expense), net	(2,014)	(22)	(2,737)	(44)
Corporate/Other
Segment Reporting Information [Line Items]
Interest income	5,142	5,323	10,354	10,288
Interest expense	(15,713)	(13,580)	(31,538)	(29,094)
Net Interest Income	(10,571)	(8,257)	(21,184)	(18,806)
Non-interest Income
Mortgage banking activities, net	0	0	0	0
Investment fair value changes, net	(159)	(711)	(556)	(692)
Other income (expense), net	(311)	0	2,222	0
Realized gains, net	0	0	0	0
Total non-interest income, net	(470)	(711)	1,666	(692)
Direct operating expenses	(12,426)	(11,412)	(24,820)	(23,803)
Provision for income taxes	0	0	0	0
Net Income	(23,467)	(20,380)	(44,338)	(43,301)
Non-cash amortization income (expense), net	$ (1,125)	$ (891)	$ (2,425)	$ (1,845)

Segment Information - Component

Segment Information - Components of Corporate/Other (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Segment Reporting Information [Line Items]
Interest income	$ 148,542	$ 82,976	$ 279,583	$ 159,595
Interest expense	(116,220)	(48,213)	(215,496)	(89,727)
Net Interest Income	32,322	34,763	64,087	69,868
Investment fair value changes, net	3,138	889	23,297	2,498
Total non-interest income, net	27,532	19,521	74,273	59,187
Direct operating expenses	(26,255)	(19,009)	(49,414)	(42,039)
Net Income	31,266	32,747	85,730	79,592
Corporate/Other
Segment Reporting Information [Line Items]
Interest income	5,142	5,323	10,354	10,288
Interest expense	(15,713)	(13,580)	(31,538)	(29,094)
Net Interest Income	(10,571)	(8,257)	(21,184)	(18,806)
Investment fair value changes, net	(159)	(711)	(556)	(692)
Other income	(311)	0	2,222	0
Total non-interest income, net	(470)	(711)	1,666	(692)
Direct operating expenses	(12,426)	(11,412)	(24,820)	(23,803)
Net Income	(23,467)	(20,380)	(44,338)	(43,301)
Corporate/Other | Legacy Consolidated VIEs
Segment Reporting Information [Line Items]
Interest income	4,776	5,017	9,629	9,829
Interest expense	(3,981)	(4,215)	(8,096)	(8,067)
Net Interest Income	795	802	1,533	1,762
Investment fair value changes, net	(123)	(720)	(497)	(728)
Other income	0	0	0	0
Total non-interest income, net	(123)	(720)	(497)	(728)
Direct operating expenses	0	0	0	0
Net Income	672	82	1,036	1,034
Corporate/Other | Other
Segment Reporting Information [Line Items]
Interest income	366	306	725	459
Interest expense	(11,732)	(9,365)	(23,442)	(21,027)
Net Interest Income	(11,366)	(9,059)	(22,717)	(20,568)
Investment fair value changes, net	(36)	9	(59)	36
Other income	(311)	0	2,222	0
Total non-interest income, net	(347)	9	2,163	36
Direct operating expenses	(12,426)	(11,412)	(24,820)	(23,803)
Net Income	$ (24,139)	$ (20,462)	$ (45,374)	$ (44,335)

Segment Information - Supplemen

Segment Information - Supplemental Information by Segment (Details) - USD ($) $ in Thousands		Jun. 30, 2019	Dec. 31, 2018
Segment Reporting Information [Line Items]
Real estate securities	[1]	$ 1,477,486	$ 1,452,494
Other investments	[1]	372,130	438,518
Goodwill and intangible assets	[1]	50,999	0
Total Assets	[1]	13,851,586	11,937,406
Residential loans
Segment Reporting Information [Line Items]
Loans, at fair value		7,283,365	7,254,742
Business purpose residential loans
Segment Reporting Information [Line Items]
Loans, at fair value		250,854	141,258
Multifamily loans
Segment Reporting Information [Line Items]
Loans, at fair value		3,749,657	2,144,598
Operating Segments | Investment Portfolio
Segment Reporting Information [Line Items]
Real estate securities		1,477,486	1,452,494
Other investments		369,900	427,764
Goodwill and intangible assets		0
Total Assets		11,790,419	10,093,993
Operating Segments | Investment Portfolio | Residential loans
Segment Reporting Information [Line Items]
Loans, at fair value		5,777,759	5,685,983
Operating Segments | Investment Portfolio | Business purpose residential loans
Segment Reporting Information [Line Items]
Loans, at fair value		159,353	112,798
Operating Segments | Investment Portfolio | Multifamily loans
Segment Reporting Information [Line Items]
Loans, at fair value		3,749,657	2,144,598
Operating Segments | Mortgage Banking
Segment Reporting Information [Line Items]
Real estate securities		0	0
Other investments		2,230	0
Goodwill and intangible assets		50,999
Total Assets		1,225,117	1,103,090
Operating Segments | Mortgage Banking | Residential loans
Segment Reporting Information [Line Items]
Loans, at fair value		1,047,856	1,048,801
Operating Segments | Mortgage Banking | Business purpose residential loans
Segment Reporting Information [Line Items]
Loans, at fair value		91,501	28,460
Operating Segments | Mortgage Banking | Multifamily loans
Segment Reporting Information [Line Items]
Loans, at fair value		0	0
Corporate/Other
Segment Reporting Information [Line Items]
Real estate securities		0	0
Other investments		0	10,754
Goodwill and intangible assets		0
Total Assets		836,050	740,323
Corporate/Other | Residential loans
Segment Reporting Information [Line Items]
Loans, at fair value		457,750	519,958
Corporate/Other | Business purpose residential loans
Segment Reporting Information [Line Items]
Loans, at fair value		0	0
Corporate/Other | Multifamily loans
Segment Reporting Information [Line Items]
Loans, at fair value		$ 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 June 30, 2019 and December 31, 2018 , assets of consolidated VIEs totaled $7,937,685 and $6,331,191 , respectively. At June 30, 2019 and December 31, 2018 , liabilities of consolidated VIEs totaled $7,189,086 and $5,709,807 , respectively. See Note 4 for further discussion.

Subsequent Events (Details)

Subsequent Events (Details) - Residential - Subsequent Event $ in Millions	1 Months Ended
	Jul. 31, 2019USD ($)
Subsequent Event [Line Items]
Deposit assets	$ 60
Payments to acquire mortgage-backed securities	$ 150