Redwood Trust (RWT) 10-Q 6 Nov 20 2020 Q3 Quarterly report Financial data

Cover Page

Cover Page - shares	9 Months Ended
	Sep. 30, 2020	Nov. 02, 2020
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2020
Document Transition Report	false
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		111,928,020
Amendment Flag	false
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	Q3
Entity Central Index Key	0000930236
Current Fiscal Year End Date	--12-31

CONSOLIDATED BALANCE SHEETS

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands		Sep. 30, 2020	Dec. 31, 2019
ASSETS
Real estate securities, at fair value	[1]	$ 351,335	$ 1,099,874
Other investments	[1]	384,628	358,130
Cash and cash equivalents	[1]	450,684	196,966
Restricted cash	[1]	73,594	93,867
Goodwill and intangible assets	[1]	60,737	161,464
Derivative assets	[1]	14,709	35,701
Other assets	[1]	124,273	419,321
Total Assets	[1]	10,402,412	17,995,440
Liabilities
Short-term debt, net	[1]	482,761	2,329,145
Derivative liabilities	[1]	1,612	163,424
Accrued expenses and other liabilities	[1]	155,989	206,893
Asset-backed securities issued (includes $6,969,376 and $10,515,475 at fair value), net	[1]	7,172,398	10,515,475
Long-term debt, net	[1]	1,536,188	2,953,272
Total liabilities	[1]	9,348,948	16,168,209
Commitments and Contingencies	[1]
Equity
Common stock, par value $0.01 per share, 395,000,000 and 270,000,000 shares authorized; 111,904,322 and 114,353,036 issued and outstanding	[1]	1,119	1,144
Additional paid-in capital	[1]	2,261,911	2,269,617
Accumulated other comprehensive (loss) income	[1]	(20,560)	41,513
Cumulative earnings	[1]	942,982	1,579,124
Cumulative distributions to stockholders	[1]	(2,131,988)	(2,064,167)
Total equity	[1]	1,053,464	1,827,231
Total Liabilities and Equity	[1]	10,402,412	17,995,440
Residential loans, held-for-sale, at fair value
ASSETS
Loans, at fair value	[1]	105,128	536,385
Residential loans, held-for-investment, at fair value
ASSETS
Loans, at fair value	[1]	4,389,808	7,178,465
Business purpose residential loans, held-for-sale, at fair value
ASSETS
Loans, at fair value	[1]	285,549	331,565
Business purpose residential loans, held-for-investment, at fair value
ASSETS
Loans, at fair value	[1]	3,670,552	3,175,178
Multifamily loans
ASSETS
Loans, at fair value	[1]	491,415	4,408,524
Variable Interest Entity, Primary Beneficiary
ASSETS
Other investments		278,487	184,802
Cash and cash equivalents		10,425	9,015
Restricted cash		20,795	21,936
Other assets		5,829	2,700
Total Assets		8,197,095	11,931,869
Liabilities
Short-term debt, net		228,998	152,554
Accrued expenses and other liabilities		18,176	14,983
Asset-backed securities issued (includes $6,969,376 and $10,515,475 at fair value), net		6,969,376	10,515,475
Total liabilities		7,238,047	10,717,072
Variable Interest Entity, Primary Beneficiary | Business purpose residential loans, held-for-investment, at fair value
ASSETS
Loans, at fair value		$ 2,969,692	$ 2,192,552
[1]	Our consolidated balance sheets include assets of consolidated variable interest entities (“VIEs”) that can only be used to settle obligations of these VIEs and liabilities of consolidated VIEs for which creditors do not have recourse to Redwood Trust, Inc. or its affiliates. At September 30, 2020 and December 31, 2019, assets of consolidated VIEs totaled $8,197,095 and $11,931,869, respectively. At September 30, 2020 and December 31, 2019, liabilities of consolidated VIEs totaled $7,238,047 and $10,717,072, respectively. See Note 4 for further discussion.

CONSOLIDATED BALANCE SHEETS (PA

CONSOLIDATED BALANCE SHEETS (PARENTHETICAL) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Statement of Financial Position [Abstract]
ABS issued, net, Fair value	$ 6,969,376	$ 10,515,475
Common stock, par value (usd per share)	$ 0.01	$ 0.01
Common stock, shares authorized (shares)	395,000,000	270,000,000
Common stock, issued (shares)	111,904,322	114,353,036
Common stock, outstanding (shares)	111,904,322	114,353,036

CONSOLIDATED STATEMENTS OF INCO

CONSOLIDATED STATEMENTS OF INCOME (LOSS) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Interest Income
Residential loans	$ 44,921	$ 77,070	$ 179,331	$ 230,308
Business purpose residential loans	55,637	5,446	161,710	12,231
Multifamily loans	4,918	36,829	49,960	94,134
Real estate securities	10,135	23,047	38,471	72,514
Other interest income	6,371	7,725	20,537	20,513
Total interest income	121,982	150,117	450,009	429,700
Interest Expense
Short-term debt	(5,145)	(24,239)	(45,119)	(70,732)
Asset-backed securities issued	(66,514)	(71,065)	(232,316)	(196,473)
Long-term debt	(28,752)	(21,300)	(72,313)	(64,895)
Total interest expense	(100,411)	(116,604)	(349,748)	(332,100)
Net Interest Income	21,571	33,513	100,261	97,600
Non-interest Income (Loss)
Mortgage banking activities, net	59,395	9,515	24,511	40,984
Investment fair value changes, net	107,047	11,444	(611,557)	34,741
Other income, net	(114)	4,356	3,979	13,840
Realized gains, net	602	4,714	30,419	18,227
Total non-interest income (loss), net	166,930	30,029	(552,648)	107,792
General and administrative expenses	(27,630)	(24,899)	(84,832)	(70,722)
Loan acquisition costs	(2,158)	(1,916)	(7,716)	(5,507)
Other expenses	(7,788)	(2,531)	(104,286)	(6,021)
Net Income (Loss) before (Provision for) Benefit from Income Taxes	150,925	34,196	(649,221)	123,142
(Provision for) benefit from income taxes	(9,113)	114	13,079	(3,102)
Net Income (Loss)	$ 141,812	$ 34,310	$ (636,142)	$ 120,040
Basic (loss) earnings per common share (in dollars per share)	$ 1.21	$ 0.33	$ (5.60)	$ 1.20
Diluted (loss) earnings per common share (in dollars per share)	$ 1.02	$ 0.31	$ (5.60)	$ 1.09
Basic weighted average shares outstanding (in shares)	113,403,102	101,872,126	113,952,308	97,214,064
Diluted weighted average shares outstanding (in shares)	141,969,977	136,522,709	113,952,308	131,202,689

CONSOLIDATED STATEMENTS OF COMP

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Statement of Comprehensive Income [Abstract]
Net Income (Loss)	$ 141,812	$ 34,310	$ (636,142)	$ 120,040
Other comprehensive income (loss):
Net unrealized gain (loss) on available-for-sale securities	8,236	4,484	(19,890)	19,764
Reclassification of unrealized gain on available-for-sale securities to net income	(445)	(3,492)	(11,525)	(15,807)
Net unrealized loss on interest rate agreements	0	(11,791)	(32,806)	(27,130)
Reclassification of unrealized loss on interest rate agreements to net income	1,040	0	2,148	0
Total other comprehensive income (loss)	8,831	(10,799)	(62,073)	(23,173)
Total Comprehensive Income (Loss)	$ 150,643	$ 23,511	$ (698,215)	$ 96,867

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 (Loss)	Cumulative Earnings	Cumulative Distributions to Stockholders
Beginning balance (in shares) at Dec. 31, 2018		84,884,344
Balance at beginning of period at Dec. 31, 2018	$ 1,348,794	$ 849	$ 1,811,422	$ 61,297	$ 1,409,941	$ (1,934,715)
Increase (Decrease) in Stockholders' Equity
Net Income (Loss)	120,040				120,040
Other comprehensive income (loss)	(23,173)			(23,173)
Issuance of common stock (in shares)		26,666,191
Issuance of common stock	418,591	$ 267	418,324
Direct stock purchase and dividend reinvestment plan (in shares)		399,838
Direct stock purchase and dividend reinvestment plan	6,307	$ 4	6,303
Employee stock purchase and incentive plans (in shares)		151,358
Employee stock purchase and incentive plans	(1,766)	$ 1	(1,767)
Non-cash equity award compensation	10,552		10,552
Common dividends declared	(94,286)					(94,286)
Ending balance (in shares) at Sep. 30, 2019		112,101,731
Balance at End of Period at Sep. 30, 2019	1,785,059	$ 1,121	2,244,834	38,124	1,529,981	(2,029,001)
Beginning balance (in shares) at Jun. 30, 2019		97,715,021
Balance at beginning of period at Jun. 30, 2019	1,564,032	$ 977	2,013,044	48,923	1,495,671	(1,994,583)
Increase (Decrease) in Stockholders' Equity
Net Income (Loss)	34,310				34,310
Other comprehensive income (loss)	(10,799)			(10,799)
Issuance of common stock (in shares)		14,375,000
Issuance of common stock	228,483	$ 144	228,339
Employee stock purchase and incentive plans (in shares)		11,710
Employee stock purchase and incentive plans	154		154
Non-cash equity award compensation	3,297		3,297
Common dividends declared	(34,418)					(34,418)
Ending balance (in shares) at Sep. 30, 2019		112,101,731
Balance at End of Period at Sep. 30, 2019	1,785,059	$ 1,121	2,244,834	38,124	1,529,981	(2,029,001)
Beginning balance (in shares) at Dec. 31, 2019		114,353,036
Balance at beginning of period at Dec. 31, 2019	1,827,231	$ 1,144	2,269,617	41,513	1,579,124	(2,064,167)
Increase (Decrease) in Stockholders' Equity
Net Income (Loss)	(636,142)				(636,142)
Other comprehensive income (loss)	(62,073)			(62,073)
Issuance of common stock (in shares)		350,088
Issuance of common stock	5,547	$ 3	5,544
Direct stock purchase and dividend reinvestment plan (in shares)		0
Employee stock purchase and incentive plans (in shares)		248,533
Employee stock purchase and incentive plans	(2,765)	$ 2	(2,767)
Non-cash equity award compensation	11,146		11,146
Share repurchases (in shares)		(3,047,335)
Share repurchases	(21,659)	$ (30)	(21,629)
Common dividends declared	(67,821)					(67,821)
Ending balance (in shares) at Sep. 30, 2020		111,904,322
Balance at End of Period at Sep. 30, 2020	1,053,464	$ 1,119	2,261,911	(20,560)	942,982	(2,131,988)
Beginning balance (in shares) at Jun. 30, 2020		114,940,197
Balance at beginning of period at Jun. 30, 2020	936,576	$ 1,149	2,279,625	(29,391)	801,170	(2,115,977)
Increase (Decrease) in Stockholders' Equity
Net Income (Loss)	141,812				141,812
Other comprehensive income (loss)	8,831			8,831
Employee stock purchase and incentive plans (in shares)		11,460
Employee stock purchase and incentive plans	9	$ 0	9
Non-cash equity award compensation	3,906		3,906
Share repurchases (in shares)		(3,047,335)
Share repurchases	(21,659)	$ (30)	(21,629)
Common dividends declared	(16,011)					(16,011)
Ending balance (in shares) at Sep. 30, 2020		111,904,322
Balance at End of Period at Sep. 30, 2020	$ 1,053,464	$ 1,119	$ 2,261,911	$ (20,560)	$ 942,982	$ (2,131,988)

CONSOLIDATED STATEMENTS OF CH_2

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (Parenthetical) - $ / shares	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Statement of Stockholders' Equity [Abstract]
Common dividends declared (in dollars per share)	$ 0.14	$ 0.30	$ 0.585	$ 0.90

CONSOLIDATED STATEMENTS OF CASH

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands		9 Months Ended
		Sep. 30, 2020	Sep. 30, 2019
Cash Flows From Operating Activities:
Net Income (Loss)		$ (636,142)	$ 120,040
Adjustments to reconcile net (loss) income to net cash used in operating activities:
Amortization of premiums, discounts, and securities issuance costs, net		6,213	(3,486)
Depreciation and amortization of non-financial assets		13,166	5,673
Originations of held-for-sale loans		(654,820)	(124,392)
Purchases of held-for-sale loans		(2,893,246)	(4,002,509)
Proceeds from sales of held-for-sale loans		3,224,526	2,971,811
Principal payments on held-for-sale loans		53,677	77,100
Net settlements of derivatives		(187,130)	(32,902)
Non-cash equity award compensation expense		11,146	10,552
Goodwill impairment expense		88,675	0
Market valuation adjustments		606,764	(62,720)
Realized gains, net		(30,419)	(18,227)
Net change in:
Accrued interest receivable and other assets		304,147	(141,197)
Accrued interest payable and accrued expenses and other liabilities		(82,489)	(1,049)
Net cash used in operating activities		(175,932)	(1,201,306)
Cash Flows From Investing Activities:
Originations of loan investments		(327,494)	(171,915)
Purchases of loan investment		0	(49,489)
Proceeds from sales of loan investments		1,574,160	9,422
Principal payments on loan investments		1,652,418	1,091,652
Purchases of real estate securities		(106,422)	(309,839)
Sales of multifamily securities held in consolidated securitization trusts		142,990	0
Proceeds from sales of real estate securities		634,709	487,469
Principal payments on real estate securities		19,446	62,711
Purchases of servicer advance investments		(179,419)	(69,610)
Principal repayments from servicer advance investments		83,124	150,512
Acquisition of 5 Arches, net of cash acquired		0	(3,714)
Net investment in participation in loan warehouse facility		0	38,209
Net investment in multifamily loan fund		40,898	(33,090)
Other investing activities, net		(19,865)	(24,989)
Net cash provided by investing activities		3,514,545	915,516
Cash Flows From Financing Activities:
Proceeds from borrowings on short-term debt		3,981,572	4,009,083
Repayments on short-term debt		(5,828,972)	(4,435,823)
Proceeds from issuance of asset-backed securities		1,343,845	1,020,136
Repayments on asset-backed securities issued		(1,037,546)	(720,651)
Proceeds from issuance of long-term debt		1,251,850	387,053
Deferred long-term debt issuance costs paid		(9,526)	(7,023)
Repayments on long-term debt		(2,640,007)	0
Net settlements of derivatives		(84,336)	0
Net proceeds from issuance of common stock		5,791	426,970
Net payments on repurchase of common stock		(21,659)	0
Taxes paid on equity award distributions		(3,009)	0
Dividends paid		(67,821)	(94,286)
Other financing activities, net		4,650	1,400
Net cash (used in) provided by financing activities		(3,105,168)	586,859
Net increase in cash, cash equivalents and restricted cash		233,445	301,069
Cash, cash equivalents and restricted cash at beginning of period	[1]	290,833	205,077
Cash, cash equivalents, and restricted cash at end of period	[1]	524,278	506,146
Cash paid during the period for:
Interest		364,875	319,036
Taxes		218	6,977
Supplemental Noncash Information:
Real estate securities retained from loan securitizations		46,560	7,759
Retention of mortgage servicing rights from loan securitizations and sales		0	868
Consolidation of residential loans held in securitization trusts		0	1,190,995
Consolidation of residential ABS		0	997,783
Consolidation of multifamily loans held in securitization trusts		(3,849,779)	1,481,554
Consolidation of multifamily ABS		(3,706,789)	1,408,002
Transfers from loans held-for-sale to loans held-for-investment		770,754	1,361,015
Transfers from residential loans to real estate owned		12,547	5,280
Right-of-use asset obtained in exchange for operating lease liability		5,362	13,016
Reduction in operating lease liability due to lease modification		1,466	0
Residential loans
Cash Flows From Investing Activities:
Purchases of multifamily securities held in consolidated securitization trusts		0	(193,212)
Multifamily loans
Cash Flows From Investing Activities:
Purchases of multifamily securities held in consolidated securitization trusts		$ 0	$ (68,601)
[1]	Cash, cash equivalents, and restricted cash at September 30, 2020 includes cash and cash equivalents of $451 million and restricted cash of $74 million, and at December 31, 2019 includes cash and cash equivalents of $197 million and restricted cash of $94 million.

CONSOLIDATED STATEMENTS OF CA_2

CONSOLIDATED STATEMENTS OF CASH FLOWS (PARENTHETICAL) - USD ($) $ in Thousands		Sep. 30, 2020	Dec. 31, 2019
Statement of Cash Flows [Abstract]
Cash and cash equivalents	[1]	$ 450,684	$ 196,966
Restricted cash	[1]	$ 73,594	$ 93,867
[1]	Our consolidated balance sheets include assets of consolidated variable interest entities (“VIEs”) that can only be used to settle obligations of these VIEs and liabilities of consolidated VIEs for which creditors do not have recourse to Redwood Trust, Inc. or its affiliates. At September 30, 2020 and December 31, 2019, assets of consolidated VIEs totaled $8,197,095 and $11,931,869, respectively. At September 30, 2020 and December 31, 2019, liabilities of consolidated VIEs totaled $7,238,047 and $10,717,072, respectively. See Note 4 for further discussion.

Organization

Organization	9 Months Ended
	Sep. 30, 2020
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 three segments: Residential Lending, Business Purpose Lending, and Third-Party Investments. Our primary sources of income are net interest income from our investments 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 origination and acquisition of loans, and their subsequent sale, securitization, or transfer to our investment portfolios. 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 “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 taxable REIT subsidiaries” or “TRS.”

Basis of Presentation

Basis of Presentation	9 Months Ended
	Sep. 30, 2020
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Basis of Presentation	Basis of Presentation The consolidated financial statements presented herein are at September 30, 2020 and December 31, 2019, and for the three and nine months ended September 30, 2020 and 2019. 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, 2019. In the opinion of management, all normal and recurring adjustments to present fairly the financial condition of the company at September 30, 2020 and results of operations for all periods presented have been made. The results of operations for the three and nine months ended September 30, 2020 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 ("Sequoia Choice"). We also consolidate the assets and liabilities of certain Freddie Mac K-Series and Freddie Mac Seasoned Loans Structured Transaction ("SLST") securitizations we invested in. Finally, we consolidated the assets and liabilities of certain CoreVest American Finance Lender ("CAFL") securitizations beginning in the fourth quarter of 2019, in connection with our acquisition of CoreVest. 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 and CAFL 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, the underlying loans at the consolidated Freddie Mac K-Series are shown under Multifamily loans held-for-investment at fair value, and the underlying single-family rental loans at the consolidated CAFL entities are shown under Business purpose residential 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 (loss), 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. During the first quarter of 2020, we sold subordinate securities issued by four of these Freddie Mac K-Series securitization trusts and determined that we should derecognize the associated assets and liabilities of each of these entities for financial reporting purposes. We deconsolidated $3.86 billion of multifamily loans and other assets and $3.72 billion of multifamily ABS issued and other liabilities, for which we realized market valuation losses of $72 million, which were recorded through Investment fair value changes, net on our consolidated statements of income (loss) for the three months ended March 31, 2020. We also consolidate 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. In the fourth quarter of 2019, we acquired and consolidated CoreVest, an originator and portfolio manager of business purpose residential loans. 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. Acquisitions In May 2018, Redwood acquired a 20% minority interest in 5 Arches, an originator of business purpose residential loans. On March 1, 2019, we completed the acquisition of the remaining 80% interest in 5 Arches. On October 15, 2019, we acquired CoreVest, an originator and portfolio manager of business purpose residential loans. Refer to our Annual Report on Form 10-K for the year ended December 31, 2019 for additional information regarding these acquisitions, including purchase price allocations. In connection with the acquisitions of 5 Arches and CoreVest, we identified and recorded finite-lived intangible assets totaling $25 million and $57 million, respectively. The amortization period for each of these assets and the activity for the nine months ended September 30, 2020 is summarized in the table below. Table 2.1 – Intangible Assets – Activity Carrying Value at December 31, 2019 Additions Amortization Expense Carrying Value at September 30, 2020 Weighted Average Amortization Period (in years) (Dollars in Thousands) Borrower network $ 43,952 $ — $ (4,854) $ 39,098 7 Broker network 15,083 — (2,715) 12,368 5 Non-compete agreements 8,236 — (2,375) 5,861 3 Tradenames 3,472 — (1,000) 2,472 3 Developed technology 1,613 — (675) 938 2 Loan administration fees on existing loan assets 433 — (433) — 1 Total $ 72,789 $ — $ (12,052) $ 60,737 6 All of our intangible assets are amortized on a straight-line basis. Estimated future amortization expense is summarized in the table below. Table 2.2 – Intangible Asset Amortization Expense by Year (In Thousands) September 30, 2020 2020 (3 months) $ 3,873 2021 15,304 2022 12,800 2023 10,091 2024 7,073 2025 and thereafter 11,596 Total Future Intangible Asset Amortization $ 60,737 We recorded total goodwill of $89 million in 2019 as a result of the total consideration exceeding the fair value of the net assets acquired from 5 Arches and CoreVest. 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 workforces continuing to provide services to the business. We expect $75 million of this goodwill to be deductible for tax purposes. For reporting purposes, we included the intangible assets and goodwill from these acquisitions within the Business Purpose Lending segment. During the first quarter of 2020, as a result of the deterioration in economic conditions caused by the spread of the COVID-19 pandemic (the "pandemic"), and its impact on our business, including a significant decline in the market price of our common stock, we determined that it was more likely than not that the fair value of our Business Purpose Lending reporting unit was lower than its carrying amount, including goodwill. Based on this analysis, we determined that an interim goodwill impairment test should be performed as of March 31, 2020 and prepared updated cash flow projections for the reporting unit, resulting in a reduction in the long-term forecasts of profitability for our Business Purpose Lending reporting unit as compared to the prior year forecasts. Using these projections, we concluded that the fair value of our Business Purpose Lending reporting unit was less than its carrying value, including goodwill. As a result of this evaluation, we recorded a non-cash $89 million goodwill impairment expense through Other expenses on our consolidated statements of income (loss) during the three months ended March 31, 2020. In conjunction with our assessment of goodwill, we also assessed our intangible assets for impairment at March 31, 2020 and determined they were not impaired. On a quarterly basis, we evaluate our finite-lived intangible assets for impairment indicators and additionally evaluate the useful lives of our intangible assets to determine if revisions to the remaining periods of amortization are warranted. The liability resulting from the contingent consideration arrangement with 5 Arches was recorded at its acquisition-date fair value of $25 million as part of total consideration for the acquisition of 5 Arches. These contingent earn-out payments were classified as a contingent consideration liability and carried at fair value prior to March 31, 2020. During the three months ended March 31, 2020, we made a cash payment of $11 million and granted $3 million of Redwood common stock in connection with the first anniversary of the purchase date. Additionally, as a result of an amendment to the agreement, we reclassified the contingent liability to a deferred liability, as the remaining payments became payable on a set timetable without any remaining contingencies. At September 30, 2020, the carrying value of this deferred liability was $14 million and was recorded as a component of Accrued expenses and other liabilities on our consolidated balance sheets. During the three and nine months ended September 30, 2020, we recorded $0.1 million and $0.6 million of contingent consideration expense, respectively, through Other expenses on our consolidated statements of income (loss). 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, 5 Arches, and CoreVest combined, for the three and nine months ended September 30, 2019, as if the acquisitions occurred as of January 1, 2018. These pro forma amounts have been adjusted to include the amortization of intangible assets and acquisition-related compensation expense 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 acquisitions had been completed as of January 1, 2018 and should not be taken as indicative of our future consolidated results of operations. Table 2.3 – Unaudited Pro Forma Financial Information Three Months Ended September 30, 2019 Nine Months Ended September 30, 2019 (In Thousands) Supplementary pro forma information: Net interest income $ 45,702 $ 133,446 Non-interest income 38,177 116,649 Net income 46,609 140,790

Summary of Significant Accounti

Summary of Significant Accounting Policies	9 Months Ended
	Sep. 30, 2020
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, 2019 is a summary of our significant accounting policies. Provided below is a summary of additional accounting policies that are significant to the company’s consolidated financial position and results of operations for the three and nine months ended September 30, 2020. Available-for-Sale Securities Upon adoption of ASU 2016-13, "Financial Instruments - Credit Losses" in the first quarter of 2020, we modified our policy for recording impairments on available-for-sale 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. The allowance for credit losses is calculated using a discounted cash flow approach and is measured as the difference between the beneficial interest’s amortized cost and the estimate of cash flows expected to be collected, discounted at the effective interest rate used to accrete the beneficial interest. Any allowance for credit losses in excess of the unrealized losses on the beneficial interests are accounted for as a prospective reduction of the effective interest rate. No allowance is recorded for beneficial interests in an unrealized gain position. Favorable changes in the discounted cash flows will result in a reduction in the allowance for credit losses, if any. Any reduction in allowance for credit losses is recorded in earnings. If the allowance for credit losses has been reduced to zero, the remaining favorable changes are reflected as a prospective increase to the effective interest rate. If we intend to sell or it is more likely than not that we will be required to sell the security before it recovers in value, the entire impairment amount will be recognized in earnings with a corresponding adjustment to the security's amortized cost basis. Goodwill Pursuant to our adoption of ASU 2017-04, "Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment" in the first quarter of 2020, we modified our goodwill impairment testing policy. We first assess qualitative factors to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying value. If, based on that assessment, we believe it is more likely than not that the fair value of the reporting unit is less than its carrying value, we measure the fair value of reporting unit and record a goodwill impairment charge for the amount by which a reporting unit's carrying value exceeds its fair value, not to exceed the carrying amount of the goodwill. Any such impairment charges would be recorded through Other expenses on our consolidated statements of income (loss). Recent Accounting Pronouncements Newly Adopted Accounting Standards Updates ("ASUs") 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. We adopted this new guidance, as required, in the first quarter of 2020, which did not have a material impact on our consolidated financial statements but impacted certain of our fair value footnote disclosures. 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. We adopted this new guidance, as required, in the first quarter of 2020, which did not 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. 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. In November 2019, the FASB issued ASU 2019-11, "Codification Improvements to Topic 326, Financial Instruments - Credit Losses," which is intended to clarify Codification guidance. In February 2020, the FASB issued ASU 2020-02, "Financial Instruments - Credit Losses (Topic 326) and Leases (Topic 842) - Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 119 and Update to SEC Section on Effective Date Related to Accounting Standards Update No. 2016-02, Leases (Topic 842) (SEC Update)," and in March 2020, the FASB issued ASU 2020-03, "Codification Improvements to Financial Instruments." These updates amend certain sections of the guidance. 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 accounted for our available-for-sale securities under the other-than-temporary impairment ("OTTI") model for debt securities prior to the issuance of this new guidance. 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 adopted this guidance, as required, in the first quarter of 2020, which did not have a material impact on our consolidated financial statements. Other Recent Accounting Pronouncements In August 2020, the FASB issued ASU 2020-06, "Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity's Own Equity (Subtopic 815-40)." This new guidance simplifies the accounting for convertible debt by reducing the number of accounting models to separately present certain conversion features in equity. This new guidance is effective for fiscal years beginning after December 31, 2021. Early adoption is permitted. We plan to adopt this new guidance by the required date and do not anticipate that this update will have a material impact on our consolidated financial statements. In March 2020, the FASB issued ASU 2020-04, "Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting." This new guidance provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. This new guidance is effective for all entities as of March 12, 2020 through December 31, 2022. We are currently evaluating the impact the adoption of this standard would have on our consolidated financial statements. Through September 30, 2020, we have not elected to apply the optional expedients and exceptions to any of our existing contracts, hedging relationships, or other transactions. In January 2020, the FASB issued ASU 2020-01, "Investments - Equity Securities (Topic 321), Investments - Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815)." This new guidance clarifies the interaction of the accounting for equity securities, equity method investments, and certain forward contracts and purchased options. This new guidance is effective for fiscal years beginning after December 15, 2020. Early adoption is permitted. We plan to adopt this new guidance by the required date and do not anticipate that this update will have a material impact on the consolidated financial statements. In December 2019, the FASB issued ASU 2019-12, "Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes." This new guidance simplifies the accounting for income taxes by removing certain exceptions to the general principles in Topic 740 and by clarifying and amending existing guidance. This new guidance is effective for fiscal years beginning after December 15, 2020. Early adoption is permitted. We plan to adopt this new guidance by the required date and do not anticipate that this update will have a material impact on our consolidated financial statements. Balance Sheet Netting Certain of our derivatives and short-term debt are subject to master netting arrangements or similar agreements. Under GAAP, in certain circumstances we may elect to present certain financial assets, liabilities and related collateral subject to master netting arrangements in a net position on our consolidated balance sheets. However, we do not report any of these financial assets or liabilities on a net basis, and instead present them on a gross basis on our consolidated balance sheets. The table below presents financial assets and liabilities that are subject to master netting arrangements or similar agreements categorized by financial instrument, together with corresponding financial instruments and corresponding collateral received or pledged at September 30, 2020 and December 31, 2019. Table 3.1 – Offsetting of Financial Assets, Liabilities, and Collateral Gross Amounts of Recognized Assets (Liabilities) Gross Amounts Offset in Consolidated Balance Sheet Net Amounts of Assets (Liabilities) Presented in Consolidated Balance Sheet Gross Amounts Not Offset in Consolidated (1) Net Amount September 30, 2020 (In Thousands) Financial Instruments Cash Collateral (Received) Pledged Assets (2) Interest rate agreements $ 3,471 $ — $ 3,471 $ (15) $ (1,240) $ 2,216 TBAs 402 — 402 — (263) 139 Futures 63 — 63 — — 63 Total Assets $ 3,936 $ — $ 3,936 $ (15) $ (1,503) $ 2,418 Liabilities (2) Interest rate agreements $ (15) $ — $ (15) $ 15 $ — $ — TBAs (263) $ — (263) — 263 — Loan warehouse debt (81,898) $ — (81,898) 81,898 — — Security repurchase agreements (75,054) — (75,054) 75,054 — — Total Liabilities $ (157,230) $ — $ (157,230) $ 156,967 $ 263 $ — 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, 2019 (In Thousands) Financial Instruments Cash Collateral (Received) Pledged Assets (2) Interest rate agreements $ 19,020 $ — $ 19,020 $ (14,178) $ (915) $ 3,927 TBAs 5,755 — 5,755 (5,755) — — Futures 137 — 137 — — 137 Total Assets $ 24,912 $ — $ 24,912 $ (19,933) $ (915) $ 4,064 Liabilities (2) Interest rate agreements $ (148,765) $ — $ (148,765) $ 14,178 $ 134,587 $ — TBAs (13,359) — (13,359) 5,755 6,673 (931) Loan warehouse debt (432,126) — (432,126) 432,126 — — Security repurchase agreements (1,096,578) — (1,096,578) 1,096,578 — — Total Liabilities $ (1,690,828) $ — $ (1,690,828) $ 1,548,637 $ 141,260 $ (931) (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 certain residential and business purpose residential loans, and security repurchase agreements are components of Short-term debt and Long-term debt on our consolidated balance sheets.

Principles of Consolidation

Principles of Consolidation	9 Months Ended
	Sep. 30, 2020
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Principles of Consolidation	Principles of ConsolidationGAAP requires us to consider whether securitizations we sponsor and other transfers of financial assets should be treated as sales or financings, as well as whether any VIEs that we hold variable interests in – for example, certain legal entities often used in securitization and other structured finance transactions – should be included in our consolidated financial statements. The GAAP principles we apply require us to reassess our requirement to consolidate VIEs each quarter and therefore our determination may change based upon new facts and circumstances pertaining to each VIE. This could result in a material impact to our consolidated financial statements during subsequent reporting periods. Analysis of Consolidated VIEs At September 30, 2020, we consolidated Legacy Sequoia, Sequoia Choice, Freddie Mac SLST, Freddie Mac K-Series and CAFL securitization entities that we determined were VIEs and for which we determined we were the primary beneficiary. Each of these entities is independent of Redwood and of each other and the assets and liabilities of these entities are not owned by and are not legal obligations of ours. Our exposure to these entities is primarily through the financial interests we have retained, although for the consolidated Sequoia and CAFL entities we are exposed to certain financial risks associated with our role as a sponsor, servicing administrator, or depositor of these entities or as a result of our having sold assets directly or indirectly to these entities. At September 30, 2020, the estimated fair value of our investments in the consolidated Legacy Sequoia, Sequoia Choice, Freddie Mac SLST, Freddie Mac K-Series and CAFL entities was $5 million, $211 million, $418 million, $27 million, and $232 million, respectively. During the first quarter of 2020, we sold subordinate securities issued by four of these Freddie Mac K-Series securitization trusts and determined that we should derecognize the associated assets and liabilities of each of these entities for financial reporting purposes. We deconsolidated $3.86 billion of multifamily loans and other assets and $3.72 billion of multifamily ABS issued and other liabilities, for which we realized market valuation losses of $72 million, which were recorded through Investment fair value changes, net on our consolidated statements of income (loss) for the three months ended March 31, 2020. Beginning in 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 September 30, 2020, 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 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 September 30, 2020, the estimated fair value of our investment in the Servicing Investment entities was $65 million. The following table presents a summary of the assets and liabilities of these VIEs. Table 4.1 – Assets and Liabilities of Consolidated VIEs Accounted for as Collateralized Financing Entities September 30, 2020 Legacy Sequoia Freddie Mac SLST Freddie Mac CAFL Servicing Investment Total (Dollars in Thousands) Residential loans, held-for-investment $ 296,765 $ 1,836,361 $ 2,256,682 $ — $ — $ — $ 4,389,808 Business purpose residential loans, held-for-investment — — — — 2,969,692 — 2,969,692 Multifamily loans, held-for-investment — — — 491,415 — — 491,415 Other investments — — — — — 278,487 278,487 Cash and cash equivalents — — — — — 10,425 10,425 Restricted cash 146 — — — — 20,649 20,795 Accrued interest receivable 402 7,292 6,928 1,342 12,071 2,609 30,644 Other assets 784 — 887 — 4,158 — 5,829 Total Assets $ 298,097 $ 1,843,653 $ 2,264,497 $ 492,757 $ 2,985,921 $ 312,170 $ 8,197,095 Short-term debt $ — $ — $ — $ — $ — $ 228,998 $ 228,998 Accrued interest payable 180 5,652 5,009 1,182 9,337 137 21,497 Accrued expenses and other liabilities — 47 — — — 18,129 18,176 Asset-backed securities issued 292,484 1,626,564 1,841,313 464,865 2,744,150 — 6,969,376 Total Liabilities $ 292,664 $ 1,632,263 $ 1,846,322 $ 466,047 $ 2,753,487 $ 247,264 $ 7,238,047 Number of VIEs 20 10 2 1 13 3 49 December 31, 2019 Legacy Sequoia Freddie Mac SLST Freddie Mac CAFL Servicing Investment Total (Dollars in Thousands) Residential loans, held-for-investment $ 407,890 $ 2,291,463 $ 2,367,215 $ — $ — $ — $ 5,066,568 Business purpose residential loans, held-for-investment — — — — 2,192,552 — 2,192,552 Multifamily loans, held-for-investment — — — 4,408,524 — — 4,408,524 Other investments — — — — — 184,802 184,802 Cash and cash equivalents — — — — — 9,015 9,015 Restricted cash 143 27 — — — 21,766 21,936 Accrued interest receivable 655 9,824 7,313 13,539 9,572 4,869 45,772 Other assets 460 — 445 — 1,795 — 2,700 Total Assets $ 409,148 $ 2,301,314 $ 2,374,973 $ 4,422,063 $ 2,203,919 $ 220,452 $ 11,931,869 Short-term debt $ — $ — $ — $ — $ — $ 152,554 $ 152,554 Accrued interest payable 395 7,732 5,374 12,887 7,485 187 34,060 Accrued expenses and other liabilities — 27 — — — 14,956 14,983 Asset-backed securities issued 402,465 2,037,198 1,918,322 4,156,239 2,001,251 — 10,515,475 Total Liabilities $ 402,860 $ 2,044,957 $ 1,923,696 $ 4,169,126 $ 2,008,736 $ 167,697 $ 10,717,072 Number of VIEs 20 9 2 5 10 3 49 The following table presents income (loss) from these VIEs for the three and nine months ended September 30, 2020 and 2019. Table 4.2 – Income (Loss) from Consolidated VIEs Accounted for as Collateralized Financing Entities Three Months Ended September 30, 2020 Legacy Sequoia Freddie Mac SLST Freddie Mac CAFL Servicing Investment Total (Dollars in Thousands) Interest income $ 1,795 $ 20,919 $ 21,696 $ 4,918 $ 36,181 $ 4,403 $ 89,912 Interest expense (1,058) (17,828) (15,473) (4,426) (27,499) (1,587) (67,871) Net interest income 737 3,091 6,223 492 8,682 2,816 22,041 Non-interest income Investment fair value changes, net (81) 7,851 82,214 2,166 9,692 (422) 101,420 Total non-interest income, net (81) 7,851 82,214 2,166 9,692 (422) 101,420 General and administrative expenses — — — — — (41) (41) Other expenses — — — — — (471) (471) Income from Consolidated VIEs $ 656 $ 10,942 $ 88,437 $ 2,658 $ 18,374 $ 1,882 $ 122,949 Nine Months Ended September 30, 2020 Legacy Sequoia Freddie Mac SLST Freddie Mac CAFL Servicing Investment Total (Dollars in Thousands) Interest income $ 7,675 $ 68,566 $ 64,869 $ 49,960 $ 99,169 $ 13,026 $ 303,265 Interest expense (5,098) (58,455) (47,495) (47,154) (75,600) (4,961) (238,763) Net interest income 2,577 10,111 17,374 2,806 23,569 8,065 64,502 Non-interest income Investment fair value changes, net (702) (22,065) (33,081) (82,744) (41,841) (9,015) (189,448) Total non-interest income, net (702) (22,065) (33,081) (82,744) (41,841) (9,015) (189,448) General and administrative expenses — — — — — (784) (784) Other expenses — — — — — 346 346 Income (Loss) from Consolidated VIEs $ 1,875 $ (11,954) $ (15,707) $ (79,938) $ (18,272) $ (1,388) $ (125,384) Three Months Ended September 30, 2019 Legacy Sequoia Freddie Mac SLST Freddie Mac CAFL Servicing Investment Total (Dollars in Thousands) Interest income $ 4,295 $ 27,555 $ 11,830 $ 36,829 $ — $ 3,922 $ 84,431 Interest expense (3,452) (23,576) (8,709) (35,328) — (2,891) (73,956) Net interest income 843 3,979 3,121 1,501 — 1,031 10,475 Non-interest income Investment fair value changes, net (407) 2,722 17,300 7,445 — 963 28,023 Total non-interest income, net (407) 2,722 17,300 7,445 — 963 28,023 General and administrative expenses — — — — — (16) (16) Other expenses — — — — — (395) (395) Income from Consolidated VIEs $ 436 $ 6,701 $ 20,421 $ 8,946 $ — $ 1,583 $ 38,087 Nine Months Ended September 30, 2019 Legacy Sequoia Freddie Mac SLST Freddie Mac CAFL Servicing Investment Total (Dollars in Thousands) Interest income $ 13,924 $ 80,045 $ 35,221 $ 94,134 $ — $ 10,847 $ 234,171 Interest expense (11,548) (68,823) (26,013) (90,089) — (9,905) (206,378) Net interest income 2,376 11,222 9,208 4,045 — 942 27,793 Non-interest income Investment fair value changes, net (904) 8,866 31,702 13,810 — 3,462 56,936 Total non-interest income, net (904) 8,866 31,702 13,810 — 3,462 56,936 General and administrative expenses — — — — — (87) (87) Other expenses — — — — — (864) (864) Income from Consolidated VIEs $ 1,472 $ 20,088 $ 40,910 $ 17,855 $ — $ 3,453 $ 83,778 We consolidate the assets and liabilities of certain Sequoia and CAFL 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 and CAFL 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 and CAFL entities in accordance with GAAP. We consolidate the assets and liabilities of certain Freddie Mac K-Series and SLST securitization trusts resulting from our investment in subordinate securities issued by these trusts, and in the case of certain CAFL securitizations, resulting from securities acquired through our acquisition of CoreVest. 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. During the third quarter of 2020, we re-securitized subordinate securities we owned in our consolidated Freddie Mac SLST securitization trusts, through the transfer of these financial assets to a re-securitization trust that we sponsored. We retain a subordinate investment in the re-securitization trust and maintain certain discretionary rights associated with the ownership of this investment that we determined reflected a controlling financial interest in the entity, as we have both the power to direct the activities that most significantly impact the performance of the VIE and the right to receive benefits of and the obligation to absorb losses from the VIE that could potentially be significant to the VIE. At securitization, we issued $210 million of ABS and have elected to account for the ABS issued at amortized cost. Analysis of Unconsolidated VIEs with Continuing Involvement Since 2012, we have transferred residential loans to 51 Sequoia securitization entities sponsored by us that are still outstanding as of September 30, 2020, and accounted for these transfers as sales for financial reporting purposes, in accordance with ASC 860. We also determined we were not the primary beneficiary of these VIEs as we lacked the power to direct the activities that will have the most significant economic impact on the entities. For certain of these transfers to securitization entities, for the transferred loans where we held the servicing rights prior to the transfer and continued to hold the servicing rights following the transfer, we recorded mortgage servicing rights ("MSRs") on our consolidated balance sheets, and classified those MSRs as Level 3 assets. We also retained senior and subordinate securities in these securitizations that we classified as Level 3 assets. Our continuing involvement in these securitizations is limited to customary servicing obligations associated with retaining servicing rights (which we retain a third-party sub-servicer to perform) and the receipt of interest income associated with the securities we retained. The following table presents information related to securitization transactions that occurred during the three and nine months ended September 30, 2020 and 2019. Table 4.3 – Securitization Activity Related to Unconsolidated VIEs Sponsored by Redwood Three Months Ended September 30, Nine Months Ended September 30, (In Thousands) 2020 2019 2020 2019 Principal balance of loans transferred $ — $ 366,999 $ 1,573,703 $ 1,116,092 Trading securities retained, at fair value — 1,228 43,362 4,736 AFS securities retained, at fair value — 1,069 3,198 3,023 The following table summarizes the cash flows during the three and nine months ended September 30, 2020 and 2019 between us and the unconsolidated VIEs sponsored by us and accounted for as sales since 2012. Table 4.4 – Cash Flows Related to Unconsolidated VIEs Sponsored by Redwood Three Months Ended September 30, Nine Months Ended September 30, (In Thousands) 2020 2019 2020 2019 Proceeds from new transfers $ — $ 376,126 $ 1,610,761 $ 1,138,778 MSR fees received 2,280 2,919 7,445 9,084 Funding of compensating interest, net 4 (76) (293) (213) Cash flows received on retained securities 5,873 6,603 19,242 20,892 The following table presents the key weighted-average assumptions used to measure MSRs and securities retained at the date of securitization for securitizations completed during the three and nine months ended September 30, 2020 and 2019. Table 4.5 – Assumptions Related to Assets Retained from Unconsolidated VIEs Sponsored by Redwood Three Months Ended September 30, 2020 Three Months Ended September 30, 2019 At Date of Securitization Senior IO Securities Subordinate Securities Senior IO Securities Subordinate Securities Prepayment rates N/A N/A 37 % 15 % Discount rates N/A N/A 14 % 7 % Credit loss assumptions N/A N/A 0.20 % 0.20 % Nine Months Ended September 30, 2020 Nine Months Ended September 30, 2019 At Date of Securitization Senior IO Securities Subordinate Securities Senior IO Securities Subordinate Securities Prepayment rates 41 % 13 % 25 % 15 % Discount rates 16 % 6 % 14 % 7 % Credit loss assumptions 0.21 % 0.22 % 0.20 % 0.20 % The following table presents additional information at September 30, 2020 and December 31, 2019, related to unconsolidated VIEs sponsored by Redwood and accounted for as sales since 2012. Table 4.6 – Unconsolidated VIEs Sponsored by Redwood (In Thousands) September 30, 2020 December 31, 2019 On-balance sheet assets, at fair value: Interest-only, senior and subordinate securities, classified as trading $ 19,878 $ 88,425 Subordinate securities, classified as AFS 124,132 140,649 Mortgage servicing rights 14,240 40,254 Maximum loss exposure (1) $ 158,250 $ 269,328 Assets transferred: Principal balance of loans outstanding $ 8,571,916 $ 10,299,442 Principal balance of loans 30+ days delinquent 200,910 41,809 (1) Maximum loss exposure from our involvement with unconsolidated VIEs pertains to the carrying value of our securities and MSRs retained from these VIEs and represents estimated losses that would be incurred under severe, hypothetical circumstances, such as if the value of our interests and any associated collateral declines to zero. This does not include, for example, any potential exposure to representation and warranty claims associated with our initial transfer of loans into a securitization. The following table presents key economic assumptions for assets retained from unconsolidated VIEs and the sensitivity of their fair values to immediate adverse changes in those assumptions at September 30, 2020 and December 31, 2019. Table 4.7 – Key Assumptions and Sensitivity Analysis for Assets Retained from Unconsolidated VIEs Sponsored by Redwood September 30, 2020 MSRs Senior Securities (1) Subordinate Securities (Dollars in Thousands) Fair value at September 30, 2020 $ 14,240 $ 16,226 $ 127,783 Expected life (in years) (2) 3 3 10 Prepayment speed assumption (annual CPR) (2) 26 % 30 % 27 % Decrease in fair value from: 10% adverse change $ 1,105 $ 1,622 $ 1,075 25% adverse change 2,678 3,675 3,735 Discount rate assumption (2) 12 % 17 % 6 % Decrease in fair value from: 100 basis point increase $ 383 $ 327 $ 10,219 200 basis point increase 746 638 19,348 Credit loss assumption (2) N/A 0.38 % 0.38 % Decrease in fair value from: 10% higher losses N/A $ — $ 2,274 25% higher losses N/A — 5,500 December 31, 2019 MSRs Senior Securities (1) Subordinate Securities (Dollars in Thousands) Fair value at December 31, 2019 $ 40,254 $ 48,765 $ 180,309 Expected life (in years) (2) 6 6 14 Prepayment speed assumption (annual CPR) (2) 11 % 14 % 16 % Decrease in fair value from: 10% adverse change $ 1,643 $ 1,908 $ 205 25% adverse change 3,913 5,086 1,434 Discount rate assumption (2) 11 % 12 % 5 % Decrease in fair value from: 100 basis point increase $ 1,447 $ 1,079 $ 18,127 200 basis point increase 2,795 2,482 33,630 Credit loss assumption (2) N/A 0.21 % 0.21 % Decrease in fair value from: 10% higher losses N/A $ — $ 1,804 25% higher losses N/A — 4,520 (1) Senior securities included $16 million and $49 million of interest-only securities at September 30, 2020 and December 31, 2019, 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 September 30, 2020 and December 31, 2019, grouped by asset type. Table 4.8 – Third-Party Sponsored VIE Summary (In Thousands) September 30, 2020 December 31, 2019 Mortgage-Backed Securities Senior $ 11,865 $ 127,094 Mezzanine 2,016 508,195 Subordinate 193,445 235,510 Total Mortgage-Backed Securities 207,326 870,799 Excess MSR 15,205 16,216 Total Investments in Third-Party Sponsored VIEs $ 222,531 $ 887,015 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.

Fair Value of Financial Instrum

Fair Value of Financial Instruments	9 Months Ended
	Sep. 30, 2020
Fair Value Disclosures [Abstract]
Fair Value of Financial Instruments	Fair Value of Financial Instruments For financial reporting purposes, we follow a fair value hierarchy established under GAAP that is used to determine the fair value of financial instruments. This hierarchy prioritizes relevant market inputs in order to determine an “exit price” at the measurement date, or the price at which an asset could be sold or a liability could be transferred in an orderly process that is not a forced liquidation or distressed sale. Level 1 inputs are observable inputs that reflect quoted prices for identical assets or liabilities in active markets. Level 2 inputs are observable inputs other than quoted prices for an asset or liability that are obtained through corroboration with observable market data. Level 3 inputs are unobservable inputs (e.g., our own data or assumptions) that are used when there is little, if any, relevant market activity for the asset or liability required to be measured at fair value. In certain cases, inputs used to measure fair value fall into different levels of the fair value hierarchy. In such cases, the level at which the fair value measurement falls is determined based on the lowest level input that is significant to the fair value measurement. Our assessment of the significance of a particular input requires judgment and considers factors specific to the asset or liability being measured. The following table presents the carrying values and estimated fair values of assets and liabilities that are required to be recorded or disclosed at fair value at September 30, 2020 and December 31, 2019. Table 5.1 – Carrying Values and Fair Values of Assets and Liabilities September 30, 2020 December 31, 2019 Carrying Fair Carrying Fair (In Thousands) Assets Residential loans, held-for-sale at fair value $ 105,091 $ 105,091 $ 536,385 $ 536,509 Residential loans, held-for-investment 4,389,808 4,389,808 7,178,465 7,178,465 Business purpose residential loans, held-for-sale 285,549 285,549 331,565 331,565 Business purpose residential loans, held-for-investment 3,670,552 3,670,552 3,175,178 3,175,178 Multifamily loans 491,415 491,415 4,408,524 4,408,524 Real estate securities 351,335 351,335 1,099,874 1,099,874 Servicer advance investments (1) 258,621 258,621 169,204 169,204 MSRs (1) 14,878 14,878 42,224 42,224 Excess MSRs (1) 35,070 35,070 31,814 31,814 Shared home appreciation options (1) 41,758 41,758 45,085 45,085 Cash and cash equivalents 450,684 450,684 196,966 196,966 Restricted cash 73,594 73,594 93,867 93,867 Derivative assets 14,709 14,709 35,701 35,701 REO (2) 8,535 9,654 9,462 10,389 Margin receivable (2) 3,809 3,809 209,776 209,776 FHLBC stock (2) 5,000 5,000 43,393 43,393 Guarantee asset (2) 579 579 1,686 1,686 Pledged collateral (2) 8,172 8,172 32,945 32,945 Liabilities Short-term debt $ 482,761 $ 482,761 $ 2,329,145 $ 2,329,145 Margin payable (3) — — 1,700 1,700 Guarantee obligation (3) 11,264 10,185 14,009 13,754 Contingent consideration (3) — — 28,484 28,484 Derivative liabilities 1,612 1,612 163,424 163,424 ABS issued, net Fair value 6,969,376 6,969,376 10,515,475 10,515,475 Amortized cost 203,022 207,812 — — FHLBC long-term borrowings 1,000 1,000 1,999,999 1,999,999 Other long-term debt, net 886,054 885,172 183,520 184,666 Convertible notes, net 510,472 476,071 631,125 661,985 Trust preferred securities and subordinated notes, net 138,663 73,238 138,628 99,045 (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 nine months ended September 30, 2020, we elected the fair value option for $18 million and $96 million of securities, respectively, $172 million and $2.86 billion of residential loans (principal balance), respectively, $260 million and $956 million of business purpose residential loans (principal balance), respectively, zero and $179 million of servicer advance investments, respectively, zero and $11 million of excess MSRs, respectively, and zero and $4 million of shared home appreciation options, 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 September 30, 2020 and December 31, 2019, as well as the fair value hierarchy of the valuation inputs used to measure fair value. Table 5.2 – Assets and Liabilities Measured at Fair Value on a Recurring Basis September 30, 2020 Carrying Fair Value Measurements Using (In Thousands) Level 1 Level 2 Level 3 Assets Residential loans $ 4,494,899 $ — $ — $ 4,494,899 Business purpose residential loans 3,956,101 — — 3,956,101 Multifamily loans 491,415 — — 491,415 Real estate securities 351,335 — — 351,335 Servicer advance investments 258,621 — — 258,621 MSRs 14,878 — — 14,878 Excess MSRs 35,070 — — 35,070 Shared home appreciation options 41,758 — — 41,758 Derivative assets 14,709 464 3,472 10,773 Pledged collateral 8,172 8,172 — — FHLBC stock 5,000 — 5,000 — Guarantee asset 579 — — 579 Liabilities Derivative liabilities $ 1,612 $ 263 $ 15 $ 1,334 ABS issued 6,969,376 — — 6,969,376 December 31, 2019 Carrying Fair Value Measurements Using (In Thousands) Level 1 Level 2 Level 3 Assets Residential loans $ 7,714,745 $ — $ — $ 7,714,745 Business purpose residential loans 3,506,743 — — 3,506,743 Multifamily loans 4,408,524 — — 4,408,524 Real estate securities 1,099,874 — — 1,099,874 Servicer advance investments 169,204 — — 169,204 MSRs 42,224 — — 42,224 Excess MSRs 31,814 — — 31,814 Shared home appreciation options 45,085 — — 45,085 Derivative assets 35,701 6,531 19,020 10,150 Pledged collateral 32,945 32,945 — — FHLBC stock 43,393 — 43,393 — Guarantee asset 1,686 — — 1,686 Liabilities Contingent consideration $ 28,484 $ — $ — $ 28,484 Derivative liabilities 163,424 13,368 148,766 1,290 ABS issued 10,515,475 — — 10,515,475 The following table presents additional information about Level 3 assets and liabilities measured at fair value on a recurring basis for the nine months ended September 30, 2020. Table 5.3 – Changes in Level 3 Assets and Liabilities Measured at Fair Value on a Recurring Basis Assets Residential Loans Business Purpose Multifamily Loans Trading Securities AFS Servicer Advance Investments MSRs Excess MSRs Shared Home Appreciation Options (In Thousands) Beginning balance - $ 7,714,745 $ 3,506,743 $ 4,408,524 $ 860,540 $ 239,334 $ 169,204 $ 42,224 $ 31,814 $ 45,085 Acquisitions 2,927,697 — — 96,318 56,664 179,419 — 10,906 3,517 Originations — 982,315 — — — — — — — Sales (4,783,682) (53,434) — (579,466) (55,193) — — — — Principal paydowns (1,210,117) (489,243) (5,830) (8,502) (10,345) (83,124) — — (2,558) Deconsolidations — — (3,849,779) — — — — — — Gains (losses) in net income (loss), net (152,145) 16,246 (61,500) (224,728) (23,287) (6,878) (27,346) (7,650) (4,286) Other settlements, net (1) (1,599) (6,526) — — — — — — — Ending balance - $ 4,494,899 $ 3,956,101 $ 491,415 $ 144,162 $ 207,173 $ 258,621 $ 14,878 $ 35,070 $ 41,758 Table 5.3 – Changes in Level 3 Assets and Liabilities Measured at Fair Value on a Recurring Basis (continued) Assets Liabilities Guarantee Asset Derivatives (2) Contingent Consideration ABS (In Thousands) Beginning balance - December 31, 2019 $ 1,686 $ 8,860 $ 28,484 $ 10,515,475 Acquisitions — — — 1,137,656 Principal paydowns — — (13,353) (1,035,359) Deconsolidations — — — (3,706,789) Gains (losses) in net income (loss), net (1,107) 34,620 (446) 58,393 Other settlements, net (1) — (34,041) (14,685) — Ending balance - September 30, 2020 $ 579 $ 9,439 $ — $ 6,969,376 (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 or interest rate lock commitments at the time loans are acquired to the basis of residential and single-family rental loans. Other settlements, net for contingent consideration reflects the reclassification from a contingent liability to a deferred liability during the period due to an amendment in the underlying agreement. See Note 16 for further discussion. (2) For the purpose of this presentation, derivative assets and liabilities, which consist of loan purchase commitments and interest rate lock commitments, are presented on a net basis. The following table presents the portion of gains or losses included in our consolidated statements of income (loss) that were attributable to Level 3 assets and liabilities recorded at fair value on a recurring basis and held at September 30, 2020 and 2019. Gains or losses incurred on assets or liabilities sold, matured, called, or fully written down during the three and nine months ended September 30, 2020 and 2019 are not included in this presentation. Table 5.4 – Portion of Net Gains (Losses) Attributable to Level 3 Assets and Liabilities Still Held at September 30, 2020 and 2019 Included in Net Income Included in Net Income Three Months Ended September 30, Nine Months Ended September 30, (In Thousands) 2020 2019 2020 2019 Assets Residential loans at Redwood $ (107) $ 17,771 $ (865) $ 82,408 Business purpose residential loans 21,155 584 17,901 4,069 Net investments in consolidated Sequoia entities (1) 7,700 1,860 (22,802) 7,051 Net investments in consolidated Freddie Mac SLST entities (1) 82,209 17,300 (33,087) 31,702 Net investments in consolidated Freddie Mac K-Series entities (1) 2,165 7,445 (11,014) 13,810 Net investments in consolidated CAFL entities (1) 9,673 — (41,048) — Trading securities (3,549) 11,206 (80,358) 33,196 Servicer advance investments 25 1,585 (6,172) 3,025 MSRs (2,376) (5,892) (16,798) (16,971) Excess MSRs (1,127) (1,634) (7,650) (2,137) Shared home appreciation options 2,384 29 (4,286) 29 Loan purchase and interest rate lock commitments 10,791 4,678 10,773 4,757 Other assets - Guarantee asset (191) (216) (1,107) (834) Liabilities Loan purchase commitments $ 420 $ (1,668) $ (1,334) $ (1,669) (1) Represents the portion of net gains or losses included in our consolidated statements of income (loss) related to loans and the associated ABS issued at our consolidated securitization entities held at September 30, 2020 and 2019, which netted together represent the change in value of our investments at the consolidated VIEs. The following table presents information on assets recorded at fair value on a non-recurring basis at September 30, 2020. This table does not include the carrying value and gains or losses associated with the asset types below that were not recorded at fair value on our consolidated balance sheets at September 30, 2020. Table 5.5 – Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis at September 30, 2020 Gain (Loss) for September 30, 2020 Carrying Fair Value Measurements Using Three Months Ended Nine Months Ended (In Thousands) Level 1 Level 2 Level 3 September 30, 2020 September 30, 2020 Assets REO $ 3,523 $ — $ — $ 3,523 $ (805) $ (840) The following table presents the net market valuation gains and losses recorded in each line item of our consolidated statements of income for the three and nine months ended September 30, 2020 and 2019. Table 5.6 – Market Valuation Gains and Losses, Net Three Months Ended September 30, Nine Months Ended September 30, (In Thousands) 2020 2019 2020 2019 Mortgage Banking Activities, Net Residential loans held-for-sale, at fair value $ (478) $ (6,623) $ (15,972) $ 289 Residential loan purchase and forward sale commitments 13,067 12,943 35,123 41,142 Single-family rental loans held-for-sale, at fair value 43,191 1,283 55,868 4,200 Single-family rental loan purchase and interest rate lock commitments — 564 341 1,273 Residential bridge loans 938 1,010 (4,256) 2,108 Risk management derivatives, net (99) (2,972) (52,931) (15,387) Total mortgage banking activities, net (1) $ 56,619 $ 6,205 $ 18,173 $ 33,625 Investment Fair Value Changes, Net Residential loans held-for-investment, at Redwood $ 218 $ 7,667 $ (93,314) $ 71,323 Single-family rental loans held-for-investment — 22 (20,806) 22 Residential bridge loans held-for-investment 6,812 (742) (10,016) (1,363) Trading securities (3,600) 15,275 (224,679) 55,577 Servicer advance investments 26 1,585 (6,172) 3,025 Excess MSRs (1,127) (1,635) (7,650) (2,137) Net investments in Legacy Sequoia entities (2) (81) (407) (702) (904) Net investments in Sequoia Choice entities (2) 7,851 2,722 (22,065) 8,866 Net investments in Freddie Mac SLST entities (2) 82,214 17,300 (33,081) 31,702 Net investments in Freddie Mac K-Series entities (2) 2,166 7,445 (82,744) 13,810 Net investments in CAFL entities (2) 9,673 — (41,048) — Other investments 2,451 (355) (9,111) (632) Risk management derivatives, net — (37,433) (59,142) (144,548) Credit recoveries (losses) on AFS securities 444 — (1,027) — Total investment fair value changes, net $ 107,047 $ 11,444 $ (611,557) $ 34,741 Other Income MSRs $ (4,783) $ (7,489) $ (27,346) $ (21,243) Risk management derivatives, net — 4,389 13,966 13,157 Gain on re-measurement of 5 Arches investment — — — 2,440 Total other income (3) $ (4,783) $ (3,100) $ (13,380) $ (5,646) Total Market Valuation Gains (Losses), Net $ 158,883 $ 14,549 $ (606,764) $ 62,720 (1) Mortgage banking activities, net presented above does not include fee income from loan originations or acquisitions, provisions for repurchases expense, and other expenses that are components of Mortgage banking activities, net presented on our consolidated statements of income (loss), 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 presented above does not include net MSR fee income or provisions for repurchases for MSRs, as these amounts do not represent market valuation adjustments. At September 30, 2020, 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, 2019. The following table provides quantitative information about the significant unobservable inputs used in the valuation of our Level 3 assets and liabilities measured at fair value. Table 5.7 – Fair Value Methodology for Level 3 Financial Instruments September 30, 2020 Fair Input Values (Dollars in Thousands, except Input Values) Unobservable Input Range Weighted Average (1) Assets Residential loans, at fair value: Jumbo fixed-rate loans $ 6,312 Prepayment rate (annual CPR) 20 - 20 % 20 % Whole loan spread to swap rate 350 - 350 bps 350 bps Jumbo loans committed to sell 98,779 Whole loan committed sales price $ 101.61 - $ 103.40 $ 103.23 Loans held by Legacy Sequoia (2) 296,765 Liability price N/A N/A Loans held by Sequoia Choice (2) 1,836,361 Liability price N/A N/A Loans held by Freddie Mac SLST (2) 2,256,682 Liability price N/A N/A Business purpose residential loans: Single-family rental loans 285,549 Senior credit spread 130 - 130 bps 130 bps Subordinate credit spread 200 - 1,600 bps 551 bps Senior credit support 30 - 32 % 31 % IO discount rate 8 - 9 % 9 % Prepayment rate (annual CPR) — - 3 % 3 % Non-securitizable loan dollar price $ 101 - $ 101 $ 101 Single-family rental loans held by CAFL 2,969,692 Liability price N/A N/A Residential bridge loans 700,860 Discount rate 6 - 12 % 8 % Non-performing loan dollar price $ 3 - $ 100 $ 89 Multifamily loans held by Freddie Mac K-Series (2) 491,415 Liability price N/A N/A Trading and AFS securities 351,335 Discount rate 3 - 34 % 9 % Prepayment rate (annual CPR) 7 - 65 % 24 % Default rate — - 26 % 1 % Loss severity — - 50 % 19 % CRT dollar price $ 49 - $ 103 $ 84 Servicer advance investments 258,621 Discount rate 3 - 4 % 4 % Prepayment rate (annual CPR) 8 - 14 % 13 % Expected remaining life (3) 1 - 2 years 2 years Mortgage servicing income 6 - 16 bps 8 bps MSRs 14,878 Discount rate 12 - 12 % 12 % Prepayment rate (annual CPR) 8 - 97 % 26 % Per loan annual cost to service $ 95 - $ 95 $ 95 Excess MSRs 35,070 Discount rate 15 - 21 % 18 % Prepayment rate (annual CPR) 10 - 13 % 11 % Excess mortgage servicing income 9 - 17 bps 12 bps Table 5.7 – Fair Value Methodology for Level 3 Financial Instruments (continued) September 30, 2020 Fair Input Values (Dollars in Thousands, except Input Values) Unobservable Input Range Weighted Average (1) Assets (continued) Shared home appreciation options $ 41,758 Discount rate 16 - 16 % 16 % Prepayment rate (annual CPR) 8 - 26 % 19 % Home price appreciation 2 - 3 % 3 % Guarantee asset 579 Discount rate 12 - 12 % 12 % Prepayment rate (annual CPR) 42 - 42 % 42 % REO 3,523 Loss severity 3 - 63 % 23 % Residential loan purchase commitments, net 10,282 Committed sales price $ 100.89 - $ 103.40 $ 102.59 Pull-through rate 13 - 100 % 58 % Whole loan spread to TBA price $ 2.00 - $ 2.00 $ 2.00 Whole loan spread to swap rate - fixed rate 350 - 350 bps 350 bps Prepayment rate (annual CPR) 15 - 15 % 15 % MSR multiple 0.8 - 4.1 x 3.4 x Liabilities ABS issued (2) : At consolidated Sequoia entities 1,919,048 Discount rate 2 - 30 % 3 % Prepayment rate (annual CPR) 5 - 53 % 27 % Default rate — - 40 % 2 % Loss severity — - 50 % 31 % At consolidated Freddie Mac SLST entities 1,841,313 Dollar price $ 1 - $ 108 $ 99 At consolidated Freddie Mac K-Series entities (4) 464,865 Discount rate 1 - 18 % 2 % At consolidated CAFL entities (4) 2,744,150 Discount rate 0.2 - 40 % 3 % Prepayment rate (annual CPR) — - 3 % — % Default rate — - 18 % 11 % Loss severity 30 - 30 % 30 % (1) The weighted average input values for all loan types are based on the unpaid principal balance. The weighted average input values for all other assets and liabilities are based on relative fair value. (2) 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. At September 30, 2020, the fair value of securities we owned at the consolidated Sequoia, Freddie Mac SLST, Freddie Mac K-Series, and CAFL entities was $215 million, $416 million, $27 million, and $229 million, respectively. (3) 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). (4) As a market convention, certain securities are priced to a no-loss yield and therefore do not include default and loss severity assumptions. Determination of Fair Value 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 input 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. Included in Note 5

Residential Loans

Residential Loans	9 Months Ended
	Sep. 30, 2020
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 and Freddie Mac SLST entities at September 30, 2020 and December 31, 2019. Table 6.1 – Classifications and Carrying Values of Residential Loans September 30, 2020 Legacy Sequoia Freddie Mac (In Thousands) Redwood Sequoia Choice SLST Total Held-for-sale at fair value $ 105,128 $ — $ — $ — $ 105,128 Held-for-investment at fair value — 296,765 1,836,361 2,256,682 4,389,808 Total Residential Loans $ 105,128 $ 296,765 $ 1,836,361 $ 2,256,682 $ 4,494,936 December 31, 2019 Legacy Sequoia Freddie Mac (In Thousands) Redwood Sequoia Choice SLST Total Held-for-sale at fair value $ 536,385 $ — $ — $ — $ 536,385 Held-for-investment at fair value 2,111,897 407,890 2,291,463 2,367,215 7,178,465 Total Residential Loans $ 2,648,282 $ 407,890 $ 2,291,463 $ 2,367,215 $ 7,714,850 At September 30, 2020, we owned mortgage servicing rights associated with $103 million (principal balance) of residential loans owned at Redwood that were 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 The following table summarizes the characteristics of residential loans held-for-sale at September 30, 2020 and December 31, 2019. Table 6.2 – Characteristics of Residential Loans Held-for-Sale (Dollars in Thousands) September 30, 2020 December 31, 2019 Number of loans 118 669 Unpaid principal balance $ 102,921 $ 524,928 Fair value of loans $ 105,128 $ 536,280 Number of loans with 90+ day delinquencies 2 1 Unpaid principal balance of loans with 90+ day delinquencies $ 2,356 $ 747 Fair value of loans with 90+ day delinquencies $ 1,767 $ 616 Number of loans in foreclosure — — Market value of loans pledged as collateral under short-term borrowing agreements $ 95,023 $ 201,949 The following table provides the activity of residential loans held-for-sale during the three and nine months ended September 30, 2020 and 2019. Table 6.3 – Quarterly Activity of Residential Loans Held-for-Sale Three Months Ended September 30, Nine Months Ended September 30, (In Thousands) 2020 2019 2020 2019 Principal balance of loans acquired $ 172,162 $ 1,446,750 $ 2,859,813 $ 3,936,111 Principal balance of loans sold 87,868 1,534,315 5,024,663 3,921,280 Net market valuation gains (losses) recorded (1) (478) (6,623) (15,972) 286 (1) Net market valuation gains (losses) on residential loans held-for-sale are recorded through Mortgage banking activities, net on our consolidated statements of income (loss). Residential Loans Held-for-Investment at Fair Value The following tables summarize the characteristics of the residential loans owned at Redwood and at consolidated Sequoia and Freddie Mac SLST entities at September 30, 2020 and December 31, 2019. Table 6.4 – Characteristics of Residential Loans Held-for-Investment September 30, 2020 Legacy Sequoia Freddie Mac (Dollars in Thousands) Redwood Sequoia Choice SLST Number of loans — 1,976 2,546 13,893 Unpaid principal balance $ — $ 352,392 $ 1,811,967 $ 2,304,047 Fair value of loans $ — $ 296,765 $ 1,836,361 $ 2,256,683 Number of loans with 90+ day delinquencies (1) — 49 132 1,772 Unpaid principal balance of loans with 90+ day delinquencies $ — $ 16,076 $ 102,693 $ 339,537 Fair value of loans with 90+ day delinquencies (2) $ — N/A N/A N/A Number of loans in foreclosure — 21 3 175 Unpaid principal balance of loans in foreclosure $ — $ 4,820 $ 1,814 $ 28,380 December 31, 2019 Legacy Sequoia Freddie Mac (Dollars in Thousands) Redwood Sequoia Choice SLST Number of loans 2,940 2,198 3,156 14,502 Unpaid principal balance $ 2,052,778 $ 424,829 $ 2,240,679 $ 2,428,035 Fair value of loans $ 2,111,897 $ 407,890 $ 2,291,463 $ 2,367,215 Number of loans with 90+ day delinquencies (1) 2 39 9 587 Unpaid principal balance of loans with 90+ day delinquencies $ 1,585 $ 9,803 $ 6,755 $ 134,680 Fair value of loans with 90+ day delinquencies (2) $ 1,424 N/A N/A N/A Number of loans in foreclosure — 16 3 208 Unpaid principal balance of loans in foreclosure $ — $ 3,673 $ 2,290 $ 33,042 (1) For loans held at consolidated entities, the number of loans greater than 90 days delinquent includes loans in foreclosure. (2) 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. The following table provides the activity of residential loans held-for-investment at Redwood during the three and nine months ended September 30, 2020 and 2019. Table 6.5 – Quarterly Activity of Residential Loans Held-for-Investment at Redwood Three Months Ended September 30, Nine Months Ended September 30, (In Thousands) 2020 2019 2020 2019 Principal balance of loans acquired $ — $ — $ — $ 39,194 Principal balance of loans sold — — — — Fair value of loans transferred from HFS to HFI — — 13,258 68,703 Fair value of loans transferred from HFI to HFS — — 1,870,986 22,814 Net market valuation gains (losses) recorded (1) 218 7,667 (93,314) 71,323 (1) Net market valuation gains (losses) on residential loans held-for-investment at Redwood are recorded through Investment fair value changes, net on our consolidated statements of income (loss). The following table provides the activity of residential loans held-for-investment at consolidated entities during the three and nine months ended September 30, 2020 and 2019. Table 6.6 – Quarterly Activity of Residential Loans Held-for-Investment at Consolidated Entities Three Months Ended September 30, 2020 Nine Months Ended September 30, 2020 Legacy Sequoia Freddie Mac Legacy Sequoia Freddie Mac (In Thousands) Sequoia Choice SLST Sequoia Choice SLST Fair value of loans transferred from HFS to HFI (1) N/A $ — N/A N/A $ 270,506 N/A Net market valuation gains (losses) recorded (2) $ 21,938 $ (5,175) $ 159,687 $ (38,996) $ (21,727) $ 15,254 Three Months Ended September 30, 2019 Nine Months Ended September 30, 2019 Legacy Sequoia Freddie Mac Legacy Sequoia Freddie Mac (In Thousands) Sequoia Choice SLST Sequoia Choice SLST Fair value of loans transferred from HFS to HFI (1) N/A $ 727,088 N/A N/A $ 1,076,671 N/A Net market valuation gains (losses) recorded (2) $ (103) $ (11,029) $ 39,783 $ 5,271 $ 4,841 $ 94,788 (1) Represents the transfer of loans from held-for-sale to held-for-investment associated with Sequoia Choice securitizations. (2) For loans held at our consolidated Legacy Sequoia, Sequoia Choice, and Freddie Mac SLST entities, market value changes are based on the estimated fair value of the associated ABS issued, pursuant to collateralized financing entity guidelines. The net impact to our income statement associated with our economic investments in these securitization entities is presented in Note 5. Business Purpose Residential Loan Originations During the three months ended September 30, 2020, we funded $261 million of business purpose residential loans and sold $2 million of residential bridge loans and $2 million of single-family rental loans to third parties. 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) for future securitizations. Prior to the transfer of residential bridge loans to our investment portfolio, we recorded a net market valuation gain of less than $0.1 million on these loans through Mortgage banking activities, net on our consolidated statements of income (loss) for the three months ended September 30, 2020. Market valuation adjustments on our single-family rental loans are also recorded in Mortgage banking activities, net on our consolidated statements of income (loss) prior to their sale or securitization. Additionally, during the three and nine months ended September 30, 2020, we recorded loan origination fee income associated with business purpose residential loans of $3 million and $13 million, respectively, through Mortgage banking activities, net on our consolidated statements of income (loss). The following table summarizes the classifications and carrying values of the business purpose residential loans owned at Redwood at September 30, 2020 and December 31, 2019. Table 7.1 – Classifications and Carrying Values of Business Purpose Residential Loans September 30, 2020 Single-Family Rental Residential (In Thousands) Redwood CAFL Bridge Total Held-for-sale at fair value $ 285,549 — $ — $ 285,549 Held-for-investment at fair value — 2,969,692 700,860 3,670,552 Total Business Purpose Residential Loans $ 285,549 $ 2,969,692 $ 700,860 $ 3,956,101 December 31, 2019 Single-Family Rental Residential (In Thousands) Redwood CAFL Bridge Total Held-for-sale at fair value $ 331,565 $ — $ — $ 331,565 Held-for-investment at fair value 237,620 2,192,552 745,006 3,175,178 Total Business Purpose Residential Loans $ 569,185 $ 2,192,552 $ 745,006 $ 3,506,743 The following tables summarize the characteristics of the business purpose residential loans owned at Redwood at September 30, 2020 and December 31, 2019. Table 7.2 – Characteristics of Business Purpose Residential Loans September 30, 2020 Single-Family Rental at Redwood Single-Family Rental at CAFL Residential Bridge (Dollars in Thousands) Number of loans 140 1,027 2,262 Unpaid principal balance $ 272,492 $ 2,815,045 $ 708,555 Fair value of loans $ 285,549 $ 2,969,692 $ 700,860 Weighted average coupon 5.26 % 5.50 % 8.02 % Weighted average remaining loan term (years) 7 6 1 Number of loans with 90+ day delinquencies (1) 6 26 24 Unpaid principal balance of loans with 90+ day delinquencies $ 3,018 $ 70,949 $ 38,437 Fair value of loans with 90+ day delinquencies (2) $ 2,954 N/A $ 33,464 Number of loans in foreclosure — 9 24 Unpaid principal balance of loans in foreclosure $ — $ 14,032 $ 39,755 Fair value of loans in foreclosure (2) $ — N/A $ 34,489 December 31, 2019 Single-Family Rental at Redwood Single-Family Rental at CAFL Residential Bridge (Dollars in Thousands) Number of loans 308 783 2,653 Unpaid principal balance $ 552,848 $ 2,078,214 $ 742,528 Fair value of loans $ 569,185 $ 2,192,552 $ 745,006 Weighted average coupon 4.96 % 5.70 % 8.11 % Weighted average remaining loan term (years) 9 7 2 Number of loans with 90+ day delinquencies (1) 2 18 31 Unpaid principal balance of loans with 90+ day delinquencies $ 1,688 $ 29,039 $ 14,186 Fair value of loans with 90+ day delinquencies (2) $ 1,818 N/A $ 12,111 Number of loans in foreclosure 1 5 15 Unpaid principal balance of loans in foreclosure $ 130 $ 9,169 $ 8,987 Fair value of loans in foreclosure (2) $ 130 N/A $ 6,917 (1) The number of loans greater than 90 days delinquent includes loans in foreclosure. (2) 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. Single-Family Rental Loans During the three and nine months ended September 30, 2020, we originated $196 million and $632 million of single-family rental loans, respectively. During the nine months ended September 30, 2020, we transferred $925 million of single-family rental loans from held-for-sale to held-for-investment associated with three CAFL securitizations and sold $34 million to third parties. Additionally, at March 31, 2020, we transferred all held-for-investment single-family rental loans to held-for-sale. During the three and nine months ended September 30, 2020, we recorded net market valuation gains of $43 million and $34 million, respectively, on single-family rental loans. The $43 million of net market valuation gains recorded during the three months ended September 30, 2020 were recorded through Mortgage banking activities, net on our consolidated statements of income (loss). Of the $34 million of net market valuation gains recorded during the nine months ended September 30, 2020, $55 million of net market valuation gains were recorded through Mortgage banking activities, net and $21 million of net market valuation losses were recorded through Investment fair value changes, net on our consolidated statements of income (loss). During the three and nine months ended September 30, 2019, we recorded net market valuation gains of $1 million and $3 million, respectively, on single-family rental loans through Mortgage banking activities, net on our consolidated statements of income (loss). Single-Family Rental Loans Held-for-Investment at CAFL In conjunction with our acquisition of CoreVest in the fourth quarter of 2019, we consolidated the single-family rental loans owned at certain CAFL securitization entities. The outstanding single-family rental loans held-for-investment at CAFL at September 30, 2020 were first-lien, fixed-rate loans with original maturities of five seven During the three and nine months ended September 30, 2020, we recorded a net market valuation gain of $88 million and a net market valuation loss of $14 million, respectively, on these loans through Investment fair value changes, net on our consolidated statements of income (loss). 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 CAFL securitizations . The net impact to our income statement associated with our retained economic investment in the CAFL securitization entities is presented in Note 5. Residential Bridge Loans Held-for-Investment The outstanding residential bridge loans held-for-investment at September 30, 2020 were first lien, fixed-rate, interest-only loans with original maturities of six During the three and nine months ended September 30, 2020, $64 million and $324 million of newly originated residential bridge loans, respectively, were transferred to our investment portfolio. During the three and nine months ended September 30, 2020, we recorded a net market valuation gain of $7 million and a net market valuation loss of $10 million, respectively, on residential bridge loans held-for-investment at fair value through Investment fair value changes, net on our consolidated statements of income (loss). During both the three and nine months ended September 30, 2019, we recorded net market valuation losses of $1 million on residential bridge loans held-for-investment at fair value through Investment fair value changes, net on our consolidated statements of income (loss). At September 30, 2020, we had a $225 million commitment to fund residential bridge loans. See Note 16 for additional information on this commitment. Since 2018, we have invested in multifamily subordinate securities issued by 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. During the first quarter of 2020, we sold subordinate securities issued by four such Freddie Mac K-Series securitization trusts and deconsolidated $3.85 billion of multifamily loans. See Note 2 for further discussion. The following table summarizes the characteristics of the multifamily loans consolidated at Redwood at September 30, 2020 and December 31, 2019. Table 8.1 – Characteristics of Multifamily Loans (Dollars in Thousands) September 30, 2020 December 31, 2019 Number of loans 28 279 Unpaid principal balance $ 464,680 $ 4,195,000 Fair value of loans $ 491,415 $ 4,408,524 Weighted average coupon 4.25 % 4.13 % Weighted average remaining loan term (years) 5 6 Number of loans with 90+ day delinquencies — — Number of loans in foreclosure — — The outstanding multifamily loans held-for-investment at the Freddie Mac K-Series entities at September 30, 2020 were first-lien, fixed-rate loans that were originated in 2015 and had original loan terms of ten years. The following table provides the activity of multifamily loans held-for-investment during the three and nine months ended September 30, 2020 and 2019. Table 8.2 – Quarterly Activity of Multifamily Loans Held-for-Investment Three Months Ended September 30, Nine Months Ended September 30, (In Thousands) 2020 2019 2020 2019 Net market valuation gains (losses) recorded (1) $ 2,340 $ 47,353 $ (61,500) $ 178,374 (1) Net market valuation gains (losses) on multifamily loans held-for-investment are recorded through Investment fair value changes, net on our consolidated statements of income (loss). For loans held at our consolidated Freddie Mac K-Series entities, market value changes are based on the estimated fair value of the associated ABS issued, pursuant to collateralized financing entity guidelines. The net impact to our income statement associated with our economic investment in these securitization entities is presented in Note 5.

Business Purpose Residential Lo

Business Purpose Residential Loans	9 Months Ended
	Sep. 30, 2020
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 and Freddie Mac SLST entities at September 30, 2020 and December 31, 2019. Table 6.1 – Classifications and Carrying Values of Residential Loans September 30, 2020 Legacy Sequoia Freddie Mac (In Thousands) Redwood Sequoia Choice SLST Total Held-for-sale at fair value $ 105,128 $ — $ — $ — $ 105,128 Held-for-investment at fair value — 296,765 1,836,361 2,256,682 4,389,808 Total Residential Loans $ 105,128 $ 296,765 $ 1,836,361 $ 2,256,682 $ 4,494,936 December 31, 2019 Legacy Sequoia Freddie Mac (In Thousands) Redwood Sequoia Choice SLST Total Held-for-sale at fair value $ 536,385 $ — $ — $ — $ 536,385 Held-for-investment at fair value 2,111,897 407,890 2,291,463 2,367,215 7,178,465 Total Residential Loans $ 2,648,282 $ 407,890 $ 2,291,463 $ 2,367,215 $ 7,714,850 At September 30, 2020, we owned mortgage servicing rights associated with $103 million (principal balance) of residential loans owned at Redwood that were 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 The following table summarizes the characteristics of residential loans held-for-sale at September 30, 2020 and December 31, 2019. Table 6.2 – Characteristics of Residential Loans Held-for-Sale (Dollars in Thousands) September 30, 2020 December 31, 2019 Number of loans 118 669 Unpaid principal balance $ 102,921 $ 524,928 Fair value of loans $ 105,128 $ 536,280 Number of loans with 90+ day delinquencies 2 1 Unpaid principal balance of loans with 90+ day delinquencies $ 2,356 $ 747 Fair value of loans with 90+ day delinquencies $ 1,767 $ 616 Number of loans in foreclosure — — Market value of loans pledged as collateral under short-term borrowing agreements $ 95,023 $ 201,949 The following table provides the activity of residential loans held-for-sale during the three and nine months ended September 30, 2020 and 2019. Table 6.3 – Quarterly Activity of Residential Loans Held-for-Sale Three Months Ended September 30, Nine Months Ended September 30, (In Thousands) 2020 2019 2020 2019 Principal balance of loans acquired $ 172,162 $ 1,446,750 $ 2,859,813 $ 3,936,111 Principal balance of loans sold 87,868 1,534,315 5,024,663 3,921,280 Net market valuation gains (losses) recorded (1) (478) (6,623) (15,972) 286 (1) Net market valuation gains (losses) on residential loans held-for-sale are recorded through Mortgage banking activities, net on our consolidated statements of income (loss). Residential Loans Held-for-Investment at Fair Value The following tables summarize the characteristics of the residential loans owned at Redwood and at consolidated Sequoia and Freddie Mac SLST entities at September 30, 2020 and December 31, 2019. Table 6.4 – Characteristics of Residential Loans Held-for-Investment September 30, 2020 Legacy Sequoia Freddie Mac (Dollars in Thousands) Redwood Sequoia Choice SLST Number of loans — 1,976 2,546 13,893 Unpaid principal balance $ — $ 352,392 $ 1,811,967 $ 2,304,047 Fair value of loans $ — $ 296,765 $ 1,836,361 $ 2,256,683 Number of loans with 90+ day delinquencies (1) — 49 132 1,772 Unpaid principal balance of loans with 90+ day delinquencies $ — $ 16,076 $ 102,693 $ 339,537 Fair value of loans with 90+ day delinquencies (2) $ — N/A N/A N/A Number of loans in foreclosure — 21 3 175 Unpaid principal balance of loans in foreclosure $ — $ 4,820 $ 1,814 $ 28,380 December 31, 2019 Legacy Sequoia Freddie Mac (Dollars in Thousands) Redwood Sequoia Choice SLST Number of loans 2,940 2,198 3,156 14,502 Unpaid principal balance $ 2,052,778 $ 424,829 $ 2,240,679 $ 2,428,035 Fair value of loans $ 2,111,897 $ 407,890 $ 2,291,463 $ 2,367,215 Number of loans with 90+ day delinquencies (1) 2 39 9 587 Unpaid principal balance of loans with 90+ day delinquencies $ 1,585 $ 9,803 $ 6,755 $ 134,680 Fair value of loans with 90+ day delinquencies (2) $ 1,424 N/A N/A N/A Number of loans in foreclosure — 16 3 208 Unpaid principal balance of loans in foreclosure $ — $ 3,673 $ 2,290 $ 33,042 (1) For loans held at consolidated entities, the number of loans greater than 90 days delinquent includes loans in foreclosure. (2) 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. The following table provides the activity of residential loans held-for-investment at Redwood during the three and nine months ended September 30, 2020 and 2019. Table 6.5 – Quarterly Activity of Residential Loans Held-for-Investment at Redwood Three Months Ended September 30, Nine Months Ended September 30, (In Thousands) 2020 2019 2020 2019 Principal balance of loans acquired $ — $ — $ — $ 39,194 Principal balance of loans sold — — — — Fair value of loans transferred from HFS to HFI — — 13,258 68,703 Fair value of loans transferred from HFI to HFS — — 1,870,986 22,814 Net market valuation gains (losses) recorded (1) 218 7,667 (93,314) 71,323 (1) Net market valuation gains (losses) on residential loans held-for-investment at Redwood are recorded through Investment fair value changes, net on our consolidated statements of income (loss). The following table provides the activity of residential loans held-for-investment at consolidated entities during the three and nine months ended September 30, 2020 and 2019. Table 6.6 – Quarterly Activity of Residential Loans Held-for-Investment at Consolidated Entities Three Months Ended September 30, 2020 Nine Months Ended September 30, 2020 Legacy Sequoia Freddie Mac Legacy Sequoia Freddie Mac (In Thousands) Sequoia Choice SLST Sequoia Choice SLST Fair value of loans transferred from HFS to HFI (1) N/A $ — N/A N/A $ 270,506 N/A Net market valuation gains (losses) recorded (2) $ 21,938 $ (5,175) $ 159,687 $ (38,996) $ (21,727) $ 15,254 Three Months Ended September 30, 2019 Nine Months Ended September 30, 2019 Legacy Sequoia Freddie Mac Legacy Sequoia Freddie Mac (In Thousands) Sequoia Choice SLST Sequoia Choice SLST Fair value of loans transferred from HFS to HFI (1) N/A $ 727,088 N/A N/A $ 1,076,671 N/A Net market valuation gains (losses) recorded (2) $ (103) $ (11,029) $ 39,783 $ 5,271 $ 4,841 $ 94,788 (1) Represents the transfer of loans from held-for-sale to held-for-investment associated with Sequoia Choice securitizations. (2) For loans held at our consolidated Legacy Sequoia, Sequoia Choice, and Freddie Mac SLST entities, market value changes are based on the estimated fair value of the associated ABS issued, pursuant to collateralized financing entity guidelines. The net impact to our income statement associated with our economic investments in these securitization entities is presented in Note 5. Business Purpose Residential Loan Originations During the three months ended September 30, 2020, we funded $261 million of business purpose residential loans and sold $2 million of residential bridge loans and $2 million of single-family rental loans to third parties. 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) for future securitizations. Prior to the transfer of residential bridge loans to our investment portfolio, we recorded a net market valuation gain of less than $0.1 million on these loans through Mortgage banking activities, net on our consolidated statements of income (loss) for the three months ended September 30, 2020. Market valuation adjustments on our single-family rental loans are also recorded in Mortgage banking activities, net on our consolidated statements of income (loss) prior to their sale or securitization. Additionally, during the three and nine months ended September 30, 2020, we recorded loan origination fee income associated with business purpose residential loans of $3 million and $13 million, respectively, through Mortgage banking activities, net on our consolidated statements of income (loss). The following table summarizes the classifications and carrying values of the business purpose residential loans owned at Redwood at September 30, 2020 and December 31, 2019. Table 7.1 – Classifications and Carrying Values of Business Purpose Residential Loans September 30, 2020 Single-Family Rental Residential (In Thousands) Redwood CAFL Bridge Total Held-for-sale at fair value $ 285,549 — $ — $ 285,549 Held-for-investment at fair value — 2,969,692 700,860 3,670,552 Total Business Purpose Residential Loans $ 285,549 $ 2,969,692 $ 700,860 $ 3,956,101 December 31, 2019 Single-Family Rental Residential (In Thousands) Redwood CAFL Bridge Total Held-for-sale at fair value $ 331,565 $ — $ — $ 331,565 Held-for-investment at fair value 237,620 2,192,552 745,006 3,175,178 Total Business Purpose Residential Loans $ 569,185 $ 2,192,552 $ 745,006 $ 3,506,743 The following tables summarize the characteristics of the business purpose residential loans owned at Redwood at September 30, 2020 and December 31, 2019. Table 7.2 – Characteristics of Business Purpose Residential Loans September 30, 2020 Single-Family Rental at Redwood Single-Family Rental at CAFL Residential Bridge (Dollars in Thousands) Number of loans 140 1,027 2,262 Unpaid principal balance $ 272,492 $ 2,815,045 $ 708,555 Fair value of loans $ 285,549 $ 2,969,692 $ 700,860 Weighted average coupon 5.26 % 5.50 % 8.02 % Weighted average remaining loan term (years) 7 6 1 Number of loans with 90+ day delinquencies (1) 6 26 24 Unpaid principal balance of loans with 90+ day delinquencies $ 3,018 $ 70,949 $ 38,437 Fair value of loans with 90+ day delinquencies (2) $ 2,954 N/A $ 33,464 Number of loans in foreclosure — 9 24 Unpaid principal balance of loans in foreclosure $ — $ 14,032 $ 39,755 Fair value of loans in foreclosure (2) $ — N/A $ 34,489 December 31, 2019 Single-Family Rental at Redwood Single-Family Rental at CAFL Residential Bridge (Dollars in Thousands) Number of loans 308 783 2,653 Unpaid principal balance $ 552,848 $ 2,078,214 $ 742,528 Fair value of loans $ 569,185 $ 2,192,552 $ 745,006 Weighted average coupon 4.96 % 5.70 % 8.11 % Weighted average remaining loan term (years) 9 7 2 Number of loans with 90+ day delinquencies (1) 2 18 31 Unpaid principal balance of loans with 90+ day delinquencies $ 1,688 $ 29,039 $ 14,186 Fair value of loans with 90+ day delinquencies (2) $ 1,818 N/A $ 12,111 Number of loans in foreclosure 1 5 15 Unpaid principal balance of loans in foreclosure $ 130 $ 9,169 $ 8,987 Fair value of loans in foreclosure (2) $ 130 N/A $ 6,917 (1) The number of loans greater than 90 days delinquent includes loans in foreclosure. (2) 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. Single-Family Rental Loans During the three and nine months ended September 30, 2020, we originated $196 million and $632 million of single-family rental loans, respectively. During the nine months ended September 30, 2020, we transferred $925 million of single-family rental loans from held-for-sale to held-for-investment associated with three CAFL securitizations and sold $34 million to third parties. Additionally, at March 31, 2020, we transferred all held-for-investment single-family rental loans to held-for-sale. During the three and nine months ended September 30, 2020, we recorded net market valuation gains of $43 million and $34 million, respectively, on single-family rental loans. The $43 million of net market valuation gains recorded during the three months ended September 30, 2020 were recorded through Mortgage banking activities, net on our consolidated statements of income (loss). Of the $34 million of net market valuation gains recorded during the nine months ended September 30, 2020, $55 million of net market valuation gains were recorded through Mortgage banking activities, net and $21 million of net market valuation losses were recorded through Investment fair value changes, net on our consolidated statements of income (loss). During the three and nine months ended September 30, 2019, we recorded net market valuation gains of $1 million and $3 million, respectively, on single-family rental loans through Mortgage banking activities, net on our consolidated statements of income (loss). Single-Family Rental Loans Held-for-Investment at CAFL In conjunction with our acquisition of CoreVest in the fourth quarter of 2019, we consolidated the single-family rental loans owned at certain CAFL securitization entities. The outstanding single-family rental loans held-for-investment at CAFL at September 30, 2020 were first-lien, fixed-rate loans with original maturities of five seven During the three and nine months ended September 30, 2020, we recorded a net market valuation gain of $88 million and a net market valuation loss of $14 million, respectively, on these loans through Investment fair value changes, net on our consolidated statements of income (loss). 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 CAFL securitizations . The net impact to our income statement associated with our retained economic investment in the CAFL securitization entities is presented in Note 5. Residential Bridge Loans Held-for-Investment The outstanding residential bridge loans held-for-investment at September 30, 2020 were first lien, fixed-rate, interest-only loans with original maturities of six During the three and nine months ended September 30, 2020, $64 million and $324 million of newly originated residential bridge loans, respectively, were transferred to our investment portfolio. During the three and nine months ended September 30, 2020, we recorded a net market valuation gain of $7 million and a net market valuation loss of $10 million, respectively, on residential bridge loans held-for-investment at fair value through Investment fair value changes, net on our consolidated statements of income (loss). During both the three and nine months ended September 30, 2019, we recorded net market valuation losses of $1 million on residential bridge loans held-for-investment at fair value through Investment fair value changes, net on our consolidated statements of income (loss). At September 30, 2020, we had a $225 million commitment to fund residential bridge loans. See Note 16 for additional information on this commitment. Since 2018, we have invested in multifamily subordinate securities issued by 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. During the first quarter of 2020, we sold subordinate securities issued by four such Freddie Mac K-Series securitization trusts and deconsolidated $3.85 billion of multifamily loans. See Note 2 for further discussion. The following table summarizes the characteristics of the multifamily loans consolidated at Redwood at September 30, 2020 and December 31, 2019. Table 8.1 – Characteristics of Multifamily Loans (Dollars in Thousands) September 30, 2020 December 31, 2019 Number of loans 28 279 Unpaid principal balance $ 464,680 $ 4,195,000 Fair value of loans $ 491,415 $ 4,408,524 Weighted average coupon 4.25 % 4.13 % Weighted average remaining loan term (years) 5 6 Number of loans with 90+ day delinquencies — — Number of loans in foreclosure — — The outstanding multifamily loans held-for-investment at the Freddie Mac K-Series entities at September 30, 2020 were first-lien, fixed-rate loans that were originated in 2015 and had original loan terms of ten years. The following table provides the activity of multifamily loans held-for-investment during the three and nine months ended September 30, 2020 and 2019. Table 8.2 – Quarterly Activity of Multifamily Loans Held-for-Investment Three Months Ended September 30, Nine Months Ended September 30, (In Thousands) 2020 2019 2020 2019 Net market valuation gains (losses) recorded (1) $ 2,340 $ 47,353 $ (61,500) $ 178,374 (1) Net market valuation gains (losses) on multifamily loans held-for-investment are recorded through Investment fair value changes, net on our consolidated statements of income (loss). For loans held at our consolidated Freddie Mac K-Series entities, market value changes are based on the estimated fair value of the associated ABS issued, pursuant to collateralized financing entity guidelines. The net impact to our income statement associated with our economic investment in these securitization entities is presented in Note 5.

Multifamily Loans

Multifamily Loans	9 Months Ended
	Sep. 30, 2020
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 and Freddie Mac SLST entities at September 30, 2020 and December 31, 2019. Table 6.1 – Classifications and Carrying Values of Residential Loans September 30, 2020 Legacy Sequoia Freddie Mac (In Thousands) Redwood Sequoia Choice SLST Total Held-for-sale at fair value $ 105,128 $ — $ — $ — $ 105,128 Held-for-investment at fair value — 296,765 1,836,361 2,256,682 4,389,808 Total Residential Loans $ 105,128 $ 296,765 $ 1,836,361 $ 2,256,682 $ 4,494,936 December 31, 2019 Legacy Sequoia Freddie Mac (In Thousands) Redwood Sequoia Choice SLST Total Held-for-sale at fair value $ 536,385 $ — $ — $ — $ 536,385 Held-for-investment at fair value 2,111,897 407,890 2,291,463 2,367,215 7,178,465 Total Residential Loans $ 2,648,282 $ 407,890 $ 2,291,463 $ 2,367,215 $ 7,714,850 At September 30, 2020, we owned mortgage servicing rights associated with $103 million (principal balance) of residential loans owned at Redwood that were 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 The following table summarizes the characteristics of residential loans held-for-sale at September 30, 2020 and December 31, 2019. Table 6.2 – Characteristics of Residential Loans Held-for-Sale (Dollars in Thousands) September 30, 2020 December 31, 2019 Number of loans 118 669 Unpaid principal balance $ 102,921 $ 524,928 Fair value of loans $ 105,128 $ 536,280 Number of loans with 90+ day delinquencies 2 1 Unpaid principal balance of loans with 90+ day delinquencies $ 2,356 $ 747 Fair value of loans with 90+ day delinquencies $ 1,767 $ 616 Number of loans in foreclosure — — Market value of loans pledged as collateral under short-term borrowing agreements $ 95,023 $ 201,949 The following table provides the activity of residential loans held-for-sale during the three and nine months ended September 30, 2020 and 2019. Table 6.3 – Quarterly Activity of Residential Loans Held-for-Sale Three Months Ended September 30, Nine Months Ended September 30, (In Thousands) 2020 2019 2020 2019 Principal balance of loans acquired $ 172,162 $ 1,446,750 $ 2,859,813 $ 3,936,111 Principal balance of loans sold 87,868 1,534,315 5,024,663 3,921,280 Net market valuation gains (losses) recorded (1) (478) (6,623) (15,972) 286 (1) Net market valuation gains (losses) on residential loans held-for-sale are recorded through Mortgage banking activities, net on our consolidated statements of income (loss). Residential Loans Held-for-Investment at Fair Value The following tables summarize the characteristics of the residential loans owned at Redwood and at consolidated Sequoia and Freddie Mac SLST entities at September 30, 2020 and December 31, 2019. Table 6.4 – Characteristics of Residential Loans Held-for-Investment September 30, 2020 Legacy Sequoia Freddie Mac (Dollars in Thousands) Redwood Sequoia Choice SLST Number of loans — 1,976 2,546 13,893 Unpaid principal balance $ — $ 352,392 $ 1,811,967 $ 2,304,047 Fair value of loans $ — $ 296,765 $ 1,836,361 $ 2,256,683 Number of loans with 90+ day delinquencies (1) — 49 132 1,772 Unpaid principal balance of loans with 90+ day delinquencies $ — $ 16,076 $ 102,693 $ 339,537 Fair value of loans with 90+ day delinquencies (2) $ — N/A N/A N/A Number of loans in foreclosure — 21 3 175 Unpaid principal balance of loans in foreclosure $ — $ 4,820 $ 1,814 $ 28,380 December 31, 2019 Legacy Sequoia Freddie Mac (Dollars in Thousands) Redwood Sequoia Choice SLST Number of loans 2,940 2,198 3,156 14,502 Unpaid principal balance $ 2,052,778 $ 424,829 $ 2,240,679 $ 2,428,035 Fair value of loans $ 2,111,897 $ 407,890 $ 2,291,463 $ 2,367,215 Number of loans with 90+ day delinquencies (1) 2 39 9 587 Unpaid principal balance of loans with 90+ day delinquencies $ 1,585 $ 9,803 $ 6,755 $ 134,680 Fair value of loans with 90+ day delinquencies (2) $ 1,424 N/A N/A N/A Number of loans in foreclosure — 16 3 208 Unpaid principal balance of loans in foreclosure $ — $ 3,673 $ 2,290 $ 33,042 (1) For loans held at consolidated entities, the number of loans greater than 90 days delinquent includes loans in foreclosure. (2) 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. The following table provides the activity of residential loans held-for-investment at Redwood during the three and nine months ended September 30, 2020 and 2019. Table 6.5 – Quarterly Activity of Residential Loans Held-for-Investment at Redwood Three Months Ended September 30, Nine Months Ended September 30, (In Thousands) 2020 2019 2020 2019 Principal balance of loans acquired $ — $ — $ — $ 39,194 Principal balance of loans sold — — — — Fair value of loans transferred from HFS to HFI — — 13,258 68,703 Fair value of loans transferred from HFI to HFS — — 1,870,986 22,814 Net market valuation gains (losses) recorded (1) 218 7,667 (93,314) 71,323 (1) Net market valuation gains (losses) on residential loans held-for-investment at Redwood are recorded through Investment fair value changes, net on our consolidated statements of income (loss). The following table provides the activity of residential loans held-for-investment at consolidated entities during the three and nine months ended September 30, 2020 and 2019. Table 6.6 – Quarterly Activity of Residential Loans Held-for-Investment at Consolidated Entities Three Months Ended September 30, 2020 Nine Months Ended September 30, 2020 Legacy Sequoia Freddie Mac Legacy Sequoia Freddie Mac (In Thousands) Sequoia Choice SLST Sequoia Choice SLST Fair value of loans transferred from HFS to HFI (1) N/A $ — N/A N/A $ 270,506 N/A Net market valuation gains (losses) recorded (2) $ 21,938 $ (5,175) $ 159,687 $ (38,996) $ (21,727) $ 15,254 Three Months Ended September 30, 2019 Nine Months Ended September 30, 2019 Legacy Sequoia Freddie Mac Legacy Sequoia Freddie Mac (In Thousands) Sequoia Choice SLST Sequoia Choice SLST Fair value of loans transferred from HFS to HFI (1) N/A $ 727,088 N/A N/A $ 1,076,671 N/A Net market valuation gains (losses) recorded (2) $ (103) $ (11,029) $ 39,783 $ 5,271 $ 4,841 $ 94,788 (1) Represents the transfer of loans from held-for-sale to held-for-investment associated with Sequoia Choice securitizations. (2) For loans held at our consolidated Legacy Sequoia, Sequoia Choice, and Freddie Mac SLST entities, market value changes are based on the estimated fair value of the associated ABS issued, pursuant to collateralized financing entity guidelines. The net impact to our income statement associated with our economic investments in these securitization entities is presented in Note 5. Business Purpose Residential Loan Originations During the three months ended September 30, 2020, we funded $261 million of business purpose residential loans and sold $2 million of residential bridge loans and $2 million of single-family rental loans to third parties. 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) for future securitizations. Prior to the transfer of residential bridge loans to our investment portfolio, we recorded a net market valuation gain of less than $0.1 million on these loans through Mortgage banking activities, net on our consolidated statements of income (loss) for the three months ended September 30, 2020. Market valuation adjustments on our single-family rental loans are also recorded in Mortgage banking activities, net on our consolidated statements of income (loss) prior to their sale or securitization. Additionally, during the three and nine months ended September 30, 2020, we recorded loan origination fee income associated with business purpose residential loans of $3 million and $13 million, respectively, through Mortgage banking activities, net on our consolidated statements of income (loss). The following table summarizes the classifications and carrying values of the business purpose residential loans owned at Redwood at September 30, 2020 and December 31, 2019. Table 7.1 – Classifications and Carrying Values of Business Purpose Residential Loans September 30, 2020 Single-Family Rental Residential (In Thousands) Redwood CAFL Bridge Total Held-for-sale at fair value $ 285,549 — $ — $ 285,549 Held-for-investment at fair value — 2,969,692 700,860 3,670,552 Total Business Purpose Residential Loans $ 285,549 $ 2,969,692 $ 700,860 $ 3,956,101 December 31, 2019 Single-Family Rental Residential (In Thousands) Redwood CAFL Bridge Total Held-for-sale at fair value $ 331,565 $ — $ — $ 331,565 Held-for-investment at fair value 237,620 2,192,552 745,006 3,175,178 Total Business Purpose Residential Loans $ 569,185 $ 2,192,552 $ 745,006 $ 3,506,743 The following tables summarize the characteristics of the business purpose residential loans owned at Redwood at September 30, 2020 and December 31, 2019. Table 7.2 – Characteristics of Business Purpose Residential Loans September 30, 2020 Single-Family Rental at Redwood Single-Family Rental at CAFL Residential Bridge (Dollars in Thousands) Number of loans 140 1,027 2,262 Unpaid principal balance $ 272,492 $ 2,815,045 $ 708,555 Fair value of loans $ 285,549 $ 2,969,692 $ 700,860 Weighted average coupon 5.26 % 5.50 % 8.02 % Weighted average remaining loan term (years) 7 6 1 Number of loans with 90+ day delinquencies (1) 6 26 24 Unpaid principal balance of loans with 90+ day delinquencies $ 3,018 $ 70,949 $ 38,437 Fair value of loans with 90+ day delinquencies (2) $ 2,954 N/A $ 33,464 Number of loans in foreclosure — 9 24 Unpaid principal balance of loans in foreclosure $ — $ 14,032 $ 39,755 Fair value of loans in foreclosure (2) $ — N/A $ 34,489 December 31, 2019 Single-Family Rental at Redwood Single-Family Rental at CAFL Residential Bridge (Dollars in Thousands) Number of loans 308 783 2,653 Unpaid principal balance $ 552,848 $ 2,078,214 $ 742,528 Fair value of loans $ 569,185 $ 2,192,552 $ 745,006 Weighted average coupon 4.96 % 5.70 % 8.11 % Weighted average remaining loan term (years) 9 7 2 Number of loans with 90+ day delinquencies (1) 2 18 31 Unpaid principal balance of loans with 90+ day delinquencies $ 1,688 $ 29,039 $ 14,186 Fair value of loans with 90+ day delinquencies (2) $ 1,818 N/A $ 12,111 Number of loans in foreclosure 1 5 15 Unpaid principal balance of loans in foreclosure $ 130 $ 9,169 $ 8,987 Fair value of loans in foreclosure (2) $ 130 N/A $ 6,917 (1) The number of loans greater than 90 days delinquent includes loans in foreclosure. (2) 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. Single-Family Rental Loans During the three and nine months ended September 30, 2020, we originated $196 million and $632 million of single-family rental loans, respectively. During the nine months ended September 30, 2020, we transferred $925 million of single-family rental loans from held-for-sale to held-for-investment associated with three CAFL securitizations and sold $34 million to third parties. Additionally, at March 31, 2020, we transferred all held-for-investment single-family rental loans to held-for-sale. During the three and nine months ended September 30, 2020, we recorded net market valuation gains of $43 million and $34 million, respectively, on single-family rental loans. The $43 million of net market valuation gains recorded during the three months ended September 30, 2020 were recorded through Mortgage banking activities, net on our consolidated statements of income (loss). Of the $34 million of net market valuation gains recorded during the nine months ended September 30, 2020, $55 million of net market valuation gains were recorded through Mortgage banking activities, net and $21 million of net market valuation losses were recorded through Investment fair value changes, net on our consolidated statements of income (loss). During the three and nine months ended September 30, 2019, we recorded net market valuation gains of $1 million and $3 million, respectively, on single-family rental loans through Mortgage banking activities, net on our consolidated statements of income (loss). Single-Family Rental Loans Held-for-Investment at CAFL In conjunction with our acquisition of CoreVest in the fourth quarter of 2019, we consolidated the single-family rental loans owned at certain CAFL securitization entities. The outstanding single-family rental loans held-for-investment at CAFL at September 30, 2020 were first-lien, fixed-rate loans with original maturities of five seven During the three and nine months ended September 30, 2020, we recorded a net market valuation gain of $88 million and a net market valuation loss of $14 million, respectively, on these loans through Investment fair value changes, net on our consolidated statements of income (loss). 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 CAFL securitizations . The net impact to our income statement associated with our retained economic investment in the CAFL securitization entities is presented in Note 5. Residential Bridge Loans Held-for-Investment The outstanding residential bridge loans held-for-investment at September 30, 2020 were first lien, fixed-rate, interest-only loans with original maturities of six During the three and nine months ended September 30, 2020, $64 million and $324 million of newly originated residential bridge loans, respectively, were transferred to our investment portfolio. During the three and nine months ended September 30, 2020, we recorded a net market valuation gain of $7 million and a net market valuation loss of $10 million, respectively, on residential bridge loans held-for-investment at fair value through Investment fair value changes, net on our consolidated statements of income (loss). During both the three and nine months ended September 30, 2019, we recorded net market valuation losses of $1 million on residential bridge loans held-for-investment at fair value through Investment fair value changes, net on our consolidated statements of income (loss). At September 30, 2020, we had a $225 million commitment to fund residential bridge loans. See Note 16 for additional information on this commitment. Since 2018, we have invested in multifamily subordinate securities issued by 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. During the first quarter of 2020, we sold subordinate securities issued by four such Freddie Mac K-Series securitization trusts and deconsolidated $3.85 billion of multifamily loans. See Note 2 for further discussion. The following table summarizes the characteristics of the multifamily loans consolidated at Redwood at September 30, 2020 and December 31, 2019. Table 8.1 – Characteristics of Multifamily Loans (Dollars in Thousands) September 30, 2020 December 31, 2019 Number of loans 28 279 Unpaid principal balance $ 464,680 $ 4,195,000 Fair value of loans $ 491,415 $ 4,408,524 Weighted average coupon 4.25 % 4.13 % Weighted average remaining loan term (years) 5 6 Number of loans with 90+ day delinquencies — — Number of loans in foreclosure — — The outstanding multifamily loans held-for-investment at the Freddie Mac K-Series entities at September 30, 2020 were first-lien, fixed-rate loans that were originated in 2015 and had original loan terms of ten years. The following table provides the activity of multifamily loans held-for-investment during the three and nine months ended September 30, 2020 and 2019. Table 8.2 – Quarterly Activity of Multifamily Loans Held-for-Investment Three Months Ended September 30, Nine Months Ended September 30, (In Thousands) 2020 2019 2020 2019 Net market valuation gains (losses) recorded (1) $ 2,340 $ 47,353 $ (61,500) $ 178,374 (1) Net market valuation gains (losses) on multifamily loans held-for-investment are recorded through Investment fair value changes, net on our consolidated statements of income (loss). For loans held at our consolidated Freddie Mac K-Series entities, market value changes are based on the estimated fair value of the associated ABS issued, pursuant to collateralized financing entity guidelines. The net impact to our income statement associated with our economic investment in these securitization entities is presented in Note 5.

Real Estate Securities

Real Estate Securities	9 Months Ended
	Sep. 30, 2020
Investments, Debt and Equity Securities [Abstract]
Real Estate Securities	Real Estate Securities We invest in real estate securities that we acquire from third parties or create and retain from our Sequoia securitizations. The following table presents the fair values of our real estate securities by type at September 30, 2020 and December 31, 2019. Table 9.1 – Fair Values of Real Estate Securities by Type (In Thousands) September 30, 2020 December 31, 2019 Trading $ 144,162 $ 860,540 Available-for-sale 207,173 239,334 Total Real Estate Securities $ 351,335 $ 1,099,874 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. Many of our mezzanine classified securities were initially rated AA through BBB- and issued in 2012 or later. Subordinate securities are all interests below mezzanine. Excluding our re-performing loan securities, nearly all of our residential securities are supported by collateral that was designated as prime at the time of issuance. Trading Securities The following table presents the fair value of trading securities by position and collateral type at September 30, 2020 and December 31, 2019. Table 9.2 – Trading Securities by Position (In Thousands) September 30, 2020 December 31, 2019 Senior $ 28,091 $ 150,067 Mezzanine 3,651 538,489 Subordinate 112,420 171,984 Total Trading Securities $ 144,162 $ 860,540 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, and our residential securities also include securities backed by re-performing loans ("RPL"). At September 30, 2020 and December 31, 2019, our senior trading securities included $28 million and $64 million of interest-only securities, respectively, for which there is no principal balance, and the unpaid principal balance of our remaining senior trading securities was zero and $84 million, respectively. Our interest-only securities included $12 million and $36 million of certificated mortgage servicing rights at September 30, 2020 and December 31, 2019, respectively, which are securities we retained from certain of our Sequoia securitizations that represent certificated servicing strips. At September 30, 2020 and December 31, 2019, our trading securities included $60 million and $161 million of RPL securities, respectively. At September 30, 2020 and December 31, 2019, our mezzanine trading securities had an unpaid principal balance of $4 million and $537 million, respectively. At September 30, 2020 and December 31, 2019, the fair value of our mezzanine securities was $4 million and $538 million, respectively, and included $4 million and $39 million of Sequoia securities, respectively, zero and $395 million of multifamily securities, respectively, and zero and $104 million of other third-party residential securities, respectively, including zero and $30 million of RPL securities, respectively. At September 30, 2020 and December 31, 2019, our subordinate trading securities had an unpaid principal balance of $266 million and $302 million, respectively. At September 30, 2020 and December 31, 2019, the fair value of our subordinate securities was $112 million and $172 million, respectively, and included $50 million and $90 million, respectively, of Agency residential mortgage credit risk transfer (or "CRT") securities, and $55 million and $82 million, respectively, of other third-party residential securities, including $51 million and $76 million of RPL securities, respectively. During the three and nine months ended September 30, 2020, we acquired $11 million and $78 million (principal balance), respectively, of securities for which we elected the fair value option and classified as trading, and sold $16 million and $721 million, respectively, of such securities. During the three and nine months ended September 30, 2019, we acquired $66 million and $335 million (principal balance), respectively, of securities for which we elected the fair value option and classified as trading, and sold $236 million and $397 million, respectively, of such securities. During the three and nine months ended September 30, 2020, we recorded net market valuation losses of $4 million and $225 million, respectively, on trading securities, included in Investment fair value changes, net on our consolidated statements of income (loss). During the three and nine months ended September 30, 2019, we recorded net market valuation gains of $15 million and $56 million, respectively, on trading securities, included in Investment fair value changes, net on our consolidated statements of income (loss). AFS Securities The following table presents the fair value of our available-for-sale securities by position and collateral type at September 30, 2020 and December 31, 2019. Table 9.3 – Available-for-Sale Securities by Position (In Thousands) September 30, 2020 December 31, 2019 Senior $ — $ 25,792 Mezzanine 2,016 13,687 Subordinate 205,157 199,855 Total AFS Securities $ 207,173 $ 239,334 At September 30, 2020 and December 31, 2019, our available-for-sale securities were comprised of $160 million and $230 million of residential mortgage-backed securities, respectively, and $48 million and $9 million of multifamily mortgage-backed securities, respectively. At September 30, 2020 and December 31, 2019, our residential available-for-sale securities were comprised of $124 million and $141 million of residential mortgage-backed securities we retained from our Sequoia securitizations, respectively, and $35 million and $90 million of other third-party residential securities, respectively. During the three and nine months ended September 30, 2020, we purchased $25 million and $57 million of AFS securities, respectively, and sold zero and $55 million of AFS securities, respectively, which resulted in net realized gains of zero and $5 million, respectively. During the three and nine months ended September 30, 2019, we purchased $12 million and $21 million of AFS securities, respectively, and sold $15 million and $82 million of AFS securities, respectively, which resulted in net realized gains of $4 million and $13 million, respectively. We often purchase AFS securities at a discount to their outstanding principal balances. To the extent we purchase an AFS security that has a likelihood of incurring a loss, we do not amortize into income the portion of the purchase discount that we do not expect to collect due to the inherent credit risk of the security. We may also expense a portion of our investment in the security to the extent we believe that principal losses will exceed the purchase discount. We designate any amount of unpaid principal balance that we do not expect to receive and thus do not expect to earn or recover as a credit reserve on the security. Any remaining net unamortized discounts or premiums on the security are amortized into income over time using the effective yield method. At September 30, 2020, we had $45 million of AFS securities with contractual maturities less than five years, $3 million with contractual maturities greater than five years but less than ten years, and the remainder of our AFS securities had contractual maturities greater than ten years. The following table presents the components of carrying value (which equals fair value) of AFS securities at September 30, 2020 and December 31, 2019. Table 9.4 – Carrying Value of AFS Securities September 30, 2020 (In Thousands) Senior Mezzanine Subordinate Total Principal balance $ — $ 2,000 $ 287,659 $ 289,659 Credit reserve — — (43,186) (43,186) Unamortized discount, net — — (99,221) (99,221) Amortized cost — 2,000 145,252 147,252 Gross unrealized gains — 16 63,439 63,455 Gross unrealized losses — — (2,507) (2,507) Allowance for credit losses — — (1,027) (1,027) Carrying Value $ — $ 2,016 $ 205,157 $ 207,173 December 31, 2019 (In Thousands) Senior Mezzanine Subordinate Total Principal balance $ 26,331 $ 13,512 $ 264,234 $ 304,077 Credit reserve (533) — (32,407) (32,940) Unamortized discount, net (10,427) (527) (113,301) (124,255) Amortized cost 15,371 12,985 118,526 146,882 Gross unrealized gains 10,450 702 81,329 92,481 Gross unrealized losses (29) — — (29) Carrying Value $ 25,792 $ 13,687 $ 199,855 $ 239,334 The following table presents the changes for the three and nine months ended September 30, 2020, in unamortized discount and designated credit reserves on AFS securities. Table 9.5 – Changes in Unamortized Discount and Designated Credit Reserves on AFS Securities Three Months Ended September 30, 2020 Nine Months Ended September 30, 2020 Credit Unamortized Credit Unamortized (In Thousands) Beginning balance $ 37,785 $ 104,260 $ 32,940 $ 124,255 Amortization of net discount — (1,766) — (4,607) Realized credit losses (194) — (897) — Acquisitions 1,303 1,019 6,487 1,796 Sales, calls, other — — (726) (16,841) (Release of) transfers to credit reserves, net 4,292 (4,292) 5,382 (5,382) Ending Balance $ 43,186 $ 99,221 $ 43,186 $ 99,221 AFS Securities with Unrealized Losses The following table presents the components comprising the total carrying value of AFS securities that were in a gross unrealized loss position at September 30, 2020 and December 31, 2019. Table 9.6 – Components of Fair Value of AFS Securities by Holding Periods Less Than 12 Consecutive Months 12 Consecutive Months or Longer Amortized Unrealized Fair Amortized Unrealized Fair (In Thousands) September 30, 2020 $ 32,890 $ (2,507) $ 30,330 $ — $ — $ — December 31, 2019 — — — 5,830 (29) 5,801 At September 30, 2020, after giving effect to purchases, sales, and extinguishment due to credit losses, our consolidated balance sheet included 96 AFS securities, of which seven were in an unrealized loss position and zero were in a continuous unrealized loss position for 12 consecutive months or longer. At December 31, 2019, our consolidated balance sheet included 107 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. Evaluating AFS Securities for Credit Losses Gross unrealized losses on our AFS securities were $3 million at September 30, 2020. Pursuant to our adoption of ASU 2016-13, "Financial Instruments - Credit Losses" in the first quarter of 2020, we evaluate all securities in an unrealized loss position to determine if the impairment is credit-related (resulting in an allowance for credit losses recorded in earnings) or non-credit-related (resulting in an unrealized loss through other comprehensive income). At September 30, 2020, 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 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. At September 30, 2020, our allowance for credit losses related to our AFS securities was $1 million. AFS securities for which an allowance 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 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 security credit losses. The table below summarizes the weighted average of the significant credit quality indicators we used for the credit loss allowance on our AFS securities at September 30, 2020. Table 9.7 – Significant Credit Quality Indicators September 30, 2020 Subordinate Securities Default rate 0.5% Loss severity 20% The following table details the activity related to the allowance for credit losses for AFS securities held at September 30, 2020. Table 9.8 – Rollforward of Allowance for Credit Losses Three Months Ended Nine Months Ended (In Thousands) September 30, 2020 September 30, 2020 Beginning balance allowance for credit losses $ 1,471 $ — Transition impact from adoption of new standard — — Additions to allowance for credit losses on securities for which credit losses were not previously recorded 339 1,864 Additional increases or decreases to the allowance for credit losses on securities that had an allowance recorded in a previous period (783) (837) Allowance on purchased financial assets with credit deterioration — — Reduction to allowance for securities sold during the period — — Reduction to allowance for securities we intend to sell or more likely than not will be required to sell — — Write-offs charged against allowance — — Recoveries of amounts previously written off — — Ending balance of allowance for credit losses $ 1,027 $ 1,027 Gains and losses from the sale of AFS securities are recorded as Realized gains, net, in our consolidated statements of income (loss). The following table presents the gross realized gains and losses on sales and calls of AFS securities for the three and nine months ended September 30, 2020 and 2019. Table 9.9 – Gross Realized Gains and Losses on AFS Securities Three Months Ended September 30, Nine Months Ended September 30, (In Thousands) 2020 2019 2020 2019 Gross realized gains - sales $ — $ 3,656 $ 8,779 $ 13,143 Gross realized gains - calls — 1,058 — 5,084 Gross realized losses - sales — — (4,144) — Total Realized Gains on Sales and Calls of AFS Securities, net $ — $ 4,714 $ 4,635 $ 18,227

Other Investments

Other Investments	9 Months Ended
	Sep. 30, 2020
Investments, All Other Investments [Abstract]
Other Investments	Other Investments Other investments at September 30, 2020 and December 31, 2019 are summarized in the following table. Table 10.1 – Components of Other Investments (In Thousands) September 30, 2020 December 31, 2019 Servicer advance investments $ 258,621 $ 169,204 Shared home appreciation options 41,758 45,085 Excess MSRs 35,070 31,814 Mortgage servicing rights 14,878 42,224 Investment in multifamily loan fund (323) 39,802 Other 34,624 30,001 Total Other Investments $ 384,628 $ 358,130 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 (Refer to our Annual Report on Form 10-K for the year ended December 31, 2019 for additional information regarding the transaction). During the nine months ended September 30, 2020, we funded additional purchases of outstanding servicer advances and excess MSRs under the same partnership structure. At September 30, 2020, we had funded $94 million of total capital to the SA Buyers (see Note 16 for additional detail). At September 30, 2020, 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 $9.71 billion. The outstanding servicer advance receivables associated with this investment were $242 million at September 30, 2020, 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 September 30, 2020 and December 31, 2019. Table 10.2 – Components of Servicer Advance Receivables (In Thousands) September 30, 2020 December 31, 2019 Principal and interest advances $ 88,370 $ 15,081 Escrow advances (taxes and insurance advances) 115,352 96,732 Corporate advances 38,337 39,769 Total Servicer Advance Receivables $ 242,059 $ 151,582 We account for our servicer advance investments at fair value and during the three and nine months ended September 30, 2020, we recorded $3 million and $8 million, respectively, of interest income associated with these investments, and recorded net market valuation gain of less than $0.1 million and a net market valuation loss of $6 million, respectively, through Investment fair value changes, net in our consolidated statements of income (loss). During the three and nine months ended September 30, 2019, we recorded $3 million and $9 million, respectively, of interest income associated with these investments for each of these periods, and recorded net market valuation gains of $2 million and $3 million, respectively, through Investment fair value changes, net in our consolidated statements of income (loss). 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 subsidiaries. At September 30, 2020 and December 31, 2019, our MSRs had a fair value of $15 million and $42 million, respectively, and were associated with loans with an aggregate principal balance of $3.14 billion and $4.35 billion, respectively. During the three and nine months ended September 30, 2020, including net market valuation gains and losses on our MSRs and related risk management derivatives, we recorded net losses of $2 million and $6 million, respectively, through Other income on our consolidated statements of income (loss). During the three and nine months ended September 30, 2019, we recognized $0.4 million and $2 million of income, net, respectively, through Other income on our consolidated statements of income (loss). Excess MSRs In association with our servicer advance investments described above, we (through our consolidated SA Buyers) invested in excess MSRs associated with the same portfolio of legacy residential mortgage-backed securitizations. Additionally, we own excess MSRs associated with specified pools of multifamily loans. We account for our excess MSRs at fair value and during the three and nine months ended September 30, 2020, we recognized $3 million and $9 million of interest income, respectively, through Other interest income, and recorded net market valuation losses of $1 million and $8 million, respectively, through Investment fair value changes, net on our consolidated statements of income (loss). During the three and nine months ended September 30, 2019, we recognized $2 million and $6 million of interest income, respectively, through Other interest income, and recorded net market valuation losses of $2 million for both periods through Investment fair value changes, net on our consolidated statements of income (loss). 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. At September 30, 2020, the carrying amount of our investment in the partnership was zero and we had no remaining funding obligations to the partnership. During the three and nine months ended September 30, 2020, we acquired $28 million and $56 million of securities, respectively, from the partnership's securitization transactions. During the three and nine months ended September 30, 2020, we recorded income of $0.3 million and $0.6 million, respectively, associated with this investment in Other income on our consolidated statements of income (loss). During the three and nine months ended September 30, 2019, we recorded $1 million and $0.5 million of income, respectively, associated with this investment in Other income on our consolidated statements of income (loss). Shared Home Appreciation Options In the third quarter of 2019, we entered into a flow purchase agreement to acquire shared home appreciation options. At September 30, 2020, we had acquired $47 million of shared home appreciation options under this flow purchase agreement and had an outstanding commitment to fund up to an additional $3 million under this agreement. We account for these investments under the fair value option and during the three and nine months ended September 30, 2020, we recorded a net market valuation gain of $2 million and a net market valuation loss of $4 million, respectively, related to these assets through Investment fair value changes, net on our consolidated statements of income (loss).

Derivative Financial Instrument

Derivative Financial Instruments	9 Months Ended
	Sep. 30, 2020
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Derivative Financial Instruments	Derivative Financial Instruments The following table presents the fair value and notional amount of our derivative financial instruments at September 30, 2020 and December 31, 2019. Table 11.1 – Fair Value and Notional Amount of Derivative Financial Instruments September 30, 2020 December 31, 2019 Fair Notional Fair Notional (In Thousands) Assets - Risk Management Derivatives Interest rate swaps $ 78 $ 25,000 $ 17,095 $ 1,399,000 TBAs 402 140,000 5,755 2,445,000 Interest rate futures 63 40,000 777 213,700 Swaptions 3,393 285,000 1,925 1,065,000 Assets - Other Derivatives Loan purchase and interest rate lock commitments 10,773 1,724,207 10,149 1,537,162 Total Assets $ 14,709 $ 2,214,207 $ 35,701 $ 6,659,862 Liabilities - Cash Flow Hedges Interest rate swaps $ — $ — $ (51,530) $ 139,500 Liabilities - Risk Management Derivatives Interest rate swaps (15) 25,000 (97,235) 2,314,300 TBAs (263) 105,000 (13,359) 4,160,000 Interest rate futures — — (10) 12,300 Liabilities - Other Derivatives Loan purchase commitments (1,334) 231,651 (1,290) 303,394 Total Liabilities $ (1,612) $ 361,651 $ (163,424) $ 6,929,494 Total Derivative Financial Instruments, Net $ 13,097 $ 2,575,858 $ (127,723) $ 13,589,356 Risk Management Derivatives To manage, to varying degrees, risks associated with certain assets and liabilities on our consolidated balance sheets, we may enter into derivative contracts. At September 30, 2020, we were party to swaps and swaptions with an aggregate notional amount of $335 million, TBA agreements sold with an aggregate notional amount of $245 million, and interest rate futures contracts with an aggregate notional amount of $40 million. At December 31, 2019, we were party to swaps and swaptions with an aggregate notional amount of $4.78 billion, TBA agreements sold with an aggregate notional amount of $6.61 billion, and interest rate futures contracts with an aggregate notional amount of $226 million. During the three and nine months ended September 30, 2020, risk management derivatives had net market valuation losses of zero and $98 million, respectively. During the three and nine months ended September 30, 2019, risk management derivatives had net market valuation losses of $36 million and $147 million, respectively. These market valuation gains and losses are recorded in Mortgage banking activities, net, Investment fair value changes, net, and Other income on our consolidated statements of income (loss). During the three months ended March 31, 2020, we settled substantially all of our outstanding derivative contracts as we determined that they were no longer effectively managing the risks associated with certain assets and liabilities. Loan Purchase and Interest Rate Lock Commitments LPCs and IRLCs that qualify as derivatives are recorded at their estimated fair values. For the three and nine months ended September 30, 2020, LPCs and IRLCs had net market valuation gains of $14 million and $35 million, respectively, that were recorded in Mortgage banking activities, net on our consolidated statements of income (loss). For the three and nine months ended September 30, 2019, LPCs and IRLCs had net market valuation gains of $14 million and $42 million, respectively, that were recorded in Mortgage banking activities, net on our consolidated statements of income (loss). 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. During the first quarter of 2020, we terminated and settled all of our outstanding derivatives that had been designated as cash flow hedges for our long-term debt, with a payment of $84 million. For interest rate agreements previously designated as cash flow hedges, our total unrealized loss reported in Accumulated other comprehensive income was $82 million and $51 million at September 30, 2020 and December 31, 2019, respectively. We will amortize this loss into interest expense over the remaining term of the trust preferred securities and subordinated notes. As of September 30, 2020, we expect to amortize $4 million of realized losses related to terminated cash flow hedges into interest expense over the next twelve months. For the three and nine months ended September 30, 2020, changes in the values of designated cash flow hedges were zero and negative $33 million, respectively, and were recorded in Accumulated other comprehensive income, a component of equity. For the three and nine months ended September 30, 2019, changes in the values of designated cash flow hedges were negative $12 million and negative $27 million, respectively, and were recorded in Accumulated other comprehensive income, a component of equity. The following table illustrates the impact on interest expense of our interest rate agreements accounted for as cash flow hedges for the three and nine months ended September 30, 2020 and 2019. Table 11.2 – Impact on Interest Expense of Interest Rate Agreements Accounted for as Cash Flow Hedges Three Months Ended September 30, Nine Months Ended September 30, (In Thousands) 2020 2019 2020 2019 Net interest expense on cash flows hedges $ — $ (727) $ (860) $ (2,004) Realized net losses reclassified from other comprehensive income (1,040) — (2,148) — Total Interest Expense $ (1,040) $ (727) $ (3,008) $ (2,004) Derivative Counterparty Credit Risk As discussed in our Annual Report on Form 10-K for the year ended December 31, 2019, we consider counterparty risk as part of our fair value assessments of all derivative financial instruments at each quarter-end. At September 30, 2020, we assessed this risk as remote and did not record a specific valuation adjustment. At September 30, 2020, we were in compliance with our derivative counterparty ISDA agreements.

Other Assets and Liabilities

Other Assets and Liabilities	9 Months Ended
	Sep. 30, 2020
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]
Other Assets and Liabilities	Other Assets and Liabilities Other assets at September 30, 2020 and December 31, 2019 are summarized in the following table. Table 12.1 – Components of Other Assets (In Thousands) September 30, 2020 December 31, 2019 Accrued interest receivable $ 39,330 $ 71,058 Investment receivable 25,767 23,330 Right-of-use asset 13,487 11,866 REO 8,535 9,462 Pledged collateral 8,172 32,945 Income tax receivables 8,148 36 FHLBC stock 5,000 43,393 Fixed assets and leasehold improvements (1) 4,408 4,901 Margin receivable 3,809 209,776 Other 7,617 12,554 Total Other Assets $ 124,273 $ 419,321 (1) Fixed assets and leasehold improvements had a basis of $12 million and accumulated depreciation of $8 million at September 30, 2020. Accrued expenses and other liabilities at September 30, 2020 and December 31, 2019 are summarized in the following table. Table 12.2 – Components of Accrued Expenses and Other Liabilities (In Thousands) September 30, 2020 December 31, 2019 Accrued interest payable $ 34,225 $ 60,655 Payable to minority partner 17,492 13,189 Accrued compensation 17,127 33,888 Lease liability 15,123 13,443 Deferred consideration 14,442 — Guarantee obligations 11,264 14,009 Current accounts payable 8,717 5,468 Residential loan and MSR repurchase reserve 8,565 4,268 Residential bridge loan holdbacks 6,350 10,682 Deferred tax liabilities 5,152 5,152 Accrued operating expenses 3,922 4,358 Contingent consideration — 28,484 Other 13,610 13,297 Total Accrued Expenses and Other Liabilities $ 155,989 $ 206,893 Refer to our Annual Report on Form 10-K for the year ended December 31, 2019 for additional descriptions of our other assets and liabilities. 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. Through September 30, 2020, we had met all margin calls due. REO The carrying value of REO at September 30, 2020 was $9 million, which included $3 million of REO from our residential bridge loan portfolio, $1 million from our consolidated Legacy Sequoia entities, $1 million from our consolidated Freddie Mac SLST entities, and $4 million from consolidated CAFL entities. At September 30, 2020, there were two residential bridge loan REO assets, three REO assets at our Legacy Sequoia entities, nine REO assets at our Freddie Mac SLST entities, and three REO assets at our CAFL entities recorded on our consolidated balance sheets. During the nine months ended September 30, 2020, transfers into REO included a $5 million residential bridge loan, $1 million from Legacy Sequoia entities, $1 million from Freddie Mac SLST entities, and $6 million from CAFL entities. During the nine months ended September 30, 2020, there were REO liquidations of $13 million, resulting in $0.3 million of unrealized losses which were recorded in Investment fair value changes, net, on our consolidated statements of income (loss). At December 31, 2019, there were four residential bridge loan REO assets, four REO assets at our Legacy Sequoia entities, three REO assets at our Freddie Mac SLST entities, and two REO assets at our CAFL entities recorded on our consolidated balance sheets.

Short-Term Debt

Short-Term Debt	9 Months Ended
	Sep. 30, 2020
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 investment banking firms. At September 30, 2020, we had outstanding agreements with several counterparties and we were in compliance with all of the related covenants. The table below summarizes our short-term debt, including the facilities that are available to us, the outstanding balances, the weighted average interest rate, and the maturity information at September 30, 2020 and December 31, 2019. Table 13.1 – Short-Term Debt September 30, 2020 (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 $ 81,898 $ 600,000 2.90 % 10/2020-8/2021 203 Business purpose residential loan warehouse (2) 2 96,811 500,000 3.28 % 6/2021-5/2022 437 Real estate securities repo (1) 3 75,054 — 2.87 % 10/2020-12/2020 38 Total Short-Term Debt Facilities 9 253,763 Servicer advance financing 1 228,998 400,000 1.96 % 11/2020 61 Total Short-Term Debt $ 482,761 December 31, 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 $ 185,894 $ 1,425,000 3.23 % 1/2020-10/2020 69 Business purpose residential loan warehouse (2) 8 814,118 1,475,000 4.11 % 12/2020-5/2022 489 Real estate securities repo (1) 10 1,176,579 — 2.94 % 1/2020-3/2020 23 Total Short-Term Debt Facilities 22 2,176,591 Servicer advance financing 1 152,554 400,000 3.56 % 11/2020 335 Total Short-Term Debt $ 2,329,145 (1) Borrowings under our facilities are generally charged interest based on a specified margin over the one-month LIBOR interest rate. At September 30, 2020 and December 31, 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 September 30, 2020. Borrowings under these facilities will be repaid as the underlying loans mature or are sold to third parties or transferred to securitizations. The following table below presents the value of loans, securities, and other assets pledged as collateral under our short-term debt facilities at September 30, 2020 and December 31, 2019. Table 13.2 – Collateral for Short-Term Debt Facilities (In Thousands) September 30, 2020 December 31, 2019 Collateral Type Held-for-sale residential loans $ 95,023 $ 201,949 Business purpose residential loans 110,505 988,179 Real estate securities On balance sheet 24,670 618,881 Sequoia Choice securitizations (1) 63,088 111,341 Freddie Mac SLST securitizations (1) — 381,640 Freddie Mac K-Series securitizations (1) 26,550 252,284 CAFL securitizations (1) — 127,840 Total real estate securities owned 114,308 1,491,986 Other assets — 16,252 Total Collateral for Short-Term Debt Facilities $ 319,836 $ 2,698,366 (1) Represents securities we have retained from consolidated securitization entities. For GAAP purposes, we consolidate the loans and non-recourse ABS debt issued from these securitizations. For the three and nine months ended September 30, 2020, the average balances of our short-term debt facilities were $313 million and $1.42 billion, respectively. At September 30, 2020 and December 31, 2019, accrued interest payable on our short-term debt facilities was $1 million and $6 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 September 30, 2020, the fair value of servicer advances, cash and restricted cash collateralizing the securitization financing was $270 million. At September 30, 2020, the accrued interest payable balance on this financing was $0.1 million and the unamortized capitalized commitment costs were $0.2 million. 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 $3 million at September 30, 2020. At both September 30, 2020 and December 31, 2019, 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 September 30, 2020. Table 13.3 – Short-Term Debt by Collateral Type and Remaining Maturities September 30, 2020 (In Thousands) Within 30 days 31 to 90 days Over 90 days Total Collateral Type Held-for-sale residential loans $ 1,217 $ — $ 80,681 $ 81,898 Business purpose residential loans — — 96,811 96,811 Real estate securities 37,217 37,837 — 75,054 Total Secured Short-Term Debt 38,434 37,837 177,492 253,763 Servicer advance financing — 228,998 — 228,998 Total Short-Term Debt $ 38,434 $ 266,835 $ 177,492 $ 482,761

Asset-Backed Securities Issued

Asset-Backed Securities Issued	9 Months Ended
	Sep. 30, 2020
Debt Disclosure [Abstract]
Asset-Backed Securities Issued	Asset-Backed Securities Issued The carrying values of ABS issued by our consolidated securitization entities at September 30, 2020 and December 31, 2019, along with other selected information, are summarized in the following table. Table 14.1 – Asset-Backed Securities Issued September 30, 2020 Legacy Sequoia Freddie Mac SLST (1) Freddie Mac CAFL Total (Dollars in Thousands) Certificates with principal balance $ 347,985 $ 1,571,714 $ 1,925,144 $ 418,212 $ 2,528,974 $ 6,792,029 Interest-only certificates 1,268 6,805 24,053 13,122 137,064 182,312 Market valuation adjustments (56,769) 48,045 95,138 33,531 78,112 198,057 ABS Issued, Net $ 292,484 $ 1,626,564 $ 2,044,335 $ 464,865 $ 2,744,150 $ 7,172,398 Range of weighted average interest rates, by series 0.35% to 1.96% 2.23% to 5.02% 3.50% to 4.75% 3.39 % 3.18% to 5.53% Stated maturities 2024 - 2036 2047 - 2050 2028 - 2059 2025 2022 - 2048 Number of series 20 10 3 1 13 December 31, 2019 Legacy Sequoia Freddie Mac SLST Freddie Mac K-Series CAFL Total (Dollars in Thousands) Certificates with principal balance $ 420,056 $ 1,979,719 $ 1,842,682 $ 3,844,789 $ 1,875,007 $ 9,962,253 Interest-only certificates 1,282 16,514 30,291 217,891 90,134 356,112 Market valuation adjustments (18,873) 40,965 45,349 93,559 36,110 197,110 ABS Issued, Net $ 402,465 $ 2,037,198 $ 1,918,322 $ 4,156,239 $ 2,001,251 $ 10,515,475 Range of weighted average interest rates, by series 1.94% to 3.26% 4.40% to 5.05% 3.50 % 3.35% to 4.35% 3.25% to 5.36% Stated maturities 2024 - 2036 2047 - 2049 2028 - 2029 2025 - 2049 2022 - 2048 Number of series 20 9 2 5 10 (1) Includes $208 million (principal balance) of ABS issued by a re-securitization trust sponsored by Redwood and accounted for at amortized cost. During the third quarter of 2020, we transferred all of the subordinate securities we owned from two consolidated re-performing loan securitization VIEs sponsored by Freddie Mac SLST to a re-securitization trust, which we determined was a VIE and for which we determined we are the primary beneficiary. At issuance, we sold $210 million (principal balance) of ABS issued to third parties and retained 100% of the remaining beneficial ownership interest in the trust through ownership of a subordinate security issued by the trust. The ABS was issued at a discount and we have elected to account for the ABS issued at amortized cost. At September 30, 2020, the carrying value of the ABS issued was $203 million and the debt discount was $5 million. The stated coupon of the ABS issued was 4.75% at issuance and the final stated maturity occurs in July 2059. The ABS issued is subject to optional redemption and interest rate step-ups prior to the stated maturity according to the terms of the respective governing agreements. The actual maturity of each class of ABS issued is primarily determined by the rate of principal prepayments on the assets of the issuing entity. Each series is also subject to redemption prior to the stated maturity according to the terms of the respective governing documents of each ABS issuing entity. As a result, the actual maturity of ABS issued may occur earlier than its stated maturity. At September 30, 2020, the majority of the ABS issued and outstanding had contractual maturities beyond five years. See Note 4 for detail on the carrying value components of the collateral for ABS issued and outstanding. The following table summarizes the accrued interest payable on ABS issued at September 30, 2020 and December 31, 2019. Interest due on consolidated ABS issued is payable monthly. Table 14.2 – Accrued Interest Payable on Asset-Backed Securities Issued (In Thousands) September 30, 2020 December 31, 2019 Legacy Sequoia $ 180 $ 395 Sequoia Choice 5,652 7,732 Freddie Mac SLST (1) 5,831 5,374 Freddie Mac K-Series 1,182 12,887 CAFL 9,180 7,298 Total Accrued Interest Payable on ABS Issued $ 22,025 $ 33,686

Long-Term Debt

Long-Term Debt	9 Months Ended
	Sep. 30, 2020
Debt Disclosure [Abstract]
Long-Term Debt	Long-Term DebtRefer to our Annual Report on Form 10-K for the year ended December 31, 2019 for a full description of our long-term debt. FHLBC Borrowings At September 30, 2020, $1 million of advances were outstanding under our FHLBC borrowing agreement, with a weighted average interest rate of 0.35%. These borrowings mature in 2026. At December 31, 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 1.88% and a weighted average maturity of six years. During the three and nine months ended September 30, 2020, we repaid zero and $2.00 billion, respectively, of our FHLBC borrowings. At September 30, 2020, total advances under this agreement were secured by $1 million of restricted cash. We do not expect to increase borrowings under our FHLBC borrowing agreement above the existing $1 million of advances outstanding. This agreement also requires our subsidiary to purchase and hold stock in the FHLBC in an amount equal to a specified percentage of outstanding advances. At September 30, 2020, our subsidiary held $5 million of FHLBC stock that is included in Other assets in our consolidated balance sheets. Recourse Subordinate Securities Financing Facilities In 2019, a subsidiary of Redwood entered into a repurchase agreement providing non-marginable (e.g., not subject to margin calls based on the market value of the underlying collateral) recourse debt financing of certain Sequoia securities as well as securities retained from our consolidated Sequoia Choice securitizations. The financing is fully and unconditionally guaranteed by Redwood, with an interest rate of approximately 4.21% through September 2022. The financing facility may be terminated, at our option, in September 2022, and has a final maturity in September 2024, provided that the interest rate on amounts outstanding under the facility increases between October 2022 and September 2024. At September 30, 2020, we had borrowings under this facility totaling $180 million and $1 million of unamortized deferred issuance costs, for a net carrying value of $179 million. At September 30, 2020, the fair value of real estate securities pledged as collateral under this long-term debt facility was $232 million and included Sequoia securities and securities retained from our Sequoia Choice securitizations. In the first quarter of 2020, a subsidiary of Redwood entered into a second repurchase agreement with similar terms to provide non-marginable recourse debt financing of certain securities retained from our consolidated CAFL securitizations. The financing is fully and unconditionally guaranteed by Redwood, with an interest rate of approximately 4.21% through February 2023. The financing facility may be terminated, at our option, in February 2023, and has a final maturity in February 2025, provided that the interest rate on amounts outstanding under the facility increases between March 2023 and February 2025. At September 30, 2020, we had borrowings under this facility totaling $103 million and $1 million of unamortized deferred issuance costs, for a net carrying value of $102 million. At September 30, 2020, the fair value of real estate securities pledged as collateral under this long-term debt facility was $112 million and included securities retained from our consolidated CAFL securitizations. Non-Recourse Business Purpose Loan Financing Facilities In the third quarter of 2020, a subsidiary of Redwood entered into a repurchase agreement providing non-marginable, non-recourse financing primarily for business purpose bridge loans. Borrowings under this facility accrue interest at a per annum rate equal to one-month LIBOR plus 3.85% (with a 0.50% LIBOR floor), through July 2022. We do not have the ability to increase borrowings under this borrowing facility above the existing amounts outstanding. At September 30, 2020, we had borrowings under this facility totaling $158 million and $1 million of unamortized deferred issuance costs, for a net carrying value of $157 million. At September 30, 2020, $216 million of bridge loans were pledged as collateral under this facility. In the second quarter of 2020, a subsidiary of Redwood entered into a repurchase agreement providing non-marginable, non-recourse financing primarily for business purpose bridge loans. Borrowings under this facility accrue interest at a per annum rate equal to one-month LIBOR plus 7.50% (with a 1.50% LIBOR floor), through June 2022 (facility is fully callable in June 2021). This facility has an aggregate maximum borrowing capacity of $530 million, which consists of a term facility of $355 million and a revolving facility of $175 million. The revolving period ends in June 2021, and amounts borrowed under the term and revolving facilities are due in full in June 2022. At September 30, 2020, we had borrowings under this facility totaling $302 million and $4 million of unamortized deferred issuance costs, for a net carrying value of $298 million. At September 30, 2020, $369 million of bridge loans and $25 million of other BPL investments were pledged as collateral under this facility. Recourse Business Purpose Loan Financing Facilities In the third quarter of 2020, a subsidiary of Redwood entered into a repurchase agreement providing non-marginable financing for business purpose bridge loans and single-family rental loans. Borrowings under this facility accrue interest at a per annum rate equal to three-month LIBOR plus 3.00% through September 2023 and are recourse to Redwood. This facility has an aggregate maximum borrowing capacity of $250 million. At September 30, 2020, we had no borrowings outstanding under this facility. In the second quarter of 2020, a subsidiary of Redwood entered into a repurchase agreement providing non-marginable financing for business purpose bridge loans and single-family rental loans. Borrowings under this facility accrue interest at a per annum rate equal to three-month LIBOR plus 3.50% to 4.00% (with a 1.00% LIBOR floor) through May 2022 and are recourse to Redwood. This facility has an aggregate maximum borrowing capacity of $350 million. At September 30, 2020, we had borrowings under this facility totaling $150 million and $1 million of unamortized deferred issuance costs, for a net carrying value of $150 million. At September 30, 2020, $18 million of bridge loans and $194 million of single-family rental loans were pledged as collateral under this facility. Recourse Revolving Debt Facility In the first quarter of 2020, a subsidiary of Redwood entered into a secured revolving debt facility agreement collateralized by MSRs and certificated mortgage servicing rights. Borrowings under this facility accrue interest at a per annum rate equal to one-month LIBOR plus 2.75% through January 2021, with an increase in rate between February 2021 and the maturity of the facility in January 2022. This facility has an aggregate maximum borrowing capacity of $50 million. We had no borrowings outstanding under this facility at September 30, 2020. At September 30, 2020, $33 million of MSRs and certificated servicing rights were pledged as collateral under this facility. Convertible Notes At September 30, 2020, we had $172 million principal amount outstanding of 5.75% exchangeable senior notes due 2025. During the second quarter of 2020, we repurchased $29 million par value of these notes at a discount and recorded a gain on extinguishment of $6 million in Realized gains, net on our consolidated statements of income (loss). At September 30, 2020, the accrued interest payable balance on this debt was $5 million and the unamortized deferred issuance costs were $4 million. At September 30, 2020, we had $150 million principal amount outstanding of 5.625% convertible senior notes due 2024. During the second quarter of 2020, we repurchased $50 million par value of these notes at a discount and recorded a gain on extinguishment of $9 million in Realized gains, net on our consolidated statements of income (loss). At September 30, 2020, the accrued interest payable on this debt was $2 million, the unamortized deferred issuance costs were $2 million, and the debt discount was $1 million. At September 30, 2020, we had $199 million principal amount outstanding of 4.75% convertible senior notes due 2023. During the second quarter of 2020, we repurchased $46 million par value of these notes at a discount and recorded a gain on extinguishment of $10 million in Realized gains, net on our consolidated statements of income (loss). At September 30, 2020, the accrued interest payable balance on this debt was $1 million and the unamortized deferred issuance costs were $3 million. Trust Preferred Securities and Subordinated Notes

Commitments and Contingencies

Commitments and Contingencies	9 Months Ended
	Sep. 30, 2020
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	Commitments and Contingencies Lease Commitments At September 30, 2020, we were obligated under seven non-cancelable operating leases with expiration dates through 2031 for $18 million of cumulative lease payments. Our operating lease expense was $3 million and $2 million for the nine months ended September 30, 2020 and 2019, respectively. The following table presents our future lease commitments at September 30, 2020. Table 16.1 – Future Lease Commitments by Year (In Thousands) September 30, 2020 2020 (3 months) $ 930 2021 2,949 2022 2,427 2023 1,913 2024 1,917 2025 8,039 Total Lease Commitments 18,175 Less: Imputed interest (3,052) Lease Liability $ 15,123 During the nine months ended September 30, 2020, we entered into three office leases and determined that each of these leases qualified as operating leases. At September 30, 2020, our lease liability was $15 million, which was a component of Accrued expenses and other liabilities, and our right-of-use asset was $13 million, which was a component of Other assets We determined that none of our leases contained 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 September 30, 2020, the weighted-average remaining lease term and weighted-average discount rate for our leases was 7 years and 5.0%, respectively. Commitment to Fund Residential Bridge Loans As of September 30, 2020, we had commitments to fund up to $225 million of additional advances on existing 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. At September 30, 2020, we recorded a $1 million derivative liability related to these commitments to fund construction advances (see Note 7 for additional detail). 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. The outstanding commitments related to these loans that we may temporarily fund totaled approximately $15 million at September 30, 2020. 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). In connection with this investment, we are 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. 5 Arches Contingent Consideration As part of the consideration for our acquisition of 5 Arches, we were committed to make earn-out payments up to $29 million, payable in a mix of cash and Redwood common stock. These contingent earn-out payments were classified as a contingent consideration liability and carried at fair value prior to March 31, 2020. During the first quarter of 2020, we made a cash payment of $11 million and granted $3 million of Redwood common stock in connection with the first anniversary of the purchase date. Additionally, as a result of an amendment to the agreement, we reclassified the contingent liability to a deferred liability, as the remaining payments became payable on a set timetable without any remaining contingencies. At September 30, 2020, the balance of this liability was $14 million, which will be paid in a mix of cash and common stock in March 2021. Commitment to Fund Shared Home Appreciation Options In the third quarter of 2019, we entered into a flow purchase agreement to acquire shared home appreciation options. The counterparty purchases an option to buy a fractional interest in a homeowner's ownership interest in residential property, and subsequently the counterparty sells the option contract to us. Pursuant to the terms of the option contract, we share in both home price appreciation and depreciation. At September 30, 2020, we had acquired $47 million of shared home appreciation options under this agreement, which are included in Other investments on our consolidated balance sheets. At September 30, 2020, we had an outstanding commitment to fund up to an additional $3 million under this agreement. Loss Contingencies — Risk-Sharing During 2015 and 2016, we sold conforming loans to the Agencies with an original unpaid principal balance of $3.19 billion, subject to our risk-sharing arrangements with the Agencies. At September 30, 2020, the maximum potential amount of future payments we could be required to make under these arrangements was $44 million and this amount was fully collateralized by assets we transferred to pledged accounts and is presented as pledged collateral in Other assets on our consolidated balance sheets. We have no recourse to any third parties that would allow us to recover any amounts related to our obligations under the arrangements. At September 30, 2020, we had not incurred any losses under these arrangements. For the three and nine months ended September 30, 2020, other income related to these arrangements was $1 million and $3 million, respectively, and net market valuation losses related to these investments were $0.3 million and $0.9 million, respectively. For the three and nine months ended September 30, 2019, other income related to these arrangements was $1 million and $2 million, respectively, and net market valuation losses related to these investments were $0.1 million and $0.2 million, respectively. All of the loans in the reference pools subject to these risk-sharing arrangements were originated in 2014 and 2015, and at September 30, 2020, the loans had an unpaid principal balance of $1.12 billion and a weighted average FICO score of 758 (at origination) and LTV ratio of 75% (at origination). At September 30, 2020, $42 million of the loans were 90 days or more delinquent, and none of these loans were in foreclosure. At September 30, 2020, the carrying value of our guarantee obligation was $11 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 September 30, 2020 and December 31, 2019, assets of such SPEs totaled $47 million and $48 million, respectively, and liabilities of such SPEs totaled $11 million and $14 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. Additionally, for certain loans we sold during the second quarter of 2020 that were previously held for investment, we have a direct obligation to repurchase these loans in the event of any early payment defaults (or EPDs) by the underlying mortgage borrowers within certain specified periods following the sales. At September 30, 2020 and December 31, 2019, our repurchase reserve associated with our residential loans and MSRs was $9 million and $4 million, respectively, and was recorded in Accrued expenses and other liabilities on our consolidated balance sheets. We received eight and ten repurchase requests during the nine months ended September 30, 2020 and 2019, respectively, and did not repurchase any loans during either of these periods. During the nine months ended September 30, 2020 and 2019, we recorded repurchase provisions of $4 million and reversals of repurchase provisions of $0.2 million, respectively, that were recorded in Mortgage banking activities, net; Investment fair value changes, net; and Other income on our consolidated statements of income (loss). Loss Contingencies — Litigation, Claims and Demands There is no significant update regarding the litigation matters described in Note 16 within the financial statements included in Redwood’s Annual Report on Form 10-K for the year ended December 31, 2019 under the heading “Loss Contingencies - Litigation.” At September 30, 2020, the aggregate amount of loss contingency reserves established in respect of the FHLB-Seattle and Schwab litigation matters described in our Annual Report on Form 10-K for the year ended December 31, 2019 was $2 million. In addition to those matters, as previously disclosed, in connection with the impact of the effects of the pandemic on the non-Agency mortgage finance market and on our business and operations, a number of the counterparties that have regularly sold residential mortgage loans to us believe that we breached perceived obligations to them, and requested or demanded that we purchase loans from them and/or compensate them for perceived damages resulting from our decisions earlier in 2020 not to purchase certain loans from them (“Residential Loan Seller Demands”). We believe that these Residential Loan Seller Demands are without merit or subject to defenses and we intend to defend vigorously any such allegations and any related demand or claim to which we are or become a party. Despite our beliefs about the legal merits of these allegations, because our ordinary course of business is to seek to continue to regularly engage in mutually beneficial transactions with these counterparties, in some cases we have been willing to engage in discussions with these counterparties with the intention of reaching resolution, including through structuring arrangements that incentivize both the counterparty and us to continue to engage in residential loan purchase and sale transactions in the future. With respect to certain of the Residential Loan Seller Demands, these resolution discussions have been successful in resolving, or establishing a framework that we believe will be the basis for successfully resolving, the demands of these counterparties, including through forward-looking joint business undertakings and structured arrangements that incentivize both the counterparty and us to continue to engage in residential loan purchase and sale transactions in the future. With respect to these counterparties, we have incurred or expect to incur certain costs in connection with finalizing these arrangements (including costs that are contingent on the successful completion of future residential loan purchase and sale transactions with these counterparties that we expect to generate future revenue for the Company) and have recorded any such actual costs incurred through September 30, 2020, as well as an accrual for the estimated costs associated with counterparties where a resolution or go-forward framework has been agreed to or has been discussed but not finalized, a portion of which was recorded through Other expense and a portion of which was recorded through Mortgage banking activities, net on our consolidated income statement. In accordance with GAAP, the accrual for estimated costs is based on the opinion of management, that it is probable that these resolutions and forward-looking joint business undertakings and structured arrangements will result in an expense and the amount of expense can be reasonably estimated. In addition, as previously disclosed, one such counterparty filed a breach of contract lawsuit against us in May 2020 alleging that it had suffered in excess of $2 million of losses as a result of our alleged failure to purchase residential mortgage loans from it; and in October 2020 we and the plaintiff agreed to settle the lawsuit on mutually satisfactory terms. During the three and nine months ended September 30, 2020, we recorded $4 million and $9 million of expenses, respectively, in association with Residential Loan Seller Demands. At September 30, 2020, the aggregate amount of our accrual for estimated costs associated with Residential Loan Seller Demands was $6.5 million, a portion of which would be contingent on the successful completion of future residential loan purchase and sale transactions with certain counterparties, with the expectation of generating future revenue for the Company. With respect to Residential Loan Seller Demands that have not been resolved or been accrued for, our beliefs about the legal merits of these allegations and our discussions with these counterparties have resulted in us determining that a significant loss from these matters is not probable. With respect to these remaining Residential Loan Seller Demands, based on the foregoing, we have concluded that we can estimate an aggregate range of reasonably possible losses with respect to these Residential Loan Seller Demands of between zero and $1.5 million. Future developments (including receipt of additional information and documents relating to these matters, new or additional resolution or settlement communications relating to these matters, resolutions of similar claims against other industry participants in similar circumstances, or receipt of additional Residential Loan Seller Demands) could result in our concluding in the future to establish additional accruals or reserves or modify our aggregate range of reasonably possible losses with respect to these Residential Loan Seller Demand matters. Our actual losses, and any accruals or reserves we may establish in the future relating to these matters, may be materially higher than the accruals, reserves and the aggregate range of reasonably possible losses we have estimated above, respectively, including in the event that any of these matters proceed to trial and result in a judgment against us. We cannot be certain that any of these matters that are not already formally resolved will be resolved through a resolution or settlement and we cannot be certain that the resolution of these matters, whether through litigation, settlement, or otherwise, will not have a material adverse effect on our financial condition or results of operations in any future period. 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. 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 litigation 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.

Equity

Equity	9 Months Ended
	Sep. 30, 2020
Equity [Abstract]
Equity	Equity The following table provides a summary of changes to accumulated other comprehensive income by component for the three and nine months ended September 30, 2020 and 2019. During the three and nine months ended September 30, 2020, we recognized net unrealized gains (losses) on our Level 3 AFS securities which we owned as of September 30, 2020 of $8 million and negative $16 million, respectively. Table 17.1 – Changes in Accumulated Other Comprehensive Income by Component Three Months Ended September 30, 2020 Three Months Ended September 30, 2019 (In Thousands) Available-for-Sale Securities Interest Rate Agreements Accounted for as Cash Flow Hedges Available-for-Sale Securities Interest Rate Agreements Accounted for as Cash Flow Hedges Balance at beginning of period $ 53,246 $ (82,637) $ 98,307 $ (49,384) Other comprehensive income (loss) 8,236 — 4,484 (11,791) Amounts reclassified from other (445) 1,040 (3,492) — Net current-period other comprehensive income (loss) 7,791 1,040 992 (11,791) Balance at End of Period $ 61,037 $ (81,597) $ 99,299 $ (61,175) Nine Months Ended September 30, 2020 Nine Months Ended September 30, 2019 (In Thousands) Available-for-Sale Securities Interest Rate Agreements Accounted for as Cash Flow Hedges Available-for-Sale Securities Interest Rate Agreements Accounted for as Cash Flow Hedges Balance at beginning of period $ 92,452 $ (50,939) $ 95,342 $ (34,045) Other comprehensive income (loss) (19,890) (32,806) 19,764 (27,130) Amounts reclassified from other (11,525) 2,148 (15,807) — Net current-period other comprehensive income (loss) (31,415) (30,658) 3,957 (27,130) Balance at End of Period $ 61,037 $ (81,597) $ 99,299 $ (61,175) The following table provides a summary of reclassifications out of accumulated other comprehensive income for the three and nine months ended September 30, 2020 and 2019. Table 17.2 – Reclassifications Out of Accumulated Other Comprehensive Income Amount Reclassified From Affected Line Item in the Three Months Ended September 30, (In Thousands) Income Statement 2020 2019 Net Realized (Gain) Loss on AFS Securities Credit loss recovery on AFS securities Investment fair value changes, net $ (444) $ — Gain on sale of AFS securities Realized gains, net — (3,492) $ (444) $ (3,492) Net Realized Loss on Interest Rate Amortization of deferred loss Interest expense $ 1,040 $ — $ 1,040 $ — Amount Reclassified From Affected Line Item in the Nine Months Ended September 30, (In Thousands) Income Statement 2020 2019 Net Realized (Gain) Loss on AFS Securities Credit loss expense on AFS securities Investment fair value changes, net $ 1,027 $ — Gain on sale of AFS securities Realized gains, net (12,552) (15,807) $ (11,525) $ (15,807) Net Realized Loss on Interest Rate Amortization of deferred loss Interest expense $ 2,148 $ — $ 2,148 $ — Issuance of Common Stock In 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. In March 2020, we increased the maximum aggregate amount of common stock offered under the ATM program to $175 million. During the nine months ended September 30, 2020, we issued 129,500 common shares for net proceeds of approximately $2 million through ATM offerings. At September 30, 2020, approximately $110 million remained outstanding for future offerings under this program. Direct Stock Purchase and Dividend Reinvestment Plan During the nine months ended September 30, 2020, we did not issue any shares of common stock through our Direct Stock Purchase and Dividend Reinvestment Plan. During the nine months ended September 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 (Loss) per Common Share The following table provides the basic and diluted earnings (loss) per common share computations for the three and nine months ended September 30, 2020 and 2019. Table 17.3 – Basic and Diluted Earnings (Loss) per Common Share Three Months Ended September 30, Nine Months Ended September 30, (In Thousands, except Share Data) 2020 2019 2020 2019 Basic Earnings (Loss) per Common Share: Net income (loss) attributable to Redwood $ 141,812 $ 34,310 $ (636,142) $ 120,040 Less: Dividends and undistributed earnings allocated to participating securities (4,067) (856) (1,427) (3,260) Net income (loss) allocated to common shareholders $ 137,745 $ 33,454 $ (637,569) $ 116,780 Basic weighted average common shares outstanding 113,403,102 101,872,126 113,952,308 97,214,064 Basic Earnings (Loss) per Common Share $ 1.21 $ 0.33 $ (5.60) $ 1.20 Diluted Earnings (Loss) per Common Share: Net income (loss) attributable to Redwood $ 141,812 $ 34,310 $ (636,142) $ 120,040 Less: Dividends and undistributed earnings allocated to participating securities (3,512) (1,036) (1,427) (3,625) Adjust for interest expense and gain on extinguishment of convertible notes for the period, net of tax 6,990 8,887 — 26,271 Net income (loss) allocated to common shareholders $ 145,290 $ 42,161 $ (637,569) $ 142,686 Weighted average common shares outstanding 113,403,102 101,872,126 113,952,308 97,214,064 Net effect of dilutive equity awards — 362,743 — 261,155 Net effect of assumed convertible notes conversion to common shares 28,566,875 34,287,840 — 33,727,470 Diluted weighted average common shares outstanding 141,969,977 136,522,709 113,952,308 131,202,689 Diluted Earnings (Loss) per Common Share $ 1.02 $ 0.31 $ (5.60) $ 1.09 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 months ended September 30, 2020 and the three and nine months ended September 30, 2019, 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 and any realized gains or losses on extinguishment of debt (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 nine months ended September 30, 2020, 32,225,825 of common shares related to the assumed conversion of our convertible notes were antidilutive and were excluded in the calculation of diluted earnings per share. For the three and nine months ended September 30, 2020, the number of outstanding equity awards that were antidilutive totaled 13,560 and 15,457, respectively. For the three and nine months ended September 30, 2019, the number of outstanding equity awards that were antidilutive totaled 11,710 and 9,361, 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. This authorization increased the previous share repurchase authorization approved in February 2016 and has no expiration date. This repurchase authorization does not obligate us to acquire any specific number of shares or securities. Under this authorization, shares or securities may be repurchased in privately negotiated and/or open market transactions, including under plans complying with Rule 10b5-1 under the Securities Exchange Act of 1934, as amended. During the three months ended September 30, 2020, we repurchased 3,047,335 shares of our common stock pursuant to this authorization for $22 million. At September 30, 2020, $78 million of the current authorization remained available for the repurchase of shares of our common stock and we also continued to be authorized to repurchase outstanding debt securities.

Equity Compensation Plans

Equity Compensation Plans	9 Months Ended
	Sep. 30, 2020
Share-based Payment Arrangement [Abstract]
Equity Compensation Plans	Equity Compensation Plans At September 30, 2020 and December 31, 2019, 8,629,455 and 3,637,480 shares of common stock, respectively, were available for grant under our Incentive Plan. During the second quarter of 2020, Redwood shareholders approved for grant an additional 5 million shares of common stock under our Incentive Plan. The unamortized compensation cost of awards issued under the Incentive Plan and purchases under the Employee Stock Purchase Plan totaled $20 million at September 30, 2020, as shown in the following table. Table 18.1 – Activities of Equity Compensation Costs by Award Type Nine Months Ended September 30, 2020 (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 $ 1,990 $ 3,534 $ 17,858 $ 8,946 $ — $ 32,328 Equity grants 108 3,581 6,780 — 160 10,629 Performance-based valuation adjustment — — — (7,352) — (7,352) Equity grant forfeitures (529) (2,161) (4,733) (648) — (8,071) Equity compensation expense (807) (1,067) (6,268) 326 (80) (7,896) Unrecognized Compensation Cost at End of Period $ 762 $ 3,887 $ 13,637 $ 1,272 $ 80 $ 19,638 At September 30, 2020, the weighted average amortization period remaining for all of our equity awards was one year. Restricted Stock Awards ("RSAs") At September 30, 2020 and December 31, 2019, there were 80,550 and 216,470 shares, respectively, of RSAs outstanding. Restrictions on these shares lapse through 2022. During the nine months ended September 30, 2020, there were no RSAs granted, restrictions on 101,063 RSAs lapsed and those shares were distributed, and 34,857 RSAs were forfeited. Restricted Stock Units ("RSUs") At September 30, 2020 and December 31, 2019, there were 294,986 and 275,173 shares, respectively, of RSUs outstanding. Restrictions on these shares lapse through 2024. During the nine months ended September 30, 2020, there were 205,482 RSUs granted, 55,514 RSUs distributed, and 130,155 RSUs forfeited. Deferred Stock Units (“DSUs”) At September 30, 2020 and December 31, 2019, there were 2,420,737 and 2,630,805 DSUs, respectively, outstanding of which 1,406,190 and 1,286,063, respectively, had vested. During the nine months ended September 30, 2020, there were 494,719 DSUs granted, 413,533 DSUs distributed, and 291,253 DSUs forfeited. Unvested DSUs at September 30, 2020 vest through 2024. Performance Stock Units (“PSUs”) At September 30, 2020 and December 31, 2019, the target number of PSUs that were unvested was 739,895 and 839,070, respectively. During the nine months ended September 30, 2020, 99,175 PSUs were forfeited. Vesting for all PSUs will generally occur at the end of three years from their grant date based on various Total Shareholder Return ("TSR") performance calculations, as discussed in our Annual Report on Form 10-K for the year ended December 31, 2019. During the first quarter of 2020, for PSUs granted in 2018 and 2019, we adjusted our vesting estimate to assume that none of these awards will meet the minimum performance thresholds for vesting. This adjustment resulted in a reversal of $1 million of stock-based compensation expense recorded in the first quarter of 2020. Employee Stock Purchase Plan ("ESPP")

Mortgage Banking Activities, Ne

Mortgage Banking Activities, Net	9 Months Ended
	Sep. 30, 2020
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 (loss) for the three and nine months ended September 30, 2020 and 2019. Table 19.1 – Mortgage Banking Activities Three Months Ended September 30, Nine Months Ended September 30, (In Thousands) 2020 2019 2020 2019 Residential Mortgage Banking Activities, Net Changes in fair value of: Residential loans, at fair value (1) $ 12,589 $ 6,320 $ 19,151 $ 41,431 Risk management derivatives (2) (10) (1,710) (31,304) (11,608) Other income (expense), net (3) (715) 407 (7,069) 1,380 Total residential mortgage banking activities, net 11,864 5,017 (19,222) 31,203 Business Purpose Mortgage Banking Activities, Net: Changes in fair value of: Single-family rental loans, at fair value (1) 43,191 1,847 56,209 5,473 Risk management derivatives (2) (89) (1,262) (21,627) (3,779) Residential bridge loans, at fair value 938 1,010 (4,256) 2,108 Other income, net (4) 3,491 2,903 13,407 5,979 Total business purpose mortgage banking activities, net 47,531 4,498 43,733 9,781 Mortgage Banking Activities, Net $ 59,395 $ 9,515 $ 24,511 $ 40,984 (1) For residential loans, includes changes in fair value for associated loan purchase and forward sale commitments. For single-family rental loans, includes changes in fair value for associated interest rate lock 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, provisions for repurchases expense, and expense related to resolving residential loan seller demands, presented net. (4) Amounts in this line item include other fee income from loan originations.

Other Income

Other Income	9 Months Ended
	Sep. 30, 2020
Other Income and Expenses [Abstract]
Other Income	Other Income The following table presents the components of Other income recorded in our consolidated statements of income (loss) for the three and nine months ended September 30, 2020 and 2019. Table 20.1 – Other Income Three Months Ended September 30, Nine Months Ended September 30, (In Thousands) 2020 2019 2020 2019 MSR (loss) income, net $ (2,362) $ 431 $ (5,595) $ 2,342 Risk share income 1,200 905 3,146 2,351 FHLBC capital stock dividend 116 541 1,201 1,623 Equity investment income 341 560 615 732 5 Arches loan administration fee income 688 1,344 2,206 3,298 Gain on re-measurement of investment in 5 Arches — — — 2,441 Other (97) 575 2,406 1,053 Other (Loss) Income $ (114) $ 4,356 $ 3,979 $ 13,840

General and Administrative Expe

General and Administrative Expenses, Loan Acquisition Costs, and Other Expenses	9 Months Ended
	Sep. 30, 2020
Other Income and Expenses [Abstract]
General and Administrative Expenses, Loan Acquisition Costs, and Other Expenses	General and Administrative Expenses, Loan Acquisition Costs, and Other Expenses Components of our general and administrative, and other expenses for the three and nine months ended September 30, 2020 and 2019 are presented in the following table. Table 21.1 – Components of General and Administrative Expenses, Loan Acquisition Costs, and Other Expenses Three Months Ended September 30, Nine Months Ended September 30, (In Thousands) 2020 2019 2020 2019 General and Administrative Expenses Fixed compensation expense $ 10,103 $ 9,391 $ 36,605 $ 26,740 Variable compensation expense 5,882 3,489 9,171 11,356 Equity compensation expense 2,639 3,155 7,896 10,132 Acquisition-related equity compensation expense (1) 1,212 — 3,636 — Systems and consulting 2,145 3,230 7,752 7,594 Office costs 1,859 1,517 5,854 4,406 Accounting and legal 1,601 1,767 6,605 3,852 Corporate costs 831 482 2,128 1,701 Other operating expenses 1,358 1,868 5,185 4,941 Total General and Administrative Expenses 27,630 24,899 84,832 70,722 Loan Acquisition Costs Commissions 879 659 3,027 1,432 Underwriting costs 771 1,074 3,289 3,184 Transfer and holding costs 508 183 1,400 891 Total Loan Acquisition Costs 2,158 1,916 7,716 5,507 Other Expenses Goodwill impairment expense — — 88,675 — Amortization of purchase-related intangible assets 3,873 1,897 12,052 4,608 Contingent consideration expense (2) 135 236 581 547 Other 3,780 398 2,978 866 Total Other Expenses 7,788 2,531 104,286 6,021 Total General and Administrative Expenses, Loan Acquisition Costs, and Other Expenses $ 37,576 $ 29,346 $ 196,834 $ 82,250 (1) Acquisition-related equity compensation expense relates to 588,260 shares of restricted stock that were issued to members of CoreVest management as a component of the consideration paid to them for our purchase of their interests in CoreVest. The grant date fair value of these restricted stock awards was $10 million, which will be recognized as compensation expense over the two-year vesting period on a straight-line basis in accordance with GAAP. (2) Contingent consideration expense relates to the acquisition of 5 Arches during 2019. Refer to Note 2 for additional detail. Variable Compensation Expense During the three months ended September 30, 2020, $8 million of cash-based retention awards were granted to certain executive and non-executive employees that will vest and be paid over the next three years, subject to continued employment through the vesting periods from 2021 through 2023. Additionally, during the three months ended September 30, 2020, Long-Term Relative TSR Performance Vesting Cash Awards ("Cash Performance Awards") with an aggregate granted award value of $2 million, were granted to certain executive and non-executive employees that will vest between 0% to 400% of granted award value based on a relative total stockholder return measure, and are contingent on continued employment over a three-year service period. The value of the cash-based retention awards is being amortized into expense on a straight-line basis over each award's respective vesting period. The Cash Performance Awards are amortized on a straight-line basis over three years, however, are remeasured at fair value each quarter-end and the cumulative straight-line expense is trued-up in respect to their updated value. For both the three and nine months ended September 30, 2020, variable compensation expense included $3 million in aggregate, related to the cash-based retention awards and the Cash Performance awards.

Taxes

Taxes	9 Months Ended
	Sep. 30, 2020
Income Tax Disclosure [Abstract]
Taxes	Taxes For the nine months ended September 30, 2020 and 2019, we recognized a benefit for income taxes of $13 million and a provision from income taxes of $3 million, respectively. The following is a reconciliation of the statutory federal and state tax rates to our effective tax rate at September 30, 2020 and 2019. Table 22.1 – Reconciliation of Statutory Tax Rate to Effective Tax Rate September 30, 2020 September 30, 2019 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 (23.6) % (2.5) % Change in valuation allowance (4.0) % (2.5) % Dividends paid deduction (1) — % (22.1) % Effective Tax Rate 2.0 % 2.5 % (1) The dividends paid deduction in the effective tax rate reconciliation is generally representative of the amount of distributions to shareholders that reduce REIT taxable income. For the nine months ended September 30, 2020, the dividends paid deduction is 0% due to our REIT incurring a taxable loss during the period; therefore, there was no REIT taxable income available to apply against the dividends paid. We assessed our tax positions for all open tax years (i.e., Federal, 2017 to 2020, and State, 2016 to 2020) at September 30, 2020 and December 31, 2019, and concluded that we had no uncertain tax positions that resulted in material unrecognized tax benefits.

Segment Information

Segment Information	9 Months Ended
	Sep. 30, 2020
Segment Reporting [Abstract]
Segment Information	Segment Information Redwood operates in three segments: Residential Lending, Business Purpose Lending, and Third-Party Investments. Beginning in the second quarter of 2020, we combined what was previously our Multifamily Investments segment and Third-Party Residential Investments segment into a new segment called Third-Party Investments. Prior periods have been conformed to the current presentation. Following is a full description of our current segments. Residential Lending – consists of a mortgage loan conduit that acquires residential loans from third-party originators for subsequent sale, securitization, or transfer into our investment portfolio, as well as the investments we retain from these activities. We typically acquire prime, jumbo mortgages and the related mortgage servicing rights on a flow basis from our network of loan sellers and distribute those loans through our Sequoia private-label securitization program or to institutions that acquire pools of whole loans. Our investments in this segment primarily consist of residential mortgage-backed securities ("RMBS") retained from our Sequoia securitizations (some of which we consolidate for GAAP purposes) and MSRs retained from jumbo whole loans we sold or securitized. This segment also includes various derivative financial instruments that we utilize to manage certain risks associated with our inventory of residential loans held-for-sale and long-term investments we hold within this segment. This segment’s main source of revenue is net interest income from its long-term investments and its inventory of loans held-for-sale, as well as income from mortgage banking activities, which includes valuation increases (or gains) on loans we acquire and subsequently sell, securitize, or transfer into our investment portfolio, and the hedges used to manage risks associated with these activities. Additionally, this segment may realize gains and losses upon the sale of securities. Funding expenses, direct operating expenses, and tax expenses associated with these activities are also included in this segment. Business Purpose Lending – consists of a platform that originates and acquires business purpose residential loans for subsequent securitization or transfer into our investment portfolio, as well as the investments we retain from these activities. We typically originate single-family rental and residential bridge loans and distribute certain single-family rental loans through our CoreVest American Finance Lender ("CAFL") private-label securitization program and retain others for investment along with our residential bridge loans. Single-family rental loans are business purpose residential mortgage loans to investors in single-family (1-4 unit) rental properties. Residential bridge loans are business purpose residential mortgage loans to investors rehabilitating and subsequently reselling or renting residential properties. Our investments in this segment primarily consist of securities retained from our CAFL securitizations (which we consolidate for GAAP purposes), and residential bridge loans. This segment also includes various derivative financial instruments that we utilize to manage certain risks associated with our inventory of single-family rental loans held-for-sale and our investments. This segment’s main source of revenue is net interest income from its investments and loans held-for-sale, as well as income from mortgage banking activities, which includes valuation increases (or gains) on loans we originate or acquire and subsequently sell, securitize or transfer into our investment portfolio, and the hedges used to manage risks associated with these activities. Additionally, this segment may realize gains and losses upon the sale of securities. Funding expenses, direct operating expenses, and tax expenses associated with these activities are also included in this segment. Third-Party Investments – consists of investments in RMBS issued by third parties, investments in Freddie Mac K-Series multifamily loan securitizations and SLST reperforming loan securitizations (which we consolidate for GAAP purposes), our servicer advance investments, and other residential and multifamily credit investments not generated through our Residential or Business Purpose Lending segments. This segment’s main sources of revenue are interest income from securities and loans held-for-investment. Additionally, this segment may realize gains and losses upon the sale of securities. Funding expenses, hedging expenses, direct operating expenses, and tax provisions associated with these activities are also included in this segment. 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 three 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 indirect general and administrative expenses and other expense. The following tables present financial information by segment for the three and nine months ended September 30, 2020 and 2019. Table 23.1 – Business Segment Financial Information Three Months Ended September 30, 2020 (In Thousands) Residential Lending Business Purpose Lending Third-Party Investments Corporate/ Total Interest income $ 26,672 $ 55,930 $ 37,576 $ 1,804 $ 121,982 Interest expense (22,541) (46,027) (27,534) (4,309) (100,411) Net interest income 4,131 9,903 10,042 (2,505) 21,571 Non-interest income Mortgage banking activities, net 11,864 47,531 — — 59,395 Investment fair value changes, net 2,443 16,892 87,890 (178) 107,047 Other income, net (2,011) 623 340 934 (114) Realized gains, net — — 602 — 602 Total non-interest income, net 12,296 65,046 88,832 756 166,930 General and administrative expenses (4,602) (9,321) (709) (12,998) (27,630) Loan acquisition costs (304) (1,660) (194) — (2,158) Other expenses (3,309) (3,874) (470) (135) (7,788) (Provision for) benefit from income taxes (826) (8,544) 257 — (9,113) Segment Contribution $ 7,386 $ 51,550 $ 97,758 $ (14,882) Net Income $ 141,812 Non-cash amortization (expense) income, net $ 1,785 $ (6,719) $ 117 $ (1,516) $ (6,333) Nine Months Ended September 30, 2020 (In Thousands) Residential Lending Business Purpose Lending Third-Party Investments Corporate/ Total Interest income $ 123,956 $ 162,732 $ 155,583 $ 7,738 $ 450,009 Interest expense (94,112) (119,854) (123,160) (12,622) (349,748) Net interest income 29,844 42,878 32,423 (4,884) 100,261 Non-interest income Mortgage banking activities, net (19,222) 43,733 — — 24,511 Investment fair value changes, net (159,107) (84,837) (366,696) (917) (611,557) Other income, net (2,278) 3,493 1,072 1,692 3,979 Realized gains, net 2,001 — 3,236 25,182 30,419 Total non-interest income, net (178,606) (37,611) (362,388) 25,957 (552,648) General and administrative expenses (12,901) (29,977) (4,230) (37,724) (84,832) Loan acquisition costs (1,512) (5,630) (567) (7) (7,716) Other expenses (3,309) (100,743) 347 (581) (104,286) Benefit from income taxes 7,827 477 4,775 — 13,079 Segment Contribution $ (158,657) $ (130,606) $ (329,640) $ (17,239) Net Loss $ (636,142) Non-cash amortization (expense) income, net $ 602 $ (18,050) $ 1,105 $ (3,035) $ (19,378) Other significant non-cash expense: goodwill impairment $ — $ (88,675) $ — $ — $ (88,675) Three Months Ended September 30, 2019 (In Thousands) Residential Lending Business Purpose Lending Third-Party Investments Corporate/ Total Interest income $ 69,586 $ 5,527 $ 70,709 $ 4,295 $ 150,117 Interest expense (48,798) (2,813) (61,541) (3,452) (116,604) Net interest income 20,788 2,714 9,168 843 33,513 Non-interest income Mortgage banking activities, net 5,016 4,499 — — 9,515 Investment fair value changes, net (11,088) (1,073) 24,057 (452) 11,444 Other income, net 1,878 1,918 560 — 4,356 Realized gains, net — — 4,714 — 4,714 Total non-interest income, net (4,194) 5,344 29,331 (452) 30,029 General and administrative expenses (5,581) (6,028) (676) (12,614) (24,899) Loan acquisition costs (867) (756) (180) (113) (1,916) Other expenses — (1,900) (395) (236) (2,531) Benefit from (provision for) income taxes 228 (8) (106) — 114 Segment Contribution $ 10,374 $ (634) $ 37,142 $ (12,572) Net Income $ 34,310 Non-cash amortization income (expense), net $ 2,537 $ (2,107) $ — $ (1,148) $ (718) Nine Months Ended September 30, 2019 (In Thousands) Residential Lending Business Purpose Lending Third-Party Investments Corporate/ Total Interest income $ 204,036 $ 12,595 $ 199,145 $ 13,924 $ 429,700 Interest expense (145,795) (6,590) (168,167) (11,548) (332,100) Net interest income 58,241 6,005 30,978 2,376 97,600 Non-interest income Mortgage banking activities, net 31,202 9,782 — — 40,984 Investment fair value changes, net (20,910) (1,833) 58,492 (1,008) 34,741 Other income, net 6,317 4,213 600 2,710 13,840 Realized gains, net 7,728 — 10,499 — 18,227 Total non-interest income, net 24,337 12,162 69,591 1,702 107,792 General and administrative expenses (17,591) (13,452) (2,239) (37,440) (70,722) Loan acquisition costs (2,859) (2,017) (503) (128) (5,507) Other expenses — (4,432) (864) (725) (6,021) (Provision for) benefit from income taxes (1,757) 25 (1,370) — (3,102) Segment Contribution $ 60,371 $ (1,709) $ 95,593 $ (34,215) Net Income $ 120,040 Non-cash amortization income (expense), net $ 6,780 $ (4,907) $ (824) $ (1,939) $ (890) The following table presents the components of Corporate/Other for the three and nine months ended September 30, 2020 and 2019. Table 23.2 – Components of Corporate/Other Three Months Ended September 30, 2020 2019 (In Thousands) Legacy Consolidated VIEs (1) Other Total Legacy Consolidated VIEs (1) Other Total Interest income $ 1,795 $ 9 $ 1,804 $ 4,295 $ — $ 4,295 Interest expense (1,058) (3,251) (4,309) (3,452) — (3,452) Net interest income 737 (3,242) (2,505) 843 — 843 Non-interest income Investment fair value changes, net (81) (97) (178) (407) (45) (452) Other income — 934 934 — — — Total non-interest income, net (81) 837 756 (407) (45) (452) General and administrative expenses — (12,998) (12,998) — (12,614) (12,614) Loan acquisition costs — — — — (113) (113) Other expenses — (135) (135) — (236) (236) Total $ 656 $ (15,538) $ (14,882) $ 436 $ (13,008) $ (12,572) Nine Months Ended September 30, 2020 2019 (In Thousands) Legacy Consolidated VIEs (1) Other Total Legacy Consolidated VIEs (1) Other Total Interest income $ 7,675 $ 63 $ 7,738 $ 13,924 $ — $ 13,924 Interest expense (5,098) (7,524) (12,622) (11,548) — (11,548) Net interest income 2,577 (7,461) (4,884) 2,376 — 2,376 Non-interest income Investment fair value changes, net (702) (215) (917) (904) (104) (1,008) Other income — 1,692 1,692 — 2,710 2,710 Realized gains, net — 25,182 25,182 — — — Total non-interest income, net (702) 26,659 25,957 (904) 2,606 1,702 General and administrative expenses — (37,724) (37,724) — (37,440) (37,440) Loan acquisition costs — (7) (7) — (128) (128) Other expenses — (581) (581) — (725) (725) Total $ 1,875 $ (19,114) $ (17,239) $ 1,472 $ (35,687) $ (34,215) (1) Legacy consolidated VIEs represent Legacy Sequoia entities that are consolidated for GAAP financial reporting purposes. See Note 4 for further discussion on VIEs. The following table presents supplemental information by segment at September 30, 2020 and December 31, 2019. Table 23.3 – Supplemental Segment Information (In Thousands) Residential Lending Business Purpose Lending Third-Party Investments Corporate/ Total September 30, 2020 Residential loans $ 1,941,489 $ — $ 2,256,682 $ 296,765 $ 4,494,936 Business purpose residential loans — 3,956,101 — — 3,956,101 Multifamily loans — — 491,415 — 491,415 Real estate securities 146,608 — 204,727 — 351,335 Other investments 14,878 25,713 344,037 — 384,628 Goodwill and intangible assets — 60,737 — — 60,737 Total assets 2,148,643 4,134,913 3,315,039 803,817 10,402,412 December 31, 2019 Residential loans $ 4,939,745 $ — $ 2,367,215 $ 407,890 $ 7,714,850 Business purpose residential loans — 3,506,743 — — 3,506,743 Multifamily loans — — 4,408,524 — 4,408,524 Real estate securities 229,074 — 870,800 — 1,099,874 Other investments 42,224 21,002 294,904 — 358,130 Goodwill and intangible assets — 161,464 — — 161,464 Total assets 5,410,540 3,786,641 8,028,946 769,313 17,995,440

Summary of Significant Accoun_2

Summary of Significant Accounting Policies (Policies)	9 Months Ended
	Sep. 30, 2020
Accounting Policies [Abstract]
Basis of Presentation	Basis of PresentationThe consolidated financial statements presented herein are at September 30, 2020 and December 31, 2019, and for the three and nine months ended September 30, 2020 and 2019. 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, 2019. In the opinion of management, all normal and recurring adjustments to present fairly the financial condition of the company at September 30, 2020 and results of operations for all periods presented have been made. The results of operations for the three and nine months ended September 30, 2020 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 ("Sequoia Choice"). We also consolidate the assets and liabilities of certain Freddie Mac K-Series and Freddie Mac Seasoned Loans Structured Transaction ("SLST") securitizations we invested in. Finally, we consolidated the assets and liabilities of certain CoreVest American Finance Lender ("CAFL") securitizations beginning in the fourth quarter of 2019, in connection with our acquisition of CoreVest. 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 and CAFL 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.
Available-for-Sale Securities	Available-for-Sale Securities Upon adoption of ASU 2016-13, "Financial Instruments - Credit Losses" in the first quarter of 2020, we modified our policy for recording impairments on available-for-sale 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. The allowance for credit losses is calculated using a discounted cash flow approach and is measured as the difference between the beneficial interest’s amortized cost and the estimate of cash flows expected to be collected, discounted at the effective interest rate used to accrete the beneficial interest. Any allowance for credit losses in excess of the unrealized losses on the beneficial interests are accounted for as a prospective reduction of the effective interest rate. No allowance is recorded for beneficial interests in an unrealized gain position. Favorable changes in the discounted cash flows will result in a reduction in the allowance for credit losses, if any. Any reduction in allowance for credit losses is recorded in earnings. If the allowance for credit losses has been reduced to zero, the remaining favorable changes are reflected as a prospective increase to the effective interest rate. If we intend to sell or it is more likely than not that we will be required to sell the security before it recovers in value, the entire impairment amount will be recognized in earnings with a corresponding adjustment to the security's amortized cost basis.
Goodwill	Goodwill Pursuant to our adoption of ASU 2017-04, "Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment" in the first quarter of 2020, we modified our goodwill impairment testing policy. We first assess qualitative factors to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying value. If, based on that assessment, we believe it is more likely than not that the fair value of the reporting unit is less than its carrying value, we measure the fair value of reporting unit and record a goodwill impairment charge for the amount by which a reporting unit's carrying value exceeds its fair value, not to exceed the carrying amount of the goodwill. Any such impairment charges would be recorded through Other expenses on our consolidated statements of income (loss).
Recent Accounting Pronouncements	Recent Accounting Pronouncements Newly Adopted Accounting Standards Updates ("ASUs") 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. We adopted this new guidance, as required, in the first quarter of 2020, which did not have a material impact on our consolidated financial statements but impacted certain of our fair value footnote disclosures. 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. We adopted this new guidance, as required, in the first quarter of 2020, which did not 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. 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. In November 2019, the FASB issued ASU 2019-11, "Codification Improvements to Topic 326, Financial Instruments - Credit Losses," which is intended to clarify Codification guidance. In February 2020, the FASB issued ASU 2020-02, "Financial Instruments - Credit Losses (Topic 326) and Leases (Topic 842) - Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 119 and Update to SEC Section on Effective Date Related to Accounting Standards Update No. 2016-02, Leases (Topic 842) (SEC Update)," and in March 2020, the FASB issued ASU 2020-03, "Codification Improvements to Financial Instruments." These updates amend certain sections of the guidance. 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 accounted for our available-for-sale securities under the other-than-temporary impairment ("OTTI") model for debt securities prior to the issuance of this new guidance. 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 adopted this guidance, as required, in the first quarter of 2020, which did not have a material impact on our consolidated financial statements. Other Recent Accounting Pronouncements In August 2020, the FASB issued ASU 2020-06, "Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity's Own Equity (Subtopic 815-40)." This new guidance simplifies the accounting for convertible debt by reducing the number of accounting models to separately present certain conversion features in equity. This new guidance is effective for fiscal years beginning after December 31, 2021. Early adoption is permitted. We plan to adopt this new guidance by the required date and do not anticipate that this update will have a material impact on our consolidated financial statements. In March 2020, the FASB issued ASU 2020-04, "Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting." This new guidance provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. This new guidance is effective for all entities as of March 12, 2020 through December 31, 2022. We are currently evaluating the impact the adoption of this standard would have on our consolidated financial statements. Through September 30, 2020, we have not elected to apply the optional expedients and exceptions to any of our existing contracts, hedging relationships, or other transactions. In January 2020, the FASB issued ASU 2020-01, "Investments - Equity Securities (Topic 321), Investments - Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815)." This new guidance clarifies the interaction of the accounting for equity securities, equity method investments, and certain forward contracts and purchased options. This new guidance is effective for fiscal years beginning after December 15, 2020. Early adoption is permitted. We plan to adopt this new guidance by the required date and do not anticipate that this update will have a material impact on the consolidated financial statements. In December 2019, the FASB issued ASU 2019-12, "Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes." This new guidance simplifies the accounting for income taxes by removing certain exceptions to the general principles in Topic 740 and by clarifying and amending existing guidance. This new guidance is effective for fiscal years beginning after December 15, 2020. Early adoption is permitted. We plan to adopt this new guidance by the required date and do not anticipate that this update will have a material impact on our consolidated financial statements.
Balance Sheet Netting	Balance Sheet Netting Certain of our derivatives and short-term debt are subject to master netting arrangements or similar agreements. Under GAAP, in certain circumstances we may elect to present certain financial assets, liabilities and related collateral subject to master netting arrangements in a net position on our consolidated balance sheets. However, we do not report any of these financial assets or liabilities on a net basis, and instead present them on a gross basis on our consolidated balance sheets.For each category of financial instrument set forth in the table above, the assets and liabilities resulting from individual transactions within that category between us and a counterparty are subject to a master netting arrangement or similar agreement with that counterparty that provides for individual transactions to be aggregated and treated as a single transaction. For certain categories of these instruments, some of our transactions are cleared and settled through one or more clearinghouses that are substituted as our counterparty. References herein to master netting arrangements or similar agreements include the arrangements and agreements governing the clearing and settlement of these transactions through the clearinghouses. In the event of the termination and close-out of any of those transactions, the corresponding master netting agreement or similar agreement provides for settlement on a net basis. Any such settlement would include the proceeds of the liquidation of any corresponding collateral, subject to certain limitations on termination, settlement, and liquidation of collateral that may apply in the event of the bankruptcy or insolvency of a party. Such limitations should not inhibit the eventual practical realization of the principal benefits of those transactions or the corresponding master netting arrangement or similar agreement and any corresponding collateral.

Basis of Presentation (Tables)

Basis of Presentation (Tables)	9 Months Ended
	Sep. 30, 2020
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Schedule of Finite-Lived Intangible Assets	The amortization period for each of these assets and the activity for the nine months ended September 30, 2020 is summarized in the table below. Table 2.1 – Intangible Assets – Activity Carrying Value at December 31, 2019 Additions Amortization Expense Carrying Value at September 30, 2020 Weighted Average Amortization Period (in years) (Dollars in Thousands) Borrower network $ 43,952 $ — $ (4,854) $ 39,098 7 Broker network 15,083 — (2,715) 12,368 5 Non-compete agreements 8,236 — (2,375) 5,861 3 Tradenames 3,472 — (1,000) 2,472 3 Developed technology 1,613 — (675) 938 2 Loan administration fees on existing loan assets 433 — (433) — 1 Total $ 72,789 $ — $ (12,052) $ 60,737 6
Finite-lived Intangible Assets Amortization Expense	All of our intangible assets are amortized on a straight-line basis. Estimated future amortization expense is summarized in the table below. Table 2.2 – Intangible Asset Amortization Expense by Year (In Thousands) September 30, 2020 2020 (3 months) $ 3,873 2021 15,304 2022 12,800 2023 10,091 2024 7,073 2025 and thereafter 11,596 Total Future Intangible Asset Amortization $ 60,737
Pro Forma Information	The following unaudited pro forma financial information presents Net interest income, Non-interest income, and Net income of Redwood, 5 Arches, and CoreVest combined, for the three and nine months ended September 30, 2019, as if the acquisitions occurred as of January 1, 2018. These pro forma amounts have been adjusted to include the amortization of intangible assets and acquisition-related compensation expense 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 acquisitions had been completed as of January 1, 2018 and should not be taken as indicative of our future consolidated results of operations. Table 2.3 – Unaudited Pro Forma Financial Information Three Months Ended September 30, 2019 Nine Months Ended September 30, 2019 (In Thousands) Supplementary pro forma information: Net interest income $ 45,702 $ 133,446 Non-interest income 38,177 116,649 Net income 46,609 140,790

Summary of Significant Accoun_3

Summary of Significant Accounting Policies (Tables)	9 Months Ended
	Sep. 30, 2020
Accounting Policies [Abstract]
Offsetting of Financial Assets, Liabilities, and Collateral	The table below presents financial assets and liabilities that are subject to master netting arrangements or similar agreements categorized by financial instrument, together with corresponding financial instruments and corresponding collateral received or pledged at September 30, 2020 and December 31, 2019. Table 3.1 – Offsetting of Financial Assets, Liabilities, and Collateral Gross Amounts of Recognized Assets (Liabilities) Gross Amounts Offset in Consolidated Balance Sheet Net Amounts of Assets (Liabilities) Presented in Consolidated Balance Sheet Gross Amounts Not Offset in Consolidated (1) Net Amount September 30, 2020 (In Thousands) Financial Instruments Cash Collateral (Received) Pledged Assets (2) Interest rate agreements $ 3,471 $ — $ 3,471 $ (15) $ (1,240) $ 2,216 TBAs 402 — 402 — (263) 139 Futures 63 — 63 — — 63 Total Assets $ 3,936 $ — $ 3,936 $ (15) $ (1,503) $ 2,418 Liabilities (2) Interest rate agreements $ (15) $ — $ (15) $ 15 $ — $ — TBAs (263) $ — (263) — 263 — Loan warehouse debt (81,898) $ — (81,898) 81,898 — — Security repurchase agreements (75,054) — (75,054) 75,054 — — Total Liabilities $ (157,230) $ — $ (157,230) $ 156,967 $ 263 $ — 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, 2019 (In Thousands) Financial Instruments Cash Collateral (Received) Pledged Assets (2) Interest rate agreements $ 19,020 $ — $ 19,020 $ (14,178) $ (915) $ 3,927 TBAs 5,755 — 5,755 (5,755) — — Futures 137 — 137 — — 137 Total Assets $ 24,912 $ — $ 24,912 $ (19,933) $ (915) $ 4,064 Liabilities (2) Interest rate agreements $ (148,765) $ — $ (148,765) $ 14,178 $ 134,587 $ — TBAs (13,359) — (13,359) 5,755 6,673 (931) Loan warehouse debt (432,126) — (432,126) 432,126 — — Security repurchase agreements (1,096,578) — (1,096,578) 1,096,578 — — Total Liabilities $ (1,690,828) $ — $ (1,690,828) $ 1,548,637 $ 141,260 $ (931) (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.

Principles of Consolidation (Ta

Principles of Consolidation (Tables)	9 Months Ended
	Sep. 30, 2020
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Schedule 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 Accounted for as Collateralized Financing Entities September 30, 2020 Legacy Sequoia Freddie Mac SLST Freddie Mac CAFL Servicing Investment Total (Dollars in Thousands) Residential loans, held-for-investment $ 296,765 $ 1,836,361 $ 2,256,682 $ — $ — $ — $ 4,389,808 Business purpose residential loans, held-for-investment — — — — 2,969,692 — 2,969,692 Multifamily loans, held-for-investment — — — 491,415 — — 491,415 Other investments — — — — — 278,487 278,487 Cash and cash equivalents — — — — — 10,425 10,425 Restricted cash 146 — — — — 20,649 20,795 Accrued interest receivable 402 7,292 6,928 1,342 12,071 2,609 30,644 Other assets 784 — 887 — 4,158 — 5,829 Total Assets $ 298,097 $ 1,843,653 $ 2,264,497 $ 492,757 $ 2,985,921 $ 312,170 $ 8,197,095 Short-term debt $ — $ — $ — $ — $ — $ 228,998 $ 228,998 Accrued interest payable 180 5,652 5,009 1,182 9,337 137 21,497 Accrued expenses and other liabilities — 47 — — — 18,129 18,176 Asset-backed securities issued 292,484 1,626,564 1,841,313 464,865 2,744,150 — 6,969,376 Total Liabilities $ 292,664 $ 1,632,263 $ 1,846,322 $ 466,047 $ 2,753,487 $ 247,264 $ 7,238,047 Number of VIEs 20 10 2 1 13 3 49 December 31, 2019 Legacy Sequoia Freddie Mac SLST Freddie Mac CAFL Servicing Investment Total (Dollars in Thousands) Residential loans, held-for-investment $ 407,890 $ 2,291,463 $ 2,367,215 $ — $ — $ — $ 5,066,568 Business purpose residential loans, held-for-investment — — — — 2,192,552 — 2,192,552 Multifamily loans, held-for-investment — — — 4,408,524 — — 4,408,524 Other investments — — — — — 184,802 184,802 Cash and cash equivalents — — — — — 9,015 9,015 Restricted cash 143 27 — — — 21,766 21,936 Accrued interest receivable 655 9,824 7,313 13,539 9,572 4,869 45,772 Other assets 460 — 445 — 1,795 — 2,700 Total Assets $ 409,148 $ 2,301,314 $ 2,374,973 $ 4,422,063 $ 2,203,919 $ 220,452 $ 11,931,869 Short-term debt $ — $ — $ — $ — $ — $ 152,554 $ 152,554 Accrued interest payable 395 7,732 5,374 12,887 7,485 187 34,060 Accrued expenses and other liabilities — 27 — — — 14,956 14,983 Asset-backed securities issued 402,465 2,037,198 1,918,322 4,156,239 2,001,251 — 10,515,475 Total Liabilities $ 402,860 $ 2,044,957 $ 1,923,696 $ 4,169,126 $ 2,008,736 $ 167,697 $ 10,717,072 Number of VIEs 20 9 2 5 10 3 49 The following table presents income (loss) from these VIEs for the three and nine months ended September 30, 2020 and 2019. Table 4.2 – Income (Loss) from Consolidated VIEs Accounted for as Collateralized Financing Entities Three Months Ended September 30, 2020 Legacy Sequoia Freddie Mac SLST Freddie Mac CAFL Servicing Investment Total (Dollars in Thousands) Interest income $ 1,795 $ 20,919 $ 21,696 $ 4,918 $ 36,181 $ 4,403 $ 89,912 Interest expense (1,058) (17,828) (15,473) (4,426) (27,499) (1,587) (67,871) Net interest income 737 3,091 6,223 492 8,682 2,816 22,041 Non-interest income Investment fair value changes, net (81) 7,851 82,214 2,166 9,692 (422) 101,420 Total non-interest income, net (81) 7,851 82,214 2,166 9,692 (422) 101,420 General and administrative expenses — — — — — (41) (41) Other expenses — — — — — (471) (471) Income from Consolidated VIEs $ 656 $ 10,942 $ 88,437 $ 2,658 $ 18,374 $ 1,882 $ 122,949 Nine Months Ended September 30, 2020 Legacy Sequoia Freddie Mac SLST Freddie Mac CAFL Servicing Investment Total (Dollars in Thousands) Interest income $ 7,675 $ 68,566 $ 64,869 $ 49,960 $ 99,169 $ 13,026 $ 303,265 Interest expense (5,098) (58,455) (47,495) (47,154) (75,600) (4,961) (238,763) Net interest income 2,577 10,111 17,374 2,806 23,569 8,065 64,502 Non-interest income Investment fair value changes, net (702) (22,065) (33,081) (82,744) (41,841) (9,015) (189,448) Total non-interest income, net (702) (22,065) (33,081) (82,744) (41,841) (9,015) (189,448) General and administrative expenses — — — — — (784) (784) Other expenses — — — — — 346 346 Income (Loss) from Consolidated VIEs $ 1,875 $ (11,954) $ (15,707) $ (79,938) $ (18,272) $ (1,388) $ (125,384) Three Months Ended September 30, 2019 Legacy Sequoia Freddie Mac SLST Freddie Mac CAFL Servicing Investment Total (Dollars in Thousands) Interest income $ 4,295 $ 27,555 $ 11,830 $ 36,829 $ — $ 3,922 $ 84,431 Interest expense (3,452) (23,576) (8,709) (35,328) — (2,891) (73,956) Net interest income 843 3,979 3,121 1,501 — 1,031 10,475 Non-interest income Investment fair value changes, net (407) 2,722 17,300 7,445 — 963 28,023 Total non-interest income, net (407) 2,722 17,300 7,445 — 963 28,023 General and administrative expenses — — — — — (16) (16) Other expenses — — — — — (395) (395) Income from Consolidated VIEs $ 436 $ 6,701 $ 20,421 $ 8,946 $ — $ 1,583 $ 38,087 Nine Months Ended September 30, 2019 Legacy Sequoia Freddie Mac SLST Freddie Mac CAFL Servicing Investment Total (Dollars in Thousands) Interest income $ 13,924 $ 80,045 $ 35,221 $ 94,134 $ — $ 10,847 $ 234,171 Interest expense (11,548) (68,823) (26,013) (90,089) — (9,905) (206,378) Net interest income 2,376 11,222 9,208 4,045 — 942 27,793 Non-interest income Investment fair value changes, net (904) 8,866 31,702 13,810 — 3,462 56,936 Total non-interest income, net (904) 8,866 31,702 13,810 — 3,462 56,936 General and administrative expenses — — — — — (87) (87) Other expenses — — — — — (864) (864) Income from Consolidated VIEs $ 1,472 $ 20,088 $ 40,910 $ 17,855 $ — $ 3,453 $ 83,778
Securitization Activity Related to Unconsolidated Variable Interest Entity's Sponsored by Redwood	The following table presents information related to securitization transactions that occurred during the three and nine months ended September 30, 2020 and 2019. Table 4.3 – Securitization Activity Related to Unconsolidated VIEs Sponsored by Redwood Three Months Ended September 30, Nine Months Ended September 30, (In Thousands) 2020 2019 2020 2019 Principal balance of loans transferred $ — $ 366,999 $ 1,573,703 $ 1,116,092 Trading securities retained, at fair value — 1,228 43,362 4,736 AFS securities retained, at fair value — 1,069 3,198 3,023
Cash Flows Related to Unconsolidated Variable Interest Entity's Sponsored by Redwood	The following table summarizes the cash flows during the three and nine months ended September 30, 2020 and 2019 between us and the unconsolidated VIEs sponsored by us and accounted for as sales since 2012. Table 4.4 – Cash Flows Related to Unconsolidated VIEs Sponsored by Redwood Three Months Ended September 30, Nine Months Ended September 30, (In Thousands) 2020 2019 2020 2019 Proceeds from new transfers $ — $ 376,126 $ 1,610,761 $ 1,138,778 MSR fees received 2,280 2,919 7,445 9,084 Funding of compensating interest, net 4 (76) (293) (213) Cash flows received on retained securities 5,873 6,603 19,242 20,892
Assumptions Related to Assets Retained from Unconsolidated Variable Interest Entity's Sponsored by Redwood	The following table presents the key weighted-average assumptions used to measure MSRs and securities retained at the date of securitization for securitizations completed during the three and nine months ended September 30, 2020 and 2019. Table 4.5 – Assumptions Related to Assets Retained from Unconsolidated VIEs Sponsored by Redwood Three Months Ended September 30, 2020 Three Months Ended September 30, 2019 At Date of Securitization Senior IO Securities Subordinate Securities Senior IO Securities Subordinate Securities Prepayment rates N/A N/A 37 % 15 % Discount rates N/A N/A 14 % 7 % Credit loss assumptions N/A N/A 0.20 % 0.20 % Nine Months Ended September 30, 2020 Nine Months Ended September 30, 2019 At Date of Securitization Senior IO Securities Subordinate Securities Senior IO Securities Subordinate Securities Prepayment rates 41 % 13 % 25 % 15 % Discount rates 16 % 6 % 14 % 7 % Credit loss assumptions 0.21 % 0.22 % 0.20 % 0.20 %
Unconsolidated Variable Interest Entity's Sponsored by Redwood	The following table presents additional information at September 30, 2020 and December 31, 2019, related to unconsolidated VIEs sponsored by Redwood and accounted for as sales since 2012. Table 4.6 – Unconsolidated VIEs Sponsored by Redwood (In Thousands) September 30, 2020 December 31, 2019 On-balance sheet assets, at fair value: Interest-only, senior and subordinate securities, classified as trading $ 19,878 $ 88,425 Subordinate securities, classified as AFS 124,132 140,649 Mortgage servicing rights 14,240 40,254 Maximum loss exposure (1) $ 158,250 $ 269,328 Assets transferred: Principal balance of loans outstanding $ 8,571,916 $ 10,299,442 Principal balance of loans 30+ days delinquent 200,910 41,809 (1) Maximum loss exposure from our involvement with unconsolidated VIEs pertains to the carrying value of our securities and MSRs retained from these VIEs and represents estimated losses that would be incurred under severe, hypothetical circumstances, such as if the value of our interests and any associated collateral declines to zero. This does not include, for example, any potential exposure to representation and warranty claims associated with our initial transfer of loans into a securitization.
Key Assumptions and Sensitivity Analysis for Assets Retained from Unconsolidated Variable Interest Entity's Sponsored by Redwood	The following table presents key economic assumptions for assets retained from unconsolidated VIEs and the sensitivity of their fair values to immediate adverse changes in those assumptions at September 30, 2020 and December 31, 2019. Table 4.7 – Key Assumptions and Sensitivity Analysis for Assets Retained from Unconsolidated VIEs Sponsored by Redwood September 30, 2020 MSRs Senior Securities (1) Subordinate Securities (Dollars in Thousands) Fair value at September 30, 2020 $ 14,240 $ 16,226 $ 127,783 Expected life (in years) (2) 3 3 10 Prepayment speed assumption (annual CPR) (2) 26 % 30 % 27 % Decrease in fair value from: 10% adverse change $ 1,105 $ 1,622 $ 1,075 25% adverse change 2,678 3,675 3,735 Discount rate assumption (2) 12 % 17 % 6 % Decrease in fair value from: 100 basis point increase $ 383 $ 327 $ 10,219 200 basis point increase 746 638 19,348 Credit loss assumption (2) N/A 0.38 % 0.38 % Decrease in fair value from: 10% higher losses N/A $ — $ 2,274 25% higher losses N/A — 5,500 December 31, 2019 MSRs Senior Securities (1) Subordinate Securities (Dollars in Thousands) Fair value at December 31, 2019 $ 40,254 $ 48,765 $ 180,309 Expected life (in years) (2) 6 6 14 Prepayment speed assumption (annual CPR) (2) 11 % 14 % 16 % Decrease in fair value from: 10% adverse change $ 1,643 $ 1,908 $ 205 25% adverse change 3,913 5,086 1,434 Discount rate assumption (2) 11 % 12 % 5 % Decrease in fair value from: 100 basis point increase $ 1,447 $ 1,079 $ 18,127 200 basis point increase 2,795 2,482 33,630 Credit loss assumption (2) N/A 0.21 % 0.21 % Decrease in fair value from: 10% higher losses N/A $ — $ 1,804 25% higher losses N/A — 4,520 (1) Senior securities included $16 million and $49 million of interest-only securities at September 30, 2020 and December 31, 2019, respectively. (2) Expected life, prepayment speed assumption, discount rate assumption, and credit loss assumption presented in the tables above represent weighted averages.
Schedule of Third-Party Sponsored VIE Summary	The following table presents a summary of our interests in third-party VIEs at September 30, 2020 and December 31, 2019, grouped by asset type. Table 4.8 – Third-Party Sponsored VIE Summary (In Thousands) September 30, 2020 December 31, 2019 Mortgage-Backed Securities Senior $ 11,865 $ 127,094 Mezzanine 2,016 508,195 Subordinate 193,445 235,510 Total Mortgage-Backed Securities 207,326 870,799 Excess MSR 15,205 16,216 Total Investments in Third-Party Sponsored VIEs $ 222,531 $ 887,015

Fair Value of Financial Instr_2

Fair Value of Financial Instruments (Tables)	9 Months Ended
	Sep. 30, 2020
Fair Value Disclosures [Abstract]
Carrying Values and Fair Values of Assets and Liabilities	The following table presents the carrying values and estimated fair values of assets and liabilities that are required to be recorded or disclosed at fair value at September 30, 2020 and December 31, 2019. Table 5.1 – Carrying Values and Fair Values of Assets and Liabilities September 30, 2020 December 31, 2019 Carrying Fair Carrying Fair (In Thousands) Assets Residential loans, held-for-sale at fair value $ 105,091 $ 105,091 $ 536,385 $ 536,509 Residential loans, held-for-investment 4,389,808 4,389,808 7,178,465 7,178,465 Business purpose residential loans, held-for-sale 285,549 285,549 331,565 331,565 Business purpose residential loans, held-for-investment 3,670,552 3,670,552 3,175,178 3,175,178 Multifamily loans 491,415 491,415 4,408,524 4,408,524 Real estate securities 351,335 351,335 1,099,874 1,099,874 Servicer advance investments (1) 258,621 258,621 169,204 169,204 MSRs (1) 14,878 14,878 42,224 42,224 Excess MSRs (1) 35,070 35,070 31,814 31,814 Shared home appreciation options (1) 41,758 41,758 45,085 45,085 Cash and cash equivalents 450,684 450,684 196,966 196,966 Restricted cash 73,594 73,594 93,867 93,867 Derivative assets 14,709 14,709 35,701 35,701 REO (2) 8,535 9,654 9,462 10,389 Margin receivable (2) 3,809 3,809 209,776 209,776 FHLBC stock (2) 5,000 5,000 43,393 43,393 Guarantee asset (2) 579 579 1,686 1,686 Pledged collateral (2) 8,172 8,172 32,945 32,945 Liabilities Short-term debt $ 482,761 $ 482,761 $ 2,329,145 $ 2,329,145 Margin payable (3) — — 1,700 1,700 Guarantee obligation (3) 11,264 10,185 14,009 13,754 Contingent consideration (3) — — 28,484 28,484 Derivative liabilities 1,612 1,612 163,424 163,424 ABS issued, net Fair value 6,969,376 6,969,376 10,515,475 10,515,475 Amortized cost 203,022 207,812 — — FHLBC long-term borrowings 1,000 1,000 1,999,999 1,999,999 Other long-term debt, net 886,054 885,172 183,520 184,666 Convertible notes, net 510,472 476,071 631,125 661,985 Trust preferred securities and subordinated notes, net 138,663 73,238 138,628 99,045 (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 September 30, 2020 and December 31, 2019, as well as the fair value hierarchy of the valuation inputs used to measure fair value. Table 5.2 – Assets and Liabilities Measured at Fair Value on a Recurring Basis September 30, 2020 Carrying Fair Value Measurements Using (In Thousands) Level 1 Level 2 Level 3 Assets Residential loans $ 4,494,899 $ — $ — $ 4,494,899 Business purpose residential loans 3,956,101 — — 3,956,101 Multifamily loans 491,415 — — 491,415 Real estate securities 351,335 — — 351,335 Servicer advance investments 258,621 — — 258,621 MSRs 14,878 — — 14,878 Excess MSRs 35,070 — — 35,070 Shared home appreciation options 41,758 — — 41,758 Derivative assets 14,709 464 3,472 10,773 Pledged collateral 8,172 8,172 — — FHLBC stock 5,000 — 5,000 — Guarantee asset 579 — — 579 Liabilities Derivative liabilities $ 1,612 $ 263 $ 15 $ 1,334 ABS issued 6,969,376 — — 6,969,376 December 31, 2019 Carrying Fair Value Measurements Using (In Thousands) Level 1 Level 2 Level 3 Assets Residential loans $ 7,714,745 $ — $ — $ 7,714,745 Business purpose residential loans 3,506,743 — — 3,506,743 Multifamily loans 4,408,524 — — 4,408,524 Real estate securities 1,099,874 — — 1,099,874 Servicer advance investments 169,204 — — 169,204 MSRs 42,224 — — 42,224 Excess MSRs 31,814 — — 31,814 Shared home appreciation options 45,085 — — 45,085 Derivative assets 35,701 6,531 19,020 10,150 Pledged collateral 32,945 32,945 — — FHLBC stock 43,393 — 43,393 — Guarantee asset 1,686 — — 1,686 Liabilities Contingent consideration $ 28,484 $ — $ — $ 28,484 Derivative liabilities 163,424 13,368 148,766 1,290 ABS issued 10,515,475 — — 10,515,475
Changes in Level 3 Assets and Liabilities Measured at Fair Value on Recurring Basis	The following table presents additional information about Level 3 assets and liabilities measured at fair value on a recurring basis for the nine months ended September 30, 2020. Table 5.3 – Changes in Level 3 Assets and Liabilities Measured at Fair Value on a Recurring Basis Assets Residential Loans Business Purpose Multifamily Loans Trading Securities AFS Servicer Advance Investments MSRs Excess MSRs Shared Home Appreciation Options (In Thousands) Beginning balance - $ 7,714,745 $ 3,506,743 $ 4,408,524 $ 860,540 $ 239,334 $ 169,204 $ 42,224 $ 31,814 $ 45,085 Acquisitions 2,927,697 — — 96,318 56,664 179,419 — 10,906 3,517 Originations — 982,315 — — — — — — — Sales (4,783,682) (53,434) — (579,466) (55,193) — — — — Principal paydowns (1,210,117) (489,243) (5,830) (8,502) (10,345) (83,124) — — (2,558) Deconsolidations — — (3,849,779) — — — — — — Gains (losses) in net income (loss), net (152,145) 16,246 (61,500) (224,728) (23,287) (6,878) (27,346) (7,650) (4,286) Other settlements, net (1) (1,599) (6,526) — — — — — — — Ending balance - $ 4,494,899 $ 3,956,101 $ 491,415 $ 144,162 $ 207,173 $ 258,621 $ 14,878 $ 35,070 $ 41,758 Table 5.3 – Changes in Level 3 Assets and Liabilities Measured at Fair Value on a Recurring Basis (continued) Assets Liabilities Guarantee Asset Derivatives (2) Contingent Consideration ABS (In Thousands) Beginning balance - December 31, 2019 $ 1,686 $ 8,860 $ 28,484 $ 10,515,475 Acquisitions — — — 1,137,656 Principal paydowns — — (13,353) (1,035,359) Deconsolidations — — — (3,706,789) Gains (losses) in net income (loss), net (1,107) 34,620 (446) 58,393 Other settlements, net (1) — (34,041) (14,685) — Ending balance - September 30, 2020 $ 579 $ 9,439 $ — $ 6,969,376 (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 or interest rate lock commitments at the time loans are acquired to the basis of residential and single-family rental loans. Other settlements, net for contingent consideration reflects the reclassification from a contingent liability to a deferred liability during the period due to an amendment in the underlying agreement. See Note 16 for further discussion. (2) For the purpose of this presentation, derivative assets and liabilities, which consist of loan purchase commitments and interest rate lock 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 (loss) that were attributable to Level 3 assets and liabilities recorded at fair value on a recurring basis and held at September 30, 2020 and 2019. Gains or losses incurred on assets or liabilities sold, matured, called, or fully written down during the three and nine months ended September 30, 2020 and 2019 are not included in this presentation. Table 5.4 – Portion of Net Gains (Losses) Attributable to Level 3 Assets and Liabilities Still Held at September 30, 2020 and 2019 Included in Net Income Included in Net Income Three Months Ended September 30, Nine Months Ended September 30, (In Thousands) 2020 2019 2020 2019 Assets Residential loans at Redwood $ (107) $ 17,771 $ (865) $ 82,408 Business purpose residential loans 21,155 584 17,901 4,069 Net investments in consolidated Sequoia entities (1) 7,700 1,860 (22,802) 7,051 Net investments in consolidated Freddie Mac SLST entities (1) 82,209 17,300 (33,087) 31,702 Net investments in consolidated Freddie Mac K-Series entities (1) 2,165 7,445 (11,014) 13,810 Net investments in consolidated CAFL entities (1) 9,673 — (41,048) — Trading securities (3,549) 11,206 (80,358) 33,196 Servicer advance investments 25 1,585 (6,172) 3,025 MSRs (2,376) (5,892) (16,798) (16,971) Excess MSRs (1,127) (1,634) (7,650) (2,137) Shared home appreciation options 2,384 29 (4,286) 29 Loan purchase and interest rate lock commitments 10,791 4,678 10,773 4,757 Other assets - Guarantee asset (191) (216) (1,107) (834) Liabilities Loan purchase commitments $ 420 $ (1,668) $ (1,334) $ (1,669) (1) Represents the portion of net gains or losses included in our consolidated statements of income (loss) related to loans and the associated ABS issued at our consolidated securitization entities held at September 30, 2020 and 2019, which netted together represent the change in value of our investments at the consolidated VIEs.
Assets and Liabilities Measured at Fair Value on Non-Recurring Basis	The following table presents information on assets recorded at fair value on a non-recurring basis at September 30, 2020. This table does not include the carrying value and gains or losses associated with the asset types below that were not recorded at fair value on our consolidated balance sheets at September 30, 2020. Table 5.5 – Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis at September 30, 2020 Gain (Loss) for September 30, 2020 Carrying Fair Value Measurements Using Three Months Ended Nine Months Ended (In Thousands) Level 1 Level 2 Level 3 September 30, 2020 September 30, 2020 Assets REO $ 3,523 $ — $ — $ 3,523 $ (805) $ (840)
Market Valuation Gains and Losses, Net	The following table presents the net market valuation gains and losses recorded in each line item of our consolidated statements of income for the three and nine months ended September 30, 2020 and 2019. Table 5.6 – Market Valuation Gains and Losses, Net Three Months Ended September 30, Nine Months Ended September 30, (In Thousands) 2020 2019 2020 2019 Mortgage Banking Activities, Net Residential loans held-for-sale, at fair value $ (478) $ (6,623) $ (15,972) $ 289 Residential loan purchase and forward sale commitments 13,067 12,943 35,123 41,142 Single-family rental loans held-for-sale, at fair value 43,191 1,283 55,868 4,200 Single-family rental loan purchase and interest rate lock commitments — 564 341 1,273 Residential bridge loans 938 1,010 (4,256) 2,108 Risk management derivatives, net (99) (2,972) (52,931) (15,387) Total mortgage banking activities, net (1) $ 56,619 $ 6,205 $ 18,173 $ 33,625 Investment Fair Value Changes, Net Residential loans held-for-investment, at Redwood $ 218 $ 7,667 $ (93,314) $ 71,323 Single-family rental loans held-for-investment — 22 (20,806) 22 Residential bridge loans held-for-investment 6,812 (742) (10,016) (1,363) Trading securities (3,600) 15,275 (224,679) 55,577 Servicer advance investments 26 1,585 (6,172) 3,025 Excess MSRs (1,127) (1,635) (7,650) (2,137) Net investments in Legacy Sequoia entities (2) (81) (407) (702) (904) Net investments in Sequoia Choice entities (2) 7,851 2,722 (22,065) 8,866 Net investments in Freddie Mac SLST entities (2) 82,214 17,300 (33,081) 31,702 Net investments in Freddie Mac K-Series entities (2) 2,166 7,445 (82,744) 13,810 Net investments in CAFL entities (2) 9,673 — (41,048) — Other investments 2,451 (355) (9,111) (632) Risk management derivatives, net — (37,433) (59,142) (144,548) Credit recoveries (losses) on AFS securities 444 — (1,027) — Total investment fair value changes, net $ 107,047 $ 11,444 $ (611,557) $ 34,741 Other Income MSRs $ (4,783) $ (7,489) $ (27,346) $ (21,243) Risk management derivatives, net — 4,389 13,966 13,157 Gain on re-measurement of 5 Arches investment — — — 2,440 Total other income (3) $ (4,783) $ (3,100) $ (13,380) $ (5,646) Total Market Valuation Gains (Losses), Net $ 158,883 $ 14,549 $ (606,764) $ 62,720 (1) Mortgage banking activities, net presented above does not include fee income from loan originations or acquisitions, provisions for repurchases expense, and other expenses that are components of Mortgage banking activities, net presented on our consolidated statements of income (loss), 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.
Quantitative Information about Significant Unobservable Inputs Used in Valuation of Level 3 Assets and Liabilities Measured at Fair Value	The following table provides quantitative information about the significant unobservable inputs used in the valuation of our Level 3 assets and liabilities measured at fair value. Table 5.7 – Fair Value Methodology for Level 3 Financial Instruments September 30, 2020 Fair Input Values (Dollars in Thousands, except Input Values) Unobservable Input Range Weighted Average (1) Assets Residential loans, at fair value: Jumbo fixed-rate loans $ 6,312 Prepayment rate (annual CPR) 20 - 20 % 20 % Whole loan spread to swap rate 350 - 350 bps 350 bps Jumbo loans committed to sell 98,779 Whole loan committed sales price $ 101.61 - $ 103.40 $ 103.23 Loans held by Legacy Sequoia (2) 296,765 Liability price N/A N/A Loans held by Sequoia Choice (2) 1,836,361 Liability price N/A N/A Loans held by Freddie Mac SLST (2) 2,256,682 Liability price N/A N/A Business purpose residential loans: Single-family rental loans 285,549 Senior credit spread 130 - 130 bps 130 bps Subordinate credit spread 200 - 1,600 bps 551 bps Senior credit support 30 - 32 % 31 % IO discount rate 8 - 9 % 9 % Prepayment rate (annual CPR) — - 3 % 3 % Non-securitizable loan dollar price $ 101 - $ 101 $ 101 Single-family rental loans held by CAFL 2,969,692 Liability price N/A N/A Residential bridge loans 700,860 Discount rate 6 - 12 % 8 % Non-performing loan dollar price $ 3 - $ 100 $ 89 Multifamily loans held by Freddie Mac K-Series (2) 491,415 Liability price N/A N/A Trading and AFS securities 351,335 Discount rate 3 - 34 % 9 % Prepayment rate (annual CPR) 7 - 65 % 24 % Default rate — - 26 % 1 % Loss severity — - 50 % 19 % CRT dollar price $ 49 - $ 103 $ 84 Servicer advance investments 258,621 Discount rate 3 - 4 % 4 % Prepayment rate (annual CPR) 8 - 14 % 13 % Expected remaining life (3) 1 - 2 years 2 years Mortgage servicing income 6 - 16 bps 8 bps MSRs 14,878 Discount rate 12 - 12 % 12 % Prepayment rate (annual CPR) 8 - 97 % 26 % Per loan annual cost to service $ 95 - $ 95 $ 95 Excess MSRs 35,070 Discount rate 15 - 21 % 18 % Prepayment rate (annual CPR) 10 - 13 % 11 % Excess mortgage servicing income 9 - 17 bps 12 bps Table 5.7 – Fair Value Methodology for Level 3 Financial Instruments (continued) September 30, 2020 Fair Input Values (Dollars in Thousands, except Input Values) Unobservable Input Range Weighted Average (1) Assets (continued) Shared home appreciation options $ 41,758 Discount rate 16 - 16 % 16 % Prepayment rate (annual CPR) 8 - 26 % 19 % Home price appreciation 2 - 3 % 3 % Guarantee asset 579 Discount rate 12 - 12 % 12 % Prepayment rate (annual CPR) 42 - 42 % 42 % REO 3,523 Loss severity 3 - 63 % 23 % Residential loan purchase commitments, net 10,282 Committed sales price $ 100.89 - $ 103.40 $ 102.59 Pull-through rate 13 - 100 % 58 % Whole loan spread to TBA price $ 2.00 - $ 2.00 $ 2.00 Whole loan spread to swap rate - fixed rate 350 - 350 bps 350 bps Prepayment rate (annual CPR) 15 - 15 % 15 % MSR multiple 0.8 - 4.1 x 3.4 x Liabilities ABS issued (2) : At consolidated Sequoia entities 1,919,048 Discount rate 2 - 30 % 3 % Prepayment rate (annual CPR) 5 - 53 % 27 % Default rate — - 40 % 2 % Loss severity — - 50 % 31 % At consolidated Freddie Mac SLST entities 1,841,313 Dollar price $ 1 - $ 108 $ 99 At consolidated Freddie Mac K-Series entities (4) 464,865 Discount rate 1 - 18 % 2 % At consolidated CAFL entities (4) 2,744,150 Discount rate 0.2 - 40 % 3 % Prepayment rate (annual CPR) — - 3 % — % Default rate — - 18 % 11 % Loss severity 30 - 30 % 30 % (1) The weighted average input values for all loan types are based on the unpaid principal balance. The weighted average input values for all other assets and liabilities are based on relative fair value. (2) 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. At September 30, 2020, the fair value of securities we owned at the consolidated Sequoia, Freddie Mac SLST, Freddie Mac K-Series, and CAFL entities was $215 million, $416 million, $27 million, and $229 million, respectively. (3) 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).

Residential Loans (Tables)

Residential Loans (Tables)	9 Months Ended
	Sep. 30, 2020
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 and Freddie Mac SLST entities at September 30, 2020 and December 31, 2019. Table 6.1 – Classifications and Carrying Values of Residential Loans September 30, 2020 Legacy Sequoia Freddie Mac (In Thousands) Redwood Sequoia Choice SLST Total Held-for-sale at fair value $ 105,128 $ — $ — $ — $ 105,128 Held-for-investment at fair value — 296,765 1,836,361 2,256,682 4,389,808 Total Residential Loans $ 105,128 $ 296,765 $ 1,836,361 $ 2,256,682 $ 4,494,936 December 31, 2019 Legacy Sequoia Freddie Mac (In Thousands) Redwood Sequoia Choice SLST Total Held-for-sale at fair value $ 536,385 $ — $ — $ — $ 536,385 Held-for-investment at fair value 2,111,897 407,890 2,291,463 2,367,215 7,178,465 Total Residential Loans $ 2,648,282 $ 407,890 $ 2,291,463 $ 2,367,215 $ 7,714,850 The following table summarizes the classifications and carrying values of the business purpose residential loans owned at Redwood at September 30, 2020 and December 31, 2019. Table 7.1 – Classifications and Carrying Values of Business Purpose Residential Loans September 30, 2020 Single-Family Rental Residential (In Thousands) Redwood CAFL Bridge Total Held-for-sale at fair value $ 285,549 — $ — $ 285,549 Held-for-investment at fair value — 2,969,692 700,860 3,670,552 Total Business Purpose Residential Loans $ 285,549 $ 2,969,692 $ 700,860 $ 3,956,101 December 31, 2019 Single-Family Rental Residential (In Thousands) Redwood CAFL Bridge Total Held-for-sale at fair value $ 331,565 $ — $ — $ 331,565 Held-for-investment at fair value 237,620 2,192,552 745,006 3,175,178 Total Business Purpose Residential Loans $ 569,185 $ 2,192,552 $ 745,006 $ 3,506,743 The following tables summarize the characteristics of the business purpose residential loans owned at Redwood at September 30, 2020 and December 31, 2019. Table 7.2 – Characteristics of Business Purpose Residential Loans September 30, 2020 Single-Family Rental at Redwood Single-Family Rental at CAFL Residential Bridge (Dollars in Thousands) Number of loans 140 1,027 2,262 Unpaid principal balance $ 272,492 $ 2,815,045 $ 708,555 Fair value of loans $ 285,549 $ 2,969,692 $ 700,860 Weighted average coupon 5.26 % 5.50 % 8.02 % Weighted average remaining loan term (years) 7 6 1 Number of loans with 90+ day delinquencies (1) 6 26 24 Unpaid principal balance of loans with 90+ day delinquencies $ 3,018 $ 70,949 $ 38,437 Fair value of loans with 90+ day delinquencies (2) $ 2,954 N/A $ 33,464 Number of loans in foreclosure — 9 24 Unpaid principal balance of loans in foreclosure $ — $ 14,032 $ 39,755 Fair value of loans in foreclosure (2) $ — N/A $ 34,489 December 31, 2019 Single-Family Rental at Redwood Single-Family Rental at CAFL Residential Bridge (Dollars in Thousands) Number of loans 308 783 2,653 Unpaid principal balance $ 552,848 $ 2,078,214 $ 742,528 Fair value of loans $ 569,185 $ 2,192,552 $ 745,006 Weighted average coupon 4.96 % 5.70 % 8.11 % Weighted average remaining loan term (years) 9 7 2 Number of loans with 90+ day delinquencies (1) 2 18 31 Unpaid principal balance of loans with 90+ day delinquencies $ 1,688 $ 29,039 $ 14,186 Fair value of loans with 90+ day delinquencies (2) $ 1,818 N/A $ 12,111 Number of loans in foreclosure 1 5 15 Unpaid principal balance of loans in foreclosure $ 130 $ 9,169 $ 8,987 Fair value of loans in foreclosure (2) $ 130 N/A $ 6,917 (1) The number of loans greater than 90 days delinquent includes loans in foreclosure. (2) 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.
Characteristics of Residential Loans Held-For-Sale	The following table summarizes the characteristics of residential loans held-for-sale at September 30, 2020 and December 31, 2019. Table 6.2 – Characteristics of Residential Loans Held-for-Sale (Dollars in Thousands) September 30, 2020 December 31, 2019 Number of loans 118 669 Unpaid principal balance $ 102,921 $ 524,928 Fair value of loans $ 105,128 $ 536,280 Number of loans with 90+ day delinquencies 2 1 Unpaid principal balance of loans with 90+ day delinquencies $ 2,356 $ 747 Fair value of loans with 90+ day delinquencies $ 1,767 $ 616 Number of loans in foreclosure — — Market value of loans pledged as collateral under short-term borrowing agreements $ 95,023 $ 201,949
Quarterly Activity of Residential Loans Held-for-Sale	The following table provides the activity of residential loans held-for-sale during the three and nine months ended September 30, 2020 and 2019. Table 6.3 – Quarterly Activity of Residential Loans Held-for-Sale Three Months Ended September 30, Nine Months Ended September 30, (In Thousands) 2020 2019 2020 2019 Principal balance of loans acquired $ 172,162 $ 1,446,750 $ 2,859,813 $ 3,936,111 Principal balance of loans sold 87,868 1,534,315 5,024,663 3,921,280 Net market valuation gains (losses) recorded (1) (478) (6,623) (15,972) 286 (1) Net market valuation gains (losses) on residential loans held-for-sale are recorded through Mortgage banking activities, net on our consolidated statements of income (loss).
Characteristics of Residential Loans Held-for-Investment	The following tables summarize the characteristics of the residential loans owned at Redwood and at consolidated Sequoia and Freddie Mac SLST entities at September 30, 2020 and December 31, 2019. Table 6.4 – Characteristics of Residential Loans Held-for-Investment September 30, 2020 Legacy Sequoia Freddie Mac (Dollars in Thousands) Redwood Sequoia Choice SLST Number of loans — 1,976 2,546 13,893 Unpaid principal balance $ — $ 352,392 $ 1,811,967 $ 2,304,047 Fair value of loans $ — $ 296,765 $ 1,836,361 $ 2,256,683 Number of loans with 90+ day delinquencies (1) — 49 132 1,772 Unpaid principal balance of loans with 90+ day delinquencies $ — $ 16,076 $ 102,693 $ 339,537 Fair value of loans with 90+ day delinquencies (2) $ — N/A N/A N/A Number of loans in foreclosure — 21 3 175 Unpaid principal balance of loans in foreclosure $ — $ 4,820 $ 1,814 $ 28,380 December 31, 2019 Legacy Sequoia Freddie Mac (Dollars in Thousands) Redwood Sequoia Choice SLST Number of loans 2,940 2,198 3,156 14,502 Unpaid principal balance $ 2,052,778 $ 424,829 $ 2,240,679 $ 2,428,035 Fair value of loans $ 2,111,897 $ 407,890 $ 2,291,463 $ 2,367,215 Number of loans with 90+ day delinquencies (1) 2 39 9 587 Unpaid principal balance of loans with 90+ day delinquencies $ 1,585 $ 9,803 $ 6,755 $ 134,680 Fair value of loans with 90+ day delinquencies (2) $ 1,424 N/A N/A N/A Number of loans in foreclosure — 16 3 208 Unpaid principal balance of loans in foreclosure $ — $ 3,673 $ 2,290 $ 33,042 (1) For loans held at consolidated entities, the number of loans greater than 90 days delinquent includes loans in foreclosure. (2) 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.
Quarterly Activity of Residential Loans Held-for-Investment	The following table provides the activity of residential loans held-for-investment at Redwood during the three and nine months ended September 30, 2020 and 2019. Table 6.5 – Quarterly Activity of Residential Loans Held-for-Investment at Redwood Three Months Ended September 30, Nine Months Ended September 30, (In Thousands) 2020 2019 2020 2019 Principal balance of loans acquired $ — $ — $ — $ 39,194 Principal balance of loans sold — — — — Fair value of loans transferred from HFS to HFI — — 13,258 68,703 Fair value of loans transferred from HFI to HFS — — 1,870,986 22,814 Net market valuation gains (losses) recorded (1) 218 7,667 (93,314) 71,323 (1) Net market valuation gains (losses) on residential loans held-for-investment at Redwood are recorded through Investment fair value changes, net on our consolidated statements of income (loss). The following table provides the activity of residential loans held-for-investment at consolidated entities during the three and nine months ended September 30, 2020 and 2019. Table 6.6 – Quarterly Activity of Residential Loans Held-for-Investment at Consolidated Entities Three Months Ended September 30, 2020 Nine Months Ended September 30, 2020 Legacy Sequoia Freddie Mac Legacy Sequoia Freddie Mac (In Thousands) Sequoia Choice SLST Sequoia Choice SLST Fair value of loans transferred from HFS to HFI (1) N/A $ — N/A N/A $ 270,506 N/A Net market valuation gains (losses) recorded (2) $ 21,938 $ (5,175) $ 159,687 $ (38,996) $ (21,727) $ 15,254 Three Months Ended September 30, 2019 Nine Months Ended September 30, 2019 Legacy Sequoia Freddie Mac Legacy Sequoia Freddie Mac (In Thousands) Sequoia Choice SLST Sequoia Choice SLST Fair value of loans transferred from HFS to HFI (1) N/A $ 727,088 N/A N/A $ 1,076,671 N/A Net market valuation gains (losses) recorded (2) $ (103) $ (11,029) $ 39,783 $ 5,271 $ 4,841 $ 94,788 (1) Represents the transfer of loans from held-for-sale to held-for-investment associated with Sequoia Choice securitizations. (2) For loans held at our consolidated Legacy Sequoia, Sequoia Choice, and Freddie Mac SLST entities, market value changes are based on the estimated fair value of the associated ABS issued, pursuant to collateralized financing entity guidelines. The net impact to our income statement associated with our economic investments in these securitization entities is presented in Note 5.

Business Purpose Residential _2

Business Purpose Residential Loans (Tables)	9 Months Ended
	Sep. 30, 2020
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 and Freddie Mac SLST entities at September 30, 2020 and December 31, 2019. Table 6.1 – Classifications and Carrying Values of Residential Loans September 30, 2020 Legacy Sequoia Freddie Mac (In Thousands) Redwood Sequoia Choice SLST Total Held-for-sale at fair value $ 105,128 $ — $ — $ — $ 105,128 Held-for-investment at fair value — 296,765 1,836,361 2,256,682 4,389,808 Total Residential Loans $ 105,128 $ 296,765 $ 1,836,361 $ 2,256,682 $ 4,494,936 December 31, 2019 Legacy Sequoia Freddie Mac (In Thousands) Redwood Sequoia Choice SLST Total Held-for-sale at fair value $ 536,385 $ — $ — $ — $ 536,385 Held-for-investment at fair value 2,111,897 407,890 2,291,463 2,367,215 7,178,465 Total Residential Loans $ 2,648,282 $ 407,890 $ 2,291,463 $ 2,367,215 $ 7,714,850 The following table summarizes the classifications and carrying values of the business purpose residential loans owned at Redwood at September 30, 2020 and December 31, 2019. Table 7.1 – Classifications and Carrying Values of Business Purpose Residential Loans September 30, 2020 Single-Family Rental Residential (In Thousands) Redwood CAFL Bridge Total Held-for-sale at fair value $ 285,549 — $ — $ 285,549 Held-for-investment at fair value — 2,969,692 700,860 3,670,552 Total Business Purpose Residential Loans $ 285,549 $ 2,969,692 $ 700,860 $ 3,956,101 December 31, 2019 Single-Family Rental Residential (In Thousands) Redwood CAFL Bridge Total Held-for-sale at fair value $ 331,565 $ — $ — $ 331,565 Held-for-investment at fair value 237,620 2,192,552 745,006 3,175,178 Total Business Purpose Residential Loans $ 569,185 $ 2,192,552 $ 745,006 $ 3,506,743 The following tables summarize the characteristics of the business purpose residential loans owned at Redwood at September 30, 2020 and December 31, 2019. Table 7.2 – Characteristics of Business Purpose Residential Loans September 30, 2020 Single-Family Rental at Redwood Single-Family Rental at CAFL Residential Bridge (Dollars in Thousands) Number of loans 140 1,027 2,262 Unpaid principal balance $ 272,492 $ 2,815,045 $ 708,555 Fair value of loans $ 285,549 $ 2,969,692 $ 700,860 Weighted average coupon 5.26 % 5.50 % 8.02 % Weighted average remaining loan term (years) 7 6 1 Number of loans with 90+ day delinquencies (1) 6 26 24 Unpaid principal balance of loans with 90+ day delinquencies $ 3,018 $ 70,949 $ 38,437 Fair value of loans with 90+ day delinquencies (2) $ 2,954 N/A $ 33,464 Number of loans in foreclosure — 9 24 Unpaid principal balance of loans in foreclosure $ — $ 14,032 $ 39,755 Fair value of loans in foreclosure (2) $ — N/A $ 34,489 December 31, 2019 Single-Family Rental at Redwood Single-Family Rental at CAFL Residential Bridge (Dollars in Thousands) Number of loans 308 783 2,653 Unpaid principal balance $ 552,848 $ 2,078,214 $ 742,528 Fair value of loans $ 569,185 $ 2,192,552 $ 745,006 Weighted average coupon 4.96 % 5.70 % 8.11 % Weighted average remaining loan term (years) 9 7 2 Number of loans with 90+ day delinquencies (1) 2 18 31 Unpaid principal balance of loans with 90+ day delinquencies $ 1,688 $ 29,039 $ 14,186 Fair value of loans with 90+ day delinquencies (2) $ 1,818 N/A $ 12,111 Number of loans in foreclosure 1 5 15 Unpaid principal balance of loans in foreclosure $ 130 $ 9,169 $ 8,987 Fair value of loans in foreclosure (2) $ 130 N/A $ 6,917 (1) The number of loans greater than 90 days delinquent includes loans in foreclosure. (2) 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.

Multifamily Loans (Tables)

Multifamily Loans (Tables)	9 Months Ended
	Sep. 30, 2020
Receivables [Abstract]
Schedule of Multifamily Loans	The following table summarizes the characteristics of the multifamily loans consolidated at Redwood at September 30, 2020 and December 31, 2019. Table 8.1 – Characteristics of Multifamily Loans (Dollars in Thousands) September 30, 2020 December 31, 2019 Number of loans 28 279 Unpaid principal balance $ 464,680 $ 4,195,000 Fair value of loans $ 491,415 $ 4,408,524 Weighted average coupon 4.25 % 4.13 % Weighted average remaining loan term (years) 5 6 Number of loans with 90+ day delinquencies — — Number of loans in foreclosure — — The outstanding multifamily loans held-for-investment at the Freddie Mac K-Series entities at September 30, 2020 were first-lien, fixed-rate loans that were originated in 2015 and had original loan terms of ten years. The following table provides the activity of multifamily loans held-for-investment during the three and nine months ended September 30, 2020 and 2019. Table 8.2 – Quarterly Activity of Multifamily Loans Held-for-Investment Three Months Ended September 30, Nine Months Ended September 30, (In Thousands) 2020 2019 2020 2019 Net market valuation gains (losses) recorded (1) $ 2,340 $ 47,353 $ (61,500) $ 178,374 (1) Net market valuation gains (losses) on multifamily loans held-for-investment are recorded through Investment fair value changes, net on our consolidated statements of income (loss). For loans held at our consolidated Freddie Mac K-Series entities, market value changes are based on the estimated fair value of the associated ABS issued, pursuant to collateralized financing entity guidelines. The net impact to our income statement associated with our economic investment in these securitization entities is presented in

Real Estate Securities (Tables)

Real Estate Securities (Tables)	9 Months Ended
	Sep. 30, 2020
Investments, Debt and Equity Securities [Abstract]
Fair Values of Real Estate Securities by Type	The following table presents the fair values of our real estate securities by type at September 30, 2020 and December 31, 2019. Table 9.1 – Fair Values of Real Estate Securities by Type (In Thousands) September 30, 2020 December 31, 2019 Trading $ 144,162 $ 860,540 Available-for-sale 207,173 239,334 Total Real Estate Securities $ 351,335 $ 1,099,874
Trading Securities by Collateral Type	The following table presents the fair value of trading securities by position and collateral type at September 30, 2020 and December 31, 2019. Table 9.2 – Trading Securities by Position (In Thousands) September 30, 2020 December 31, 2019 Senior $ 28,091 $ 150,067 Mezzanine 3,651 538,489 Subordinate 112,420 171,984 Total Trading Securities $ 144,162 $ 860,540
Available-for-Sale Securities by Collateral Type	The following table presents the fair value of our available-for-sale securities by position and collateral type at September 30, 2020 and December 31, 2019. Table 9.3 – Available-for-Sale Securities by Position (In Thousands) September 30, 2020 December 31, 2019 Senior $ — $ 25,792 Mezzanine 2,016 13,687 Subordinate 205,157 199,855 Total AFS Securities $ 207,173 $ 239,334
Carrying Value of Residential Available for Sale Securities	The following table presents the components of carrying value (which equals fair value) of AFS securities at September 30, 2020 and December 31, 2019. Table 9.4 – Carrying Value of AFS Securities September 30, 2020 (In Thousands) Senior Mezzanine Subordinate Total Principal balance $ — $ 2,000 $ 287,659 $ 289,659 Credit reserve — — (43,186) (43,186) Unamortized discount, net — — (99,221) (99,221) Amortized cost — 2,000 145,252 147,252 Gross unrealized gains — 16 63,439 63,455 Gross unrealized losses — — (2,507) (2,507) Allowance for credit losses — — (1,027) (1,027) Carrying Value $ — $ 2,016 $ 205,157 $ 207,173 December 31, 2019 (In Thousands) Senior Mezzanine Subordinate Total Principal balance $ 26,331 $ 13,512 $ 264,234 $ 304,077 Credit reserve (533) — (32,407) (32,940) Unamortized discount, net (10,427) (527) (113,301) (124,255) Amortized cost 15,371 12,985 118,526 146,882 Gross unrealized gains 10,450 702 81,329 92,481 Gross unrealized losses (29) — — (29) Carrying Value $ 25,792 $ 13,687 $ 199,855 $ 239,334
Changes of Unamortized Discount and Designated Credit Reserves on Residential Available for Sale Securities	The following table presents the changes for the three and nine months ended September 30, 2020, in unamortized discount and designated credit reserves on AFS securities. Table 9.5 – Changes in Unamortized Discount and Designated Credit Reserves on AFS Securities Three Months Ended September 30, 2020 Nine Months Ended September 30, 2020 Credit Unamortized Credit Unamortized (In Thousands) Beginning balance $ 37,785 $ 104,260 $ 32,940 $ 124,255 Amortization of net discount — (1,766) — (4,607) Realized credit losses (194) — (897) — Acquisitions 1,303 1,019 6,487 1,796 Sales, calls, other — — (726) (16,841) (Release of) transfers to credit reserves, net 4,292 (4,292) 5,382 (5,382) Ending Balance $ 43,186 $ 99,221 $ 43,186 $ 99,221
Components of Fair Value of Available for Sale Securities by Holding Periods	The following table presents the components comprising the total carrying value of AFS securities that were in a gross unrealized loss position at September 30, 2020 and December 31, 2019. Table 9.6 – Components of Fair Value of AFS Securities by Holding Periods Less Than 12 Consecutive Months 12 Consecutive Months or Longer Amortized Unrealized Fair Amortized Unrealized Fair (In Thousands) September 30, 2020 $ 32,890 $ (2,507) $ 30,330 $ — $ — $ — December 31, 2019 — — — 5,830 (29) 5,801
Summary of Significant Valuation Assumptions for Available for Sale Securities Credit Loss	The table below summarizes the weighted average of the significant credit quality indicators we used for the credit loss allowance on our AFS securities at September 30, 2020. Table 9.7 – Significant Credit Quality Indicators September 30, 2020 Subordinate Securities Default rate 0.5% Loss severity 20%
Activity of Allowance for Credit Losses for Available-for-sale Securities	The following table details the activity related to the allowance for credit losses for AFS securities held at September 30, 2020. Table 9.8 – Rollforward of Allowance for Credit Losses Three Months Ended Nine Months Ended (In Thousands) September 30, 2020 September 30, 2020 Beginning balance allowance for credit losses $ 1,471 $ — Transition impact from adoption of new standard — — Additions to allowance for credit losses on securities for which credit losses were not previously recorded 339 1,864 Additional increases or decreases to the allowance for credit losses on securities that had an allowance recorded in a previous period (783) (837) Allowance on purchased financial assets with credit deterioration — — Reduction to allowance for securities sold during the period — — Reduction to allowance for securities we intend to sell or more likely than not will be required to sell — — Write-offs charged against allowance — — Recoveries of amounts previously written off — — Ending balance of allowance for credit losses $ 1,027 $ 1,027
Gross Realized Gains and Losses on Available for Sale Securities	The following table presents the gross realized gains and losses on sales and calls of AFS securities for the three and nine months ended September 30, 2020 and 2019. Table 9.9 – Gross Realized Gains and Losses on AFS Securities Three Months Ended September 30, Nine Months Ended September 30, (In Thousands) 2020 2019 2020 2019 Gross realized gains - sales $ — $ 3,656 $ 8,779 $ 13,143 Gross realized gains - calls — 1,058 — 5,084 Gross realized losses - sales — — (4,144) — Total Realized Gains on Sales and Calls of AFS Securities, net $ — $ 4,714 $ 4,635 $ 18,227

Other Investments (Tables)

Other Investments (Tables)	9 Months Ended
	Sep. 30, 2020
Investments, All Other Investments [Abstract]
Summary of Other Investments	Other investments at September 30, 2020 and December 31, 2019 are summarized in the following table. Table 10.1 – Components of Other Investments (In Thousands) September 30, 2020 December 31, 2019 Servicer advance investments $ 258,621 $ 169,204 Shared home appreciation options 41,758 45,085 Excess MSRs 35,070 31,814 Mortgage servicing rights 14,878 42,224 Investment in multifamily loan fund (323) 39,802 Other 34,624 30,001 Total Other Investments $ 384,628 $ 358,130
Components of Servicer Advance Investments	The servicer advance receivables were comprised of the following types of advances at September 30, 2020 and December 31, 2019. Table 10.2 – Components of Servicer Advance Receivables (In Thousands) September 30, 2020 December 31, 2019 Principal and interest advances $ 88,370 $ 15,081 Escrow advances (taxes and insurance advances) 115,352 96,732 Corporate advances 38,337 39,769 Total Servicer Advance Receivables $ 242,059 $ 151,582

Derivative Financial Instrume_2

Derivative Financial Instruments (Tables)	9 Months Ended
	Sep. 30, 2020
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Fair Value and Notional Amount of Derivative Financial Instruments	The following table presents the fair value and notional amount of our derivative financial instruments at September 30, 2020 and December 31, 2019. Table 11.1 – Fair Value and Notional Amount of Derivative Financial Instruments September 30, 2020 December 31, 2019 Fair Notional Fair Notional (In Thousands) Assets - Risk Management Derivatives Interest rate swaps $ 78 $ 25,000 $ 17,095 $ 1,399,000 TBAs 402 140,000 5,755 2,445,000 Interest rate futures 63 40,000 777 213,700 Swaptions 3,393 285,000 1,925 1,065,000 Assets - Other Derivatives Loan purchase and interest rate lock commitments 10,773 1,724,207 10,149 1,537,162 Total Assets $ 14,709 $ 2,214,207 $ 35,701 $ 6,659,862 Liabilities - Cash Flow Hedges Interest rate swaps $ — $ — $ (51,530) $ 139,500 Liabilities - Risk Management Derivatives Interest rate swaps (15) 25,000 (97,235) 2,314,300 TBAs (263) 105,000 (13,359) 4,160,000 Interest rate futures — — (10) 12,300 Liabilities - Other Derivatives Loan purchase commitments (1,334) 231,651 (1,290) 303,394 Total Liabilities $ (1,612) $ 361,651 $ (163,424) $ 6,929,494 Total Derivative Financial Instruments, Net $ 13,097 $ 2,575,858 $ (127,723) $ 13,589,356
Impact on Interest Expense of Interest Rate Agreements Accounted for as Cash Flow Hedges	The following table illustrates the impact on interest expense of our interest rate agreements accounted for as cash flow hedges for the three and nine months ended September 30, 2020 and 2019. Table 11.2 – Impact on Interest Expense of Interest Rate Agreements Accounted for as Cash Flow Hedges Three Months Ended September 30, Nine Months Ended September 30, (In Thousands) 2020 2019 2020 2019 Net interest expense on cash flows hedges $ — $ (727) $ (860) $ (2,004) Realized net losses reclassified from other comprehensive income (1,040) — (2,148) — Total Interest Expense $ (1,040) $ (727) $ (3,008) $ (2,004)

Other Assets and Liabilities (T

Other Assets and Liabilities (Tables)	9 Months Ended
	Sep. 30, 2020
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]
Components of Other Assets	Other assets at September 30, 2020 and December 31, 2019 are summarized in the following table. Table 12.1 – Components of Other Assets (In Thousands) September 30, 2020 December 31, 2019 Accrued interest receivable $ 39,330 $ 71,058 Investment receivable 25,767 23,330 Right-of-use asset 13,487 11,866 REO 8,535 9,462 Pledged collateral 8,172 32,945 Income tax receivables 8,148 36 FHLBC stock 5,000 43,393 Fixed assets and leasehold improvements (1) 4,408 4,901 Margin receivable 3,809 209,776 Other 7,617 12,554 Total Other Assets $ 124,273 $ 419,321
Components of Accrued Expenses and Other Liabilities	Accrued expenses and other liabilities at September 30, 2020 and December 31, 2019 are summarized in the following table. Table 12.2 – Components of Accrued Expenses and Other Liabilities (In Thousands) September 30, 2020 December 31, 2019 Accrued interest payable $ 34,225 $ 60,655 Payable to minority partner 17,492 13,189 Accrued compensation 17,127 33,888 Lease liability 15,123 13,443 Deferred consideration 14,442 — Guarantee obligations 11,264 14,009 Current accounts payable 8,717 5,468 Residential loan and MSR repurchase reserve 8,565 4,268 Residential bridge loan holdbacks 6,350 10,682 Deferred tax liabilities 5,152 5,152 Accrued operating expenses 3,922 4,358 Contingent consideration — 28,484 Other 13,610 13,297 Total Accrued Expenses and Other Liabilities $ 155,989 $ 206,893

Short-Term Debt (Tables)

Short-Term Debt (Tables)	9 Months Ended
	Sep. 30, 2020
Debt Disclosure [Abstract]
Short-Term Debt Facilities	The table below summarizes our short-term debt, including the facilities that are available to us, the outstanding balances, the weighted average interest rate, and the maturity information at September 30, 2020 and December 31, 2019. Table 13.1 – Short-Term Debt September 30, 2020 (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 $ 81,898 $ 600,000 2.90 % 10/2020-8/2021 203 Business purpose residential loan warehouse (2) 2 96,811 500,000 3.28 % 6/2021-5/2022 437 Real estate securities repo (1) 3 75,054 — 2.87 % 10/2020-12/2020 38 Total Short-Term Debt Facilities 9 253,763 Servicer advance financing 1 228,998 400,000 1.96 % 11/2020 61 Total Short-Term Debt $ 482,761 December 31, 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 $ 185,894 $ 1,425,000 3.23 % 1/2020-10/2020 69 Business purpose residential loan warehouse (2) 8 814,118 1,475,000 4.11 % 12/2020-5/2022 489 Real estate securities repo (1) 10 1,176,579 — 2.94 % 1/2020-3/2020 23 Total Short-Term Debt Facilities 22 2,176,591 Servicer advance financing 1 152,554 400,000 3.56 % 11/2020 335 Total Short-Term Debt $ 2,329,145 (1) Borrowings under our facilities are generally charged interest based on a specified margin over the one-month LIBOR interest rate. At September 30, 2020 and December 31, 2019, all of these borrowings were under uncommitted facilities and were due within 364 days (or less) of the borrowing date.
Collateral for Short-Term Debt Facilities	The following table below presents the value of loans, securities, and other assets pledged as collateral under our short-term debt facilities at September 30, 2020 and December 31, 2019. Table 13.2 – Collateral for Short-Term Debt Facilities (In Thousands) September 30, 2020 December 31, 2019 Collateral Type Held-for-sale residential loans $ 95,023 $ 201,949 Business purpose residential loans 110,505 988,179 Real estate securities On balance sheet 24,670 618,881 Sequoia Choice securitizations (1) 63,088 111,341 Freddie Mac SLST securitizations (1) — 381,640 Freddie Mac K-Series securitizations (1) 26,550 252,284 CAFL securitizations (1) — 127,840 Total real estate securities owned 114,308 1,491,986 Other assets — 16,252 Total Collateral for Short-Term Debt Facilities $ 319,836 $ 2,698,366
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 September 30, 2020. Table 13.3 – Short-Term Debt by Collateral Type and Remaining Maturities September 30, 2020 (In Thousands) Within 30 days 31 to 90 days Over 90 days Total Collateral Type Held-for-sale residential loans $ 1,217 $ — $ 80,681 $ 81,898 Business purpose residential loans — — 96,811 96,811 Real estate securities 37,217 37,837 — 75,054 Total Secured Short-Term Debt 38,434 37,837 177,492 253,763 Servicer advance financing — 228,998 — 228,998 Total Short-Term Debt $ 38,434 $ 266,835 $ 177,492 $ 482,761

Asset-Backed Securities Issued

Asset-Backed Securities Issued (Tables)	9 Months Ended
	Sep. 30, 2020
Debt Disclosure [Abstract]
Asset-Backed Securities Issued	The carrying values of ABS issued by our consolidated securitization entities at September 30, 2020 and December 31, 2019, along with other selected information, are summarized in the following table. Table 14.1 – Asset-Backed Securities Issued September 30, 2020 Legacy Sequoia Freddie Mac SLST (1) Freddie Mac CAFL Total (Dollars in Thousands) Certificates with principal balance $ 347,985 $ 1,571,714 $ 1,925,144 $ 418,212 $ 2,528,974 $ 6,792,029 Interest-only certificates 1,268 6,805 24,053 13,122 137,064 182,312 Market valuation adjustments (56,769) 48,045 95,138 33,531 78,112 198,057 ABS Issued, Net $ 292,484 $ 1,626,564 $ 2,044,335 $ 464,865 $ 2,744,150 $ 7,172,398 Range of weighted average interest rates, by series 0.35% to 1.96% 2.23% to 5.02% 3.50% to 4.75% 3.39 % 3.18% to 5.53% Stated maturities 2024 - 2036 2047 - 2050 2028 - 2059 2025 2022 - 2048 Number of series 20 10 3 1 13 December 31, 2019 Legacy Sequoia Freddie Mac SLST Freddie Mac K-Series CAFL Total (Dollars in Thousands) Certificates with principal balance $ 420,056 $ 1,979,719 $ 1,842,682 $ 3,844,789 $ 1,875,007 $ 9,962,253 Interest-only certificates 1,282 16,514 30,291 217,891 90,134 356,112 Market valuation adjustments (18,873) 40,965 45,349 93,559 36,110 197,110 ABS Issued, Net $ 402,465 $ 2,037,198 $ 1,918,322 $ 4,156,239 $ 2,001,251 $ 10,515,475 Range of weighted average interest rates, by series 1.94% to 3.26% 4.40% to 5.05% 3.50 % 3.35% to 4.35% 3.25% to 5.36% Stated maturities 2024 - 2036 2047 - 2049 2028 - 2029 2025 - 2049 2022 - 2048 Number of series 20 9 2 5 10 (1) Includes $208 million (principal balance) of ABS issued by a re-securitization trust sponsored by Redwood and accounted for at amortized cost.
Accrued Interest Payable on Asset-Backed Securities Issued	The following table summarizes the accrued interest payable on ABS issued at September 30, 2020 and December 31, 2019. Interest due on consolidated ABS issued is payable monthly. Table 14.2 – Accrued Interest Payable on Asset-Backed Securities Issued (In Thousands) September 30, 2020 December 31, 2019 Legacy Sequoia $ 180 $ 395 Sequoia Choice 5,652 7,732 Freddie Mac SLST (1) 5,831 5,374 Freddie Mac K-Series 1,182 12,887 CAFL 9,180 7,298 Total Accrued Interest Payable on ABS Issued $ 22,025 $ 33,686 (1) Includes accrued interest payable on ABS issued by a re-securitization trust sponsored by Redwood.

Commitments and Contingencies (

Commitments and Contingencies (Tables)	9 Months Ended
	Sep. 30, 2020
Commitments and Contingencies Disclosure [Abstract]
Future Lease Commitments by Year	The following table presents our future lease commitments at September 30, 2020. Table 16.1 – Future Lease Commitments by Year (In Thousands) September 30, 2020 2020 (3 months) $ 930 2021 2,949 2022 2,427 2023 1,913 2024 1,917 2025 8,039 Total Lease Commitments 18,175 Less: Imputed interest (3,052) Lease Liability $ 15,123

Equity (Tables)

Equity (Tables)	9 Months Ended
	Sep. 30, 2020
Equity [Abstract]
Changes to Accumulated Other Comprehensive Income by Component	The following table provides a summary of changes to accumulated other comprehensive income by component for the three and nine months ended September 30, 2020 and 2019. During the three and nine months ended September 30, 2020, we recognized net unrealized gains (losses) on our Level 3 AFS securities which we owned as of September 30, 2020 of $8 million and negative $16 million, respectively. Table 17.1 – Changes in Accumulated Other Comprehensive Income by Component Three Months Ended September 30, 2020 Three Months Ended September 30, 2019 (In Thousands) Available-for-Sale Securities Interest Rate Agreements Accounted for as Cash Flow Hedges Available-for-Sale Securities Interest Rate Agreements Accounted for as Cash Flow Hedges Balance at beginning of period $ 53,246 $ (82,637) $ 98,307 $ (49,384) Other comprehensive income (loss) 8,236 — 4,484 (11,791) Amounts reclassified from other (445) 1,040 (3,492) — Net current-period other comprehensive income (loss) 7,791 1,040 992 (11,791) Balance at End of Period $ 61,037 $ (81,597) $ 99,299 $ (61,175) Nine Months Ended September 30, 2020 Nine Months Ended September 30, 2019 (In Thousands) Available-for-Sale Securities Interest Rate Agreements Accounted for as Cash Flow Hedges Available-for-Sale Securities Interest Rate Agreements Accounted for as Cash Flow Hedges Balance at beginning of period $ 92,452 $ (50,939) $ 95,342 $ (34,045) Other comprehensive income (loss) (19,890) (32,806) 19,764 (27,130) Amounts reclassified from other (11,525) 2,148 (15,807) — Net current-period other comprehensive income (loss) (31,415) (30,658) 3,957 (27,130) Balance at End of Period $ 61,037 $ (81,597) $ 99,299 $ (61,175)
Reclassifications out of Accumulated Other Comprehensive Income	The following table provides a summary of reclassifications out of accumulated other comprehensive income for the three and nine months ended September 30, 2020 and 2019. Table 17.2 – Reclassifications Out of Accumulated Other Comprehensive Income Amount Reclassified From Affected Line Item in the Three Months Ended September 30, (In Thousands) Income Statement 2020 2019 Net Realized (Gain) Loss on AFS Securities Credit loss recovery on AFS securities Investment fair value changes, net $ (444) $ — Gain on sale of AFS securities Realized gains, net — (3,492) $ (444) $ (3,492) Net Realized Loss on Interest Rate Amortization of deferred loss Interest expense $ 1,040 $ — $ 1,040 $ — Amount Reclassified From Affected Line Item in the Nine Months Ended September 30, (In Thousands) Income Statement 2020 2019 Net Realized (Gain) Loss on AFS Securities Credit loss expense on AFS securities Investment fair value changes, net $ 1,027 $ — Gain on sale of AFS securities Realized gains, net (12,552) (15,807) $ (11,525) $ (15,807) Net Realized Loss on Interest Rate Amortization of deferred loss Interest expense $ 2,148 $ — $ 2,148 $ —
Basic and Diluted Earnings Per Common Share	The following table provides the basic and diluted earnings (loss) per common share computations for the three and nine months ended September 30, 2020 and 2019. Table 17.3 – Basic and Diluted Earnings (Loss) per Common Share Three Months Ended September 30, Nine Months Ended September 30, (In Thousands, except Share Data) 2020 2019 2020 2019 Basic Earnings (Loss) per Common Share: Net income (loss) attributable to Redwood $ 141,812 $ 34,310 $ (636,142) $ 120,040 Less: Dividends and undistributed earnings allocated to participating securities (4,067) (856) (1,427) (3,260) Net income (loss) allocated to common shareholders $ 137,745 $ 33,454 $ (637,569) $ 116,780 Basic weighted average common shares outstanding 113,403,102 101,872,126 113,952,308 97,214,064 Basic Earnings (Loss) per Common Share $ 1.21 $ 0.33 $ (5.60) $ 1.20 Diluted Earnings (Loss) per Common Share: Net income (loss) attributable to Redwood $ 141,812 $ 34,310 $ (636,142) $ 120,040 Less: Dividends and undistributed earnings allocated to participating securities (3,512) (1,036) (1,427) (3,625) Adjust for interest expense and gain on extinguishment of convertible notes for the period, net of tax 6,990 8,887 — 26,271 Net income (loss) allocated to common shareholders $ 145,290 $ 42,161 $ (637,569) $ 142,686 Weighted average common shares outstanding 113,403,102 101,872,126 113,952,308 97,214,064 Net effect of dilutive equity awards — 362,743 — 261,155 Net effect of assumed convertible notes conversion to common shares 28,566,875 34,287,840 — 33,727,470 Diluted weighted average common shares outstanding 141,969,977 136,522,709 113,952,308 131,202,689 Diluted Earnings (Loss) per Common Share $ 1.02 $ 0.31 $ (5.60) $ 1.09

Equity Compensation Plans (Tabl

Equity Compensation Plans (Tables)	9 Months Ended
	Sep. 30, 2020
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 $20 million at September 30, 2020, as shown in the following table. Table 18.1 – Activities of Equity Compensation Costs by Award Type Nine Months Ended September 30, 2020 (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 $ 1,990 $ 3,534 $ 17,858 $ 8,946 $ — $ 32,328 Equity grants 108 3,581 6,780 — 160 10,629 Performance-based valuation adjustment — — — (7,352) — (7,352) Equity grant forfeitures (529) (2,161) (4,733) (648) — (8,071) Equity compensation expense (807) (1,067) (6,268) 326 (80) (7,896) Unrecognized Compensation Cost at End of Period $ 762 $ 3,887 $ 13,637 $ 1,272 $ 80 $ 19,638

Mortgage Banking Activities, _2

Mortgage Banking Activities, Net (Tables)	9 Months Ended
	Sep. 30, 2020
Mortgage Banking [Abstract]
Mortgage Banking Activities	The following table presents the components of Mortgage banking activities, net, recorded in our consolidated statements of income (loss) for the three and nine months ended September 30, 2020 and 2019. Table 19.1 – Mortgage Banking Activities Three Months Ended September 30, Nine Months Ended September 30, (In Thousands) 2020 2019 2020 2019 Residential Mortgage Banking Activities, Net Changes in fair value of: Residential loans, at fair value (1) $ 12,589 $ 6,320 $ 19,151 $ 41,431 Risk management derivatives (2) (10) (1,710) (31,304) (11,608) Other income (expense), net (3) (715) 407 (7,069) 1,380 Total residential mortgage banking activities, net 11,864 5,017 (19,222) 31,203 Business Purpose Mortgage Banking Activities, Net: Changes in fair value of: Single-family rental loans, at fair value (1) 43,191 1,847 56,209 5,473 Risk management derivatives (2) (89) (1,262) (21,627) (3,779) Residential bridge loans, at fair value 938 1,010 (4,256) 2,108 Other income, net (4) 3,491 2,903 13,407 5,979 Total business purpose mortgage banking activities, net 47,531 4,498 43,733 9,781 Mortgage Banking Activities, Net $ 59,395 $ 9,515 $ 24,511 $ 40,984 (1) For residential loans, includes changes in fair value for associated loan purchase and forward sale commitments. For single-family rental loans, includes changes in fair value for associated interest rate lock 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, provisions for repurchases expense, and expense related to resolving residential loan seller demands, presented net. (4) Amounts in this line item include other fee income from loan originations.

Other Income (Tables)

Other Income (Tables)	9 Months Ended
	Sep. 30, 2020
Other Income and Expenses [Abstract]
Schedule of other income	The following table presents the components of Other income recorded in our consolidated statements of income (loss) for the three and nine months ended September 30, 2020 and 2019. Table 20.1 – Other Income Three Months Ended September 30, Nine Months Ended September 30, (In Thousands) 2020 2019 2020 2019 MSR (loss) income, net $ (2,362) $ 431 $ (5,595) $ 2,342 Risk share income 1,200 905 3,146 2,351 FHLBC capital stock dividend 116 541 1,201 1,623 Equity investment income 341 560 615 732 5 Arches loan administration fee income 688 1,344 2,206 3,298 Gain on re-measurement of investment in 5 Arches — — — 2,441 Other (97) 575 2,406 1,053 Other (Loss) Income $ (114) $ 4,356 $ 3,979 $ 13,840

General and Administrative Ex_2

General and Administrative Expenses, Loan Acquisition Costs, and Other Expenses (Tables)	9 Months Ended
	Sep. 30, 2020
Other Income and Expenses [Abstract]
Components of General and Administrative Expenses and Other Expenses	Components of our general and administrative, and other expenses for the three and nine months ended September 30, 2020 and 2019 are presented in the following table. Table 21.1 – Components of General and Administrative Expenses, Loan Acquisition Costs, and Other Expenses Three Months Ended September 30, Nine Months Ended September 30, (In Thousands) 2020 2019 2020 2019 General and Administrative Expenses Fixed compensation expense $ 10,103 $ 9,391 $ 36,605 $ 26,740 Variable compensation expense 5,882 3,489 9,171 11,356 Equity compensation expense 2,639 3,155 7,896 10,132 Acquisition-related equity compensation expense (1) 1,212 — 3,636 — Systems and consulting 2,145 3,230 7,752 7,594 Office costs 1,859 1,517 5,854 4,406 Accounting and legal 1,601 1,767 6,605 3,852 Corporate costs 831 482 2,128 1,701 Other operating expenses 1,358 1,868 5,185 4,941 Total General and Administrative Expenses 27,630 24,899 84,832 70,722 Loan Acquisition Costs Commissions 879 659 3,027 1,432 Underwriting costs 771 1,074 3,289 3,184 Transfer and holding costs 508 183 1,400 891 Total Loan Acquisition Costs 2,158 1,916 7,716 5,507 Other Expenses Goodwill impairment expense — — 88,675 — Amortization of purchase-related intangible assets 3,873 1,897 12,052 4,608 Contingent consideration expense (2) 135 236 581 547 Other 3,780 398 2,978 866 Total Other Expenses 7,788 2,531 104,286 6,021 Total General and Administrative Expenses, Loan Acquisition Costs, and Other Expenses $ 37,576 $ 29,346 $ 196,834 $ 82,250 (1) Acquisition-related equity compensation expense relates to 588,260 shares of restricted stock that were issued to members of CoreVest management as a component of the consideration paid to them for our purchase of their interests in CoreVest. The grant date fair value of these restricted stock awards was $10 million, which will be recognized as compensation expense over the two-year vesting period on a straight-line basis in accordance with GAAP. (2) Contingent consideration expense relates to the acquisition of 5 Arches during 2019. Refer to Note 2 for additional detail.

Taxes (Tables)

Taxes (Tables)	9 Months Ended
	Sep. 30, 2020
Income Tax Disclosure [Abstract]
Reconciliation of Statutory Tax Rate to Effective Tax Rate	The following is a reconciliation of the statutory federal and state tax rates to our effective tax rate at September 30, 2020 and 2019. Table 22.1 – Reconciliation of Statutory Tax Rate to Effective Tax Rate September 30, 2020 September 30, 2019 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 (23.6) % (2.5) % Change in valuation allowance (4.0) % (2.5) % Dividends paid deduction (1) — % (22.1) % Effective Tax Rate 2.0 % 2.5 % (1) The dividends paid deduction in the effective tax rate reconciliation is generally representative of the amount of distributions to shareholders that reduce REIT taxable income. For the nine months ended September 30, 2020, the dividends paid deduction is 0% due to our REIT incurring a taxable loss during the period; therefore, there was no REIT taxable income available to apply against the dividends paid.

Segment Information (Tables)

Segment Information (Tables)	9 Months Ended
	Sep. 30, 2020
Segment Reporting [Abstract]
Business Segment Financial Information	The following tables present financial information by segment for the three and nine months ended September 30, 2020 and 2019. Table 23.1 – Business Segment Financial Information Three Months Ended September 30, 2020 (In Thousands) Residential Lending Business Purpose Lending Third-Party Investments Corporate/ Total Interest income $ 26,672 $ 55,930 $ 37,576 $ 1,804 $ 121,982 Interest expense (22,541) (46,027) (27,534) (4,309) (100,411) Net interest income 4,131 9,903 10,042 (2,505) 21,571 Non-interest income Mortgage banking activities, net 11,864 47,531 — — 59,395 Investment fair value changes, net 2,443 16,892 87,890 (178) 107,047 Other income, net (2,011) 623 340 934 (114) Realized gains, net — — 602 — 602 Total non-interest income, net 12,296 65,046 88,832 756 166,930 General and administrative expenses (4,602) (9,321) (709) (12,998) (27,630) Loan acquisition costs (304) (1,660) (194) — (2,158) Other expenses (3,309) (3,874) (470) (135) (7,788) (Provision for) benefit from income taxes (826) (8,544) 257 — (9,113) Segment Contribution $ 7,386 $ 51,550 $ 97,758 $ (14,882) Net Income $ 141,812 Non-cash amortization (expense) income, net $ 1,785 $ (6,719) $ 117 $ (1,516) $ (6,333) Nine Months Ended September 30, 2020 (In Thousands) Residential Lending Business Purpose Lending Third-Party Investments Corporate/ Total Interest income $ 123,956 $ 162,732 $ 155,583 $ 7,738 $ 450,009 Interest expense (94,112) (119,854) (123,160) (12,622) (349,748) Net interest income 29,844 42,878 32,423 (4,884) 100,261 Non-interest income Mortgage banking activities, net (19,222) 43,733 — — 24,511 Investment fair value changes, net (159,107) (84,837) (366,696) (917) (611,557) Other income, net (2,278) 3,493 1,072 1,692 3,979 Realized gains, net 2,001 — 3,236 25,182 30,419 Total non-interest income, net (178,606) (37,611) (362,388) 25,957 (552,648) General and administrative expenses (12,901) (29,977) (4,230) (37,724) (84,832) Loan acquisition costs (1,512) (5,630) (567) (7) (7,716) Other expenses (3,309) (100,743) 347 (581) (104,286) Benefit from income taxes 7,827 477 4,775 — 13,079 Segment Contribution $ (158,657) $ (130,606) $ (329,640) $ (17,239) Net Loss $ (636,142) Non-cash amortization (expense) income, net $ 602 $ (18,050) $ 1,105 $ (3,035) $ (19,378) Other significant non-cash expense: goodwill impairment $ — $ (88,675) $ — $ — $ (88,675) Three Months Ended September 30, 2019 (In Thousands) Residential Lending Business Purpose Lending Third-Party Investments Corporate/ Total Interest income $ 69,586 $ 5,527 $ 70,709 $ 4,295 $ 150,117 Interest expense (48,798) (2,813) (61,541) (3,452) (116,604) Net interest income 20,788 2,714 9,168 843 33,513 Non-interest income Mortgage banking activities, net 5,016 4,499 — — 9,515 Investment fair value changes, net (11,088) (1,073) 24,057 (452) 11,444 Other income, net 1,878 1,918 560 — 4,356 Realized gains, net — — 4,714 — 4,714 Total non-interest income, net (4,194) 5,344 29,331 (452) 30,029 General and administrative expenses (5,581) (6,028) (676) (12,614) (24,899) Loan acquisition costs (867) (756) (180) (113) (1,916) Other expenses — (1,900) (395) (236) (2,531) Benefit from (provision for) income taxes 228 (8) (106) — 114 Segment Contribution $ 10,374 $ (634) $ 37,142 $ (12,572) Net Income $ 34,310 Non-cash amortization income (expense), net $ 2,537 $ (2,107) $ — $ (1,148) $ (718) Nine Months Ended September 30, 2019 (In Thousands) Residential Lending Business Purpose Lending Third-Party Investments Corporate/ Total Interest income $ 204,036 $ 12,595 $ 199,145 $ 13,924 $ 429,700 Interest expense (145,795) (6,590) (168,167) (11,548) (332,100) Net interest income 58,241 6,005 30,978 2,376 97,600 Non-interest income Mortgage banking activities, net 31,202 9,782 — — 40,984 Investment fair value changes, net (20,910) (1,833) 58,492 (1,008) 34,741 Other income, net 6,317 4,213 600 2,710 13,840 Realized gains, net 7,728 — 10,499 — 18,227 Total non-interest income, net 24,337 12,162 69,591 1,702 107,792 General and administrative expenses (17,591) (13,452) (2,239) (37,440) (70,722) Loan acquisition costs (2,859) (2,017) (503) (128) (5,507) Other expenses — (4,432) (864) (725) (6,021) (Provision for) benefit from income taxes (1,757) 25 (1,370) — (3,102) Segment Contribution $ 60,371 $ (1,709) $ 95,593 $ (34,215) Net Income $ 120,040 Non-cash amortization income (expense), net $ 6,780 $ (4,907) $ (824) $ (1,939) $ (890)
Components of Corporate and Other	The following table presents the components of Corporate/Other for the three and nine months ended September 30, 2020 and 2019. Table 23.2 – Components of Corporate/Other Three Months Ended September 30, 2020 2019 (In Thousands) Legacy Consolidated VIEs (1) Other Total Legacy Consolidated VIEs (1) Other Total Interest income $ 1,795 $ 9 $ 1,804 $ 4,295 $ — $ 4,295 Interest expense (1,058) (3,251) (4,309) (3,452) — (3,452) Net interest income 737 (3,242) (2,505) 843 — 843 Non-interest income Investment fair value changes, net (81) (97) (178) (407) (45) (452) Other income — 934 934 — — — Total non-interest income, net (81) 837 756 (407) (45) (452) General and administrative expenses — (12,998) (12,998) — (12,614) (12,614) Loan acquisition costs — — — — (113) (113) Other expenses — (135) (135) — (236) (236) Total $ 656 $ (15,538) $ (14,882) $ 436 $ (13,008) $ (12,572) Nine Months Ended September 30, 2020 2019 (In Thousands) Legacy Consolidated VIEs (1) Other Total Legacy Consolidated VIEs (1) Other Total Interest income $ 7,675 $ 63 $ 7,738 $ 13,924 $ — $ 13,924 Interest expense (5,098) (7,524) (12,622) (11,548) — (11,548) Net interest income 2,577 (7,461) (4,884) 2,376 — 2,376 Non-interest income Investment fair value changes, net (702) (215) (917) (904) (104) (1,008) Other income — 1,692 1,692 — 2,710 2,710 Realized gains, net — 25,182 25,182 — — — Total non-interest income, net (702) 26,659 25,957 (904) 2,606 1,702 General and administrative expenses — (37,724) (37,724) — (37,440) (37,440) Loan acquisition costs — (7) (7) — (128) (128) Other expenses — (581) (581) — (725) (725) Total $ 1,875 $ (19,114) $ (17,239) $ 1,472 $ (35,687) $ (34,215) (1) Legacy consolidated VIEs represent Legacy Sequoia entities that are consolidated for GAAP financial reporting purposes. See Note 4 for further discussion on VIEs.
Supplemental Information by Segment	The following table presents supplemental information by segment at September 30, 2020 and December 31, 2019. Table 23.3 – Supplemental Segment Information (In Thousands) Residential Lending Business Purpose Lending Third-Party Investments Corporate/ Total September 30, 2020 Residential loans $ 1,941,489 $ — $ 2,256,682 $ 296,765 $ 4,494,936 Business purpose residential loans — 3,956,101 — — 3,956,101 Multifamily loans — — 491,415 — 491,415 Real estate securities 146,608 — 204,727 — 351,335 Other investments 14,878 25,713 344,037 — 384,628 Goodwill and intangible assets — 60,737 — — 60,737 Total assets 2,148,643 4,134,913 3,315,039 803,817 10,402,412 December 31, 2019 Residential loans $ 4,939,745 $ — $ 2,367,215 $ 407,890 $ 7,714,850 Business purpose residential loans — 3,506,743 — — 3,506,743 Multifamily loans — — 4,408,524 — 4,408,524 Real estate securities 229,074 — 870,800 — 1,099,874 Other investments 42,224 21,002 294,904 — 358,130 Goodwill and intangible assets — 161,464 — — 161,464 Total assets 5,410,540 3,786,641 8,028,946 769,313 17,995,440

Organization (Details)

Organization (Details)	9 Months Ended
	Sep. 30, 2020segment
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Number of operating segments	3

Basis of Presentation - Narrati

Basis of Presentation - Narrative (Details)	Oct. 15, 2019USD ($)	Mar. 31, 2019	Sep. 30, 2020USD ($)	Mar. 31, 2020USD ($)	Sep. 30, 2019USD ($)	Sep. 30, 2020USD ($)	Sep. 30, 2019USD ($)	Dec. 31, 2018partnership	Dec. 31, 2019USD ($)	Mar. 01, 2019USD ($)	May 31, 2018
Variable Interest Entity [Line Items]
Consolidation of multifamily loans held in securitization trusts						$ (3,849,779,000)	$ 1,481,554,000
Consolidation of multifamily ABS						$ (3,706,789,000)	1,408,002,000
Deconsolidation, realized market valuation gain (loss)				$ (72,000,000)
Number of partnerships consolidated | partnership								2
VIE, ownership interest rate						80.00%
Goodwill impairment expense			$ 0	89,000,000	$ 0	$ 88,675,000	0
Intangible assets impairment expense				0
Contingent consideration			0			0			$ 28,484,000
Acquisition related costs			135,000		$ 236,000	581,000	$ 547,000
Multifamily loans
Variable Interest Entity [Line Items]
Consolidation of multifamily loans held in securitization trusts				3,860,000,000
Consolidation of multifamily ABS				3,720,000,000
5 Arches
Variable Interest Entity [Line Items]
Minority interest, percentage											20.00%
Percent acquired		80.00%
Intangible assets										$ 25,000,000
Contingent consideration			$ 14,000,000			$ 14,000,000				$ 25,000,000
Cash payment for contingent consideration liability				11,000,000
Restricted stock awards				$ 3,000,000
CoreVest
Variable Interest Entity [Line Items]
Intangible assets	$ 57,000,000
Restricted stock awards	$ 10,000,000
5 Arches LLC and CoreVest
Variable Interest Entity [Line Items]
Goodwill									89,000,000
Goodwill deductible for tax purposes									$ 75,000,000

Basis of Presentation - Intangi

Basis of Presentation - Intangible Assets – Activity (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2020USD ($)
Finite-lived Intangible Assets [Roll Forward]
Carrying Value at September 30, 2020	$ 60,737
5 Arches LLC and CoreVest
Finite-lived Intangible Assets [Roll Forward]
Carrying Value at December 31, 2019	72,789
Additions	0
Amortization Expense	(12,052)
Carrying Value at September 30, 2020	$ 60,737
Weighted Average Amortization Period (in years)	6 years
5 Arches LLC and CoreVest | Borrower network
Finite-lived Intangible Assets [Roll Forward]
Carrying Value at December 31, 2019	$ 43,952
Additions	0
Amortization Expense	(4,854)
Carrying Value at September 30, 2020	$ 39,098
Weighted Average Amortization Period (in years)	7 years
5 Arches LLC and CoreVest | Broker network
Finite-lived Intangible Assets [Roll Forward]
Carrying Value at December 31, 2019	$ 15,083
Additions	0
Amortization Expense	(2,715)
Carrying Value at September 30, 2020	$ 12,368
Weighted Average Amortization Period (in years)	5 years
5 Arches LLC and CoreVest | Non-compete agreements
Finite-lived Intangible Assets [Roll Forward]
Carrying Value at December 31, 2019	$ 8,236
Additions	0
Amortization Expense	(2,375)
Carrying Value at September 30, 2020	$ 5,861
Weighted Average Amortization Period (in years)	3 years
5 Arches LLC and CoreVest | Tradenames
Finite-lived Intangible Assets [Roll Forward]
Carrying Value at December 31, 2019	$ 3,472
Additions	0
Amortization Expense	(1,000)
Carrying Value at September 30, 2020	$ 2,472
Weighted Average Amortization Period (in years)	3 years
5 Arches LLC and CoreVest | Developed technology
Finite-lived Intangible Assets [Roll Forward]
Carrying Value at December 31, 2019	$ 1,613
Additions	0
Amortization Expense	(675)
Carrying Value at September 30, 2020	$ 938
Weighted Average Amortization Period (in years)	2 years
5 Arches LLC and CoreVest | Loan administration fees on existing loan assets
Finite-lived Intangible Assets [Roll Forward]
Carrying Value at December 31, 2019	$ 433
Additions	0
Amortization Expense	(433)
Carrying Value at September 30, 2020	$ 0
Weighted Average Amortization Period (in years)	1 year

Basis of Presentation - Intan_2

Basis of Presentation - Intangible Asset Amortization Expense by Year (Details) $ in Thousands	Sep. 30, 2020USD ($)
Organization, Consolidation and Presentation of Financial Statements [Abstract]
2020 (3 months)	$ 3,873
2021	15,304
2022	12,800
2023	10,091
2024	7,073
2025 and thereafter	11,596
Total Future Intangible Asset Amortization	$ 60,737

Basis of Presentation - Pro For

Basis of Presentation - Pro Forma Information (Details) - 5 Arches LLC and CoreVest - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2019
Business Acquisition [Line Items]
Net interest income	$ 45,702	$ 133,446
Non-interest income	38,177	116,649
Net income	$ 46,609	$ 140,790

Summary of Significant Accoun_4

Summary of Significant Accounting Policies - Offsetting of Financial Assets, Liabilities, and Collateral (Details) - USD ($) $ in Thousands		Sep. 30, 2020	Dec. 31, 2019
Total Liabilities
Gross Amounts of Recognized Assets (Liabilities)		$ (157,230)	$ (1,690,828)
Gross Amounts Offset in Consolidated Balance Sheet		0	0
Net Amounts of Assets (Liabilities) Presented in Consolidated Balance Sheet		(157,230)	(1,690,828)
Gross Amounts Not Offset in Consolidated Balance Sheet, Financial Instruments		156,967	1,548,637
Gross Amounts Not Offset in Consolidated Balance Sheet, Cash Collateral (Received) Pledged		263	141,260
Net Amount		0	(931)
Net Amounts of Assets (Liabilities) Presented in Consolidated Balance Sheet	[1]	(1,612)	(163,424)
Assets
Net Amounts of Assets (Liabilities) Presented in Consolidated Balance Sheet	[1]	14,709	35,701
Interest rate agreements
Total Liabilities
Gross Amounts of Recognized Assets (Liabilities)		(15)	(148,765)
Gross Amounts Offset in Consolidated Balance Sheet		0	0
Net Amounts of Assets (Liabilities) Presented in Consolidated Balance Sheet		(15)	(148,765)
Gross Amounts Not Offset in Consolidated Balance Sheet, Financial Instruments		15	14,178
Gross Amounts Not Offset in Consolidated Balance Sheet, Cash Collateral (Received) Pledged		0	134,587
Net Amount		0	0
Assets
Gross Amounts of Recognized Assets (Liabilities)		3,471	19,020
Gross Amounts Offset in Consolidated Balance Sheet		0	0
Net Amounts of Assets (Liabilities) Presented in Consolidated Balance Sheet		3,471	19,020
Gross Amounts Not Offset in Consolidated Balance Sheet, Financial Instruments		(15)	(14,178)
Gross Amounts Not Offset in Consolidated Balance Sheet, Cash Collateral (Received) Pledged		(1,240)	(915)
Net Amount		2,216	3,927
TBAs
Total Liabilities
Gross Amounts of Recognized Assets (Liabilities)		(263)	(13,359)
Gross Amounts Offset in Consolidated Balance Sheet		0	0
Net Amounts of Assets (Liabilities) Presented in Consolidated Balance Sheet		(263)	(13,359)
Gross Amounts Not Offset in Consolidated Balance Sheet, Financial Instruments		0	5,755
Gross Amounts Not Offset in Consolidated Balance Sheet, Cash Collateral (Received) Pledged		263	6,673
Net Amount		0	(931)
Assets
Gross Amounts of Recognized Assets (Liabilities)		402	5,755
Gross Amounts Offset in Consolidated Balance Sheet		0	0
Net Amounts of Assets (Liabilities) Presented in Consolidated Balance Sheet		402	5,755
Gross Amounts Not Offset in Consolidated Balance Sheet, Financial Instruments		0	(5,755)
Gross Amounts Not Offset in Consolidated Balance Sheet, Cash Collateral (Received) Pledged		(263)	0
Net Amount		139	0
Futures
Assets
Gross Amounts of Recognized Assets (Liabilities)		63	137
Gross Amounts Offset in Consolidated Balance Sheet		0	0
Net Amounts of Assets (Liabilities) Presented in Consolidated Balance Sheet		63	137
Gross Amounts Not Offset in Consolidated Balance Sheet, Financial Instruments		0	0
Gross Amounts Not Offset in Consolidated Balance Sheet, Cash Collateral (Received) Pledged		0	0
Net Amount		63	137
Interest Rate Agreement, TBAs, and Futures
Assets
Gross Amounts of Recognized Assets (Liabilities)		3,936	24,912
Gross Amounts Offset in Consolidated Balance Sheet			0
Net Amounts of Assets (Liabilities) Presented in Consolidated Balance Sheet		3,936	24,912
Gross Amounts Not Offset in Consolidated Balance Sheet, Financial Instruments		(15)	(19,933)
Gross Amounts Not Offset in Consolidated Balance Sheet, Cash Collateral (Received) Pledged		(1,503)	(915)
Net Amount		2,418	4,064
Loan warehouse debt
Loan warehouse debt and Security repurchase agreement
Gross Amounts of Recognized Assets (Liabilities)		(81,898)	(432,126)
Gross Amounts Offset in Consolidated Balance Sheet		0	0
Net Amounts of Assets (Liabilities) Presented in Consolidated Balance Sheet		(81,898)	(432,126)
Gross Amounts Not Offset in Consolidated Balance Sheet, Financial Instruments		81,898	432,126
Gross Amounts Not Offset in Consolidated Balance Sheet, Cash Collateral (Received) Pledged		0	0
Net Amount			0
Security repurchase agreements
Loan warehouse debt and Security repurchase agreement
Gross Amounts of Recognized Assets (Liabilities)		(75,054)	(1,096,578)
Gross Amounts Offset in Consolidated Balance Sheet		0	0
Net Amounts of Assets (Liabilities) Presented in Consolidated Balance Sheet		(75,054)	(1,096,578)
Gross Amounts Not Offset in Consolidated Balance Sheet, Financial Instruments		75,054	1,096,578
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 September 30, 2020 and December 31, 2019, assets of consolidated VIEs totaled $8,197,095 and $11,931,869, respectively. At September 30, 2020 and December 31, 2019, liabilities of consolidated VIEs totaled $7,238,047 and $10,717,072, respectively. See Note 4 for further discussion.

Principles of Consolidation - A

Principles of Consolidation - Additional Information (Details) $ in Thousands	3 Months Ended	9 Months Ended		12 Months Ended
	Mar. 31, 2020USD ($)	Sep. 30, 2020USD ($)entity	Sep. 30, 2019USD ($)	Dec. 31, 2018partnership	Dec. 31, 2019USD ($)
Variable Interest Entity [Line Items]
Consolidation of multifamily loans held in securitization trusts		$ (3,849,779)	$ 1,481,554
Consolidation of multifamily ABS		$ (3,706,789)	$ 1,408,002
Deconsolidation, realized market valuation gain (loss)	$ (72,000)
Number of partnerships consolidated | partnership				2
VIE, ownership interest rate		80.00%
MSRs		$ 242,059			$ 151,582
Variable Interest Entity, Not Primary Beneficiary
Variable Interest Entity [Line Items]
Number of securitization entities to which asset transferred (in entities) | entity		51
Legacy Sequoia | Variable Interest Entity, Primary Beneficiary
Variable Interest Entity [Line Items]
Estimated fair value of investments		$ 5,000
Sequoia Choice | Variable Interest Entity, Primary Beneficiary
Variable Interest Entity [Line Items]
Estimated fair value of investments		211,000
Freddie Mac SLST | Variable Interest Entity, Primary Beneficiary
Variable Interest Entity [Line Items]
Estimated fair value of investments		418,000
ABS issued, net, Amortized cost		210,000
Freddie Mac K-Series | Variable Interest Entity, Primary Beneficiary
Variable Interest Entity [Line Items]
Estimated fair value of investments		27,000
CoreVest | Variable Interest Entity, Primary Beneficiary
Variable Interest Entity [Line Items]
Estimated fair value of investments		232,000
Servicing Investment | Variable Interest Entity, Primary Beneficiary
Variable Interest Entity [Line Items]
MSRs		$ 65,000

Principles of Consolidation -_2

Principles of Consolidation - Assets and Liabilities of Consolidated Variable Interest Entities Accounted for as Collateralized Financing Entities (Details) $ in Thousands		Sep. 30, 2020USD ($)investment	Dec. 31, 2019USD ($)investment
Variable Interest Entity [Line Items]
Other investments	[1]	$ 384,628	$ 358,130
Cash and cash equivalents	[1]	450,684	196,966
Restricted cash	[1]	73,594	93,867
Accrued interest receivable		39,330	71,058
Other assets	[1]	124,273	419,321
Total Assets	[1]	10,402,412	17,995,440
Short-term debt	[1]	482,761	2,329,145
Accrued interest payable		34,225	60,655
Accrued expenses and other liabilities	[1]	155,989	206,893
Asset-backed securities issued	[1]	7,172,398	10,515,475
Total liabilities	[1]	$ 9,348,948	$ 16,168,209
Number of VIEs | investment		49	49
Business purpose residential loans, held-for-investment
Variable Interest Entity [Line Items]
Loans, at fair value	[1]	$ 3,670,552	$ 3,175,178
Legacy Sequoia
Variable Interest Entity [Line Items]
Number of VIEs | investment		20	20
Sequoia Choice
Variable Interest Entity [Line Items]
Number of VIEs | investment		10	9
Freddie Mac SLST
Variable Interest Entity [Line Items]
Number of VIEs | investment		2	2
Freddie Mac K-Series
Variable Interest Entity [Line Items]
Number of VIEs | investment		1	5
CAFL
Variable Interest Entity [Line Items]
Number of VIEs | investment		13	10
Servicing Investment
Variable Interest Entity [Line Items]
Number of VIEs | investment		3	3
Variable Interest Entity, Primary Beneficiary
Variable Interest Entity [Line Items]
Other investments		$ 278,487	$ 184,802
Cash and cash equivalents		10,425	9,015
Restricted cash		20,795	21,936
Accrued interest receivable		30,644	45,772
Other assets		5,829	2,700
Total Assets		8,197,095	11,931,869
Short-term debt		228,998	152,554
Accrued interest payable		21,497	34,060
Accrued expenses and other liabilities		18,176	14,983
Asset-backed securities issued		6,969,376	10,515,475
Total liabilities		7,238,047	10,717,072
Variable Interest Entity, Primary Beneficiary | Residential loans, held-for-investment
Variable Interest Entity [Line Items]
Loans, at fair value		4,389,808	5,066,568
Variable Interest Entity, Primary Beneficiary | Business purpose residential loans, held-for-investment
Variable Interest Entity [Line Items]
Loans, at fair value		2,969,692	2,192,552
Variable Interest Entity, Primary Beneficiary | Multifamily loans, held-for-investment
Variable Interest Entity [Line Items]
Loans, at fair value		491,415	4,408,524
Variable Interest Entity, Primary Beneficiary | Legacy Sequoia
Variable Interest Entity [Line Items]
Other investments		0	0
Cash and cash equivalents		0	0
Restricted cash		146	143
Accrued interest receivable		402	655
Other assets		784	460
Total Assets		298,097	409,148
Short-term debt		0	0
Accrued interest payable		180	395
Accrued expenses and other liabilities		0	0
Asset-backed securities issued		292,484	402,465
Total liabilities		292,664	402,860
Variable Interest Entity, Primary Beneficiary | Legacy Sequoia | Residential loans, held-for-investment
Variable Interest Entity [Line Items]
Loans, at fair value		296,765	407,890
Variable Interest Entity, Primary Beneficiary | Legacy Sequoia | Business purpose residential loans, held-for-investment
Variable Interest Entity [Line Items]
Loans, at fair value		0	0
Variable Interest Entity, Primary Beneficiary | Legacy Sequoia | Multifamily loans, held-for-investment
Variable Interest Entity [Line Items]
Loans, at fair value		0	0
Variable Interest Entity, Primary Beneficiary | Sequoia Choice
Variable Interest Entity [Line Items]
Other investments		0	0
Cash and cash equivalents		0	0
Restricted cash		0	27
Accrued interest receivable		7,292	9,824
Other assets		0	0
Total Assets		1,843,653	2,301,314
Short-term debt		0	0
Accrued interest payable		5,652	7,732
Accrued expenses and other liabilities		47	27
Asset-backed securities issued		1,626,564	2,037,198
Total liabilities		1,632,263	2,044,957
Variable Interest Entity, Primary Beneficiary | Sequoia Choice | Residential loans, held-for-investment
Variable Interest Entity [Line Items]
Loans, at fair value		1,836,361	2,291,463
Variable Interest Entity, Primary Beneficiary | Sequoia Choice | Business purpose residential loans, held-for-investment
Variable Interest Entity [Line Items]
Loans, at fair value		0	0
Variable Interest Entity, Primary Beneficiary | Sequoia Choice | Multifamily loans, held-for-investment
Variable Interest Entity [Line Items]
Loans, at fair value		0	0
Variable Interest Entity, Primary Beneficiary | Freddie Mac SLST
Variable Interest Entity [Line Items]
Other investments		0	0
Cash and cash equivalents		0	0
Restricted cash		0	0
Accrued interest receivable		6,928	7,313
Other assets		887	445
Total Assets		2,264,497	2,374,973
Short-term debt		0	0
Accrued interest payable		5,009	5,374
Accrued expenses and other liabilities		0	0
Asset-backed securities issued		1,841,313	1,918,322
Total liabilities		1,846,322	1,923,696
Variable Interest Entity, Primary Beneficiary | Freddie Mac SLST | Residential loans, held-for-investment
Variable Interest Entity [Line Items]
Loans, at fair value		2,256,682	2,367,215
Variable Interest Entity, Primary Beneficiary | Freddie Mac SLST | Business purpose residential loans, held-for-investment
Variable Interest Entity [Line Items]
Loans, at fair value		0	0
Variable Interest Entity, Primary Beneficiary | Freddie Mac SLST | Multifamily loans, held-for-investment
Variable Interest Entity [Line Items]
Loans, at fair value		0	0
Variable Interest Entity, Primary Beneficiary | Freddie Mac K-Series
Variable Interest Entity [Line Items]
Other investments		0	0
Cash and cash equivalents		0	0
Restricted cash		0	0
Accrued interest receivable		1,342	13,539
Other assets		0	0
Total Assets		492,757	4,422,063
Short-term debt		0	0
Accrued interest payable		1,182	12,887
Accrued expenses and other liabilities		0	0
Asset-backed securities issued		464,865	4,156,239
Total liabilities		466,047	4,169,126
Variable Interest Entity, Primary Beneficiary | Freddie Mac K-Series | Residential loans, held-for-investment
Variable Interest Entity [Line Items]
Loans, at fair value		0	0
Variable Interest Entity, Primary Beneficiary | Freddie Mac K-Series | Business purpose residential loans, held-for-investment
Variable Interest Entity [Line Items]
Loans, at fair value		0	0
Variable Interest Entity, Primary Beneficiary | Freddie Mac K-Series | Multifamily loans, held-for-investment
Variable Interest Entity [Line Items]
Loans, at fair value		491,415	4,408,524
Variable Interest Entity, Primary Beneficiary | CAFL
Variable Interest Entity [Line Items]
Other investments		0	0
Cash and cash equivalents		0	0
Restricted cash		0	0
Accrued interest receivable		12,071	9,572
Other assets		4,158	1,795
Total Assets		2,985,921	2,203,919
Short-term debt		0	0
Accrued interest payable		9,337	7,485
Accrued expenses and other liabilities		0	0
Asset-backed securities issued		2,744,150	2,001,251
Total liabilities		2,753,487	2,008,736
Variable Interest Entity, Primary Beneficiary | CAFL | Residential loans, held-for-investment
Variable Interest Entity [Line Items]
Loans, at fair value		0	0
Variable Interest Entity, Primary Beneficiary | CAFL | Business purpose residential loans, held-for-investment
Variable Interest Entity [Line Items]
Loans, at fair value		2,969,692	2,192,552
Variable Interest Entity, Primary Beneficiary | CAFL | Multifamily loans, held-for-investment
Variable Interest Entity [Line Items]
Loans, at fair value		0	0
Variable Interest Entity, Primary Beneficiary | Servicing Investment
Variable Interest Entity [Line Items]
Other investments		278,487	184,802
Cash and cash equivalents		10,425	9,015
Restricted cash		20,649	21,766
Accrued interest receivable		2,609	4,869
Other assets		0	0
Total Assets		312,170	220,452
Short-term debt		228,998	152,554
Accrued interest payable		137	187
Accrued expenses and other liabilities		18,129	14,956
Asset-backed securities issued		0	0
Total liabilities		247,264	167,697
Variable Interest Entity, Primary Beneficiary | Servicing Investment | Residential loans, held-for-investment
Variable Interest Entity [Line Items]
Loans, at fair value		0	0
Variable Interest Entity, Primary Beneficiary | Servicing Investment | Business purpose residential loans, held-for-investment
Variable Interest Entity [Line Items]
Loans, at fair value		0	0
Variable Interest Entity, Primary Beneficiary | Servicing Investment | Multifamily loans, held-for-investment
Variable Interest Entity [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 September 30, 2020 and December 31, 2019, assets of consolidated VIEs totaled $8,197,095 and $11,931,869, respectively. At September 30, 2020 and December 31, 2019, liabilities of consolidated VIEs totaled $7,238,047 and $10,717,072, respectively. See Note 4 for further discussion.

Principles of Consolidation - I

Principles of Consolidation - Income (Loss) from Consolidated VIEs Accounted for as Collateralized Financing Entities (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Variable Interest Entity [Line Items]
Interest income	$ 121,982	$ 150,117	$ 450,009	$ 429,700
Interest expense	(100,411)	(116,604)	(349,748)	(332,100)
Net Interest Income	21,571	33,513	100,261	97,600
Investment fair value changes, net	107,047	11,444	(611,557)	34,741
Total non-interest income (loss), net	166,930	30,029	(552,648)	107,792
General and administrative expenses	(27,630)	(24,899)	(84,832)	(70,722)
Net Income (Loss)	141,812	34,310	(636,142)	120,040
Variable Interest Entity, Primary Beneficiary
Variable Interest Entity [Line Items]
Interest income	89,912	84,431	303,265	234,171
Interest expense	(67,871)	(73,956)	(238,763)	(206,378)
Net Interest Income	22,041	10,475	64,502	27,793
Investment fair value changes, net	101,420	28,023	(189,448)	56,936
Total non-interest income (loss), net	101,420	28,023	(189,448)	56,936
General and administrative expenses	(41)	(16)	(784)	(87)
Other expenses	(471)	(395)	346	(864)
Net Income (Loss)	122,949	38,087	(125,384)	83,778
Legacy Sequoia | Variable Interest Entity, Primary Beneficiary
Variable Interest Entity [Line Items]
Interest income	1,795	4,295	7,675	13,924
Interest expense	(1,058)	(3,452)	(5,098)	(11,548)
Net Interest Income	737	843	2,577	2,376
Investment fair value changes, net	(81)	(407)	(702)	(904)
Total non-interest income (loss), net	(81)	(407)	(702)	(904)
General and administrative expenses	0	0	0	0
Other expenses	0	0	0	0
Net Income (Loss)	656	436	1,875	1,472
Sequoia Choice | Variable Interest Entity, Primary Beneficiary
Variable Interest Entity [Line Items]
Interest income	20,919	27,555	68,566	80,045
Interest expense	(17,828)	(23,576)	(58,455)	(68,823)
Net Interest Income	3,091	3,979	10,111	11,222
Investment fair value changes, net	7,851	2,722	(22,065)	8,866
Total non-interest income (loss), net	7,851	2,722	(22,065)	8,866
General and administrative expenses	0	0	0	0
Other expenses	0	0	0	0
Net Income (Loss)	10,942	6,701	(11,954)	20,088
Freddie Mac SLST | Variable Interest Entity, Primary Beneficiary
Variable Interest Entity [Line Items]
Interest income	21,696	11,830	64,869	35,221
Interest expense	(15,473)	(8,709)	(47,495)	(26,013)
Net Interest Income	6,223	3,121	17,374	9,208
Investment fair value changes, net	82,214	17,300	(33,081)	31,702
Total non-interest income (loss), net	82,214	17,300	(33,081)	31,702
General and administrative expenses	0	0	0	0
Other expenses	0	0	0	0
Net Income (Loss)	88,437	20,421	(15,707)	40,910
Freddie Mac K-Series | Variable Interest Entity, Primary Beneficiary
Variable Interest Entity [Line Items]
Interest income	4,918	36,829	49,960	94,134
Interest expense	(4,426)	(35,328)	(47,154)	(90,089)
Net Interest Income	492	1,501	2,806	4,045
Investment fair value changes, net	2,166	7,445	(82,744)	13,810
Total non-interest income (loss), net	2,166	7,445	(82,744)	13,810
General and administrative expenses	0	0	0	0
Other expenses	0	0	0	0
Net Income (Loss)	2,658	8,946	(79,938)	17,855
CAFL | Variable Interest Entity, Primary Beneficiary
Variable Interest Entity [Line Items]
Interest income	36,181	0	99,169	0
Interest expense	(27,499)	0	(75,600)	0
Net Interest Income	8,682	0	23,569	0
Investment fair value changes, net	9,692	0	(41,841)	0
Total non-interest income (loss), net	9,692	0	(41,841)	0
General and administrative expenses	0	0	0	0
Other expenses	0	0	0	0
Net Income (Loss)	18,374	0	(18,272)	0
Servicing Investment | Variable Interest Entity, Primary Beneficiary
Variable Interest Entity [Line Items]
Interest income	4,403	3,922	13,026	10,847
Interest expense	(1,587)	(2,891)	(4,961)	(9,905)
Net Interest Income	2,816	1,031	8,065	942
Investment fair value changes, net	(422)	963	(9,015)	3,462
Total non-interest income (loss), net	(422)	963	(9,015)	3,462
General and administrative expenses	(41)	(16)	(784)	(87)
Other expenses	(471)	(395)	346	(864)
Net Income (Loss)	$ 1,882	$ 1,583	$ (1,388)	$ 3,453

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		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Variable Interest Entity [Line Items]
Principal balance of loans transferred	$ 0	$ 366,999	$ 1,573,703	$ 1,116,092
Trading securities retained, at fair value
Variable Interest Entity [Line Items]
Securities retained, at fair value	0	1,228	43,362	4,736
AFS securities retained, at fair value
Variable Interest Entity [Line Items]
Securities retained, at fair value	$ 0	$ 1,069	$ 3,198	$ 3,023

Principles of Consolidation - C

Principles of Consolidation - Cash Flows Related to Unconsolidated Variable Interest Entity's Sponsored by Redwood (Details) - Variable Interest Entity, Not Primary Beneficiary - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Variable Interest Entity [Line Items]
Proceeds from new transfers	$ 0	$ 376,126	$ 1,610,761	$ 1,138,778
MSR fees received	2,280	2,919	7,445	9,084
Funding of compensating interest, net	4	(76)	(293)	(213)
Cash flows received on retained securities	$ 5,873	$ 6,603	$ 19,242	$ 20,892

Principles of Consolidation -_3

Principles of Consolidation - Assumptions Related to Unconsolidated Variable Interest Entity's Sponsored by Redwood (Details) - Variable Interest Entity, Not Primary Beneficiary	3 Months Ended	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
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	37.00%	41.00%	25.00%
Discount rates	14.00%	16.00%	14.00%
Credit loss assumptions	0.20%	0.21%	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%	13.00%	15.00%
Discount rates	7.00%	6.00%	7.00%
Credit loss assumptions	0.20%	0.22%	0.20%

Principles of Consolidation -_4

Principles of Consolidation - Summary of Unconsolidated Variable Interest Entity's Sponsored by Redwood (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
On-balance sheet assets, at fair value:
Available-for-sale securities	$ 207,173	$ 239,334
Servicing asset, fair value	242,059	151,582
Mortgage servicing rights
On-balance sheet assets, at fair value:
Servicing asset, fair value	14,878	42,224
Variable Interest Entity, Not Primary Beneficiary
On-balance sheet assets, at fair value:
Maximum loss exposure	158,250	269,328
Assets transferred:
Principal balance of loans outstanding	8,571,916	10,299,442
Principal balance of loans 30+ days delinquent	200,910	41,809
Variable Interest Entity, Not Primary Beneficiary | Interest-only, senior and subordinate securities, classified as trading
On-balance sheet assets, at fair value:
Interest-only, senior and subordinate securities, classified as trading	19,878	88,425
Variable Interest Entity, Not Primary Beneficiary | Subordinate securities, classified as AFS
On-balance sheet assets, at fair value:
Available-for-sale securities	124,132	140,649
Variable Interest Entity, Not Primary Beneficiary | Mortgage servicing rights
On-balance sheet assets, at fair value:
Servicing asset, fair value	$ 14,240	$ 40,254

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	Sep. 30, 2020	Dec. 31, 2019	Mar. 31, 2020	Sep. 30, 2020
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	$ 14,240	$ 40,254		$ 14,240
Expected life (in years)	3 years	6 years
Prepayment speed assumption (annual CPR)	26.00%	11.00%
Decrease in fair value from:
10% adverse change	$ 1,105	$ 1,643		1,105
25% adverse change	$ 2,678	$ 3,913		2,678
Discount rate assumption	12.00%	11.00%
Decrease in fair value from:
100 basis point increase	$ 383	$ 1,447		383
200 basis point increase	746	2,795		746
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	$ 16,226	$ 48,765		16,226
Expected life (in years)	3 years	6 years
Prepayment speed assumption (annual CPR)	30.00%	14.00%
Decrease in fair value from:
10% adverse change	$ 1,622	$ 1,908		1,622
25% adverse change	$ 3,675	$ 5,086		3,675
Discount rate assumption	17.00%	12.00%
Decrease in fair value from:
100 basis point increase	$ 327	$ 1,079		327
200 basis point increase	$ 638	$ 2,482		638
Credit loss assumption	0.38%	0.21%
Decrease in fair value from:
10% higher losses	$ 0	$ 0		0
25% higher losses	0	0		0
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	$ 127,783	$ 180,309		127,783
Expected life (in years)	10 years	14 years
Prepayment speed assumption (annual CPR)	27.00%	16.00%
Decrease in fair value from:
10% adverse change	$ 1,075	$ 205		1,075
25% adverse change	$ 3,735	$ 1,434		3,735
Discount rate assumption	6.00%	5.00%
Decrease in fair value from:
100 basis point increase	$ 10,219	$ 18,127		10,219
200 basis point increase	$ 19,348	$ 33,630		19,348
Credit loss assumption	0.38%	0.21%
Decrease in fair value from:
10% higher losses	$ 2,274	$ 1,804		2,274
25% higher losses	$ 5,500	$ 4,520		$ 5,500
Minimum | MSRs
Decrease in fair value from:
Impact of adverse change in prepayment speed			10.00%	10.00%
Impact of increase in discount rate assumption			1.00%	1.00%
Impact of adverse change in expected credit losses			10.00%	10.00%
Minimum | Senior Securities
Decrease in fair value from:
Impact of adverse change in prepayment speed			10.00%	10.00%
Impact of increase in discount rate assumption			1.00%	1.00%
Impact of adverse change in expected credit losses			10.00%	10.00%
Minimum | Subordinate Securities
Decrease in fair value from:
Impact of adverse change in prepayment speed			10.00%	10.00%
Impact of increase in discount rate assumption			1.00%	1.00%
Impact of adverse change in expected credit losses			10.00%	10.00%
Maximum | MSRs
Decrease in fair value from:
Impact of adverse change in prepayment speed			25.00%	25.00%
Impact of increase in discount rate assumption			2.00%	2.00%
Impact of adverse change in expected credit losses			25.00%	25.00%
Maximum | Senior Securities
Decrease in fair value from:
Impact of adverse change in prepayment speed			25.00%	25.00%
Impact of increase in discount rate assumption			2.00%	2.00%
Impact of adverse change in expected credit losses			25.00%	25.00%
Maximum | Subordinate Securities
Decrease in fair value from:
Impact of adverse change in prepayment speed			25.00%	25.00%
Impact of increase in discount rate assumption			2.00%	2.00%
Impact of adverse change in expected credit losses			25.00%	25.00%

Principles of Consolidation -_5

Principles of Consolidation - Summary of Redwood's Interest in Third-Party Variable Interest Entity's (Details) - USD ($) $ in Thousands		Sep. 30, 2020	Dec. 31, 2019
Variable Interest Entity [Line Items]
Real estate securities	[1]	$ 351,335	$ 1,099,874
Variable Interest Entity, Not Primary Beneficiary | Other assets
Variable Interest Entity [Line Items]
Real estate securities		222,531	887,015
Variable Interest Entity, Not Primary Beneficiary | Other assets | Senior
Variable Interest Entity [Line Items]
Real estate securities		11,865	127,094
Variable Interest Entity, Not Primary Beneficiary | Other assets | Mezzanine
Variable Interest Entity [Line Items]
Real estate securities		2,016	508,195
Variable Interest Entity, Not Primary Beneficiary | Other assets | Subordinate
Variable Interest Entity [Line Items]
Real estate securities		193,445	235,510
Variable Interest Entity, Not Primary Beneficiary | Other assets | Total Mortgage-Backed Securities
Variable Interest Entity [Line Items]
Real estate securities		207,326	870,799
Variable Interest Entity, Not Primary Beneficiary | Other assets | Excess MSR
Variable Interest Entity [Line Items]
Real estate securities		$ 15,205	$ 16,216
[1]	Our consolidated balance sheets include assets of consolidated variable interest entities (“VIEs”) that can only be used to settle obligations of these VIEs and liabilities of consolidated VIEs for which creditors do not have recourse to Redwood Trust, Inc. or its affiliates. At September 30, 2020 and December 31, 2019, assets of consolidated VIEs totaled $8,197,095 and $11,931,869, respectively. At September 30, 2020 and December 31, 2019, liabilities of consolidated VIEs totaled $7,238,047 and $10,717,072, respectively. See Note 4 for further discussion.

Fair Value of Financial Instr_3

Fair Value of Financial Instruments - Carrying Values and Estimated Fair Values of Assets and Liabilities (Details) - USD ($) $ in Thousands		Sep. 30, 2020	Dec. 31, 2019
Assets
Real estate securities		$ 144,162	$ 860,540
MSRs		242,059	151,582
Derivative assets	[1]	14,709	35,701
Pledged collateral		8,172	32,945
Liabilities
Contingent consideration		0	28,484
Derivative liabilities	[1]	1,612	163,424
ABS issued, net, Fair value		6,969,376	10,515,475
Residential Loans
Assets
MSRs		258,621	169,204
Carrying Value
Assets
Real estate securities		351,335	1,099,874
Cash and cash equivalents		450,684	196,966
Restricted cash		73,594	93,867
Derivative assets		14,709	35,701
Margin receivable		3,809	209,776
FHLBC stock		5,000	43,393
Guarantee asset		579	1,686
Pledged collateral		8,172	32,945
Liabilities
Margin payable		0	1,700
Guarantee obligation		11,264	14,009
Contingent consideration		0	28,484
Derivative liabilities		1,612	163,424
ABS issued, net, Fair value		6,969,376	10,515,475
ABS issued, net, Amortized cost		203,022	0
FHLBC long-term borrowings		1,000	1,999,999
Other long-term debt, net		886,054	183,520
Convertible notes, net		510,472	631,125
Trust preferred securities and subordinated notes, net		138,663	138,628
Carrying Value | Servicer advance investments
Assets
MSRs		258,621	169,204
Carrying Value | MSRs
Assets
MSRs		14,878	42,224
Carrying Value | Excess MSRs
Assets
REO		35,070	31,814
Carrying Value | REO
Assets
REO		8,535	9,462
Carrying Value | Short-term debt
Liabilities
Short-term debt		482,761	2,329,145
Carrying Value | Residential Loans | Residential loans, at fair value
Assets
Loans, held-for-sale		105,091	536,385
Carrying Value | Residential Loans | Residential loans, held-for-investment
Assets
Loans receivable, fair value		4,389,808	7,178,465
Carrying Value | Residential Loans | Business purpose residential loans, held-for-sale
Assets
Loans, held-for-sale		285,549	331,565
Carrying Value | Residential Loans | Business purpose residential loans, held-for-investment
Assets
Loans receivable, fair value		3,670,552	3,175,178
Carrying Value | Residential Loans | Multifamily loans
Assets
Loans receivable, fair value		491,415	4,408,524
Fair Value
Assets
Real estate securities		351,335	1,099,874
Cash and cash equivalents		450,684	196,966
Restricted cash		73,594	93,867
Derivative assets		14,709	35,701
Margin receivable		3,809	209,776
FHLBC stock		5,000	43,393
Guarantee asset		579	1,686
Pledged collateral		8,172	32,945
Liabilities
Margin payable		0	1,700
Guarantee obligation		10,185	13,754
Contingent consideration		0	28,484
Derivative liabilities		1,612	163,424
ABS issued, net, Fair value		6,969,376	10,515,475
ABS issued, net, Amortized cost		207,812	0
FHLBC long-term borrowings		1,000	1,999,999
Other long-term debt, net		885,172	184,666
Convertible notes, net		476,071	661,985
Trust preferred securities and subordinated notes, net		73,238	99,045
Fair Value | Servicer advance investments
Assets
MSRs		258,621	169,204
Fair Value | MSRs
Assets
MSRs		14,878	42,224
Fair Value | Excess MSRs
Assets
REO		35,070	31,814
Fair Value | REO
Assets
REO		9,654	10,389
Fair Value | Short-term debt
Liabilities
Short-term debt		482,761	2,329,145
Fair Value | Residential Loans | Residential loans, at fair value
Assets
Loans, held-for-sale		105,091	536,509
Fair Value | Residential Loans | Residential loans, held-for-investment
Assets
Loans receivable, fair value		4,389,808	7,178,465
Fair Value | Residential Loans | Business purpose residential loans, held-for-sale
Assets
Loans, held-for-sale		285,549	331,565
Fair Value | Residential Loans | Business purpose residential loans, held-for-investment
Assets
Loans receivable, fair value		3,670,552	3,175,178
Fair Value | Residential Loans | Multifamily loans
Assets
Loans receivable, fair value		491,415	4,408,524
Shared home appreciation options
Assets
Shared home appreciation options			45,085
Shared home appreciation options | Carrying Value
Assets
Shared home appreciation options		41,758	45,085
Shared home appreciation options | Fair Value
Assets
Shared home appreciation options		$ 41,758	$ 45,085
[1]	Our consolidated balance sheets include assets of consolidated variable interest entities (“VIEs”) that can only be used to settle obligations of these VIEs and liabilities of consolidated VIEs for which creditors do not have recourse to Redwood Trust, Inc. or its affiliates. At September 30, 2020 and December 31, 2019, assets of consolidated VIEs totaled $8,197,095 and $11,931,869, respectively. At September 30, 2020 and December 31, 2019, liabilities of consolidated VIEs totaled $7,238,047 and $10,717,072, respectively. See Note 4 for further discussion.

Fair Value of Financial Instr_4

Fair Value of Financial Instruments - Additional Information (Details) - USD ($)	3 Months Ended	9 Months Ended
	Sep. 30, 2020	Sep. 30, 2020
Securities
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Fair value option elected aggregate carrying amount, asset	$ 18,000,000	$ 96,000,000
Residential loans
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Fair value option elected aggregate carrying amount, asset	172,000,000	2,860,000,000
Business purpose residential loans
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Fair value option elected aggregate carrying amount, asset	260,000,000	956,000,000
Servicer advance investments
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Fair value option elected aggregate carrying amount, asset	0	179,000,000
Excess MSR
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Fair value option elected aggregate carrying amount, asset	0	11,000,000
Shared home appreciation options
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Fair value option elected aggregate carrying amount, asset	$ 0	$ 4,000,000

Fair Value of Financial Instr_5

Fair Value of Financial Instruments - Assets and Liabilities Measured at Fair Value on Recurring Basis (Details) - USD ($) $ in Thousands		Sep. 30, 2020	Dec. 31, 2019
Assets
Real estate securities		$ 144,162	$ 860,540
MSRs		242,059	151,582
Derivative assets	[1]	14,709	35,701
Pledged collateral		8,172	32,945
Liabilities
Contingent consideration		0	28,484
Derivative liabilities	[1]	1,612	163,424
ABS issued		6,969,376	10,515,475
Fair Value, Measurements, Recurring
Assets
Business purpose residential loans		3,956,101	3,506,743
Multifamily loans		491,415	4,408,524
Real estate securities		351,335	1,099,874
Servicer advance investments		258,621	169,204
MSRs		14,878	42,224
Excess MSRs		35,070	31,814
Shared home appreciation options		41,758	45,085
Derivative assets		14,709	35,701
Pledged collateral		8,172	32,945
FHLBC stock		5,000	43,393
Guarantee asset		579	1,686
Liabilities
Contingent consideration			28,484
Derivative liabilities		1,612	163,424
ABS issued		6,969,376	10,515,475
Fair Value, Measurements, Recurring | Residential Loans
Assets
Residential loans		4,494,899	7,714,745
Fair Value, Measurements, Recurring | Level 1
Assets
Business purpose residential loans		0	0
Multifamily loans		0	0
Real estate securities		0	0
Servicer advance investments		0	0
MSRs		0	0
Excess MSRs		0	0
Shared home appreciation options		0	0
Derivative assets		464	6,531
Pledged collateral		8,172	32,945
FHLBC stock		0	0
Guarantee asset		0	0
Liabilities
Contingent consideration			0
Derivative liabilities		263	13,368
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
Real estate securities		0	0
Servicer advance investments		0	0
MSRs		0	0
Excess MSRs		0	0
Shared home appreciation options		0	0
Derivative assets		3,472	19,020
Pledged collateral		0	0
FHLBC stock		5,000	43,393
Guarantee asset		0	0
Liabilities
Contingent consideration			0
Derivative liabilities		15	148,766
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		3,956,101	3,506,743
Multifamily loans		491,415	4,408,524
Real estate securities		351,335	1,099,874
Servicer advance investments		258,621	169,204
MSRs		14,878	42,224
Excess MSRs		35,070	31,814
Shared home appreciation options		41,758	45,085
Derivative assets		10,773	10,150
Pledged collateral		0	0
FHLBC stock		0	0
Guarantee asset		579	1,686
Liabilities
Contingent consideration			28,484
Derivative liabilities		1,334	1,290
ABS issued		6,969,376	10,515,475
Fair Value, Measurements, Recurring | Level 3 | Residential Loans
Assets
Residential loans		$ 4,494,899	$ 7,714,745
[1]	Our consolidated balance sheets include assets of consolidated variable interest entities (“VIEs”) that can only be used to settle obligations of these VIEs and liabilities of consolidated VIEs for which creditors do not have recourse to Redwood Trust, Inc. or its affiliates. At September 30, 2020 and December 31, 2019, assets of consolidated VIEs totaled $8,197,095 and $11,931,869, respectively. At September 30, 2020 and December 31, 2019, liabilities of consolidated VIEs totaled $7,238,047 and $10,717,072, respectively. See Note 4 for further discussion.

Fair Value of Financial Instr_6

Fair Value of Financial Instruments - Changes in Level 3 Assets and Liabilities Measured at Fair Value on Recurring Basis (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2020USD ($)
Contingent Consideration
Liabilities
Beginning balance - December 31, 2019	$ 28,484
Acquisitions	0
Principal paydowns	(13,353)
Deconsolidations	0
Gains (losses) in net income (loss), net	(446)
Other settlements, net	(14,685)
Ending balance - September 30, 2020	0
ABS Issued
Liabilities
Beginning balance - December 31, 2019	10,515,475
Acquisitions	1,137,656
Principal paydowns	(1,035,359)
Deconsolidations	(3,706,789)
Gains (losses) in net income (loss), net	58,393
Other settlements, net	0
Ending balance - September 30, 2020	6,969,376
Residential Loans
Assets
Beginning balance - December 31, 2019	7,714,745
Acquisitions	2,927,697
Originations	0
Sales	(4,783,682)
Principal paydowns	(1,210,117)
Deconsolidations	0
Gains (losses) in net income (loss), net	(152,145)
Other settlements, net	(1,599)
Ending balance - September 30, 2020	4,494,899
Business purpose residential loans
Assets
Beginning balance - December 31, 2019	3,506,743
Acquisitions	0
Originations	982,315
Sales	(53,434)
Principal paydowns	(489,243)
Deconsolidations	0
Gains (losses) in net income (loss), net	16,246
Other settlements, net	(6,526)
Ending balance - September 30, 2020	3,956,101
Multifamily loans
Assets
Beginning balance - December 31, 2019	4,408,524
Acquisitions	0
Originations	0
Sales	0
Principal paydowns	(5,830)
Deconsolidations	(3,849,779)
Gains (losses) in net income (loss), net	(61,500)
Other settlements, net	0
Ending balance - September 30, 2020	491,415
Trading securities
Assets
Beginning balance - December 31, 2019	860,540
Acquisitions	96,318
Originations	0
Sales	(579,466)
Principal paydowns	(8,502)
Deconsolidations	0
Gains (losses) in net income (loss), net	(224,728)
Other settlements, net	0
Ending balance - September 30, 2020	144,162
AFS Securities
Assets
Beginning balance - December 31, 2019	239,334
Acquisitions	56,664
Originations	0
Sales	(55,193)
Principal paydowns	(10,345)
Deconsolidations	0
Gains (losses) in net income (loss), net	(23,287)
Other settlements, net	0
Ending balance - September 30, 2020	207,173
Servicer Advance Investments
Assets
Beginning balance - December 31, 2019	169,204
Acquisitions	179,419
Originations	0
Sales	0
Principal paydowns	(83,124)
Deconsolidations	0
Gains (losses) in net income (loss), net	(6,878)
Other settlements, net	0
Ending balance - September 30, 2020	258,621
MSRs
Assets
Beginning balance - December 31, 2019	42,224
Acquisitions	0
Originations	0
Sales	0
Principal paydowns	0
Deconsolidations	0
Gains (losses) in net income (loss), net	(27,346)
Other settlements, net	0
Ending balance - September 30, 2020	14,878
Excess MSRs
Assets
Beginning balance - December 31, 2019	31,814
Acquisitions	10,906
Originations	0
Sales	0
Principal paydowns	0
Deconsolidations	0
Gains (losses) in net income (loss), net	(7,650)
Other settlements, net	0
Ending balance - September 30, 2020	35,070
Shared Home Appreciation Options
Assets
Beginning balance - December 31, 2019	45,085
Acquisitions	3,517
Originations	0
Sales	0
Principal paydowns	(2,558)
Deconsolidations	0
Gains (losses) in net income (loss), net	(4,286)
Other settlements, net	0
Ending balance - September 30, 2020	41,758
Shared Home Appreciation Options
Assets
Beginning balance - December 31, 2019	1,686
Acquisitions	0
Principal paydowns	0
Deconsolidations	0
Gains (losses) in net income (loss), net	(1,107)
Other settlements, net	0
Ending balance - September 30, 2020	579
Derivatives
Assets
Beginning balance - December 31, 2019	8,860
Acquisitions	0
Principal paydowns	0
Deconsolidations	0
Gains (losses) in net income (loss), net	34,620
Other settlements, net	(34,041)
Ending balance - September 30, 2020	$ 9,439

Fair Value of Financial Instr_7

Fair Value of Financial Instruments - Portion of Net Gains (Losses) Attributable to Level 3 Assets and Liabilities Still Held Included in Net Income (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Loan purchase and interest rate lock 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	$ 420	$ (1,668)	$ (1,334)	$ (1,669)
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	(107)	17,771	(865)	82,408
Held-for-investment at fair value | Sequoia Choice
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	7,700	1,860	(22,802)	7,051
Held-for-investment at fair value | 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	82,209	17,300	(33,087)	31,702
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	21,155	584	17,901	4,069
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	2,165	7,445	(11,014)	13,810
Single family rental loans | CAFL
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	9,673	0	(41,048)	0
Trading securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Net gains (losses) attributable to level 3 assets still held included in net income	(3,549)	11,206	(80,358)	33,196
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	25	1,585	(6,172)	3,025
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	(2,376)	(5,892)	(16,798)	(16,971)
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	(1,127)	(1,634)	(7,650)	(2,137)
Shared home appreciation options
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Net gains (losses) attributable to level 3 assets still held included in net income	2,384	29	(4,286)	29
Loan purchase and interest rate lock 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	10,791	4,678	10,773	4,757
Other assets - 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	$ (191)	$ (216)	$ (1,107)	$ (834)

Fair Value of Financial Instr_8

Fair Value of Financial Instruments - Assets and Liabilities Measured at Fair Value on Non-Recurring Basis (Details) - Fair Value, Measurements, Nonrecurring - REO $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2020USD ($)	Sep. 30, 2020USD ($)
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
REO	$ 3,523	$ 3,523
Gain (Loss) on assets measured at fair value on a non-recurring basis	(805)	(840)
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	$ 3,523	$ 3,523

Fair Value of Financial Instr_9

Fair Value of Financial Instruments - Market Valuation Adjustments, Net (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Other Income	$ (2,362)	$ 431	$ (5,595)	$ 2,342
Gain on re-measurement of 5 Arches investment	0	0	0	2,441
Total Market Valuation Gains (Losses), Net	158,883	14,549	(606,764)	62,720
Mortgage Banking Activities, Net
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Changes in fair value of assets	56,619	6,205	18,173	33,625
Mortgage Banking Activities, Net | Residential loans, at fair value
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Changes in fair value of assets	(478)	(6,623)	(15,972)	289
Mortgage Banking Activities, Net | Residential loan purchase and forward sale commitments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Changes in fair value of assets	13,067	12,943	35,123	41,142
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]
Changes in fair value of assets	43,191	1,283	55,868	4,200
Mortgage Banking Activities, Net | Single-family rental loan purchase and interest rate lock commitments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Changes in fair value of assets	0	564	341	1,273
Mortgage Banking Activities, Net | Residential bridge loans
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Changes in fair value of assets	938	1,010	(4,256)	2,108
Mortgage Banking Activities, Net | Risk management derivatives, net
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Changes in fair value of assets	(99)	(2,972)	(52,931)	(15,387)
Investment Fair Value Changes, Net
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Changes in fair value of assets	107,047	11,444	(611,557)	34,741
Investment Fair Value Changes, Net | Risk management derivatives, net
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Changes in fair value of assets	0	(37,433)	(59,142)	(144,548)
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]
Changes in fair value of assets	218	7,667	(93,314)	71,323
Investment Fair Value Changes, Net | Single-family rental loans held-for-investment
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Changes in fair value of assets	0	22	(20,806)	22
Investment Fair Value Changes, Net | Residential bridge loans held-for-investment
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Changes in fair value of assets	6,812	(742)	(10,016)	(1,363)
Investment Fair Value Changes, Net | Trading securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Changes in fair value of assets	(3,600)	15,275	(224,679)	55,577
Investment Fair Value Changes, Net | Servicer advance investments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Changes in fair value of assets	26	1,585	(6,172)	3,025
Investment Fair Value Changes, Net | Excess MSRs
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Changes in fair value of assets	(1,127)	(1,635)	(7,650)	(2,137)
Investment Fair Value Changes, Net | Legacy Sequoia
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Changes in fair value of assets	(81)	(407)	(702)	(904)
Investment Fair Value Changes, Net | Sequoia Choice
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Changes in fair value of assets	7,851	2,722	(22,065)	8,866
Investment Fair Value Changes, Net | Freddie Mac SLST
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Changes in fair value of assets	82,214	17,300	(33,081)	31,702
Investment Fair Value Changes, Net | Freddie Mac K-Series
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Changes in fair value of assets	2,166	7,445	(82,744)	13,810
Investment Fair Value Changes, Net | CAFL
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Changes in fair value of assets	9,673	0	(41,048)	0
Investment Fair Value Changes, Net | Other investments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Changes in fair value of assets	2,451	(355)	(9,111)	(632)
Investment Fair Value Changes, Net | Credit recoveries (losses) on AFS securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Changes in fair value of assets	444	0	(1,027)	0
Other Income
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Other Income	(4,783)	(3,100)	(13,380)	(5,646)
Gain on re-measurement of 5 Arches investment	0	0	0	2,440
Other Income | Risk management derivatives, net
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Other Income	0	4,389	13,966	13,157
Other Income | MSRs
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Other Income	$ (4,783)	$ (7,489)	$ (27,346)	$ (21,243)

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	9 Months Ended
	Sep. 30, 2020USD ($)$ / loan	Dec. 31, 2019USD ($)	Sep. 30, 2019
Assets
ABS issued, net, Fair value | $	$ 6,969,376	$ 10,515,475
ABS Issued
Liabilities
ABS issued | $	$ 1,919,048
ABS Issued | Prepayment rate (annual CPR) | Minimum
Liabilities
ABS issued, measurement input	0.05
ABS Issued | Prepayment rate (annual CPR) | Maximum
Liabilities
ABS issued, measurement input	0.53
ABS Issued | Prepayment rate (annual CPR) | Weighted Average
Liabilities
ABS issued, measurement input	0.27
ABS Issued | Discount rate | Minimum
Liabilities
ABS issued, measurement input	0.02
ABS Issued | Discount rate | Maximum
Liabilities
ABS issued, measurement input	0.30
ABS Issued | Discount rate | Weighted Average
Liabilities
ABS issued, measurement input	0.03
ABS Issued | Default rate | Minimum
Liabilities
ABS issued, measurement input	0
ABS Issued | Default rate | Maximum
Liabilities
ABS issued, measurement input	0.40
ABS Issued | Default rate | Weighted Average
Liabilities
ABS issued, measurement input	0.02
ABS Issued | Loss severity | Minimum
Liabilities
ABS issued, measurement input	0
ABS Issued | Loss severity | Maximum
Liabilities
ABS issued, measurement input	0.50
ABS Issued | Loss severity | Weighted Average
Liabilities
ABS issued, measurement input	0.31
Freddie Mac SLST
Liabilities
ABS issued | $	$ 1,841,313
Freddie Mac K-Series
Liabilities
ABS issued | $	$ 464,865
Freddie Mac K-Series | Discount rate | Minimum
Liabilities
ABS issued, measurement input	0.01
Freddie Mac K-Series | Discount rate | Maximum
Liabilities
ABS issued, measurement input	0.18
Freddie Mac K-Series | Discount rate | Weighted Average
Liabilities
ABS issued, measurement input	0.02
Freddie Mac K-Series | Dollar price | Minimum
Liabilities
ABS issued, measurement input	1
Freddie Mac K-Series | Dollar price | Maximum
Liabilities
ABS issued, measurement input	108
Freddie Mac K-Series | Dollar price | Weighted Average
Liabilities
ABS issued, measurement input	99
CAFL
Liabilities
ABS issued | $	$ 2,744,150
CAFL | Prepayment rate (annual CPR) | Minimum
Liabilities
ABS issued, measurement input	0
CAFL | Prepayment rate (annual CPR) | Maximum
Liabilities
ABS issued, measurement input	0.03
CAFL | Prepayment rate (annual CPR) | Weighted Average
Liabilities
ABS issued, measurement input	0
CAFL | Discount rate | Minimum
Liabilities
ABS issued, measurement input	0.002
CAFL | Discount rate | Maximum
Liabilities
ABS issued, measurement input	0.40
CAFL | Discount rate | Weighted Average
Liabilities
ABS issued, measurement input	0.03
CAFL | Default rate | Minimum
Liabilities
ABS issued, measurement input	0
CAFL | Default rate | Maximum
Liabilities
ABS issued, measurement input	0.18
CAFL | Default rate | Weighted Average
Liabilities
ABS issued, measurement input	0.11
CAFL | Loss severity | Minimum
Liabilities
ABS issued, measurement input	0.30
CAFL | Loss severity | Maximum
Liabilities
ABS issued, measurement input	0.30
CAFL | Loss severity | Weighted Average
Liabilities
ABS issued, measurement input	0.30
Jumbo fixed-rate loans
Assets
ABS issued, net, Fair value | $	$ 6,312
Jumbo fixed-rate loans | Prepayment rate (annual CPR) | Minimum
Assets
Loans held-for-sale, measurement input	0.20
Jumbo fixed-rate loans | Prepayment rate (annual CPR) | Maximum
Assets
Loans held-for-sale, measurement input	0.20
Jumbo fixed-rate loans | Prepayment rate (annual CPR) | Weighted Average
Assets
Loans held-for-sale, measurement input	0.20
Jumbo fixed-rate loans | Whole loan spread to swap rate | Minimum
Assets
Loans held-for-sale, measurement input	0.0350
Jumbo fixed-rate loans | Whole loan spread to swap rate | Maximum
Assets
Loans held-for-sale, measurement input	0.0350
Jumbo fixed-rate loans | Whole loan spread to swap rate | Weighted Average
Assets
Loans held-for-sale, measurement input	0.0350
Jumbo loans committed to sell
Assets
Loans receivable, fair value | $	$ 98,779
Jumbo loans committed to sell | Whole loan committed sales price | Minimum
Assets
Loans held-for-sale, measurement input	101.61
Jumbo loans committed to sell | Whole loan committed sales price | Maximum
Assets
Loans held-for-sale, measurement input	103.40
Jumbo loans committed to sell | Whole loan committed sales price | Weighted Average
Assets
Loans held-for-sale, measurement input	103.23
Legacy Sequoia
Assets
Loans receivable, fair value | $	$ 296,765
Sequoia Choice
Assets
Loans receivable, fair value | $	1,836,361
Liabilities
Fair value of securities owned | $	215,000
Freddie Mac SLST
Assets
Loans receivable, fair value | $	2,256,682
Liabilities
Fair value of securities owned | $	416,000
Single-family rental loans
Assets
Loans receivable, fair value | $	$ 285,549
Single-family rental loans | Prepayment rate (annual CPR) | Minimum
Assets
Loans receivable, measurement input	0
Single-family rental loans | Prepayment rate (annual CPR) | Maximum
Assets
Loans receivable, measurement input	0.03
Single-family rental loans | Prepayment rate (annual CPR) | Weighted Average
Assets
Loans receivable, measurement input	0.03
Single-family rental loans | Senior credit spread | Minimum
Assets
Loans receivable, measurement input	0.0130
Single-family rental loans | Senior credit spread | Maximum
Assets
Loans receivable, measurement input	0.0130
Single-family rental loans | Senior credit spread | Weighted Average
Assets
Loans receivable, measurement input	0.0130
Single-family rental loans | Subordinate credit spread | Minimum
Assets
Loans receivable, measurement input	0.0200
Single-family rental loans | Subordinate credit spread | Maximum
Assets
Loans receivable, measurement input	0.1600
Single-family rental loans | Subordinate credit spread | Weighted Average
Assets
Loans receivable, measurement input	0.0551
Single-family rental loans | Senior credit support | Minimum
Assets
Loans receivable, measurement input	0.30
Single-family rental loans | Senior credit support | Maximum
Assets
Loans receivable, measurement input	0.32
Single-family rental loans | Senior credit support | Weighted Average
Assets
Loans receivable, measurement input	0.31
Single-family rental loans | IO discount rate | Minimum
Assets
Loans receivable, measurement input	0.08
Single-family rental loans | IO discount rate | Maximum
Assets
Loans receivable, measurement input	0.09
Single-family rental loans | IO discount rate | Weighted Average
Assets
Loans receivable, measurement input	0.09
Single-family rental loans | Non-securitizable loan dollar price | Minimum
Assets
Loans receivable, measurement input	101
Single-family rental loans | Non-securitizable loan dollar price | Maximum
Assets
Loans receivable, measurement input	101
Single-family rental loans | Non-securitizable loan dollar price | Weighted Average
Assets
Loans receivable, measurement input	101
CAFL
Assets
Loans receivable, fair value | $	$ 2,969,692
Liabilities
Fair value of securities owned | $	229,000
Residential bridge loans
Assets
Loans receivable, fair value | $	$ 700,860
Residential bridge loans | Discount rate | Minimum
Assets
Loans held-for-investment, measurement input	0.06
Residential bridge loans | Discount rate | Maximum
Assets
Loans held-for-investment, measurement input	0.12
Residential bridge loans | Discount rate | Weighted Average
Assets
Loans held-for-investment, measurement input	0.08
Residential bridge loans | Non-performing loan dollar price | Minimum
Assets
Loans held-for-investment, measurement input	3
Residential bridge loans | Non-performing loan dollar price | Maximum
Assets
Loans held-for-investment, measurement input	100
Residential bridge loans | Non-performing loan dollar price | Weighted Average
Assets
Loans held-for-investment, measurement input	89
Freddie Mac K-Series
Assets
Loans receivable, fair value | $	$ 491,415
Liabilities
Fair value of securities owned | $	27,000
Trading and AFS securities
Assets
Trading and AFS securities | $	$ 351,335
Trading and AFS securities | Prepayment rate (annual CPR) | Minimum
Assets
Trading and AFS securities	0.07
Trading and AFS securities | Prepayment rate (annual CPR) | Maximum
Assets
Trading and AFS securities	0.65
Trading and AFS securities | Prepayment rate (annual CPR) | Weighted Average
Assets
Trading and AFS securities	0.24
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	0.34
Trading and AFS securities | Discount rate | Weighted Average
Assets
Trading and AFS securities	0.09
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	0.26
Trading and AFS securities | Default rate | Weighted Average
Assets
Trading and AFS securities	0.01
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	0.50
Trading and AFS securities | Loss severity | Weighted Average
Assets
Trading and AFS securities	0.19
Trading and AFS securities | Measurement Input, CRT Dollar Price | Minimum
Assets
Trading and AFS securities	49
Trading and AFS securities | Measurement Input, CRT Dollar Price | Maximum
Assets
Trading and AFS securities	103
Trading and AFS securities | Measurement Input, CRT Dollar Price | Weighted Average
Assets
Trading and AFS securities	84
Servicer advance investments
Assets
Servicing asset | $	$ 258,621
Servicer advance investments | Minimum
Assets
Expected remaining life	1 year
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
Servicing asset, measurement input	0.08
Servicer advance investments | Prepayment rate (annual CPR) | Maximum
Assets
Servicing asset, measurement input	0.14
Servicer advance investments | Prepayment rate (annual CPR) | Weighted Average
Assets
Servicing asset, measurement input	0.13
Servicer advance investments | Discount rate | Minimum
Assets
Servicing asset, measurement input	0.03
Servicer advance investments | Discount rate | Maximum
Assets
Servicing asset, measurement input	0.04
Servicer advance investments | Discount rate | Weighted Average
Assets
Servicing asset, measurement input	0.04
Loan purchase and interest rate lock commitments
Liabilities
Loan purchase commitments, net | $	$ 10,282
Loan purchase and interest rate lock commitments | Prepayment rate (annual CPR) | Minimum
Assets
Loans receivable, measurement input	0.15
Loan purchase and interest rate lock commitments | Prepayment rate (annual CPR) | Maximum
Assets
Loans receivable, measurement input	0.15
Loan purchase and interest rate lock commitments | Prepayment rate (annual CPR) | Weighted Average
Assets
Loans receivable, measurement input	0.15
Loan purchase and interest rate lock commitments | Whole loan spread to swap rate | Minimum
Assets
Loans receivable, measurement input	0.0350
Loan purchase and interest rate lock commitments | Whole loan spread to swap rate | Maximum
Assets
Loans receivable, measurement input	0.0350
Loan purchase and interest rate lock commitments | Whole loan spread to swap rate | Weighted Average
Assets
Loans receivable, measurement input	0.0350
Loan purchase and interest rate lock commitments | Mortgage servicing income | Minimum
Assets
Servicing asset, measurement input	0.0006
Loan purchase and interest rate lock commitments | Mortgage servicing income | Maximum
Assets
Servicing asset, measurement input	0.0016
Loan purchase and interest rate lock commitments | Mortgage servicing income | Weighted Average
Assets
Servicing asset, measurement input	0.0008
Loan purchase and interest rate lock commitments | Committed sales price | Minimum
Liabilities
Loan purchase commitments, measurement input	100.89
Loan purchase and interest rate lock commitments | Committed sales price | Maximum
Liabilities
Loan purchase commitments, measurement input	103.40
Loan purchase and interest rate lock commitments | Committed sales price | Weighted Average
Liabilities
Loan purchase commitments, measurement input	102.59
Loan purchase and interest rate lock commitments | Pull-through rate | Minimum
Liabilities
Loan purchase commitments, measurement input	0.13
Loan purchase and interest rate lock commitments | Pull-through rate | Maximum
Liabilities
Loan purchase commitments, measurement input	1
Loan purchase and interest rate lock commitments | Pull-through rate | Weighted Average
Liabilities
Loan purchase commitments, measurement input	0.58
Loan purchase and interest rate lock commitments | MSR Multiple | Minimum
Assets
Loans receivable, measurement input	0.8
Loan purchase and interest rate lock commitments | MSR Multiple | Maximum
Assets
Loans receivable, measurement input	4.1
Loan purchase and interest rate lock commitments | MSR Multiple | Weighted Average
Assets
Loans receivable, measurement input	3.4
Loan purchase and interest rate lock commitments | Whole Loan Spread to TBA Price | Minimum
Assets
Loans receivable, measurement input	2
Loan purchase and interest rate lock commitments | Whole Loan Spread to TBA Price | Maximum
Assets
Loans receivable, measurement input	2
Loan purchase and interest rate lock commitments | Whole Loan Spread to TBA Price | Weighted Average
Assets
Loans receivable, measurement input	2
MSRs
Assets
Servicing asset | $	$ 14,878
MSRs | Prepayment rate (annual CPR) | Minimum
Assets
Servicing asset, measurement input	0.08
MSRs | Prepayment rate (annual CPR) | Maximum
Assets
Servicing asset, measurement input	0.97
MSRs | Prepayment rate (annual CPR) | Weighted Average
Assets
Servicing asset, measurement input	0.26
MSRs | Discount rate | Minimum
Assets
Servicing asset, measurement input	0.12
MSRs | Discount rate | Maximum
Assets
Servicing asset, measurement input	0.12
MSRs | Discount rate | Weighted Average
Assets
Servicing asset, measurement input	0.12
MSRs | Per loan annual cost to service | Minimum
Assets
Servicing asset, measurement input	95
MSRs | Per loan annual cost to service | Maximum
Assets
Servicing asset, measurement input	95
MSRs | Per loan annual cost to service | Weighted Average
Assets
Servicing asset, measurement input	95
Excess MSRs
Assets
Servicing asset | $	$ 35,070
Excess MSRs | Prepayment rate (annual CPR) | Minimum
Assets
Servicing asset, measurement input	0.10
Excess MSRs | Prepayment rate (annual CPR) | Maximum
Assets
Servicing asset, measurement input	0.13
Excess MSRs | Prepayment rate (annual CPR) | Weighted Average
Assets
Servicing asset, measurement input	0.11
Excess MSRs | Discount rate | Minimum
Assets
Servicing asset, measurement input	0.15
Excess MSRs | Discount rate | Maximum
Assets
Servicing asset, measurement input	0.21
Excess MSRs | Discount rate | Weighted Average
Assets
Servicing asset, measurement input	0.18
Excess MSRs | Excess mortgage servicing income | Minimum
Assets
Servicing asset, measurement input	0.0009
Excess MSRs | Excess mortgage servicing income | Maximum
Assets
Servicing asset, measurement input	0.0017
Excess MSRs | Excess mortgage servicing income | Weighted Average
Assets
Servicing asset, measurement input	0.0012
Shared home appreciation options
Assets
Shared home appreciation options | $	$ 41,758
Shared home appreciation options | Prepayment rate (annual CPR) | Minimum
Assets
Shared home appreciation options			0.08
Shared home appreciation options | Prepayment rate (annual CPR) | Maximum
Assets
Shared home appreciation options			0.26
Shared home appreciation options | Prepayment rate (annual CPR) | Weighted Average
Assets
Shared home appreciation options			0.19
Shared home appreciation options | Discount rate | Minimum
Assets
Shared home appreciation options	0.16
Shared home appreciation options | Discount rate | Maximum
Assets
Shared home appreciation options	0.16
Shared home appreciation options | Discount rate | Weighted Average
Assets
Shared home appreciation options	0.16
Shared home appreciation options | Home price appreciation | Minimum
Assets
Shared home appreciation options			0.02
Shared home appreciation options | Home price appreciation | Maximum
Assets
Shared home appreciation options			0.03
Shared home appreciation options | Home price appreciation | Weighted Average
Assets
Shared home appreciation options			0.03
Guarantee asset
Assets
Guarantee asset | $	$ 579
Guarantee asset | Prepayment rate (annual CPR) | Minimum
Assets
Guarantee asset	0.42
Guarantee asset | Prepayment rate (annual CPR) | Maximum
Assets
Guarantee asset	0.42
Guarantee asset | Prepayment rate (annual CPR) | Weighted Average
Assets
Guarantee asset	0.42
Guarantee asset | Discount rate | Minimum
Assets
Guarantee asset	0.12
Guarantee asset | Discount rate | Maximum
Assets
Guarantee asset	0.12
Guarantee asset | Discount rate | Weighted Average
Assets
Guarantee asset	0.12
REO
Assets
REO | $	$ 3,523
REO | Loss severity | Minimum
Assets
REO, measurement input	0.03
REO | Loss severity | Maximum
Assets
REO, measurement input	0.63
REO | Loss severity | Weighted Average
Assets
REO, measurement input	0.23

Residential Loans - Summary of

Residential Loans - Summary of Classifications and Carrying Value of Residential Loans (Details) - USD ($) $ in Thousands		Sep. 30, 2020	Dec. 31, 2019
Held-for-sale at fair value
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Loans, at fair value	[1]	$ 105,128	$ 536,385
Legacy Sequoia | Held-for-investment at fair value
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Loans, at fair value		296,765	407,890
Sequoia Choice | Held-for-investment at fair value
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Loans, at fair value		1,836,361	2,291,463
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]
Loans, at fair value		2,256,683	2,367,215
Redwood | Held-for-investment at fair value
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Loans, at fair value		0	2,111,897
Residential Loans
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Loans, at fair value		4,494,936	7,714,850
Residential Loans | Held-for-sale at fair value
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Loans, at fair value		105,128	536,385
Residential Loans | Held-for-investment at fair value
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Loans, at fair value		4,389,808	7,178,465
Residential Loans | Legacy Sequoia
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Loans, at fair value		296,765	407,890
Residential Loans | Legacy Sequoia | Held-for-sale at fair value
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Loans, at fair value		0	0
Residential Loans | Legacy Sequoia | Held-for-investment at fair value
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Loans, at fair value		296,765	407,890
Residential Loans | Sequoia Choice
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Loans, at fair value		1,836,361	2,291,463
Residential Loans | Sequoia Choice | Held-for-sale at fair value
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Loans, at fair value		0	0
Residential Loans | Sequoia Choice | Held-for-investment at fair value
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Loans, at fair value		1,836,361	2,291,463
Residential Loans | Freddie Mac SLST
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Loans, at fair value		2,256,682	2,367,215
Residential Loans | Freddie Mac SLST | Held-for-sale at fair value
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Loans, at fair value		0	0
Residential Loans | 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]
Loans, at fair value		2,256,682	2,367,215
Residential Loans | Redwood
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Loans, at fair value		105,128	2,648,282
Residential Loans | Redwood | Held-for-sale at fair value
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Loans, at fair value		105,128	536,385
Residential Loans | Redwood | Held-for-investment at fair value
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Loans, at fair value		$ 0	$ 2,111,897
[1]	Our consolidated balance sheets include assets of consolidated variable interest entities (“VIEs”) that can only be used to settle obligations of these VIEs and liabilities of consolidated VIEs for which creditors do not have recourse to Redwood Trust, Inc. or its affiliates. At September 30, 2020 and December 31, 2019, assets of consolidated VIEs totaled $8,197,095 and $11,931,869, respectively. At September 30, 2020 and December 31, 2019, liabilities of consolidated VIEs totaled $7,238,047 and $10,717,072, respectively. See Note 4 for further discussion.

Residential Loans - Additional

Residential Loans - Additional Information (Details) $ in Millions	Sep. 30, 2020USD ($)
MSRs
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Mortgage servicing rights, at amortized cost	$ 103

Residential Loans - Characteris

Residential Loans - Characteristics of Residential Loans Held-for-Sale (Details) - Residential Loans $ in Thousands	Sep. 30, 2020USD ($)loan	Dec. 31, 2019USD ($)loan
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Number of loans | loan	118	669
Unpaid principal balance	$ 102,921	$ 524,928
Loans, at fair value	$ 105,128	$ 536,280
Number of loans in foreclosure | loan	0	0
Loan pledged as collateral	$ 95,023	$ 201,949
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	2	1
Balance of loans 90 days or more delinquent	$ 2,356	$ 747
Fair value of loans with 90+ day delinquencies	$ 1,767	$ 616

Residential Loans - Quarterly A

Residential Loans - Quarterly Activity of Residential Loans Held-for-Sale (Details) - Residential Loans - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Principal balance of loans acquired	$ 172,162	$ 1,446,750	$ 2,859,813	$ 3,936,111
Principal balance of loans sold	87,868	1,534,315	5,024,663	3,921,280
Net market valuation gains (losses) recorded	$ (478)	$ (6,623)	$ (15,972)	$ 286

Residential Loans - Character_2

Residential Loans - Characteristics of Loans Held-for-Investment (Details) - Held-for-investment at fair value $ in Thousands	Sep. 30, 2020USD ($)loan	Dec. 31, 2019USD ($)loan
Legacy Sequoia
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Number of loans | loan	1,976	2,198
Unpaid principal balance	$ 352,392	$ 424,829
Loans, at fair value	$ 296,765	$ 407,890
Number of loans in foreclosure | loan	21	16
Fair value of loans, in foreclosure	$ 4,820	$ 3,673
Legacy Sequoia | 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	49	39
Fair value of loans with 90+ day delinquencies	$ 16,076	$ 9,803
Sequoia Choice
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Number of loans | loan	2,546	3,156
Unpaid principal balance	$ 1,811,967	$ 2,240,679
Loans, at fair value	$ 1,836,361	$ 2,291,463
Number of loans in foreclosure | loan	3	3
Fair value of loans, in foreclosure	$ 1,814	$ 2,290
Sequoia Choice | 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	132	9
Fair value of loans with 90+ day delinquencies	$ 102,693	$ 6,755
Freddie Mac SLST
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Number of loans | loan	13,893	14,502
Unpaid principal balance	$ 2,304,047	$ 2,428,035
Loans, at fair value	$ 2,256,683	$ 2,367,215
Number of loans in foreclosure | loan	175	208
Fair value of loans, in foreclosure	$ 28,380	$ 33,042
Freddie Mac SLST | 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	1,772	587
Fair value of loans with 90+ day delinquencies	$ 339,537	$ 134,680
Redwood
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Number of loans | loan	0	2,940
Unpaid principal balance	$ 0	$ 2,052,778
Loans, at fair value	$ 0	$ 2,111,897
Number of loans in foreclosure | loan	0	0
Fair value of loans, in foreclosure	$ 0	$ 0
Redwood | 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]
Unpaid principal balance	$ 0	$ 1,424
Number of loans past due | loan	0	2
Fair value of loans with 90+ day delinquencies	$ 0	$ 1,585

Residential Loans - Quarterly_2

Residential Loans - Quarterly Activity of Residential Loans Held-for-Investment (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
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			$ 770,754	$ 1,361,015
Held-for-investment at fair value | Sequoia Choice
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Net market valuation gain (loss)	$ (5,175)	$ (11,029)	(21,727)	4,841
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]
Net market valuation gain (loss)	159,687	39,783	15,254	94,788
Held-for-investment at fair value | Legacy Sequoia
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Net market valuation gain (loss)	21,938	(103)	(38,996)	5,271
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	727,088	270,506	1,076,671
Held-for-investment at fair value | Redwood
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Principal balance of loans acquired	0	0	0	39,194
Principal balance of loans sold	0	0	0	0
Transfers from loans held-for-sale to loans held-for-investment	0	0	13,258	68,703
Transfers from loans held-for-investment to loans held-for-sale	0	0	1,870,986	22,814
Net market valuation gains (losses) recorded	$ 218	$ 7,667	$ (93,314)	$ 71,323

Business Purpose Residential _3

Business Purpose Residential Loans (Details)	Sep. 30, 2020USD ($)loan	Dec. 31, 2019USD ($)loan	Sep. 30, 2020USD ($)loan	Sep. 30, 2019USD ($)	Sep. 30, 2020USD ($)loan	Sep. 30, 2019USD ($)
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Proceeds from sales of held-for-sale loans					$ 3,224,526,000	$ 2,971,811,000
Purchases of held-for-sale loans					$ 2,893,246,000	4,002,509,000
Number of loans transferred | loan					4
Transfer to REO					$ 12,547,000	5,280,000
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	$ 225,000,000		$ 225,000,000		225,000,000
Single-Family Rental, Held-for-sale at fair value
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Proceeds from loan originations to third parties			2,000,000
Loans, at fair value	$ 285,549,000	$ 569,185,000	285,549,000		285,549,000
Number of loans | loan	140	308
Loan principal	$ 272,492,000	$ 552,848,000	$ 272,492,000		$ 272,492,000
Weighted average coupon rate	5.26%	4.96%	5.26%		5.26%
Contract maturities	7 years	9 years
Fair value of loans with 90+ day delinquencies	$ 0	$ 130,000	$ 0		$ 0
Number of loans in foreclosure | loan	0	1	0		0
Fair value of loans, in foreclosure	$ 0	$ 130,000	$ 0		$ 0
Purchases of held-for-sale loans			196,000,000		632,000,000
Gain (loss) on investments			43,000,000	$ 1,000,000	34,000,000	3,000,000
Residential Bridge, Held-for-sale at fair value
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Loans, at fair value	0	0	0		0
Residential Bridge, Held-for-investment at fair value
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Loans, at fair value	$ 700,860,000	$ 745,006,000	700,860,000		700,860,000
Number of loans | loan	2,262	2,653
Loan principal	$ 708,555,000	$ 742,528,000	$ 708,555,000		$ 708,555,000
Weighted average coupon rate	8.02%	8.11%	8.02%		8.02%
Contract maturities	1 year	2 years
Fair value of loans with 90+ day delinquencies	$ 39,755,000	$ 8,987,000	$ 39,755,000		$ 39,755,000
Number of loans in foreclosure | loan	24	15	24		24
Fair value of loans, in foreclosure	$ 34,489,000	$ 6,917,000	$ 34,489,000		$ 34,489,000
Purchases of held-for-sale loans			64,000,000		324,000,000
Gain (loss) on investments			7,000,000	(1,000,000)	(10,000,000)	(1,000,000)
Transfer to REO					$ 5,000,000
Residential Bridge, Held-for-investment at fair value | Minimum
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Residential bridge loans held-for-investment, original maturities (in months)					6 months
Residential Bridge, Held-for-investment at fair value | Maximum
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Residential bridge loans held-for-investment, original maturities (in months)					24 months
Residential bridge loans
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Proceeds from loan originations to third parties			2,000,000
Loans, at fair value	700,860,000	745,006,000	700,860,000		$ 700,860,000
Held-for-sale at fair value, Total
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Loans, at fair value	285,549,000	331,565,000	285,549,000		285,549,000
Held-for-investment at fair value, Total
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Loans, at fair value	3,670,552,000	3,175,178,000	3,670,552,000		3,670,552,000
Business purpose residential loans
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Proceeds from loan originations			261,000,000
Fee income			3,000,000		13,000,000
Loans, at fair value	$ 3,956,101,000	$ 3,506,743,000	3,956,101,000		3,956,101,000
Business Purpose Mortgage Banking Activities
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Market valuations gains (losses), net			938,000	$ 1,010,000	(4,256,000)	$ 2,108,000
Business Purpose Mortgage Banking Activities | Single-Family Rental, Held-for-sale at fair value
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Gain (loss) on investments					55,000,000
Business Purpose Mortgage Banking Activities | Business purpose residential loans
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Market valuations gains (losses), net			$ 100,000
Business Purpose Investment Fair Value Change | Single-Family Rental, Held-for-sale at fair value
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Gain (loss) on investments					$ 21,000,000
Financing Receivables, Equal to Greater than 90 Days Past Due | Single-Family Rental, Held-for-sale at fair value
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Number of loans past due | loan	6	2	6		6
Fair value of loans with 90+ day delinquencies	$ 3,018,000	$ 1,688,000	$ 3,018,000		$ 3,018,000
Balance of loans 90 days or more delinquent	$ 2,954,000	$ 1,818,000	$ 2,954,000		$ 2,954,000
Financing Receivables, Equal to Greater than 90 Days Past Due | Residential Bridge, Held-for-investment at fair value
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Number of loans past due | loan	24	31	24		24
Fair value of loans with 90+ day delinquencies	$ 38,437,000	$ 14,186,000	$ 38,437,000		$ 38,437,000
Balance of loans 90 days or more delinquent	33,464,000	12,111,000	33,464,000		33,464,000
Redwood | Single-Family Rental, Held-for-sale at fair value
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Loans, at fair value	285,549,000	331,565,000	285,549,000		285,549,000
Redwood | Single-family rental loans held-for-investment
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Loans, at fair value	0	237,620,000	0		0
Redwood | Single family rental loans
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Loans, at fair value	285,549,000	569,185,000	285,549,000		285,549,000
CoreVest | Single-Family Rental, Held-for-sale at fair value
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Loans, at fair value	0	0	0		0
CoreVest | Single-family rental loans held-for-investment
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Loans, at fair value	2,969,692,000	2,192,552,000	2,969,692,000		2,969,692,000
CoreVest | Single family rental loans
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Loans, at fair value	$ 2,969,692,000	2,192,552,000	$ 2,969,692,000		2,969,692,000
CAFL | Single-Family Rental, Held-for-sale at fair value
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Proceeds from sales of held-for-sale loans					34,000,000
Purchases of held-for-sale loans					$ 925,000,000
Number of securitization entities to which asset transferred (in entities) | loan	3		3		3
CAFL | Single-family rental loans held-for-investment
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Loans, at fair value	$ 2,969,692,000	$ 2,192,552,000	$ 2,969,692,000		$ 2,969,692,000
Number of loans | loan	1,027	783
Loan principal	$ 2,815,045,000	$ 2,078,214,000	$ 2,815,045,000		$ 2,815,045,000
Weighted average coupon rate	5.50%	5.70%	5.50%		5.50%
Contract maturities	6 years	7 years
Fair value of loans with 90+ day delinquencies	$ 14,032,000	$ 9,169,000	$ 14,032,000		$ 14,032,000
Number of loans in foreclosure | loan	9	5	9		9
Gain (loss) on investments			$ 88,000,000		$ (14,000,000)
Loans maturity one					5 years
Loans maturity two					7 years
Loans maturity three					10 years
CAFL | Financing Receivables, Equal to Greater than 90 Days Past Due | Single-family rental loans held-for-investment
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Number of loans past due | loan	26	18	26		26
Fair value of loans with 90+ day delinquencies	$ 70,949,000	$ 29,039,000	$ 70,949,000		$ 70,949,000

Multifamily Loans (Details)

Multifamily Loans (Details) $ in Thousands	Sep. 30, 2020USD ($)loan	Dec. 31, 2019USD ($)loan	Sep. 30, 2020USD ($)loan	Mar. 31, 2020USD ($)	Sep. 30, 2019USD ($)	Sep. 30, 2020USD ($)loan	Sep. 30, 2019USD ($)
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Multifamily loans deconsolidated				$ 3,850,000
Multifamily loans, held-for-investment, at fair value
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Net market valuation gain (loss)					$ 47,353
Multifamily loans, held-for-investment, at fair value | Maximum
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Weighted average maturity (in years)						10 years
Redwood | Multifamily loans, held-for-investment, at fair value
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Number of loans | loan	28	279
Loan principal	$ 464,680	$ 4,195,000	$ 464,680			$ 464,680
Loans, at fair value	$ 491,415	$ 4,408,524	$ 491,415			$ 491,415
Weighted average coupon rate	4.25%	4.13%	4.25%			4.25%
Contract maturities		6 years				5 years
Number of loans in foreclosure | loan	0	0	0			0
Redwood | Financing Receivables, Equal to Greater than 90 Days Past Due | Multifamily loans, held-for-investment, at fair value
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 | Multifamily loans, held-for-investment, at fair value
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Net market valuation gain (loss)			$ 2,340			$ (61,500)	$ 178,374
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	0	2,940
Loan principal	$ 0	$ 2,052,778	0			0
Loans, at fair value	$ 0	$ 2,111,897	$ 0			$ 0
Number of loans in foreclosure | loan	0	0	0			0
Held-for-investment at fair value | Redwood | 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]
Loan principal	$ 0	$ 1,424	$ 0			$ 0
Number of loans past due | loan	0	2	0			0

Real Estate Securities - Fair V

Real Estate Securities - Fair Values of Real Estate Securities (Details) - USD ($) $ in Thousands		Sep. 30, 2020	Dec. 31, 2019
Investments, Debt and Equity Securities [Abstract]
Trading		$ 144,162	$ 860,540
Available-for-sale		207,173	239,334
Total Real Estate Securities	[1]	$ 351,335	$ 1,099,874
[1]	Our consolidated balance sheets include assets of consolidated variable interest entities (“VIEs”) that can only be used to settle obligations of these VIEs and liabilities of consolidated VIEs for which creditors do not have recourse to Redwood Trust, Inc. or its affiliates. At September 30, 2020 and December 31, 2019, assets of consolidated VIEs totaled $8,197,095 and $11,931,869, respectively. At September 30, 2020 and December 31, 2019, liabilities of consolidated VIEs totaled $7,238,047 and $10,717,072, respectively. See Note 4 for further discussion.

Real Estate Securities - Tradin

Real Estate Securities - Trading Securities by Collateral Type (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Investment Holdings [Line Items]
Real estate securities	$ 144,162	$ 860,540
Senior IO Securities
Investment Holdings [Line Items]
Real estate securities	28,091	150,067
Subordinate Securities | Mezzanine
Investment Holdings [Line Items]
Real estate securities	3,651	538,489
Subordinate Securities | Subordinate
Investment Holdings [Line Items]
Real estate securities	$ 112,420	$ 171,984

Real Estate Securities - Additi

Real Estate Securities - Additional Information (Details)	3 Months Ended		9 Months Ended
	Sep. 30, 2020USD ($)investment	Sep. 30, 2019USD ($)	Sep. 30, 2020USD ($)investment	Sep. 30, 2019USD ($)	Jun. 30, 2020USD ($)	Dec. 31, 2019USD ($)investment
Investment Holdings [Line Items]
Real estate securities	$ 144,162,000		$ 144,162,000			$ 860,540,000
Trading securities acquired	11,000,000	$ 66,000,000	78,000,000	$ 335,000,000
Trading securities sold	16,000,000	236,000,000	721,000,000	397,000,000
Increase (decrease) in valuation of trading securities	(4,000,000)	15,000,000	(225,000,000)	56,000,000
Available-for-sale securities	207,173,000		207,173,000			$ 239,334,000
Available-for-sale securities purchased	25,000,000	12,000,000	57,000,000	21,000,000
Available-for-sale securities sold	0	15,000,000	55,000,000	82,000,000
Net realized gains on AFS securities	$ 0	$ 4,000,000	$ 5,000,000	$ 13,000,000
Number of AFS securities (in investments) | investment	96		96			107
Number of securities in unrealized loss position | investment	7		7			1
Number of securities in a continuous unrealized loss position for twelve consecutive months or longer (in investments) | investment	0		0			1
Gross unrealized losses	$ 2,507,000		$ 2,507,000			$ 29,000
CECL credit allowance	1,027,000		1,027,000		$ 1,471,000	0
Interest Only Senior Trading Securities
Investment Holdings [Line Items]
Debt securities, trading	28,000,000		28,000,000			64,000,000
Unpaid principal balance	0		0			84,000,000
Certificated Servicing Strips
Investment Holdings [Line Items]
Debt securities, trading	12,000,000		12,000,000			36,000,000
Re-preforming Loans Securities
Investment Holdings [Line Items]
Debt securities, trading	60,000,000		60,000,000			161,000,000
Third Party Multifamily Mortgage-backed Securities
Investment Holdings [Line Items]
Available-for-sale securities	48,000,000		48,000,000			9,000,000
Residential
Investment Holdings [Line Items]
Available-for-sale securities	160,000,000		160,000,000			230,000,000
AFS securities, contractual maturities	45,000,000		45,000,000
Marketable securities, due from five to ten years	3,000,000		3,000,000
CECL credit allowance	43,186,000		43,186,000		$ 37,785,000	32,940,000
Residential | Sequoia Choice
Investment Holdings [Line Items]
Available-for-sale securities	124,000,000		124,000,000			141,000,000
Residential | Other Third Party Securities
Investment Holdings [Line Items]
Available-for-sale securities	35,000,000		35,000,000			90,000,000
Mezzanine
Investment Holdings [Line Items]
Available-for-sale securities	2,016,000		2,016,000			13,687,000
Gross unrealized losses	0		0			0
CECL credit allowance	0		0
Mezzanine | Re-preforming Loans Securities
Investment Holdings [Line Items]
Real estate securities	0		0			30,000,000
Mezzanine | Trading securities
Investment Holdings [Line Items]
Unpaid principal balance	4,000,000		4,000,000			537,000,000
Mezzanine | Sequoia securities
Investment Holdings [Line Items]
Real estate securities	4,000,000		4,000,000			39,000,000
Mezzanine | Subordinate Securities
Investment Holdings [Line Items]
Real estate securities	3,651,000		3,651,000			538,489,000
Available-for-sale securities	2,016,000		2,016,000			13,687,000
Mezzanine | Third Party Multifamily Mortgage-backed Securities
Investment Holdings [Line Items]
Real estate securities	0		0			395,000,000
Mezzanine | Other Third Party Securities
Investment Holdings [Line Items]
Real estate securities	0		0			104,000,000
Subordinate Securities
Investment Holdings [Line Items]
Available-for-sale securities	205,157,000		205,157,000			199,855,000
Gross unrealized losses	2,507,000		2,507,000			0
CECL credit allowance	1,027,000		1,027,000
Subordinate Securities | Re-preforming Loans Securities
Investment Holdings [Line Items]
Real estate securities	51,000,000		51,000,000			76,000,000
Subordinate Securities | Other Third Party Securities
Investment Holdings [Line Items]
Real estate securities	55,000,000		55,000,000			82,000,000
Subordinate Securities | Credit Risk Transfer (CRT) Securities
Investment Holdings [Line Items]
Real estate securities	50,000,000		50,000,000			90,000,000
Residential Subordinate Securities | Trading securities
Investment Holdings [Line Items]
Unpaid principal balance	266,000,000		266,000,000			302,000,000
Subordinate | Subordinate Securities
Investment Holdings [Line Items]
Real estate securities	112,420,000		112,420,000			171,984,000
Available-for-sale securities	$ 205,157,000		$ 205,157,000			$ 199,855,000

Real Estate Securities - Availa

Real Estate Securities - Available for Sale Securities by Collateral Type (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Investment Holdings [Line Items]
Available-for-sale	$ 207,173	$ 239,334
Senior IO Securities
Investment Holdings [Line Items]
Available-for-sale	0	25,792
Mezzanine
Investment Holdings [Line Items]
Available-for-sale	2,016	13,687
Senior IO Securities
Investment Holdings [Line Items]
Available-for-sale	0	25,792
Subordinate Securities | Mezzanine
Investment Holdings [Line Items]
Available-for-sale	2,016	13,687
Subordinate Securities | Subordinate
Investment Holdings [Line Items]
Available-for-sale	$ 205,157	$ 199,855

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	Sep. 30, 2020	Jun. 30, 2020	Dec. 31, 2019
Debt Securities, Available-for-sale [Line Items]
Principal balance	$ 289,659		$ 304,077
Credit reserve	(43,186)		(32,940)
Unamortized discount, net	(99,221)		(124,255)
Amortized cost	147,252		146,882
Gross unrealized gains	63,455		92,481
Gross unrealized losses	(2,507)		(29)
Allowance for credit losses	(1,027)	$ (1,471)	0
Carrying Value	207,173		239,334
Senior
Debt Securities, Available-for-sale [Line Items]
Principal balance	0		26,331
Credit reserve	0		(533)
Unamortized discount, net	0		(10,427)
Amortized cost	0		15,371
Gross unrealized gains	0		10,450
Gross unrealized losses	0		(29)
Allowance for credit losses	0
Carrying Value	0		25,792
Mezzanine
Debt Securities, Available-for-sale [Line Items]
Principal balance	2,000		13,512
Credit reserve	0		0
Unamortized discount, net	0		(527)
Amortized cost	2,000		12,985
Gross unrealized gains	16		702
Gross unrealized losses	0		0
Allowance for credit losses	0
Carrying Value	2,016		13,687
Subordinate
Debt Securities, Available-for-sale [Line Items]
Principal balance	287,659		264,234
Credit reserve	(43,186)		(32,407)
Unamortized discount, net	(99,221)		(113,301)
Amortized cost	145,252		118,526
Gross unrealized gains	63,439		81,329
Gross unrealized losses	(2,507)		0
Allowance for credit losses	(1,027)
Carrying Value	$ 205,157		$ 199,855

Real Estate Securities - Change

Real Estate Securities - Changes of Unamortized Discount and Designated Credit Reserves on Residential Available for Sale Securities (Details) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2020	Sep. 30, 2020
Credit Reserve
Beginning balance	$ 1,471	$ 0
Sales, calls, other	0	0
Ending Balance	1,027	1,027
Unamortized Discount, Net
Beginning balance		124,255
Ending Balance	99,221	99,221
Residential
Credit Reserve
Beginning balance	37,785	32,940
Amortization of net discount	0	0
Realized credit losses	(194)	(897)
Acquisitions	1,303	6,487
Sales, calls, other	0	(726)
(Release of) transfers to credit reserves, net	4,292	5,382
Ending Balance	43,186	43,186
Unamortized Discount, Net
Beginning balance	104,260	124,255
Amortization of net discount	(1,766)	(4,607)
Realized credit losses	0	0
Acquisitions	1,019	1,796
Sales, calls, other	0	(16,841)
(Release of) transfers to credit reserves, net	(4,292)	(5,382)
Ending Balance	$ 99,221	$ 99,221

Real Estate Securities - Comp_2

Real Estate Securities - Components of Carrying Value of Residential Available for Sale Securities in Unrealized Loss Position (Details) - Residential - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Debt Securities, Available-for-sale [Line Items]
Less Than 12 Consecutive Months, Amortized Cost	$ 32,890	$ 0
Less Than 12 Consecutive Months, Unrealized Losses	(2,507)	0
Less Than 12 Consecutive Months, Fair Value	30,330	0
12 Consecutive Months or Longer, Amortized Cost	0	5,830
12 Consecutive Months or Longer, Unrealized Losses	0	(29)
12 Consecutive Months or Longer, Fair Value	$ 0	$ 5,801

Real Estate Securities - Summar

Real Estate Securities - Summary of Significant Valuation Assumptions for Available for Sale Securities Credit Loss (Details) - Subordinate Securities	9 Months Ended
	Sep. 30, 2020
Debt Securities, Available-for-sale [Line Items]
Default rate	0.50%
Loss severity	20.00%

Real Estate Securities - Activi

Real Estate Securities - Activity of Allowance for Credit Losses for Available-for-sale Securities (Details) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2020	Sep. 30, 2020
Rollforward of Allowance for Credit Losses
Beginning balance	$ 1,471	$ 0
Additions to allowance for credit losses on securities for which credit losses were not previously recorded	339	1,864
Additional increases or decreases to the allowance for credit losses on securities that had an allowance recorded in a previous period	(783)	(837)
Allowance on purchased financial assets with credit deterioration	0	0
Reduction to allowance for securities sold during the period	0	0
Reduction to allowance for securities we intend to sell or more likely than not will be required to sell	0	0
Write-offs charged against allowance	0	0
Recoveries of amounts previously written off	0	0
Ending Balance	1,027	1,027
Cumulative Effect, Period of Adoption, Adjustment
Rollforward of Allowance for Credit Losses
Beginning balance	$ 0	$ 0

Real Estate Securities - Gross

Real Estate Securities - Gross Realized Gains and Losses on Sales and Calls of Available for Sale Securities (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Debt Securities, Available-for-sale [Line Items]
Gross realized gains	$ 0	$ 4,000	$ 5,000	$ 13,000
Total Realized Gains on Sales and Calls of AFS Securities, net	0	4,714	4,635	18,227
Sales
Debt Securities, Available-for-sale [Line Items]
Gross realized gains	0	3,656	8,779	13,143
Gross realized losses - sales	0	0	(4,144)	0
Calls
Debt Securities, Available-for-sale [Line Items]
Gross realized gains	$ 0	$ 1,058	$ 0	$ 5,084

Other Investments - Summary of

Other Investments - Summary of Other Investments (Details) - USD ($) $ in Thousands		Sep. 30, 2020	Dec. 31, 2019
Net Investment Income [Line Items]
Servicing asset, fair value		$ 242,059	$ 151,582
Other Investments	[1]	384,628	358,130
Residential Loans
Net Investment Income [Line Items]
Servicing asset, fair value		258,621	169,204
Excess MSRs
Net Investment Income [Line Items]
Servicing asset, fair value		35,070	31,814
Shared home appreciation options
Net Investment Income [Line Items]
Shared home appreciation options			45,085
Mortgage servicing rights
Net Investment Income [Line Items]
Servicing asset, fair value		14,878	42,224
Investment in multifamily loan fund
Net Investment Income [Line Items]
Shared home appreciation options		(323)	39,802
Other
Net Investment Income [Line Items]
Shared home appreciation options		$ 34,624	$ 30,001
[1]	Our consolidated balance sheets include assets of consolidated variable interest entities (“VIEs”) that can only be used to settle obligations of these VIEs and liabilities of consolidated VIEs for which creditors do not have recourse to Redwood Trust, Inc. or its affiliates. At September 30, 2020 and December 31, 2019, assets of consolidated VIEs totaled $8,197,095 and $11,931,869, respectively. At September 30, 2020 and December 31, 2019, liabilities of consolidated VIEs totaled $7,238,047 and $10,717,072, respectively. See Note 4 for further discussion.

Other Investments - Additional

Other Investments - Additional Information (Details)	Sep. 30, 2020USD ($)	Sep. 30, 2020USD ($)	Sep. 30, 2019USD ($)	Sep. 30, 2020USD ($)	Sep. 30, 2019USD ($)	Dec. 31, 2018partnership	Dec. 31, 2019USD ($)
Net Investment Income [Line Items]
Number of partnerships consolidated | partnership						2
Commitment to fund partnership	$ 94,000,000
Servicing asset, fair value	242,059,000	$ 242,059,000		$ 242,059,000			$ 151,582,000
Equity investment income		341,000	$ 560,000	615,000	$ 732,000
Investment fair value changes, net		107,047,000	11,444,000	(611,557,000)	34,741,000
Interest income		121,982,000	150,117,000	450,009,000	429,700,000
Servicer advance financing
Net Investment Income [Line Items]
Collateral amounts	242,000,000	242,000,000		242,000,000
Equity investment income		3,000,000	3,000,000	8,000,000	9,000,000
Investment fair value changes, net		100,000	2,000,000	(6,000,000)	3,000,000
Residential Loans
Net Investment Income [Line Items]
Servicing asset, fair value	258,621,000	258,621,000		258,621,000			169,204,000
Servicing asset, unpaid principal balance on underlying loan	9,710,000,000	9,710,000,000		9,710,000,000
Excess MSRs
Net Investment Income [Line Items]
Servicing asset, fair value	35,070,000	35,070,000		35,070,000			31,814,000
Investment fair value changes, net		(1,000,000)	(2,000,000)	(8,000,000)
Interest income		3,000,000	2,000,000	9,000,000	6,000,000
Light-Renovation Multifamily Loans
Net Investment Income [Line Items]
Equity investment income		300,000	1,000,000	600,000	500,000
Carrying amount of investment in partnership	0	0		0
Commitment to fund partnership, funded amount	0	0		0
Securities acquired from first securitization transaction		28,000,000		56,000,000
MSRs
Net Investment Income [Line Items]
Servicing asset, fair value	14,878,000	14,878,000		14,878,000			42,224,000
Servicing asset	3,140,000,000	3,140,000,000		3,140,000,000			$ 4,350,000,000
MSR income (losses), net		(2,000,000)	$ 400,000	(6,000,000)	$ 2,000,000
Shared home appreciation options
Net Investment Income [Line Items]
Payments to acquire investments	47,000,000
Shared home appreciation options | Commitment To Fund Investment
Net Investment Income [Line Items]
Investment fair value changes, net		2,000,000		(4,000,000)
Commitment to fund loan	$ 3,000,000	$ 3,000,000		$ 3,000,000

Other Investments - Servicing A

Other Investments - Servicing Advance Investments (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Schedule of Investments [Line Items]
Total Servicer Advance Receivables	$ 242,059	$ 151,582
Residential Loans
Schedule of Investments [Line Items]
Principal and interest advances	88,370	15,081
Escrow advances (taxes and insurance advances)	115,352	96,732
Corporate advances	$ 38,337	$ 39,769

Derivative Financial Instrume_3

Derivative Financial Instruments - Aggregate Fair Value and Notional Amount of Derivative Financial Instruments (Details) - USD ($)	Sep. 30, 2020	Dec. 31, 2019
Derivative [Line Items]
Fair Value	$ 13,097,000	$ (127,723,000)
Notional Amount	2,575,858,000	13,589,356,000
TBAs
Derivative [Line Items]
Notional Amount	245,000,000	6,610,000,000
Interest rate futures
Derivative [Line Items]
Notional Amount	40,000,000	226,000,000
Derivative Liabilities
Derivative [Line Items]
Fair Value	(1,612,000)	(163,424,000)
Notional Amount	361,651,000	6,929,494,000
Derivative Liabilities | Interest rate swaps
Derivative [Line Items]
Fair Value	(15,000)	(97,235,000)
Notional Amount	25,000,000	2,314,300,000
Derivative Liabilities | Interest rate swaps | Cash Flow Hedging
Derivative [Line Items]
Fair Value	0	(51,530,000)
Notional Amount	0	139,500,000
Derivative Liabilities | TBAs
Derivative [Line Items]
Fair Value	(263,000)	(13,359,000)
Notional Amount	105,000,000	4,160,000,000
Derivative Liabilities | Interest rate futures
Derivative [Line Items]
Fair Value	0	(10,000)
Notional Amount	0	12,300,000
Derivative Liabilities | Loan purchase and interest rate lock commitments
Derivative [Line Items]
Fair Value	(1,334,000)	(1,290,000)
Notional Amount	231,651,000	303,394,000
Derivative Assets
Derivative [Line Items]
Fair Value	14,709,000	35,701,000
Notional Amount	2,214,207,000	6,659,862,000
Derivative Assets | Interest rate swaps
Derivative [Line Items]
Fair Value	78,000	17,095,000
Notional Amount	25,000,000	1,399,000,000
Derivative Assets | TBAs
Derivative [Line Items]
Fair Value	402,000	5,755,000
Notional Amount	140,000,000	2,445,000,000
Derivative Assets | Interest rate futures
Derivative [Line Items]
Fair Value	63,000	777,000
Notional Amount	40,000,000	213,700,000
Derivative Assets | Swaptions
Derivative [Line Items]
Fair Value	3,393,000	1,925,000
Notional Amount	285,000,000	1,065,000,000
Derivative Assets | Loan purchase and interest rate lock commitments
Derivative [Line Items]
Fair Value	10,773,000	10,149,000
Notional Amount	$ 1,724,207,000	$ 1,537,162,000

Derivative Financial Instrume_4

Derivative Financial Instruments - Additional Information (Details) - USD ($)	3 Months Ended			9 Months Ended
	Sep. 30, 2020	Mar. 31, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019	Jun. 30, 2020	Dec. 31, 2019	Jun. 30, 2019	Dec. 31, 2018
Derivative [Line Items]
Notional amount	$ 2,575,858,000			$ 2,575,858,000			$ 13,589,356,000
Accumulated other comprehensive income (loss)	1,053,464,000		$ 1,785,059,000	1,053,464,000	$ 1,785,059,000	$ 936,576,000	1,827,231,000	$ 1,564,032,000	$ 1,348,794,000
Interest Rate Agreements Accounted for as Cash Flow Hedges
Derivative [Line Items]
Accumulated other comprehensive income (loss)	(81,597,000)		(61,175,000)	(81,597,000)	(61,175,000)	$ (82,637,000)	(50,939,000)	$ (49,384,000)	$ (34,045,000)
Interest Expense
Derivative [Line Items]
Cash flow hedge gain (loss) to be reclassified over the next 12 months				(4,000,000)
Mortgage Banking Activities, Net
Derivative [Line Items]
Market valuations gains (losses), net	56,619,000		6,205,000	18,173,000	33,625,000
Loan purchase commitments and forward sales commitments | Mortgage Banking Activities, Net
Derivative [Line Items]
Market valuations gains (losses), net	14,000,000		14,000,000	35,000,000	42,000,000
Interest rate contract
Derivative [Line Items]
Notional amount	335,000,000			335,000,000			4,780,000,000
TBAs
Derivative [Line Items]
Notional amount	245,000,000			245,000,000			6,610,000,000
Interest rate futures
Derivative [Line Items]
Notional amount	40,000,000			40,000,000			$ 226,000,000
Unsecuritized Residential and Commercial Loans
Derivative [Line Items]
Derivative gain (loss)	0		(36,000,000)	(98,000,000)	(147,000,000)
Interest rate swaps | Cash Flow Hedging
Derivative [Line Items]
Derivative gain (loss)	$ 0		$ (12,000,000)	$ (33,000,000)	$ (27,000,000)
Derivative, cost of hedge		$ 84,000,000

Derivative Financial Instrume_5

Derivative Financial Instruments - Impact on Interest Expense of Interest Rate Agreements Accounted for as Cash Flow Hedges (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Derivative [Line Items]
Total interest expense	$ (100,411)	$ (116,604)	$ (349,748)	$ (332,100)
Cash Flow Hedging | Interest rate contract
Derivative [Line Items]
Net interest expense on cash flows hedges	0	(727)	(860)	(2,004)
Realized net losses reclassified from other comprehensive income	(1,040)	0	(2,148)	0
Total interest expense	$ (1,040)	$ (727)	$ (3,008)	$ (2,004)

Other Assets and Liabilities -

Other Assets and Liabilities - Components of Other Assets (Details) - USD ($) $ in Thousands		Sep. 30, 2020	Dec. 31, 2019
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]
Accrued interest receivable		$ 39,330	$ 71,058
Investment receivable		25,767	23,330
Right-of-use asset		13,487	11,866
REO		8,535	9,462
Pledged collateral		8,172	32,945
Income tax receivables		8,148	36
FHLBC stock		5,000	43,393
Fixed assets and leasehold improvements		4,408	4,901
Margin receivable		3,809	209,776
Other		7,617	12,554
Total Other Assets	[1]	124,273	$ 419,321
Fixed assets		12,000
Accumulated depreciation		$ 8,000
[1]	Our consolidated balance sheets include assets of consolidated variable interest entities (“VIEs”) that can only be used to settle obligations of these VIEs and liabilities of consolidated VIEs for which creditors do not have recourse to Redwood Trust, Inc. or its affiliates. At September 30, 2020 and December 31, 2019, assets of consolidated VIEs totaled $8,197,095 and $11,931,869, respectively. At September 30, 2020 and December 31, 2019, liabilities of consolidated VIEs totaled $7,238,047 and $10,717,072, respectively. See Note 4 for further discussion.

Other Assets and Liabilities _2

Other Assets and Liabilities - Accrued Expenses and Other Liabilities (Details) - USD ($) $ in Thousands		Sep. 30, 2020	Dec. 31, 2019
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]
Accrued interest payable		$ 34,225	$ 60,655
Payable to minority partner		17,492	13,189
Accrued compensation		17,127	33,888
Lease liability		15,123	13,443
Deferred consideration		14,442	0
Guarantee obligations		11,264	14,009
Current accounts payable		8,717	5,468
Residential loan and MSR repurchase reserve		8,565	4,268
Residential bridge loan holdbacks		6,350	10,682
Deferred tax liabilities		5,152	5,152
Accrued operating expenses		3,922	4,358
Contingent consideration		0	28,484
Other		13,610	13,297
Total Accrued Expenses and Other Liabilities	[1]	$ 155,989	$ 206,893
[1]	Our consolidated balance sheets include assets of consolidated variable interest entities (“VIEs”) that can only be used to settle obligations of these VIEs and liabilities of consolidated VIEs for which creditors do not have recourse to Redwood Trust, Inc. or its affiliates. At September 30, 2020 and December 31, 2019, assets of consolidated VIEs totaled $8,197,095 and $11,931,869, respectively. At September 30, 2020 and December 31, 2019, liabilities of consolidated VIEs totaled $7,238,047 and $10,717,072, respectively. See Note 4 for further discussion.

Other Assets and Liabilities _3

Other Assets and Liabilities - Additional Information (Details) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2020USD ($)property	Sep. 30, 2020USD ($)property	Dec. 31, 2019USD ($)property
Other Assets and Other Liabilities [Line Items]
Real estate owned (REO)	$ 8,535	$ 8,535	$ 9,462
REO liquidations	13,000
Unrealized gain (loss) resulting from market valuation adjustments on REO		(300)
Legacy Sequoia
Other Assets and Other Liabilities [Line Items]
Real estate owned (REO)	$ 1,000	$ 1,000
Number of REO properties recorded on balance sheet | property	3	3	4
Amount related to transfers into REO	$ 1,000
Freddie Mac SLST
Other Assets and Other Liabilities [Line Items]
Real estate owned (REO)	$ 1,000	$ 1,000
Number of REO properties recorded on balance sheet | property	9	9	3
Amount related to transfers into REO	$ 1,000
CAFL
Other Assets and Other Liabilities [Line Items]
Real estate owned (REO)	$ 4,000	$ 4,000
Number of REO properties recorded on balance sheet | property	3	3	2
Amount related to transfers into REO	$ 6,000
Bridge Loan | Debt Securities
Other Assets and Other Liabilities [Line Items]
Real estate owned (REO)	$ 3,000	$ 3,000
Number of REO properties recorded on balance sheet | property	2	2	4
Amount related to transfers into REO	$ 5,000

Short-Term Debt - Outstanding B

Short-Term Debt - Outstanding Balances of Short-Term Debt by Type of Collateral Securing Debt (Details)		9 Months Ended	12 Months Ended
		Sep. 30, 2020USD ($)facility	Dec. 31, 2019USD ($)facility
Short-term Debt [Line Items]
Outstanding Balance	[1]	$ 482,761,000	$ 2,329,145,000
Facilities
Short-term Debt [Line Items]
Number of Facilities | facility		9	22
Outstanding Balance		$ 253,763,000	$ 2,176,591,000
Facilities | Residential loan warehouse
Short-term Debt [Line Items]
Number of Facilities | facility		4	4
Outstanding Balance		$ 81,898,000	$ 185,894,000
Limit		$ 600,000,000	$ 1,425,000,000
Weighted Average Interest Rate		2.90%	3.23%
Weighted Average Days Until Maturity		203 days	69 days
Facilities | Business purpose residential loan warehouse
Short-term Debt [Line Items]
Number of Facilities | facility		2	8
Outstanding Balance		$ 96,811,000	$ 814,118,000
Limit		$ 500,000,000	$ 1,475,000,000
Weighted Average Interest Rate		3.28%	4.11%
Weighted Average Days Until Maturity		437 days	489 days
Facilities | Real estate securities repo
Short-term Debt [Line Items]
Number of Facilities | facility		3	10
Outstanding Balance		$ 75,054,000	$ 1,176,579,000
Limit		$ 0	$ 0
Weighted Average Interest Rate		2.87%	2.94%
Weighted Average Days Until Maturity		38 days	23 days
Servicer advance financing
Short-term Debt [Line Items]
Number of Facilities | facility		1	1
Outstanding Balance		$ 228,998,000	$ 152,554,000
Limit		$ 400,000,000	$ 400,000,000
Weighted Average Interest Rate		1.96%	3.56%
Weighted Average Days Until Maturity		61 days	335 days
[1]	Our consolidated balance sheets include assets of consolidated variable interest entities (“VIEs”) that can only be used to settle obligations of these VIEs and liabilities of consolidated VIEs for which creditors do not have recourse to Redwood Trust, Inc. or its affiliates. At September 30, 2020 and December 31, 2019, assets of consolidated VIEs totaled $8,197,095 and $11,931,869, respectively. At September 30, 2020 and December 31, 2019, liabilities of consolidated VIEs totaled $7,238,047 and $10,717,072, respectively. See Note 4 for further discussion.

Short-Term Debt - Collateral fo

Short-Term Debt - Collateral for Short-Term Debt Facilities (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Short-term Debt [Line Items]
Total real estate securities owned	$ 114,308	$ 1,491,986
Other assets	0	16,252
Total Collateral for Short-Term Debt Facilities	319,836	2,698,366
Held-for-sale residential loans
Short-term Debt [Line Items]
Loan pledged as collateral	95,023	201,949
Business purpose residential loans
Short-term Debt [Line Items]
Loan pledged as collateral	110,505	988,179
On balance sheet
Short-term Debt [Line Items]
Available-for-sale securities pledged as collateral	24,670	618,881
Sequoia Choice | Sequoia securities | Short Term Borrowing Agreement
Short-term Debt [Line Items]
Trading securities pledged as collateral	63,088	111,341
Freddie Mac SLST | Sequoia securities | Short Term Borrowing Agreement
Short-term Debt [Line Items]
Trading securities pledged as collateral	0	381,640
Freddie Mac K-Series | Sequoia securities | Short Term Borrowing Agreement
Short-term Debt [Line Items]
Trading securities pledged as collateral	26,550	252,284
CAFL | Sequoia securities | Short Term Borrowing Agreement
Short-term Debt [Line Items]
Trading securities pledged as collateral	$ 0	$ 127,840

Short-Term Debt - Additional In

Short-Term Debt - Additional Information (Details) - USD ($)	3 Months Ended	9 Months Ended
	Sep. 30, 2020	Sep. 30, 2020	Dec. 31, 2019
Short-term Debt [Line Items]
Average balance of short-term debt	$ 313,000,000	$ 1,420,000,000
Accrued interest payable on short-term debt	1,000,000	1,000,000	$ 6,000,000
Committed line of credit	10,000,000	10,000,000
Fair value of mortgage backed securities securing loan (in excess)	3,000,000	3,000,000
Amount outstanding under credit facilities	0	0	$ 0
Residential Loans
Short-term Debt [Line Items]
Fair value of servicer advances, cash and restricted cash	270,000,000	270,000,000
Servicer advance financing
Short-term Debt [Line Items]
Accrued interest payable on short-term debt	100,000	100,000
Unamortized capitalized commitment costs	$ 200,000	$ 200,000

Short-Term Debt - Remaining Mat

Short-Term Debt - Remaining Maturities of Short Term Debt (Details) - USD ($) $ in Thousands		Sep. 30, 2020	Dec. 31, 2019
Short-term Debt [Line Items]
Short-term debt	[1]	$ 482,761	$ 2,329,145
Within 30 days
Short-term Debt [Line Items]
Short-term debt		38,434
31 to 90 days
Short-term Debt [Line Items]
Short-term debt		266,835
Over 90 days
Short-term Debt [Line Items]
Short-term debt		177,492
Facilities
Short-term Debt [Line Items]
Short-term debt		253,763	2,176,591
Facilities | Within 30 days
Short-term Debt [Line Items]
Short-term debt		38,434
Facilities | 31 to 90 days
Short-term Debt [Line Items]
Short-term debt		37,837
Facilities | Over 90 days
Short-term Debt [Line Items]
Short-term debt		177,492
Facilities | Held-for-sale residential loans
Short-term Debt [Line Items]
Short-term debt		81,898	185,894
Facilities | Held-for-sale residential loans | Within 30 days
Short-term Debt [Line Items]
Short-term debt		1,217
Facilities | Held-for-sale residential loans | 31 to 90 days
Short-term Debt [Line Items]
Short-term debt		0
Facilities | Held-for-sale residential loans | Over 90 days
Short-term Debt [Line Items]
Short-term debt		80,681
Facilities | Business purpose residential loans
Short-term Debt [Line Items]
Short-term debt		96,811
Facilities | Business purpose residential loans | Within 30 days
Short-term Debt [Line Items]
Short-term debt		0
Facilities | Business purpose residential loans | 31 to 90 days
Short-term Debt [Line Items]
Short-term debt		0
Facilities | Business purpose residential loans | Over 90 days
Short-term Debt [Line Items]
Short-term debt		96,811
Facilities | Real estate securities
Short-term Debt [Line Items]
Short-term debt		75,054
Facilities | Real estate securities | Within 30 days
Short-term Debt [Line Items]
Short-term debt		37,217
Facilities | Real estate securities | 31 to 90 days
Short-term Debt [Line Items]
Short-term debt		37,837
Facilities | Real estate securities | Over 90 days
Short-term Debt [Line Items]
Short-term debt		0
Servicer advance financing
Short-term Debt [Line Items]
Short-term debt		228,998	$ 152,554
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		228,998
Servicer advance financing | Over 90 days
Short-term Debt [Line Items]
Short-term debt		$ 0
[1]	Our consolidated balance sheets include assets of consolidated variable interest entities (“VIEs”) that can only be used to settle obligations of these VIEs and liabilities of consolidated VIEs for which creditors do not have recourse to Redwood Trust, Inc. or its affiliates. At September 30, 2020 and December 31, 2019, assets of consolidated VIEs totaled $8,197,095 and $11,931,869, respectively. At September 30, 2020 and December 31, 2019, liabilities of consolidated VIEs totaled $7,238,047 and $10,717,072, 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) - Asset-backed securities issued	Sep. 30, 2020USD ($)series	Dec. 31, 2019USD ($)series
Debt Instrument [Line Items]
Long-term debt	$ 7,172,398,000	$ 10,515,475,000
Revision of Prior Period, Accounting Standards Update, Adjustment
Debt Instrument [Line Items]
Long-term debt	198,057,000	197,110,000
Certificates with principal balance
Debt Instrument [Line Items]
Certificates	6,792,029,000	9,962,253,000
Interest-only certificates
Debt Instrument [Line Items]
Certificates	182,312,000	356,112,000
Legacy Sequoia
Debt Instrument [Line Items]
Long-term debt	$ 292,484,000	$ 402,465,000
Number of series | series	20	20
Legacy Sequoia | Revision of Prior Period, Accounting Standards Update, Adjustment
Debt Instrument [Line Items]
Long-term debt	$ (56,769,000)	$ (18,873,000)
Legacy Sequoia | Minimum
Debt Instrument [Line Items]
Range of weighted average interest rates, by series	0.35%	1.94%
Legacy Sequoia | Maximum
Debt Instrument [Line Items]
Range of weighted average interest rates, by series	1.96%	3.26%
Legacy Sequoia | Certificates with principal balance
Debt Instrument [Line Items]
Certificates	$ 347,985,000	$ 420,056,000
Legacy Sequoia | Interest-only certificates
Debt Instrument [Line Items]
Certificates	1,268,000	1,282,000
Sequoia Choice
Debt Instrument [Line Items]
Long-term debt	$ 1,626,564,000	$ 2,037,198,000
Number of series | series	10	9
Sequoia Choice | Revision of Prior Period, Accounting Standards Update, Adjustment
Debt Instrument [Line Items]
Long-term debt	$ 48,045,000	$ 40,965,000
Sequoia Choice | Minimum
Debt Instrument [Line Items]
Range of weighted average interest rates, by series	2.23%	4.40%
Sequoia Choice | Maximum
Debt Instrument [Line Items]
Range of weighted average interest rates, by series	5.02%	5.05%
Sequoia Choice | Certificates with principal balance
Debt Instrument [Line Items]
Certificates	$ 1,571,714,000	$ 1,979,719,000
Sequoia Choice | Interest-only certificates
Debt Instrument [Line Items]
Certificates	6,805,000	16,514,000
Freddie Mac SLST
Debt Instrument [Line Items]
Long-term debt	$ 2,044,335,000	$ 1,918,322,000
Range of weighted average interest rates, by series		3.50%
Number of series | series	3	2
Debt instrument, face amount	$ 208,000,000
Freddie Mac SLST | Revision of Prior Period, Accounting Standards Update, Adjustment
Debt Instrument [Line Items]
Long-term debt	$ 95,138,000	$ 45,349,000
Freddie Mac SLST | Minimum
Debt Instrument [Line Items]
Range of weighted average interest rates, by series	3.50%
Freddie Mac SLST | Maximum
Debt Instrument [Line Items]
Range of weighted average interest rates, by series	4.75%
Freddie Mac SLST | Certificates with principal balance
Debt Instrument [Line Items]
Certificates	$ 1,925,144,000	1,842,682,000
Freddie Mac SLST | Interest-only certificates
Debt Instrument [Line Items]
Certificates	24,053,000	30,291,000
Freddie Mac K-Series
Debt Instrument [Line Items]
Long-term debt	$ 464,865,000	$ 4,156,239,000
Range of weighted average interest rates, by series	3.39%
Number of series | series	1	5
Freddie Mac K-Series | Revision of Prior Period, Accounting Standards Update, Adjustment
Debt Instrument [Line Items]
Long-term debt	$ 33,531,000	$ 93,559,000
Freddie Mac K-Series | Minimum
Debt Instrument [Line Items]
Range of weighted average interest rates, by series		3.35%
Freddie Mac K-Series | Maximum
Debt Instrument [Line Items]
Range of weighted average interest rates, by series		4.35%
Freddie Mac K-Series | Certificates with principal balance
Debt Instrument [Line Items]
Certificates	418,212,000	$ 3,844,789,000
Freddie Mac K-Series | Interest-only certificates
Debt Instrument [Line Items]
Certificates	13,122,000	217,891,000
CAFL
Debt Instrument [Line Items]
Long-term debt	$ 2,744,150,000	$ 2,001,251,000
Number of series | series	13	10
CAFL | Revision of Prior Period, Accounting Standards Update, Adjustment
Debt Instrument [Line Items]
Long-term debt	$ 78,112,000	$ 36,110,000
CAFL | Minimum
Debt Instrument [Line Items]
Range of weighted average interest rates, by series	3.18%	3.25%
CAFL | Maximum
Debt Instrument [Line Items]
Range of weighted average interest rates, by series	5.53%	5.36%
CAFL | Certificates with principal balance
Debt Instrument [Line Items]
Certificates	$ 2,528,974,000	$ 1,875,007,000
CAFL | Interest-only certificates
Debt Instrument [Line Items]
Certificates	$ 137,064,000	$ 90,134,000

Asset-Backed Securities Issue_3

Asset-Backed Securities Issued - Additional Information (Details) - USD ($)	3 Months Ended	9 Months Ended
	Sep. 30, 2020	Sep. 30, 2020	Sep. 30, 2019
Debt Instrument [Line Items]
Sale of ABS issued to third parties		$ 142,990,000	$ 0
VIE, ownership interest rate		80.00%
Asset-backed securities issued | Variable Interest Entity, Primary Beneficiary
Debt Instrument [Line Items]
VIE, ownership interest rate	100.00%
Debt instrument, face amount	$ 203,000,000	$ 203,000,000
Unamortized debt discount	$ 5,000,000	$ 5,000,000
Debt Instrument interest rate	4.75%	4.75%
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	9 Months Ended	12 Months Ended
	Sep. 30, 2020	Dec. 31, 2019
Debt Instrument [Line Items]
Amortization of debt issuance costs	$ 22,025	$ 33,686
Freddie Mac SLST
Debt Instrument [Line Items]
Amortization of debt issuance costs	5,831	5,374
Freddie Mac K-Series
Debt Instrument [Line Items]
Amortization of debt issuance costs	1,182	12,887
CAFL
Debt Instrument [Line Items]
Amortization of debt issuance costs	9,180	7,298
Asset-backed securities issued | Legacy Sequoia
Debt Instrument [Line Items]
Amortization of debt issuance costs	180	395
Asset-backed securities issued | Sequoia Choice
Debt Instrument [Line Items]
Amortization of debt issuance costs	$ 5,652	$ 7,732

Long-Term Debt (Details)

Long-Term Debt (Details) - USD ($)	Dec. 31, 2019	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Sep. 30, 2020
Debt Instrument [Line Items]
Repayments for FHLBC borrowings		$ 0			$ 2,000,000,000
FHLBC stock	$ 43,393,000	5,000,000			5,000,000
Accrued interest payable	6,000,000	1,000,000			1,000,000
Notional amount	13,589,356,000	2,575,858,000			2,575,858,000
Accrued interest payable	60,655,000	34,225,000			34,225,000
Line of Credit | Non-Recourse Business Purpose Loan Financing Facility Two
Debt Instrument [Line Items]
Amount outstanding		158,000,000			158,000,000
Unamortized debt issuance costs		1,000,000			1,000,000
Debt instrument face amount		$ 157,000,000			157,000,000
Line of Credit | Non-Recourse Business Purpose Loan Financing Facility Two | LIBOR
Debt Instrument [Line Items]
Basis spread on variable rate		3.85%
Reference rate floor		0.50%
Line of Credit | Non-Recourse Business Purpose Loan Financing Facility One
Debt Instrument [Line Items]
Amount outstanding		$ 302,000,000			302,000,000
Unamortized debt issuance costs		4,000,000			4,000,000
Debt instrument face amount		298,000,000			298,000,000
Maximum borrowing limit			$ 530,000,000
Line of Credit | Non-Recourse Business Purpose Loan Financing Facility One | Secured Debt
Debt Instrument [Line Items]
Maximum borrowing limit			355,000,000
Line of Credit | Non-Recourse Business Purpose Loan Financing Facility One | Revolving Credit Facility
Debt Instrument [Line Items]
Maximum borrowing limit			$ 175,000,000
Line of Credit | Non-Recourse Business Purpose Loan Financing Facility One | LIBOR
Debt Instrument [Line Items]
Basis spread on variable rate			7.50%
Reference rate floor			1.50%
Line of Credit | Recourse Business Purpose Loan Financing Facility Through September 2023
Debt Instrument [Line Items]
Amount outstanding		0			0
Maximum borrowing limit		$ 250,000,000			250,000,000
Line of Credit | Recourse Business Purpose Loan Financing Facility Through September 2023 | LIBOR
Debt Instrument [Line Items]
Basis spread on variable rate		3.00%
Line of Credit | Recourse Business Purpose Loan Financing Facility
Debt Instrument [Line Items]
Amount outstanding		$ 150,000,000			150,000,000
Unamortized debt issuance costs		1,000,000			1,000,000
Debt instrument face amount		150,000,000			150,000,000
Maximum borrowing limit			$ 350,000,000
Line of Credit | Recourse Business Purpose Loan Financing Facility | LIBOR
Debt Instrument [Line Items]
Reference rate floor			1.00%
Line of Credit | Recourse Business Purpose Loan Financing Facility | LIBOR | Minimum
Debt Instrument [Line Items]
Basis spread on variable rate			3.50%
Line of Credit | Recourse Business Purpose Loan Financing Facility | LIBOR | Maximum
Debt Instrument [Line Items]
Basis spread on variable rate			4.00%
Line of Credit | Recourse Revolving Debt Facility
Debt Instrument [Line Items]
Amount outstanding		0			0
Maximum borrowing limit				$ 50,000,000
Collateral amounts		33,000,000			33,000,000
Line of Credit | Recourse Revolving Debt Facility | LIBOR
Debt Instrument [Line Items]
Basis spread on variable rate				2.75%
Bridge Loan | Non-Recourse Business Purpose Loan Financing Facility Two
Debt Instrument [Line Items]
Pledged assets real estate pledged as collateral, at fair value		216,000,000			216,000,000
Bridge Loan | Non-Recourse Business Purpose Loan Financing Facility One
Debt Instrument [Line Items]
Pledged assets real estate pledged as collateral, at fair value		369,000,000			369,000,000
Bridge Loan | Recourse Business Purpose Loan Financing Facility
Debt Instrument [Line Items]
Pledged assets real estate pledged as collateral, at fair value		18,000,000			18,000,000
Loans Payable | Non-Recourse Business Purpose Loan Financing Facility One
Debt Instrument [Line Items]
Pledged assets real estate pledged as collateral, at fair value		25,000,000			25,000,000
Loans Payable | Recourse Business Purpose Loan Financing Facility
Debt Instrument [Line Items]
Pledged assets real estate pledged as collateral, at fair value		$ 194,000,000			$ 194,000,000
Convertible Debt | Exchangeable Senior Notes Due 2025
Debt Instrument [Line Items]
Debt Instrument interest rate		5.75%			5.75%
Unamortized debt issuance costs		$ 4,000,000			$ 4,000,000
Convertible notes		172,000,000			172,000,000
Amount of debt repurchased		29,000,000			29,000,000
Gain (loss) on extinguishment of debt		6,000,000
Accrued interest payable		$ 5,000,000			$ 5,000,000
Convertible Debt | Senior Notes Due 2024
Debt Instrument [Line Items]
Debt Instrument interest rate		5.625%			5.625%
Unamortized debt issuance costs		$ 2,000,000			$ 2,000,000
Convertible notes		150,000,000			150,000,000
Amount of debt repurchased		50,000,000			50,000,000
Gain (loss) on extinguishment of debt		9,000,000
Accrued interest payable		2,000,000			2,000,000
Unamortized debt discount		$ 1,000,000			$ 1,000,000
Convertible Debt | Senior Notes Due 2023
Debt Instrument [Line Items]
Debt Instrument interest rate		4.75%			4.75%
Unamortized debt issuance costs		$ 3,000,000			$ 3,000,000
Convertible notes		199,000,000			199,000,000
Amount of debt repurchased		46,000,000			46,000,000
Gain (loss) on extinguishment of debt		10,000,000
Accrued interest payable		1,000,000			1,000,000
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]
Accrued interest payable	1,000,000	1,000,000			1,000,000
FHLB Chicago | FHLB Member Subsidiary
Debt Instrument [Line Items]
Federal home loan bank advances outstanding	$ 2,000,000,000	$ 1,000,000			$ 1,000,000
Weighted average interest rate	1.88%	0.35%			0.35%
Weighted average maturity (in years)	6 years
FHLB Chicago | Redwood | Held-for-sale residential loans | Restricted cash
Debt Instrument [Line Items]
Loans pledged as collateral under borrowing agreement with FHLBC		$ 1,000,000			$ 1,000,000
Affiliated Entity | Recourse Subordinate Securities Financing Facilities | Non-Marginable Debt Repurchase Agreement One
Debt Instrument [Line Items]
Debt Instrument interest rate	4.21%
Amount outstanding		180,000,000			180,000,000
Unamortized debt issuance costs		1,000,000			1,000,000
Debt instrument face amount		179,000,000			179,000,000
Affiliated Entity | Recourse Subordinate Securities Financing Facilities | Non-Marginable Debt Repurchase Agreement Two
Debt Instrument [Line Items]
Debt Instrument interest rate			4.21%
Amount outstanding		103,000,000			103,000,000
Unamortized debt issuance costs		1,000,000			1,000,000
Debt instrument face amount		102,000,000			102,000,000
Affiliated Entity | Sequoia Choice | Recourse Subordinate Securities Financing Facilities | Non-Marginable Debt Repurchase Agreement One
Debt Instrument [Line Items]
Pledged assets real estate pledged as collateral, at fair value		232,000,000			232,000,000
Affiliated Entity | CAFL | Recourse Subordinate Securities Financing Facilities | Non-Marginable Debt Repurchase Agreement Two
Debt Instrument [Line Items]
Pledged assets real estate pledged as collateral, at fair value		$ 112,000,000			$ 112,000,000

Commitments and Contingencies -

Commitments and Contingencies - Additional Information (Details)		Sep. 30, 2020USD ($)lease	May 31, 2020USD ($)	Sep. 30, 2020USD ($)lease	Mar. 31, 2020USD ($)	Sep. 30, 2019USD ($)	Dec. 31, 2018partnership	Sep. 30, 2020USD ($)leaserepurchase_requestloan	Sep. 30, 2019USD ($)repurchase_requestloan	Dec. 31, 2019USD ($)	Mar. 01, 2019USD ($)	May 31, 2018USD ($)	Dec. 31, 2016USD ($)	Dec. 31, 2015USD ($)
Loss Contingencies [Line Items]
Lessee, number of leases | lease		7		7				7
Present value of remaining lease payments		$ 18,175,000		$ 18,175,000				$ 18,175,000
Operating lease expense								$ 3,000,000	$ 2,000,000
Number of new office leases | lease								3
Lease liability		$ 15,123,000		$ 15,123,000				$ 15,123,000		$ 13,443,000
Operating lease liability, statement of financial position [Extensible List]		us-gaap:AccountsPayableAndAccruedLiabilitiesCurrentAndNoncurrent		us-gaap:AccountsPayableAndAccruedLiabilitiesCurrentAndNoncurrent				us-gaap:AccountsPayableAndAccruedLiabilitiesCurrentAndNoncurrent
Right-of-use asset		$ 13,487,000		$ 13,487,000				$ 13,487,000		11,866,000
Operating lease right-of-use asset, statement of financial position [Extensible List]		us-gaap:OtherAssets		us-gaap:OtherAssets				us-gaap:OtherAssets
Weighted average remaining lease term		7 years		7 years				7 years
Discount rate		5.00%		5.00%				5.00%
Derivative liabilities	[1]	$ 1,612,000		$ 1,612,000				$ 1,612,000		163,424,000
Number of partnerships, committed to fund | partnership							2
Contingent consideration		0		0				0		28,484,000
Other income related to risk sharing agreement				1,200,000		$ 905,000		3,146,000	$ 2,351,000
Guarantee obligations		11,264,000		11,264,000				11,264,000		14,009,000
Guarantee obligations, credit reserve		5,000,000		5,000,000				5,000,000
Special purpose entities assets		47,000,000		47,000,000				47,000,000		48,000,000
Special purpose entities liabilities		11,000,000		11,000,000				11,000,000		14,000,000
Residential repurchase reserve		8,565,000		8,565,000				$ 8,565,000		4,268,000
Number of residential repurchase requests (in repurchase requests) | repurchase_request								8	10
Number of loans repurchased | loan								0	0
Residential loans repurchase provision (reversal)								$ 4,000,000	$ (200,000)
Aggregate amount of loss contingency reserves		2,000,000		2,000,000				2,000,000
Damages sought			$ 2,000,000
Residential Loan Seller Demands
Loss Contingencies [Line Items]
Expenses from litigation recorded				4,000,000				9,000,000
Aggregate amount of accrual		6,500,000		6,500,000				6,500,000
Minimum | Residential Loan Seller Demands
Loss Contingencies [Line Items]
Reasonably possible losses estimated		0		0				0
Maximum | Residential Loan Seller Demands
Loss Contingencies [Line Items]
Reasonably possible losses estimated		1,500,000		1,500,000				1,500,000
Residential Loans
Loss Contingencies [Line Items]
Loan principal		102,921,000		102,921,000				102,921,000		524,928,000
Financing Receivables, Equal to Greater than 90 Days Past Due | Residential Loans
Loss Contingencies [Line Items]
Balance of loans 90 days or more delinquent		2,356,000		2,356,000				2,356,000		$ 747,000
Other income
Loss Contingencies [Line Items]
Other income related to risk sharing agreement				1,000,000		1,000,000		3,000,000	2,000,000
Mortgage banking and investment activities
Loss Contingencies [Line Items]
Market valuation losses related to these investments				(300,000)		$ (100,000)		(900,000)	$ (200,000)
Guarantee Obligations
Loss Contingencies [Line Items]
Original unpaid balance of loans subject to risk sharing agreements													$ 3,190,000,000	$ 3,190,000,000
Potential future payments on loans		44,000,000		44,000,000				44,000,000
Loan principal		$ 1,120,000,000		$ 1,120,000,000				$ 1,120,000,000
Weighted average original FICO score		758		758				758
Weighted average original loan-to-value (LTV)		75.00%		75.00%				75.00%
Guarantee Obligations | Residential Loans
Loss Contingencies [Line Items]
Fair value of loans, in foreclosure		$ 0		$ 0				$ 0
Guarantee Obligations | Financing Receivables, Equal to Greater than 90 Days Past Due
Loss Contingencies [Line Items]
Balance of loans 90 days or more delinquent		42,000,000		42,000,000				42,000,000
Commitment To Fund Residential Bridge Loan
Loss Contingencies [Line Items]
Commitments to fund temporary advances		225,000,000		225,000,000				225,000,000
Derivative liabilities		1,000,000		1,000,000				1,000,000
Commitment To Fund Temporary Advances On Residential Bridge Loans
Loss Contingencies [Line Items]
Commitments to fund temporary advances		15,000,000		15,000,000				15,000,000
5 Arches
Loss Contingencies [Line Items]
Contingent consideration maximum amount												$ 29,000,000
Cash payment for contingent consideration liability					$ 11,000,000
Restricted stock awards					$ 3,000,000
Contingent consideration		14,000,000		14,000,000				14,000,000			$ 25,000,000
Shared home appreciation options
Loss Contingencies [Line Items]
Payments to acquire investments		47,000,000
Shared home appreciation options | Commitment To Fund Investment
Loss Contingencies [Line Items]
Commitments to fund temporary advances		$ 3,000,000		$ 3,000,000				$ 3,000,000
[1]	Our consolidated balance sheets include assets of consolidated variable interest entities (“VIEs”) that can only be used to settle obligations of these VIEs and liabilities of consolidated VIEs for which creditors do not have recourse to Redwood Trust, Inc. or its affiliates. At September 30, 2020 and December 31, 2019, assets of consolidated VIEs totaled $8,197,095 and $11,931,869, respectively. At September 30, 2020 and December 31, 2019, liabilities of consolidated VIEs totaled $7,238,047 and $10,717,072, respectively. See Note 4 for further discussion.

Commitments and Contingencies_2

Commitments and Contingencies - Future Lease Commitments (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Commitments and Contingencies Disclosure [Abstract]
2020 (3 months)	$ 930
2021	2,949
2022	2,427
2023	1,913
2024	1,917
2025	8,039
Total Lease Commitments	18,175
Less: Imputed interest	(3,052)
Lease liability	$ 15,123	$ 13,443

Equity - Changes to Accumulated

Equity - Changes to Accumulated Other Comprehensive Income (Loss) by Component (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Net unrealized gains (losses) on our Level 3 AFS securities	$ 8,000		$ (16,000)
Balance at beginning of period	936,576	$ 1,564,032	1,827,231	$ 1,348,794
Total other comprehensive income (loss)	8,831	(10,799)	(62,073)	(23,173)
Balance at End of Period	1,053,464	1,785,059	1,053,464	1,785,059
Available-for-Sale Securities
Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Balance at beginning of period	53,246	98,307	92,452	95,342
Other comprehensive income (loss) before reclassifications	8,236	4,484	(19,890)	19,764
Amounts reclassified from other accumulated comprehensive income	(445)	(3,492)	(11,525)	(15,807)
Total other comprehensive income (loss)	7,791	992	(31,415)	3,957
Balance at End of Period	61,037	99,299	61,037	99,299
Interest Rate Agreements Accounted for as Cash Flow Hedges
Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Balance at beginning of period	(82,637)	(49,384)	(50,939)	(34,045)
Other comprehensive income (loss) before reclassifications	0	(11,791)	(32,806)	(27,130)
Amounts reclassified from other accumulated comprehensive income	1,040	0	2,148	0
Total other comprehensive income (loss)	1,040	(11,791)	(30,658)	(27,130)
Balance at End of Period	$ (81,597)	$ (61,175)	$ (81,597)	$ (61,175)

Equity - Reclassifications out

Equity - Reclassifications out of Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Investment fair value changes, net	$ 107,047	$ 11,444	$ (611,557)	$ 34,741
Realized gains, net	(602)	(4,714)	(30,419)	(18,227)
Interest expense	100,411	116,604	349,748	332,100
Net income before provision for income taxes	150,925	34,196	(649,221)	123,142
Reclassification out of Accumulated Other Comprehensive Income | Available-for-Sale Securities
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Investment fair value changes, net	(444)	0	1,027	0
Realized gains, net	0	(3,492)	(12,552)	(15,807)
Net income before provision for income taxes	(444)	(3,492)	(11,525)	(15,807)
Reclassification out of Accumulated Other Comprehensive Income | Interest Rate Agreements Accounted for as Cash Flow Hedges
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Interest expense	1,040	0	2,148	0
Net income before provision for income taxes	$ 1,040	$ 0	$ 2,148	$ 0

Equity - Additional Information

Equity - Additional Information (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019	Mar. 31, 2020	Dec. 31, 2018	Feb. 28, 2018
Stockholders Equity Note [Line Items]
Net proceeds from issuance of common stock			$ 5,791,000	$ 426,970,000
Direct stock purchase and dividend reinvestment plan				$ 6,307,000
Common stock repurchased, amount	$ 21,659,000		21,659,000
Share Repurchase Plan, February 2018
Stockholders Equity Note [Line Items]
Common stock authorized to repurchase by Board							$ 100,000,000
Common stock repurchased (in shares)	3,047,335
Common stock repurchased, amount	$ 22,000,000
Available authorization remaining for repurchase	$ 78,000,000		$ 78,000,000
Convertible Debt Securities
Stockholders Equity Note [Line Items]
Securities excluded in the calculation of diluted earnings per share (in shares)			32,225,825
Equity awards
Stockholders Equity Note [Line Items]
Securities excluded in the calculation of diluted earnings per share (in shares)	13,560	11,710	15,457	9,361
At The Market Offerings | Common Stock
Stockholders Equity Note [Line Items]
Stock issuance program, authorized amount					$ 175,000,000	$ 150,000,000
Issuance of common stock (in shares)			129,500
Net proceeds from issuance of common stock			$ 2,000,000
Remaining outstanding	$ 110,000,000		$ 110,000,000
Common Stock
Stockholders Equity Note [Line Items]
Issuance of common stock (in shares)		14,375,000	350,088	26,666,191
Direct stock purchase and dividend reinvestment plan (in shares)			0	399,838
Direct stock purchase and dividend reinvestment plan				$ 4,000
Common stock repurchased (in shares)	3,047,335		3,047,335
Common stock repurchased, amount	$ 30,000		$ 30,000

Equity - Basic and Diluted Earn

Equity - Basic and Diluted Earnings Per Common Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Basic Earnings (Loss) per Common Share:
Net income (loss) attributable to Redwood	$ 141,812	$ 34,310	$ (636,142)	$ 120,040
Less: Dividends and undistributed earnings allocated to participating securities	(4,067)	(856)	(1,427)	(3,260)
Net income (loss) allocated to common shareholders	$ 137,745	$ 33,454	$ (637,569)	$ 116,780
Basic weighted average common shares outstanding (in shares)	113,403,102	101,872,126	113,952,308	97,214,064
Basic Earnings (Loss) per Common Share (in dollars per share)	$ 1.21	$ 0.33	$ (5.60)	$ 1.20
Diluted Earnings (Loss) per Common Share:
Net income (loss) attributable to Redwood	$ 141,812	$ 34,310	$ (636,142)	$ 120,040
Less: Dividends and undistributed earnings allocated to participating securities	(3,512)	(1,036)	(1,427)	(3,625)
Adjust for interest expense and gain on extinguishment of convertible notes for the period, net of tax	6,990	8,887	0	26,271
Net income (loss) allocated to common shareholders	$ 145,290	$ 42,161	$ (637,569)	$ 142,686
Weighted average common shares outstanding (in shares)	113,403,102	101,872,126	113,952,308	97,214,064
Net effect of dilutive equity awards (in shares)	0	362,743	0	261,155
Net effect of assumed convertible notes conversion to common shares (in shares)	28,566,875	34,287,840	0	33,727,470
Diluted weighted average common shares outstanding (in shares)	141,969,977	136,522,709	113,952,308	131,202,689
Diluted Earnings (Loss) per Common Share (in dollars per share)	$ 1.02	$ 0.31	$ (5.60)	$ 1.09

Equity Compensation Plans - Add

Equity Compensation Plans - Additional Information (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended	12 Months Ended
	Jun. 30, 2020	Mar. 31, 2020	Sep. 30, 2020	Dec. 31, 2019
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Weighted average amortization period remaining for equity awards			1 year
Reversal of stock-based compensation expense previously recorded		$ 1
Shares of common stock to be purchased in aggregate for all employees (in shares)			600,000
Number of shares purchased by employees (in shares)			477,142	430,772
Restricted Stock Awards
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unvested outstanding stock awards (in shares)			80,550	216,470
Number of stock awards granted (in shares)			0
Number of stock awards vested (in shares)			101,063
Number of stock awards forfeited (in shares)			34,857
Restricted Stock Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unvested outstanding stock awards (in shares)			294,986	275,173
Number of stock awards granted (in shares)			205,482
Number of stock awards vested (in shares)			55,514
Number of stock awards forfeited (in shares)			130,155
Deferred Stock Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unvested outstanding stock awards (in shares)			2,420,737	2,630,805
Number of stock awards granted (in shares)			494,719
Number of stock awards vested (in shares)			1,406,190	1,286,063
Number of stock awards forfeited (in shares)			291,253
Stock units distributed (in shares)			413,533
Performance Stock Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unvested outstanding stock awards (in shares)			739,895	839,070
Number of stock awards forfeited (in shares)			99,175
Share-based compensation, vesting period (in years)			3 years
Redwood Incentive Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common stock available for grant (in shares)			8,629,455	3,637,480
Additional common stock authorized (in shares)	5,000,000

Equity Compensation Plans - Unr

Equity Compensation Plans - Unrecognized Compensation Cost (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2020USD ($)
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized [Roll Forward]
Unrecognized compensation cost at beginning of period	$ 32,328
Equity grants	10,629
Performance-based valuation adjustment	(7,352)
Equity grant forfeitures	(8,071)
Equity compensation expense	(7,896)
Unrecognized Compensation Cost at End of Period	19,638
Redwood Incentive Plan | Restricted Stock Awards
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized [Roll Forward]
Unrecognized compensation cost at beginning of period	1,990
Equity grants	108
Performance-based valuation adjustment	0
Equity grant forfeitures	(529)
Equity compensation expense	(807)
Unrecognized Compensation Cost at End of Period	762
Redwood Incentive Plan | Restricted Stock Units
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized [Roll Forward]
Unrecognized compensation cost at beginning of period	3,534
Equity grants	3,581
Performance-based valuation adjustment	0
Equity grant forfeitures	(2,161)
Equity compensation expense	(1,067)
Unrecognized Compensation Cost at End of Period	3,887
Redwood Incentive Plan | Deferred Stock Units
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized [Roll Forward]
Unrecognized compensation cost at beginning of period	17,858
Equity grants	6,780
Performance-based valuation adjustment	0
Equity grant forfeitures	(4,733)
Equity compensation expense	(6,268)
Unrecognized Compensation Cost at End of Period	13,637
Redwood Incentive Plan | Performance Stock Units
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized [Roll Forward]
Unrecognized compensation cost at beginning of period	8,946
Equity grants	0
Performance-based valuation adjustment	(7,352)
Equity grant forfeitures	(648)
Equity compensation expense	326
Unrecognized Compensation Cost at End of Period	1,272
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
Performance-based valuation adjustment	0
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		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Other income, net	$ (114)	$ 4,356	$ 3,979	$ 13,840
Mortgage banking activities, net	59,395	9,515	24,511	40,984
Residential Mortgage Banking Activities, Net
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Other income, net	(715)	407	(7,069)	1,380
Mortgage banking activities, net	11,864	5,017	(19,222)	31,203
Residential Mortgage Banking Activities, Net | 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	12,589	6,320	19,151	41,431
Residential 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	(10)	(1,710)	(31,304)	(11,608)
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	938	1,010	(4,256)	2,108
Other income, net	3,491	2,903	13,407	5,979
Mortgage banking activities, net	47,531	4,498	43,733	9,781
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	(89)	(1,262)	(21,627)	(3,779)
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	$ 43,191	$ 1,847	$ 56,209	$ 5,473

Other Income (Details)

Other Income (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Other Income and Expenses [Abstract]
MSR (loss) income, net	$ (2,362)	$ 431	$ (5,595)	$ 2,342
Risk share income	1,200	905	3,146	2,351
FHLBC capital stock dividend	116	541	1,201	1,623
Equity investment income	341	560	615	732
5 Arches loan administration fee income	688	1,344	2,206	3,298
Gain on re-measurement of investment in 5 Arches	0	0	0	2,441
Other	(97)	575	2,406	1,053
Other income, net	$ (114)	$ 4,356	$ 3,979	$ 13,840

General and Administrative Ex_3

General and Administrative Expenses, Loan Acquisition Costs, and Other Expenses - Components of General and Administrative Expenses and Other Expenses (Details) - USD ($) $ in Thousands	Oct. 15, 2019	Sep. 30, 2020	Mar. 31, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Business Acquisition [Line Items]
Fixed compensation expense		$ 10,103		$ 9,391	$ 36,605	$ 26,740
Variable compensation expense		5,882		3,489	9,171	11,356
Equity compensation expense		2,639		3,155	7,896	10,132
Acquisition-related equity compensation expense		1,212		0	3,636	0
Systems and consulting		2,145		3,230	7,752	7,594
Office costs		1,859		1,517	5,854	4,406
Accounting and legal		1,601		1,767	6,605	3,852
Corporate costs		831		482	2,128	1,701
Other operating expenses		1,358		1,868	5,185	4,941
Total General and Administrative Expenses		27,630		24,899	84,832	70,722
Commissions		879		659	3,027	1,432
Underwriting costs		771		1,074	3,289	3,184
Transfer and holding costs		508		183	1,400	891
Total Loan Acquisition Costs		2,158		1,916	7,716	5,507
Goodwill impairment expense		0	$ 89,000	0	88,675	0
Amortization of purchase-related intangible assets		3,873		1,897	12,052	4,608
Contingent consideration expense		135		236	581	547
Other		3,780		398	2,978	866
Total Other Expenses		7,788		2,531	104,286	6,021
Total General and Administrative Expenses, Loan Acquisition Costs, and Other Expenses		37,576		$ 29,346	196,834	$ 82,250
Variable compensation expense		3,000			3,000
Cash Based Retention Award
Business Acquisition [Line Items]
Cash-based retention awards granted		$ 8,000			$ 8,000
Variable compensation expense, term		3 years
Long Term Relative TSR Performance Vesting Cash Awards
Business Acquisition [Line Items]
Variable compensation expense, service period		3 years
CoreVest
Business Acquisition [Line Items]
Restricted stock awards (in shares)	588,260
Restricted stock awards	$ 10,000
Contingent consideration performance term	2 years

Taxes - Additional Information

Taxes - Additional Information (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Income Tax Disclosure [Abstract]
Provision from (benefit for) income taxes	$ 9,113	$ (114)	$ (13,079)	$ 3,102

Taxes - Reconciliation of Statu

Taxes - Reconciliation of Statutory Tax Rate to Effective Tax Rate (Details)	9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
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	(23.60%)	(2.50%)
Change in valuation allowance	(4.00%)	(2.50%)
Dividends paid deduction	0.00%	(22.10%)
Effective Tax Rate	2.00%	2.50%

Segment Information - Additiona

Segment Information - Additional Information (Details)	9 Months Ended
	Sep. 30, 2020segment
Segment Reporting [Abstract]
Number of operating segments	3

Segment Information - Financial

Segment Information - Financial Information by Segment (Details) - USD ($) $ in Thousands	3 Months Ended			9 Months Ended
	Sep. 30, 2020	Mar. 31, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Segment Reporting Information [Line Items]
Interest income	$ 121,982		$ 150,117	$ 450,009	$ 429,700
Interest expense	(100,411)		(116,604)	(349,748)	(332,100)
Net Interest Income	21,571		33,513	100,261	97,600
Non-interest Income (Loss)
Mortgage banking activities, net	59,395		9,515	24,511	40,984
Investment fair value changes, net	107,047		11,444	(611,557)	34,741
Other income, net	(114)		4,356	3,979	13,840
Realized gains, net	602		4,714	30,419	18,227
Total non-interest income (loss), net	166,930		30,029	(552,648)	107,792
General and administrative expenses	(27,630)		(24,899)	(84,832)	(70,722)
Loan acquisition costs	(2,158)		(1,916)	(7,716)	(5,507)
Other expenses	(7,788)		(2,531)	(104,286)	(6,021)
(Provision for) benefit from income taxes	(9,113)		114	13,079	(3,102)
Net Income (Loss)	141,812		34,310	(636,142)	120,040
Non-cash amortization (expense) income, net	(6,333)		(718)	(19,378)	(890)
Other significant non-cash expense: goodwill impairment	0	$ (89,000)	0	(88,675)	0
Operating Segments | Residential Lending
Segment Reporting Information [Line Items]
Interest income	26,672		69,586	123,956	204,036
Interest expense	(22,541)		(48,798)	(94,112)	(145,795)
Net Interest Income	4,131		20,788	29,844	58,241
Non-interest Income (Loss)
Mortgage banking activities, net	11,864		5,016	(19,222)	31,202
Investment fair value changes, net	2,443		(11,088)	(159,107)	(20,910)
Other income, net	(2,011)		1,878	(2,278)	6,317
Realized gains, net	0		0	2,001	7,728
Total non-interest income (loss), net	12,296		(4,194)	(178,606)	24,337
General and administrative expenses	(4,602)		(5,581)	(12,901)	(17,591)
Loan acquisition costs	(304)		(867)	(1,512)	(2,859)
Other expenses	(3,309)		0	(3,309)	0
(Provision for) benefit from income taxes	(826)		228	7,827	(1,757)
Net Income (Loss)	7,386		10,374	(158,657)	60,371
Non-cash amortization (expense) income, net	1,785		2,537	602	6,780
Other significant non-cash expense: goodwill impairment				0
Operating Segments | Business Purpose Lending
Segment Reporting Information [Line Items]
Interest income	55,930		5,527	162,732	12,595
Interest expense	(46,027)		(2,813)	(119,854)	(6,590)
Net Interest Income	9,903		2,714	42,878	6,005
Non-interest Income (Loss)
Mortgage banking activities, net	47,531		4,499	43,733	9,782
Investment fair value changes, net	16,892		(1,073)	(84,837)	(1,833)
Other income, net	623		1,918	3,493	4,213
Realized gains, net	0		0	0	0
Total non-interest income (loss), net	65,046		5,344	(37,611)	12,162
General and administrative expenses	(9,321)		(6,028)	(29,977)	(13,452)
Loan acquisition costs	(1,660)		(756)	(5,630)	(2,017)
Other expenses	(3,874)		(1,900)	(100,743)	(4,432)
(Provision for) benefit from income taxes	(8,544)		(8)	477	25
Net Income (Loss)	51,550		(634)	(130,606)	(1,709)
Non-cash amortization (expense) income, net	(6,719)		(2,107)	(18,050)	(4,907)
Other significant non-cash expense: goodwill impairment				(88,675)
Operating Segments | Third-Party Investments
Segment Reporting Information [Line Items]
Interest income	37,576		70,709	155,583	199,145
Interest expense	(27,534)		(61,541)	(123,160)	(168,167)
Net Interest Income	10,042		9,168	32,423	30,978
Non-interest Income (Loss)
Mortgage banking activities, net	0		0	0	0
Investment fair value changes, net	87,890		24,057	(366,696)	58,492
Other income, net	340		560	1,072	600
Realized gains, net	602		4,714	3,236	10,499
Total non-interest income (loss), net	88,832		29,331	(362,388)	69,591
General and administrative expenses	(709)		(676)	(4,230)	(2,239)
Loan acquisition costs	(194)		(180)	(567)	(503)
Other expenses	(470)		(395)	347	(864)
(Provision for) benefit from income taxes	257		(106)	4,775	(1,370)
Net Income (Loss)	97,758		37,142	(329,640)	95,593
Non-cash amortization (expense) income, net	117		0	1,105	(824)
Other significant non-cash expense: goodwill impairment				0
Corporate/ Other
Segment Reporting Information [Line Items]
Interest income	1,804		4,295	7,738	13,924
Interest expense	(4,309)		(3,452)	(12,622)	(11,548)
Net Interest Income	(2,505)		843	(4,884)	2,376
Non-interest Income (Loss)
Mortgage banking activities, net	0		0	0	0
Investment fair value changes, net	(178)		(452)	(917)	(1,008)
Other income, net	934		0	1,692	2,710
Realized gains, net	0		0	25,182	0
Total non-interest income (loss), net	756		(452)	25,957	1,702
General and administrative expenses	(12,998)		(12,614)	(37,724)	(37,440)
Loan acquisition costs	0		(113)	(7)	(128)
Other expenses	(135)		(236)	(581)	(725)
(Provision for) benefit from income taxes	0		0	0	0
Net Income (Loss)	(14,882)		(12,572)	(17,239)	(34,215)
Non-cash amortization (expense) income, net	$ (1,516)		$ (1,148)	(3,035)	$ (1,939)
Other significant non-cash expense: goodwill impairment				$ 0

Segment Information - Component

Segment Information - Components of Corporate/Other (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Segment Reporting Information [Line Items]
Interest income	$ 121,982	$ 150,117	$ 450,009	$ 429,700
Interest expense	(100,411)	(116,604)	(349,748)	(332,100)
Net Interest Income	21,571	33,513	100,261	97,600
Investment fair value changes, net	107,047	11,444	(611,557)	34,741
Other	(97)	575	2,406	1,053
Realized gains, net	602	4,714	30,419	18,227
Total non-interest income (loss), net	166,930	30,029	(552,648)	107,792
General and administrative expenses	(27,630)	(24,899)	(84,832)	(70,722)
Loan acquisition costs	(2,158)	(1,916)	(7,716)	(5,507)
Other expenses	(7,788)	(2,531)	(104,286)	(6,021)
Net Income (Loss)	141,812	34,310	(636,142)	120,040
Corporate/ Other
Segment Reporting Information [Line Items]
Interest income	1,804	4,295	7,738	13,924
Interest expense	(4,309)	(3,452)	(12,622)	(11,548)
Net Interest Income	(2,505)	843	(4,884)	2,376
Investment fair value changes, net	(178)	(452)	(917)	(1,008)
Other	934	0	1,692	2,710
Realized gains, net	0	0	25,182	0
Total non-interest income (loss), net	756	(452)	25,957	1,702
General and administrative expenses	(12,998)	(12,614)	(37,724)	(37,440)
Loan acquisition costs	0	(113)	(7)	(128)
Other expenses	(135)	(236)	(581)	(725)
Net Income (Loss)	(14,882)	(12,572)	(17,239)	(34,215)
Corporate/ Other | Legacy Consolidated VIEs
Segment Reporting Information [Line Items]
Interest income	1,795	4,295	7,675	13,924
Interest expense	(1,058)	(3,452)	(5,098)	(11,548)
Net Interest Income	737	843	2,577	2,376
Investment fair value changes, net	(81)	(407)	(702)	(904)
Other	0	0	0	0
Realized gains, net			0	0
Total non-interest income (loss), net	(81)	(407)	(702)	(904)
General and administrative expenses	0	0	0	0
Loan acquisition costs	0	0	0	0
Other expenses	0	0	0	0
Net Income (Loss)	656	436	1,875	1,472
Corporate/ Other | Other
Segment Reporting Information [Line Items]
Interest income	9	0	63	0
Interest expense	(3,251)	0	(7,524)	0
Net Interest Income	(3,242)	0	(7,461)	0
Investment fair value changes, net	(97)	(45)	(215)	(104)
Other	934	0	1,692	2,710
Realized gains, net			25,182	0
Total non-interest income (loss), net	837	(45)	26,659	2,606
General and administrative expenses	(12,998)	(12,614)	(37,724)	(37,440)
Loan acquisition costs	0	(113)	(7)	(128)
Other expenses	(135)	(236)	(581)	(725)
Net Income (Loss)	$ (15,538)	$ (13,008)	$ (19,114)	$ (35,687)

Segment Information - Supplemen

Segment Information - Supplemental Information by Segment (Details) - USD ($) $ in Thousands		Sep. 30, 2020	Dec. 31, 2019
Segment Reporting Information [Line Items]
Real estate securities	[1]	$ 351,335	$ 1,099,874
Other investments	[1]	384,628	358,130
Goodwill and intangible assets	[1]	60,737	161,464
Total Assets	[1]	10,402,412	17,995,440
Residential loans
Segment Reporting Information [Line Items]
Loans, at fair value		4,494,936	7,714,850
Business purpose residential loans
Segment Reporting Information [Line Items]
Loans, at fair value		3,956,101	3,506,743
Multifamily loans
Segment Reporting Information [Line Items]
Loans, at fair value		491,415	4,408,524
Operating Segments | Residential Lending
Segment Reporting Information [Line Items]
Real estate securities		146,608	229,074
Other investments		14,878	42,224
Goodwill and intangible assets		0	0
Total Assets		2,148,643	5,410,540
Operating Segments | Residential Lending | Residential loans
Segment Reporting Information [Line Items]
Loans, at fair value		1,941,489	4,939,745
Operating Segments | Residential Lending | Business purpose residential loans
Segment Reporting Information [Line Items]
Loans, at fair value		0	0
Operating Segments | Residential Lending | Multifamily loans
Segment Reporting Information [Line Items]
Loans, at fair value		0	0
Operating Segments | Business Purpose Lending
Segment Reporting Information [Line Items]
Real estate securities		0	0
Other investments		25,713	21,002
Goodwill and intangible assets		60,737	161,464
Total Assets		4,134,913	3,786,641
Operating Segments | Business Purpose Lending | Residential loans
Segment Reporting Information [Line Items]
Loans, at fair value		0	0
Operating Segments | Business Purpose Lending | Business purpose residential loans
Segment Reporting Information [Line Items]
Loans, at fair value		3,956,101	3,506,743
Operating Segments | Business Purpose Lending | Multifamily loans
Segment Reporting Information [Line Items]
Loans, at fair value		0	0
Operating Segments | Third-Party Investments
Segment Reporting Information [Line Items]
Real estate securities		204,727	870,800
Other investments		344,037	294,904
Goodwill and intangible assets		0	0
Total Assets		3,315,039	8,028,946
Operating Segments | Third-Party Investments | Residential loans
Segment Reporting Information [Line Items]
Loans, at fair value		2,256,682	2,367,215
Operating Segments | Third-Party Investments | Business purpose residential loans
Segment Reporting Information [Line Items]
Loans, at fair value		0	0
Operating Segments | Third-Party Investments | Multifamily loans
Segment Reporting Information [Line Items]
Loans, at fair value		491,415	4,408,524
Corporate/ Other
Segment Reporting Information [Line Items]
Real estate securities		0	0
Other investments		0	0
Goodwill and intangible assets		0	0
Total Assets		803,817	769,313
Corporate/ Other | Residential loans
Segment Reporting Information [Line Items]
Loans, at fair value		296,765	407,890
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 September 30, 2020 and December 31, 2019, assets of consolidated VIEs totaled $8,197,095 and $11,931,869, respectively. At September 30, 2020 and December 31, 2019, liabilities of consolidated VIEs totaled $7,238,047 and $10,717,072, respectively. See Note 4 for further discussion.