Redwood Trust’s loss due to wind down of legacy investments

While its two mortgage banking segments made money during the second quarter, Redwood Trust lost $100.2 million for the period, related to businesses it is winding down.

This compared with net income of $14.4 million in the first quarter and $13.8 million in the second quarter of 2024.

The legacy investments are now its own reporting segment, consisting of the assets it is selling, allowing to run-off or otherwise be disposed of.

This segment lost $104 million in the second quarter, driven by fair value adjustments from realized and anticipated near-term resolutions on legacy bridge loans. It also was driven by changes in the underlying performance of those loans.

But both the Sequoia and Corevest mortgage banking segments reported GAAP net income. Redwood noted its combined mortgage…