Redwood Trust (NYSE: RWT) reported second-quarter 2026 results on July 28, 2026 showing mortgage banking production exceeded $8 billion for the second consecutive quarter — nearly double the volume from the same period a year earlier — while disclosing it had finalized documentation for a joint venture that gives its Aspire mortgage platform potential purchasing power of up to $8 billion, according to the company’s earnings release.
“This quarter further reinforced our confidence in the direction of the business,” CEO Christopher Abate said in the release. “We generated more than $8 billion of mortgage banking production while continuing to prioritize profitability over headline volume.” Abate added that “the business we operate today is fundamentally different than it was only a few years ago,” pointing to a growing share of earnings coming from the company’s operating platforms rather than its legacy investment portfolio.
Aspire’s growth
Aspire, Redwood’s mortgage banking platform, locked a record $2.1 billion in loans during the quarter, up 31% from the first quarter. Gain-on-sale margins rose to 101 basis points from 73 basis points in Q1, and the platform’s network of active loan sellers grew to more than 150 as of June 30, up from 136 three months earlier. Aspire distributed $1.3 billion of loans during the quarter through $920 million in securitizations and $393 million in whole-loan sales, and completed two SPIRE securitization transactions. The platform generated $7.3 million in GAAP net income, up from $2.3 million in the first quarter.
The newly finalized joint venture — announced in preliminary form earlier this year and formally documented after quarter-end — gives Aspire access to up to $8 billion in purchasing power, a substantial expansion of its capital base for acquiring loans from its seller network.
Company-wide production and the Castlelake venture
Total mortgage banking production across Redwood’s platforms broke down as $5.6 billion at its Sequoia jumbo-lending business, $2.1 billion at Aspire and $410 million at CoreVest, its investor-loan platform. At Sequoia, newer loan products — including hybrid loans, medical-professional loans and closed-end second-lien loans — made up 30% of quarterly lock volume, reflecting the platform’s push beyond traditional jumbo mortgages.
Separately, Redwood’s joint venture with alternative-investment firm Castlelake, launched in April to purchase prime jumbo mortgage loans, now carries roughly $18 billion in combined purchasing power across the company’s platforms. Redwood closed a new $500 million warehouse facility to support that venture and said it is negotiating an additional $1 billion in warehouse capacity for Castlelake.
Overall financial results
Company-wide, Redwood posted a GAAP net loss of $2.9 million, or $0.03 per basic and diluted share, while non-GAAP earnings available for distribution came in at $0.15 per share and core-segments EAD at $0.25 per share. Book value per share fell to $6.90 from $7.12 at the end of the first quarter, an economic return on book value of negative 0.6%. The company’s core segments — its operating platforms — posted GAAP net income of $40.8 million, and the mortgage banking platforms combined for $40.1 million in GAAP net income, up 9% from the first quarter. The board declared a regular dividend of $0.18 per share. Redwood ended the quarter with $192 million in unrestricted cash and $4.5 billion in recourse debt, down from $4.7 billion in the first quarter, at 5.0 times recourse leverage.
What it means
Verified facts: Redwood’s Aspire platform gained a new $8 billion joint-venture capital source and posted record quarterly loan locks, while the company’s overall mortgage production exceeded $8 billion for a second straight quarter even as GAAP results showed a small net loss and book value declined.
RealtyWire analysis: The combination of a widening capital base (Castlelake’s $18 billion and Aspire’s new $8 billion facility) with a shift toward newer, non-traditional loan products suggests Redwood is positioning its operating platforms — not its legacy investment portfolio — as the company’s primary growth engine, a strategy that insulates it somewhat from the book-value swings that come with holding mortgage assets directly.
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