Core Insights - The company is undergoing a strategic transition to a more scalable and simplified operating model, aiming to reduce legacy asset exposure from 33% to 20% by year-end [1][21] - A record $7 billion in loans was locked and originated in Q3 2025, with significant contributions from its Sequoia and Aspire platforms [5][13] - The company has maintained a return on equity (ROE) above 20% for its mortgage banking segments for five consecutive quarters, with a core segment's earnings available for distribution (EAD) of $0.20 per share in Q3 [6][23] Financial Performance - The GAAP net loss for Q3 was $9.5 million, a significant improvement from a loss of $100 million in Q2, primarily due to transaction-related expenses [22] - Book value per share decreased slightly to $7.35 from $7.49 in the previous quarter, reflecting the impact of share repurchases and dividends [22][8] - Core segment's EAD was $27 million, representing a 17% return on equity, indicating strong earnings from the core mortgage banking segments [23] Business Segments - Sequoia locked $5.1 billion in loans during Q3, a 53% increase from Q2, capturing approximately 80% of the market share for jumbo production [13][14] - Aspire platform saw a significant increase in volume, locking $1.2 billion in loans, nearly four times the volume from the previous quarter [16] - CorVest achieved its highest quarterly volume since mid-2022, with a focus on smaller balance products, which accounted for 40% of its Q3 volume [19][20] Market Conditions - The company is closely monitoring the credit landscape and U.S. economy, noting pressures in certain consumer asset-backed sectors but highlighting the strength of current underwriting standards in the residential mortgage market [10][11] - The private label securitization market is experiencing strong growth, with the company advocating for more efficient capital flows into securitization [10][11] - The decline in mortgage rates and potential monetary easing are expected to support a recovery in the housing finance sector [11] Strategic Partnerships - The company expanded its relationship with CPP Investments, increasing the investment period of its joint venture secured borrowing facility from $250 million to $400 million [7] - The partnership is expected to enhance fundraising efforts for the Sequoia platform, which has strong growth prospects [7][30] Legacy Portfolio Management - The company has significantly reduced its legacy portfolio, which now represents 25% of total capital, down from 33% [21][8] - The legacy segment reported a net loss of $22 million, driven by transaction costs and net interest margin pressure [27] - Continued efforts to resolve legacy assets are expected to further decrease legacy exposure by year-end [21]