SecProbe.io

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 September 12, 2025

Brooke E. Carillo
Chief Financial Officer
Redwood Trust, Inc.
One Belvedere Place, Suite 300
Mill Valley, CA 94941

 Re: Redwood Trust, Inc.
 Form 10-K for the Year Ended December 31, 2024
 File No. 001-13759
Dear Brooke E. Carillo:

 We have completed our review of your filing. We remind you that the
company and
its management are responsible for the accuracy and adequacy of their
disclosures,
notwithstanding any review, comments, action or absence of action by the staff.

 Sincerely,

 Division of Corporation
Finance
 Office of Real Estate &
Construction
</TEXT>
</DOCUMENT>

CORRESP
 1
 filename1.htm

 One Belvedere Place

 Suite 300

 Mill Valley, CA 94941

 Phone 415.389.7373

 VIA EDGAR

 September 3, 2025

 Securities and Exchange Commission
Division of Corporation Finance
100 F Street, N.W.
Washington, D.C. 20549

 Attn:

 William Demarest

 Isaac Esquivel

 Office of Real Estate & Construction

 Re:
 Redwood Trust, Inc.

 Response to Comments on:

 Form 10-K for the Year Ended December 31, 2024

 File No. 001-13759

 Dear Messrs. Demarest and Esquivel,

 On behalf of Redwood Trust, Inc. ("Redwood"
or the "Company"), I hereby provide the following responses in reply to the Staff's comment letter dated August 22,
2025 (the "Comment Letter") in connection with the above-referenced Annual Report on Form 10-K (the "Form 10-K").
For your convenience, our responses are preceded with an italicized recitation of the comments set forth in the Comment Letter.

 Form 10-K for the Year Ended December 31, 2024

 Item 1A. Risk Factors

 Through certain of our wholly-owned subsidiaries
we have engaged in the past…, page 35

 1.

 We note from your response to comment 1
 that you hold a minority interest in LiquidFi, Inc. Please clarify both the amount and percentage of your investment.

 Redwood holds a convertible debt investment with
a principal balance of $810,000 that is convertible into equity securities amounting to approximately 13.5% of the fully-diluted capitalization
of LiquidFi, Inc. ("LiquidFi").

 2.

 Your response to comment 1 indicates that
LiquidFi uses blockchain-based technology to provide end users with reporting of loan level payments of principal and interest on the
underlying residential mortgages. We also note that LiquidFi's website references digital assets. Please clarify whether LiquidFi actually
creates a digital asset or if it's a record (a digital copy of an asset).

 We understand, based on feedback from LiquidFi,
that LiquidFi creates a digital copy of the original loan asset. This reference to "digital asset" has no legal relationship
to the underlying loan and is simply meant to provide an immutable, transparent, and standardized record of data over the life of the
loan.

 September 3, 2025

 Page 2 of 2

 3.

 Related to the comment above, your
 response indicates that end users can access LiquidFi's platform to view updated information which is mirrored through digital
 entries on the Stellar blockchain. Please clarify whether LiquidFi is creating entries on its own blockchain or merely creating
 records on the Stellar blockchain. Tell us also if end users need Lumens to view information on the Stellar blockchain and if
 LiquidFi provides Lumens to end users as part of granting access.

 We understand, based on feedback from LiquidFi,
that all Redwood securitization transactions onboarded to LiquidFi pursuant to a distributed ledger agent agreement are mirrored and tracked
on the Stellar blockchain, where all records are created. LiquidFi uses additional blockchains for non-Redwood transactions, including
Avalanche and a LiquidFi private-permissioned blockchain. End users are not required to own Lumen or any other cryptocurrency to use the
LiquidFi platform. LiquidFi absorbs all costs related to posting information on the blockchain, including all "gas fees" and
infrastructure costs. End users access information with a username/password and/or API keys and do not pay fees with cryptocurrency to
use the platform.

 * * *

 Should you have any further comments or questions
about this letter, please contact me by telephone at 415-384-3827 or by email at brooke.carillo@redwoodtrust.com .

 Very truly yours,

 Redwood Trust, Inc.

 By:
 /s/
 Brooke Carillo

 Brooke Carillo

 Chief Financial Officer

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 August 22, 2025

Brooke E. Carillo
Chief Financial Officer
Redwood Trust, Inc.
One Belvedere Place, Suite 300
Mill Valley, CA 94941

 Re: Redwood Trust, Inc.
 Form 10-K for the Year Ended December 31, 2024
 Response dated August 6, 2025
 File No. 001-13759
Dear Brooke E. Carillo:

 We have reviewed your August 6, 2025 response to our comment letter and
have the
following comments.

 Please respond to this letter within ten business days by providing the
requested
information or advise us as soon as possible when you will respond. If you do
not believe a
comment applies to your facts and circumstances, please tell us why in your
response.

 After reviewing your response to this letter, we may have additional
comments.
Unless we note otherwise, any references to prior comments are to comments in
our July 24,
2025 letter.

Form 10-K for the Year Ended December 31, 2024
Item 1A. Risk Factors
Through certain of our wholly-owned subsidiaries we have engaged in the
past..., page 35

1. We note from your response to comment 1 that you hold a minority
interest
 in LiquidFi, Inc. Please clarify both the amount and percentage of your
investment.
2. Your response to comment 1 indicates that LiquidFi uses blockchain-based
 technology to provide end users with reporting of loan level payments of
principal and
 interest on the underlying residential mortgages. We also note that
LiquidFi's
 website references digital assets. Please clarify whether LiquidFi
actually creates a
 digital asset or if it s a record (a digital copy of an asset).
3. Related to the comment above, your response indicates that end users can
access
 LiquidFi's platform to view updated information which is mirrored
through digital
 entries on the Stellar blockchain. Please clarify whether LiquidFi is
creating entries on
 August 22, 2025
Page 2

 its own blockchain or merely creating records on the Stellar blockchain.
Tell us also if
 end users need Lumens to view information on the Stellar blockchain and
if LiquidFi
 provides Lumens to end users as part of granting access.
 Please contact William Demarest at 202-551-3432 or Isaac Esquivel at
202-551-3395
if you have questions regarding comments on the financial statements and
related matters.

 Sincerely,

 Division of
Corporation Finance
 Office of Real
Estate & Construction
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CORRESP
 1
 filename1.htm

 One Belvedere Place

 Suite 300

 Mill Valley, CA 94941

 Phone	 415.389.7373

 VIA EDGAR

 August 6, 2025

 Securities and Exchange Commission
Division of Corporation Finance
100 F Street, N.W.
Washington, D.C. 20549

 Attn:

 William Demarest
 Isaac Esquivel

 Office of Real Estate & Construction

 Re:
 Redwood Trust, Inc.

 Response to Comments on:

 Form 10-K for the Year Ended December 31, 2024

 File No. 001-13759

 Dear Messrs. Demarest and Esquivel,

 On behalf of Redwood Trust, Inc. ("Redwood"
or the "Company"), I hereby provide the following responses in reply to the Staff's comment letter dated July 24,
2025 (the "Comment Letter") in connection with the above-referenced Annual Report on Form 10-K (the "Form 10-K").
For your convenience, our responses are preceded with an italicized recitation of the comments set forth in the Comment Letter.

 Form 10-K for the Year Ended December 31, 2024

 Item 1A. Risk Factors

 Through certain of our wholly-owned subsidiaries
we have engaged in the past…, page 35

 1.

 We note your disclosure on page 37
that you have incorporated blockchain technology into securitization transactions. Please clarify which blockchain you use and how the
blockchain is used in the securitization process. Describe how you access the blockchain and the functions you have under this access.

 Redwood respectfully advises the Staff that
Redwood engages LiquidFi, Inc. ("LiquidFi"), a corporation in which Redwood owns a minority interest, to act as
distributed ledger agent for certain residential mortgage-backed securitization transactions sponsored by subsidiaries of Redwood. In this role, LiquidFi leverages its blockchain-based technology to provide end users with reporting of loan level payments
of principal and interest on the underlying residential mortgages by maintaining a platform at https://www.liquidfi.io/deals/. End users can access this platform to view updated information on each business day relating to payments received on the servicing released
mortgage loans, which are mirrored through digital entries on the Stellar blockchain.

 LiquidFi, in its capacity as distributed ledger
agent, is responsible for maintaining its digital asset platform and performing the duties it is obligated to perform under the distributed
ledger agent agreement. Additionally, one or more third-party residential mortgage sub-servicers for these securitization transactions
is responsible for creating the daily payment files that the distributed ledger agent relies upon to perform its duties under the distributed
ledger agent agreement, including making payment information available to end users on the distributed ledger agent's platform.
The distributed ledger agent receives, processes, uploads and distributes information to and from its digital asset platform, and/or grants
end users access to the same. The distributed ledger agent relies on information technology networks and systems, including the internet,
to receive, process, distribute and otherwise make information available to end users in connection with its obligations under the distributed
ledger agent agreement.

 August 6, 2025

 Page 2 of 2

 2.

 Related to the comment above, tell us
whether any "tokenized" digital securities have been issued to date and your accounting policies related to any such issuances.

 Redwood respectfully advises the Staff that Redwood has not issued any such "tokenized"
digital securities to date, and has no imminent plans to do so, therefore, Redwood has not adopted any accounting policies related to
such issuances.

 * * *

 Should you have any further comments or questions
about this letter, please contact me by telephone at 415-384-3827 or by email at brooke.carillo@redwoodtrust.com .

 Very truly yours,

 Redwood Trust, Inc.

 By:
 /s/
 Brooke Carillo

 Brooke Carillo

 Chief Financial Officer

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 July 24, 2025

Brooke E. Carillo
Chief Financial Officer
Redwood Trust, Inc.
One Belvedere Place, Suite 300
Mill Valley, CA 94941

 Re: Redwood Trust, Inc.
 Form 10-K for the Year Ended December 31, 2024
 File No. 001-13759
Dear Brooke E. Carillo:

 We have limited our review of your filing to the financial statements
and related
disclosures and have the following comments.

 Please respond to this letter within ten business days by providing the
requested
information or advise us as soon as possible when you will respond. If you do
not believe a
comment applies to your facts and circumstances, please tell us why in your
response.

 After reviewing your response to this letter, we may have additional
comments.

Form 10-K for the Year Ended December 31, 2024
Item 1A. Risk Factors
Through certain of our wholly-owned subsidiaries we have engaged in the
past..., page 35

1. We note your disclosure on page 37 that you have incorporated blockchain
technology
 into securitization transactions. Please clarify which blockchain you
use and how the
 blockchain is used in the securitization process. Describe how you
access
 the blockchain and the functions you have under this access.
2. Related to the comment above, tell us whether any tokenized
digital securities have
 been issued to date and your accounting policies related to any such
issuances.
 In closing, we remind you that the company and its management are
responsible for
the accuracy and adequacy of their disclosures, notwithstanding any review,
comments,
action or absence of action by the staff.
 July 24, 2025
Page 2

 Please contact William Demarest at 202-551-3432 or Isaac Esquivel at
202-551-3395
with any questions.

 Sincerely,

 Division of Corporation
Finance
 Office of Real Estate &
Construction
</TEXT>
</DOCUMENT>

United States securities and exchange commission logo
November 20, 2023
Brooke E. Carillo
Chief Financial Officer
Redwood Trust, Inc.
One Belvedere Place, Suite 300
Mill Valley, CA 94941
Re:Redwood Trust, Inc.
Form 10-K for the year ended December 31, 2022
File No. 001-13759
Dear Brooke E. Carillo:
            We have completed our review of your filing. We remind you that the company and its
management are responsible for the accuracy and adequacy of their disclosures, notwithstanding
any review, comments, action or absence of action by the staff.
Sincerely,
Division of Corporation Finance
Office of Real Estate & Construction

CORRESP
1
filename1.htm

    One Belvedere Place

    Suite 300

    Mill Valley, CA 94941

    Phone      415.389.7373

VIA EDGAR

November 17, 2023

Securities and Exchange Commission

Division of Corporation Finance

100 F Street, N.W.

Washington, D.C. 20549

    Attn:

    Eric McPhee

    Jennifer Monick

    Office of Real Estate & Construction

    Re:
    Redwood Trust, Inc.

    Response to Comments on:

    Form 10-K for the Year Ended December 31, 2022, filed March 1, 2023

    Form 8-K, filed October 30, 2023

    Response dated October 11, 2023

    File No. 001-13759

Dear Mr. McPhee and Ms. Monick,

On behalf of Redwood Trust, Inc. (“Redwood”
or the “Company”), I hereby provide the following responses in reply to the Staff’s comment letter dated November 14,
2023 (the “Comment Letter”) in connection with the above-referenced Current Report on Form 8-K (the “October 2023 8-K”).
For your convenience, our responses are preceded with an italicized recitation of the comments set forth in the Comment Letter.

Form 8-K filed October 30, 2023

Exhibit 99.1

Non-GAAP Disclosures, page 10

    1.

    We have considered your response to comment
1 and your revised disclosure related to non-GAAP Earnings Available for Distribution within your most recent earnings release. Your
adjustment for Change in economic basis of investments presents income from your investments on an alternative basis. This adjustment
is inconsistent with Question 100.04 of the Compliance & Disclosure Interpretations on the use of Non-GAAP Financial Measures. Specifically,
changing the income recognition appears to be an individually tailored measurement principle. Please revise your non-GAAP measure to
eliminate the adjustment for Change in economic basis of investments.

We acknowledge the Commission’s position
regarding Redwood’s inclusion of the adjustment for Change in economic basis of investments in our calculation of non-GAAP Earnings
available for distribution (“EAD”). Going forward, when we disclose EAD as an alternative measure of financial performance,
we will eliminate the adjustment for Change in economic basis of investments and will conform any prior periods presented.

November 17, 2023

Page 2 of 2

*           *          *

Should you have any further comments or questions
about this letter, please contact me by telephone at 415-384-3827 or by email at brooke.carillo@redwoodtrust.com.

    Very truly yours,

    Redwood Trust, Inc.

    By:
    /s/
    Brooke Carillo

    Brooke Carillo

    Chief Financial Officer

United States securities and exchange commission logo
November 14, 2023
Brooke E. Carillo
Chief Financial Officer
Redwood Trust, Inc.
One Belvedere Place, Suite 300
Mill Valley, CA 94941
Re:Redwood Trust, Inc.
Form 10-K for the year ended December 31, 2022
Form 8-K filed October 30, 2023
Response dated October 11, 2023
File No. 001-13759
Dear Brooke E. Carillo:
            We have reviewed your October 11, 2023 response to our comment letter and have the
following comment.
            Please respond to this letter within ten business days by providing the requested
information or advise us as soon as possible when you will respond. If you do not believe a
comment applies to your facts and circumstances, please tell us why in your response.
            After reviewing your response to this letter, we may have additional comments. Unless
we note otherwise, any references to prior comments are to comments in our September 27, 2023
letter.
Form 8-K filed October 30, 2023
Exhibit 99.1
Non-GAAP Disclosures, page 10
1.We have considered your response to comment 1 and your revised disclosure related to
non-GAAP Earnings Available for Distribution within your most recent earnings release.
Your adjustment for Change in economic basis of investments presents income from your
investments on an alternative basis. This adjustment is inconsistent with Question 100.04
of the Compliance & Disclosure Interpretations on the use of Non-GAAP Financial
Measures. Specifically, changing the income recognition appears to be an individually
tailored measurement principle. Please revise your non-GAAP measure to eliminate the
adjustment for Change in economic basis of investments.

 FirstName LastNameBrooke E. Carillo
 Comapany NameRedwood Trust, Inc.
 November 14, 2023 Page 2
 FirstName LastName
Brooke E. Carillo
Redwood Trust, Inc.
November 14, 2023
Page 2
            Please contact Eric McPhee at 202-551-3693 or Jennifer Monick at 202-551-3295 if you
have questions regarding comments on the financial statements and related matters.
Sincerely,
Division of Corporation Finance
Office of Real Estate & Construction

CORRESP
1
filename1.htm

    One Belvedere Place

    Suite 300

    Mill Valley, CA 94941

    Phone    415.389.7373

October 11, 2023

VIA EDGAR

Securities and Exchange Commission

Division of Corporation Finance

100 F Street, N.W.

Washington, D.C. 20549

    Attn:
    Eric McPhee

    Jennifer Monick

    Office of Real Estate & Construction

    Re:
    Redwood Trust, Inc.

    Response to Comments on:

    Form 10-K for the Year Ended December 31,
    2022, filed March 1, 2023

    Form 8-K, filed July 27, 2023

    Response dated September 13, 2023

    File No. 001-13759

Dear Mr. McPhee and Ms. Monick,

On behalf of Redwood Trust, Inc. (“Redwood”
or the “Company”), I hereby provide the following responses in reply to the Staff’s comment letter dated September 27,
2023 (the “Comment Letter”) in connection with the above-referenced Current Report on Form 8-K (the “July 2023
8-K”). For your convenience, our responses are preceded with an italicized recitation of the comments set forth in the Comment
Letter.

Form 8-K filed July 27, 2023

Exhibit 99.1

Non-GAAP Disclosures, page 10

    1.
    We have reviewed your response to comment
    1. Please clarify the following related to your change in economic basis of investments adjustment:

 · We
                                            note that you believe that Earnings Available for Distribution ("EAD") is a non-GAAP
                                            measure that can supplement your analysis of your ability to pay dividends. In light of this
                                            purpose, please tell us how you determined it was appropriate to adjust net earnings to include
                                            what appears to be a non-cash item to arrive at EAD.

Redwood takes a long-term perspective in analyzing
the returns it seeks to provide to shareholders through a stable and sustainable level of dividend payments; and Redwood’s analysis
of its ability to pay dividends, is based on many factors, including its run rate and projected earnings, its liquidity, and REIT taxable
income and distribution requirements. Further, Redwood’s approach to setting dividends is generally not based on cash earned in
the current period, and EAD is not intended to represent a cash earnings metric. Rather, EAD is intended to provide a supplemental measure
of Redwood’s earnings, which, among other things, adjusts for certain market valuation changes that may not be indicative of Redwood’s
current run rate returns. Additionally, while the adjustment for change in economic basis may represent a non-cash amount in any given
period, it represents the accretion in value of an investment based on cash Redwood expects to receive in the future relative to an investment’s
current fair value. As Redwood carries its investment portfolio at a net discount to par value, accretion represents an important component
of economic net income – and this was one factor which led Redwood to include this adjustment to GAAP net income to arrive at EAD.

October 11, 2023

Page 2 of 5

Please further elaborate for us
why the component of your investments’ market value changes associated with the passage of time provides useful information for
investors.

Redwood marks substantially all of its assets
to market, which has created volatility in our GAAP earnings due in part to short-term market fluctuations. Over time, Wall Street analysts
and Redwood’s investors have provided feedback that it is helpful to have an additional earnings metric that, among other things,
excludes the impact of this volatility and provides a measure of what Redwood expects to earn over the remaining life of its investments
relative to its current book value. Similar to the analysis an investor might take when buying a bond, a key data point for Redwood’s
investors is the Company’s expected forward yield on its portfolio of investments, which is based on expected cash flows relative
to the portfolio’s current fair value. The component of Redwood’s investments’ market value changes associated with
the passage of time represents the accretion in value of an investment based on its estimated economic yield (i.e., forward yield).

Please clarify for us how this
adjustment isolates the changes associated with the passage of time, as it appears to be based, in part, on the GAAP fair value, which
would be based, in part, on changes in benchmark interest rates, credit spreads and other factors.

This adjustment isolates changes associated with
the passage of time, as it reflects the accretion in value of an investment based on the time value of money using the beginning fair
value of an investment and its expected future cash flows. Using a principal-only/zero-coupon bond as an example, while such a bond does
not pay any current interest, all else held equal (market interest rates, credit spreads, loss assumptions, etc.), its fair value
will increase each quarter based on the time value of money and the passage of time. That increase in fair value is what Redwood refers
to as the “estimated economic income” for an investment and is used to derive an investment’s “change in economic
basis”. Any other changes in fair value aside from this amount are excluded from Redwood’s calculation of EAD.

In your example, you discuss an
instrument with a fair value that is 85% of par value. Please clarify for us how the following variations to your example would factor
into your calculation of your expected economic return and/or EAD: (1) originated loan at 100% of par value and a current fair value
of 85% of par value, (2) loan purchased at 75% of par value and a current fair value of 85% of par value, (3) loan purchased
at 100% of par value and a current fair value of 85% of par value, (4) loan where the company expects losses on the security.

See Table 1 below for detail on the following
example, which presents the first and third variations from the inquiry (including a loss assumption from the fourth variation) –
the calculations are the same regardless of whether a loan is originated or purchased at par, so the example represents a single scenario.
In this example, the loan begins with a fair value of 100% of par, with the fair value subsequently declining at the end of the second
year to 85% of par, and ultimately recovering to 95% of par at maturity.

In Period 1, since the beginning and ending prices
are 100% of par, there are no adjustments to EAD. In the Period 2, the loan’s fair value declines from 100% of par to 85% of par,
generating negative $15 of investment fair value changes for GAAP. EAD is adjusted by adding back the $15 unrealized loss.

October 11, 2023

Page 3 of 5

At the beginning of Period 3, using the beginning
price of $85, and assuming a $5 principal loss at maturity, a new estimated economic yield of 7.34% is calculated. For an investor in
Redwood, this is the projected yield the investment is expected to earn going forward. For Period 3, assuming no changes in cash flows
or discount rates, the fair value of the investment would increase by $2.2. Here we would note that the total investment fair value changes
are solely attributable to the “change in economic basis” over the period.

Therefore, GAAP income for Period 3 would be
equal to the interest income of $4 plus the change in economic basis of the investment of $2.2, totaling $6.2. EAD would equal GAAP income
for the investment, as you start with GAAP income, subtract out total investment fair value changes of $2.2 and then add back the portion
attributable to the change in economic basis, which in this case is the same $2.2, to arrive at $6.2.

It is important to underscore that the change
in economic basis is a component of the total investment fair value change, which is why we have a two-step process to first subtract
out the entirety of the investment fair value changes and then only add back the component related to the change in basis to ensure there
is no double counting of any economic income in EAD for the period.

The relevance of EAD to our shareholders is illustrated
by an investor purchasing our stock at the beginning of Period 3. For the investment in this example, which was marked to $85 at the
beginning of Period 3, and forecasted to pay off at 95% of par, over its remaining life projected EAD income and GAAP income would be
the same, as the investments fair value would increase to $95 at maturity, generating $15 of positive investment fair value changes income
for GAAP, and EAD would recognize $15 of change in economic basis income through EAD (the same interest income would be recognized under
both). However, given that over many scenarios, GAAP income and EAD will not equate over the entire life of an investment, Redwood’s
disclosures for EAD include language noting how management uses the metric and the limits to its usefulness and comparability over time
or as a cumulative measure.

October 11, 2023

Page 4 of 5

Table 1

    Period
      1
      2
      3
      4
      5
      6

    Principal balance
    $ 100
    $ 100
    $ 100
    $ 100
    $ 100
    $ 100

    Key Assumptions

    Beginning Price
    $ 100.0
    $ 100.0
    $ 85.0
    $ 87.2
    $ 89.6
    $ 92.2

    Ending price
    $ 100.0
    $ 85.0
    $ 87.2
    $ 89.6
    $ 92.2
    $ 95.0

    Coupon
      4.0 %
      4.0 %
      4.0 %
      4.0 %
      4.0 %
      4.0 %

    Economic Yield (beginning period)
      4.00 %
      4.00 %
      7.34 %
      7.34 %
      7.34 %
      7.34 %

    Expected principal recovery
      100 %
      95 %
      95 %
      95 %
      95 %
      95 %

    GAAP income

    Interest income
      4.0
      4.0
      4.0
      4.0
      4.0
      4.0

    Investment fair value changes

    Change in value from rates, spreads, etc.
      0.0
      (15.0 )
      0.0
      0.0
      0.0
      0.0

    Change in economic basis
      0.0
      0.0
      2.2
      2.4
      2.6
      2.8

    Total investment fair value changes
      0.0
      (15.0 )
      2.2
      2.4
      2.6
      2.8

    Total GAAP income
      4.0
      (11.0 )
      6.2
      6.4
      6.6
      6.8

    EAD Adjustments

    Reverse total investment fair value changes
      0.0
      15.0
      (2.2 )
      (2.4 )
      (2.6 )
      (2.8 )

    Add back change in economic basis
      0.0
      0.0
      2.2
      2.4
      2.6
      2.8

    EAD
      4.0
      4.0
      6.2
      6.4
      6.6
      6.8

For the second variation from the inquiry, all
the adjustments would be the same for the Period 1 (assuming no change in fair value at the end of Period 1) and for Periods 3 through
6. In Period 2, $10 of positive investment fair value changes would be recorded in GAAP income and EAD would subtract the same $10, causing
EAD income to be lower than GAAP income by $10.

To enable us to better understand
the mechanics of your calculation, please clarify for us if there is a different impact to your adjustment and/or to EAD for a loan that
was originated at 100% of par value with a current fair value of 85% of par value as compared to a loan originated at 100% of par value
with a current fair value of 100% of par value. In your response, please address the impact to an individual quarter, as well as over
the 10 year life of the instrument.

There would be a different impact to the adjustments
to EAD and to EAD overall for the two variations described in this inquiry. The example shown in Table 1 above, presents how EAD would
be recorded for the first variation in this inquiry. For the second variation in this inquiry, assuming the loan is valued at par over
the life of the investment, there would be no adjustments to EAD in any of the years, and therefore GAAP and EAD would be the same over
the life of the investment.

October 11, 2023

Page 5 of 5

Enhanced Disclosure:

Upon the Staff’s request, Redwood will
enhance its future disclosures related to non-GAAP Earnings Available for Distribution, and specifically related to the Change in economic
basis of investments adjustment, to provide additional detail as to the methodology of the calculation and the usefulness of the adjustment,
including limitations of the metric as a cumulative measure over historical periods, consistent with the additional information included
in this and the prior response to the Staff’s inquiries.

*           *           *

Should you have any further comments or questions
about this letter, please contact me by telephone at 415-384-3827 or by email at brooke.carillo@redwoodtrust.com.

    Very truly
    yours,

    Redwood
    Trust, Inc.

    By:
    /s/
    Brooke Carillo

    Brooke Carillo

    Chief Financial Officer

United States securities and exchange commission logo
September 27, 2023
Brooke E. Carillo
Chief Financial Officer
Redwood Trust, Inc.
One Belvedere Place, Suite 300
Mill Valley, CA 94941
Re:Redwood Trust, Inc.
Form 10-K for the year ended December 31, 2022
Form 8-K filed July 27, 2023
Response dated September 13, 2023
File No. 001-13759
Dear Brooke E. Carillo:
            We have reviewed your September 13, 2023 response to our comment letter and have the
following comment.  In our comment, we may ask you to provide us with information so we may
better understand your disclosure.
            Please respond to this comment within ten business days by providing the requested
information or advise us as soon as possible when you will respond.  If you do not believe our
comment applies to your facts and circumstances, please tell us why in your response.
            After reviewing your response to this comment, we may have additional
comments.  Unless we note otherwise, our references to prior comments are to comments in our
August 31, 2023 letter.
Form 8-K Filed July 27, 2023
Exhibit 99.1
Non-GAAP Disclosures, page 10
1.We have reviewed your response to comment 1.  Please clarify the following related to
your change in economic basis of investments adjustment:
•We note that you believe that Earnings Available for Distribution ("EAD") is a non-
GAAP measure that can supplement your analysis of your ability to pay dividends.
In light of this purpose, please tell us how you determined it was appropriate to adjust
net earnings to include what appears to be a non-cash item to arrive at EAD.
•Please further elaborate for us why the component of your investments’ market value
changes associated with the passage of time provides useful information for

 FirstName LastNameBrooke E. Carillo
 Comapany NameRedwood Trust, Inc.
 September 27, 2023 Page 2
 FirstName LastName
Brooke E. Carillo
Redwood Trust, Inc.
September 27, 2023
Page 2
investors.
•Please clarify for us how this adjustment isolates the changes associated with the
passage of time, as it appears to be based, in part, on the GAAP fair value, which
would be based, in part, on changes in benchmark interest rates, credit spreads and
other factors.
•In your example, you discuss an instrument with a fair value that is 85% of par value.
Please clarify for us how the following variations to your example would factor into
your calculation of your expected economic return and/or EAD: (1) originated loan at
100% of par value and a current fair value of 85% of par value, (2) loan purchased at
75% of par value and a current fair value of 85% of par value, (3) loan purchased at
100% of par value and a current fair value of 85% of par value, (4) loan where the
company expects losses on the security.
•To enable us to better understand the mechanics of your calculation, please clarify for
us if there is a different impact to your adjustment and/or to EAD for a loan that was
originated at 100% of par value with a current fair value of 85% of par value as
compared to a loan originated at 100% of par value with a current fair value of 100%
of par value.  In your response, please address the impact to an individual quarter, as
well as over the 10 year life of the instrument.
            You may contact Eric McPhee at 202-551-3693 or Jennifer Monick at 202-551-3295 if
you have any questions.
Sincerely,
Division of Corporation Finance
Office of Real Estate & Construction

CORRESP
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    One Belvedere
    Place

    Suite 300

    Mill Valley, CA 94941

    Phone
    415.389.7373

September 13, 2023

VIA EDGAR AND E-MAIL

Securities and Exchange Commission

Division of Corporation Finance

100 F Street, N.W.

Washington, D.C. 20549

    Attn:
    Eric McPhee

    Jennifer Monick

    Office of Real Estate & Construction

    Re:
    Redwood Trust, Inc.

    Response to Comments on:

    Form 10-K for the Year Ended December 31,
    2022, filed March 1, 2023

    Form 8-K, filed July 27, 2023

    File No. 001-13759

Dear Mr. McPhee and Ms. Monick,

On behalf of Redwood Trust, Inc. (“Redwood”
or the “Company”), I hereby provide the following responses in reply to the Staff’s comment letter dated August 31,
2023 (the “Comment Letter”) in connection with the above-referenced Annual Report on Form 10-K (the “2022 Form 10-K”)
and Current Report on Form 8-K (the “July 2023 8-K”). For your convenience, our response is preceded with an italicized
recitation of the comment set forth in the Comment Letter.

Form 8-K filed July 27, 2023

Exhibit 99.1

Non-GAAP Disclosures, Page 10

    1.
    We note your reconciliation
    of GAAP Net Income Available to Common Stockholders to non-GAAP Earnings Available for Distribution; specifically, we note your reconciling
    item for change in economic basis of investments and your note (4) to the table. Please further clarify for us how you derive
    estimated economic income. In addition, please tell us how you determined it was appropriate to adjust for this item.

How Redwood Derives Estimated Economic
Income:

Redwood consistently derives estimated economic
income for an investment by first calculating the internal rate of return (“IRR”) for an investment, using the investment’s
carrying value at the beginning of a quarter (which for nearly all of our investments is fair value) and our projected future cash flows
for the investment (the same cash flows we use to value the assets at the beginning of the quarter, which include any expected losses).
We apply this IRR (or estimated economic yield) to the average carrying value of the investment for the quarter to derive what we refer
to as “estimated economic income”.

September 13, 2023

Page 2 of 3

As an illustrative example, assume the Company
held a mortgage-backed security with a par value of $1 million, a 4.0% coupon and a 10-year expected remaining life. The security is
accounted for under the fair value option, and at the beginning of the quarter it had a GAAP fair value of 85% of par value. Assuming
the Company expects no losses on the security, the estimated economic yield for this security would be approximately 6% (representing
the IRR based on the projected cash flows and the carrying value at the beginning of the quarter). Applying this estimated economic yield
to the average carrying value of the security for the quarter, the estimated economic income for this security for the quarter would
be $12.8 thousand. Further, assuming we recorded coupon interest income from this security of $10.0 thousand for the quarter, our change
in economic basis of this security for that quarter would be $2.8 thousand ($12.8 thousand, less $10.0 thousand). While the change in
the economic basis of the security in this example is positive, we note that the change in economic basis for an investment can also
be negative.

Why Change in Economic Basis of Investments
is One of the Adjustments Redwood Makes to GAAP Net Income in Calculating Earnings Available for Distribution:

The Company believes a non-GAAP measure of earnings
 – in particular, non-GAAP Earnings Available for Distribution – that adjusts for various items (as presented in our non-GAAP
reconciliation), including the adjustment for Change in economic basis of investments, is and has been considered useful information
to assist management and investors in analyzing the Company’s results of operations and help facilitate comparisons to industry
peers. The Company also believes that Earnings Available for Distribution is a metric that can supplement management’s analysis
of the Company’s ability to pay dividends, by providing an indication of the current income generating capacity of the Company's
business operations as of the quarter being presented.

With respect to the question of why it is appropriate
for Change in economic basis of investments to be one of the adjustments the Company makes in calculating non-GAAP Earnings Available
for Distribution, management believes the inclusion of this adjustment assists in analysis of the Company’s results of operations
in the following manner:

 · By
                                            including the adjustment for Change in economic basis of investments as one of these adjustments,
                                            users of the Company’s financial statements can readily distinguish:

 o the
                                            component of our investments’ market value changes associated with the passage of time
                                            based on our expected economic return (i.e., the “Change in the economic basis of investments”);
                                            from

 o the
                                            component of our investments’ market value changes associated with changes in benchmark
                                            interest rates, credit spreads and other factors, which can be volatile and may not be indicative
                                            of future economic performance.

Based on discussions with users of the Company’s
financial statements (both investors and Wall St. equity research analysts), the Company believes they too find these adjustments related
to investment fair value (together with the other adjustments used to derive non-GAAP Earnings Available for Distribution) valuable for
distinguishing between these two components of market value changes as part of reviewing this supplemental measure of our overall results
of operations. Prior to the Company first publishing the Earnings Available for Distribution metric, several analysts suggested that
the Company provide such a supplemental metric, and after its introduction the analyst community provided positive feedback to the Company
regarding the metric. Further, after it began publishing its Earnings Available for Distribution metric, all of the analysts who cover
the Company incorporated the metric into their analysis of the Company and utilized it as a supplemental measure to the Company’s
GAAP results.

September 13, 2023

Page 3 of 3

The Company recently re-surveyed the non-GAAP
disclosure practices of twelve other publicly-traded mortgage REITs whose business models share a common focus with Redwood on investing
in residential mortgage and related assets. This survey found that all of them publish non-GAAP financial measures – with ten of
the twelve disclosing an “earnings available for distribution” or “distributable earnings” metric, reflecting
wide and recognized use of this type of metric. While each of these companies has separately established the adjustments they make in
calculating their own non-GAAP metric – presumably to provide disclosures that are meaningful in the context of their own investments
and/or operations – this review confirmed the Company’s view that investors and Wall St. equity research analysts focused
on this sector of the market are accustomed to having this type of disclosure available to analyze together with, and in the context
of, a mortgage REIT’s GAAP financial statements.

Enhanced Disclosure:

Upon the Staff’s request, Redwood can enhance
its future disclosures related to non-GAAP Earnings Available for Distribution, and specifically related to the Change in basis of investments
adjustment, to provide additional detail as to the methodology of the calculation and the usefulness of the adjustment, consistent with
the additional information included in this response to the Staff’s inquiry.

*                 *                 *

Should you have any further comments or questions
about this letter, please contact me by telephone at 415-384-3827 or by email at brooke.carillo@redwoodtrust.com.

    Very truly
    yours,

    Redwood Trust, Inc.

    By:
    /s/
    Brooke Carillo

    Brooke Carillo

    Chief Financial Officer

United States securities and exchange commission logo
August 31, 2023
Brooke E. Carillo
Chief Financial Officer
Redwood Trust, Inc.
One Belvedere Place, Suite 300
Mill Valley, CA 94941
Re:Redwood Trust, Inc.
Form 10-K for the year ended December 31, 2022
Filed March 1, 2023
Form 8-K filed July 27, 2023
File No. 001-13759
Dear Brooke E. Carillo:
            We have limited our review of your filing to the financial statements and related
disclosures and have the following comment.  In our comment, we may ask you to provide us
with information so we may better understand your disclosure.
            Please respond to this comment within ten business days by providing the requested
information or advise us as soon as possible when you will respond.  If you do not believe our
comment applies to your facts and circumstances, please tell us why in your response.
            After reviewing your response to this comment, we may have additional comments.
Form 8-K filed July 27, 2023
Exhibit 99.1
Non-GAAP Disclosures, page 10
1.We note your reconciliation of GAAP Net Income Available to Common Stockholders to
non-GAAP Earnings Available for Distribution; specifically, we note your reconciling
item for change in economic basis of investments and your note (4) to the table.  Please
further clarify for us how you derive estimated economic income.  In addition, please tell
us how you determined it was appropriate to adjust for this item.
            In closing, we remind you that the company and its management are responsible for the
accuracy and adequacy of their disclosures, notwithstanding any review, comments, action or
absence of action by the staff.

 FirstName LastNameBrooke E. Carillo
 Comapany NameRedwood Trust, Inc.
 August 31, 2023 Page 2
 FirstName LastName
Brooke E. Carillo
Redwood Trust, Inc.
August 31, 2023
Page 2
            You may contact Eric McPhee at 202-551-3693 or Jennifer Monick at 202-551-3295 with
any questions.
Sincerely,
Division of Corporation Finance
Office of Real Estate & Construction

United States securities and exchange commission logo
August 10, 2021
Brooke E. Carillo
Chief Financial Officer
Redwood Trust, Inc.
One Belvedere Place, Suite 300
Mill Valley, CA 94941
Re:Redwood Trust, Inc.
Form 10-K for the Fiscal Year Ended December 31, 2020
Filed February 26, 2021
File No. 001-13759
Dear Ms. Carillo:
            We have completed our review of your filing.  We remind you that the company and its
management are responsible for the accuracy and adequacy of their disclosures, notwithstanding
any review, comments, action or absence of action by the staff.
Sincerely,
Division of Corporation Finance
Office of Real Estate & Construction
cc:       Redwood Trust, Inc. SEC Notices

CORRESP
1
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One Belvedere Place

Suite 300

Mill Valley, CA 94941

Phone

415.389.7373

Fax

415.381.1773

VIA EDGAR

August 9, 2021

Securities and Exchange Commission
 Division of Corporation Finance
 100 F Street, N.W.
 Washington, D.C. 20549

Attn:

William Demarest, Staff   Accountant

Isaac Esquivel, Staff   Accountant

Office of Real   Estate & Construction

Re:

Redwood   Trust, Inc.

Response to Comments   on:

Form 10-K for the   Fiscal Year Ended December 31, 2020

Form 8-K

Filed February 26,   2021 and April 28, 2021

File No. 001-13759

Dear Messrs. Demarest and Esquivel,

On behalf of Redwood Trust, Inc. (“Redwood”), I hereby provide the following response in reply to the Staff’s comment letter dated August 6, 2021 (the “Comment Letter”) in connection with the above-referenced Annual Report on Form 10-K (the “2020 Form 10-K”) and Form 8-K (the “April 2021 8-K”). For your convenience, each response is preceded with an italicized recitation of the comment set forth in the Comment Letter.

Correspondence dated July 30, 2021

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
 Differences between Estimated Total Taxable Income and GAAP Income, page 83

1.

We   note your responses to prior comments 1 and 2. We are unable to concur with   your conclusion that the measures presented are outside of the definition of   a “non-GAAP financial measure” as defined in Item 10(e)(5) of Regulation   S-K, and therefore not subject to the provisions described in Item   10(e)(1)(i) of Regulation S-K and the cited Compliance and Disclosure   Interpretations. As such, in future filings please revise your disclosures   related to REIT taxable income and total taxable income (both in the   aggregate and on a per-share basis) in order to comply with the requirements   of Item 10(e) of Regulation S-K and Regulation G.

We acknowledge the Commission’s position regarding Redwood’s presentation of REIT taxable income and total taxable income in the 2020 Form 10-K and April 2021 8-K. To the extent we present these items in future filings with the Commission, we will modify our disclosures accordingly.

*                                         *                                         *

Should you have any further comments or questions about this letter, please contact me by telephone at 415-384-3827, by fax at 415-381-1773, or by email at brooke.carillo@redwoodtrust.com.

Very truly yours,

Redwood   Trust, Inc.

By:

/S/ BROOKE CARILLO

Brooke Carillo

Chief Financial Officer

2

United States securities and exchange commission logo
August 6, 2021
Brooke E. Carillo
Chief Financial Officer
Redwood Trust, Inc.
One Belvedere Place, Suite 300
Mill Valley, CA 94941
Re:Redwood Trust, Inc.
Form 10-K for the Fiscal Year Ended December 31, 2020
Form 8-K
Filed February 26, 2021 and April 28, 2021
File No. 001-13759
Dear Ms. Carillo:
            We have reviewed your July 30, 2021 response to our comment letter and have the
following comment.  In our comment, we may ask you to provide us with information so we may
better understand your disclosure.
            Please respond to this comment within ten business days by providing the requested
information or advise us as soon as possible when you will respond.  If you do not believe our
comment applies to your facts and circumstances, please tell us why in your response.
            After reviewing your response to this comment, we may have additional
comments.  Unless we note otherwise, our references to prior comments are to comments in our
July 19, 2021 letter.
Correspondence dated July 30, 2021
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations
Differences between Estimated Total Taxable Income and GAAP Income, page 83
1.We note your responses to prior comments 1 and 2.  We are unable to concur with your
conclusion that the measures presented are outside of the definition of a “non-GAAP
financial measure” as defined in Item 10(e)(5) of Regulation S-K, and therefore not
subject to the provisions described in Item 10(e)(1)(i) of Regulation S-K and the cited
Compliance and Disclosure Interpretations.  As such, in future filings please revise your
disclosures related to REIT taxable income and total taxable income (both in the aggregate
and on a per-share basis) in order to comply with the requirements of Item 10(e) of
Regulation S-K and Regulation G.

 FirstName LastNameBrooke E. Carillo
 Comapany NameRedwood Trust, Inc.
 August 6, 2021 Page 2
 FirstName LastName
Brooke E. Carillo
Redwood Trust, Inc.
August 6, 2021
Page 2
            You may contact William Demarest, Staff Accountant at 202-551-3432 or Isaac
Esquivel, Staff Accountant at 202-551-3395 if you have any questions.
Sincerely,
Division of Corporation Finance
Office of Real Estate & Construction
cc:       Redwood Trust, Inc. SEC Notices

CORRESP
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One Belvedere Place

Suite 300

Mill Valley, CA 94941

Phone

415.389.7373

Fax

415.381.1773

VIA EDGAR AND E-MAIL

July 30, 2021

Securities and Exchange Commission
 Division of Corporation Finance
 100 F Street, N.W.
 Washington, D.C. 20549

Attn:

William Demarest, Staff   Accountant

Isaac Esquivel, Staff   Accountant

Office of Real   Estate & Construction

Re:

Redwood   Trust, Inc.

Response to Comments   on:

Form 10-K for the   Fiscal Year Ended December 31, 2020

Form 8-K

Filed February 26,   2021 and April 28, 2021

File No. 001-13759

Dear Messrs. Demarest and Esquivel,

On behalf of Redwood Trust, Inc. (“Redwood”), I hereby provide the following responses in reply to the Staff’s comment letter dated July 19, 2021 (the “Comment Letter”) in connection with the above-referenced Annual Report on Form 10-K (the “2020 Form 10-K”) and Form 8-K (the “April 2021 8-K”). For your convenience, each response is preceded with an italicized recitation of the comment set forth in the Comment Letter.

Form 10-K for the fiscal year ended December 31, 2020

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations Differences between Estimated Total Taxable Income and GAAP Income, page 83

1.

We   note your tables that reconcile total taxable income (loss) and total taxable   income (loss) on a per share basis to GAAP income (loss) and GAAP income   (loss) on a per share basis, respectively, for the years ended   December 31, 2020, 2019, and 2018, which appear to be non-GAAP income   statements reconciling non-GAAP measures to the most directly comparable GAAP   measures. Please tell us how you considered the guidance in Item   10(e)(1)(i)(A) and the guidance in Questions 102.10 and 102.05 of the   Non-GAAP Financial Measures Compliance and Disclosure Interpretations in your

presentation.

We believe Redwood’s presentation of total taxable income (loss) and total taxable income (loss) on a per share basis in the 2020 Form 10-K falls outside of the definition of a “non-GAAP financial measure” as defined in Item 10(e)(5) of Regulation S-K, and is therefore not subject to the provisions described in Item 10(e)(1)(i)(A) of Regulation S-K and the cited Compliance and Disclosure Interpretations. Specifically, Item 10(e)(5) states the following:

“[N]on-GAAP financial measures exclude financial measures required to be disclosed by . . . a system of regulation of a government or governmental authority or self-regulatory organization that is applicable to the registrant.”

Redwood has elected to be taxed as a real estate investment trust (“REIT”) under the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”). As a REIT, we believe Redwood is subject to the Financial Accounting Standards Board Accounting Standards Codification sections 740-10-50-16 and 974-10-S99 and the related guidance. Under these provisions, Redwood is required to disclose its tax status, including whether Redwood or our stockholders are subject to income taxes on Redwood’s income directly and the tax treatment of distributions paid on a per share basis.

In order for Redwood to qualify as a REIT under the Internal Revenue Code for federal income tax purposes, among other requirements, Redwood is required to distribute to its stockholders at least 90% of its annual REIT taxable income (the “90% Distribution Requirement”). Further, under the federal income tax rules applicable to REITs, the portion of a distribution treated for federal income tax purposes as a dividend rather than a reduction of basis (or, if applicable, capital gain) is generally determined by the amount of REIT taxable income.

Redwood has historically disclosed the amount of its REIT taxable income and total taxable income, which includes its taxable REIT subsidiary income, and which are calculated in accordance with the Internal Revenue Code, as well as dividends paid per share, in order to provide these disclosures related to our REIT tax status, including with respect to our compliance with the 90% Distribution Requirement and the tax treatment (e.g., as dividends vs. reduction of basis) of distributions we pay to our stockholders. Because it directly relates to the amount of dividends that we are required to distribute in order to maintain our REIT status, Redwood views its REIT taxable income and total taxable income—both in the aggregate and on a per-share basis—as material and helpful disclosures for our stockholders and prospective investors.

Moreover, as noted in the 2020 10-K, as a result of differences between GAAP accounting and federal income tax determinations, Redwood’s taxable income can vary significantly from our GAAP income during certain reporting periods. As such, Redwood has elected to provide reconciliations of total taxable income and total taxable income on a per share basis to GAAP income and GAAP income on a per share basis for the benefit of investors, to provide greater transparency with respect to the information used by our management in its financial decision-making, which includes planning for maintaining Redwood’s compliance with the 90% Distribution Requirement. We present these reconciliations because we view them as helpful to investors in evaluating our business and the tax treatment of distributions they may receive, to offer comprehensive tax status disclosures, and to demonstrate our compliance with the Internal Revenue Code’s REIT requirements.

Form 8-K

Exhibit 99.1 Press Release dated April 28, 2021, page 3

2.

We   note your discussion of REIT taxable income (estimated) and REIT taxable   income per share (estimated), which appear to be non-GAAP measures. Please   tell us how you have complied with the disclosure requirements of Regulation   G and Item 10(e)(1)(i) of Regulation S-K, including reconciliations to   the most directly comparable GAAP financial measures.

As set forth above, we believe Redwood’s presentation of REIT taxable income (loss) (estimated) and REIT taxable income (loss) per share (estimated) in the April 2021 8-K falls outside of the definition of a “non-GAAP financial measure” under Item 10(e)(1)(i) and Regulation G. We present these figures alongside our GAAP net income because we view them as material and helpful to investors in evaluating our business and the tax treatment of dividends they may receive, to offer comprehensive tax status disclosures, and to demonstrate our compliance with the Internal Revenue Code’s REIT requirements.

*                                         *                                         *

2

Notwithstanding our interpretation that Redwood’s disclosures of REIT taxable income and total taxable income (both in the aggregate and on a per-share basis) fall outside of the definition of a “non-GAAP financial measure” as defined in Item 10(e) of Regulation S-K and Regulation G, Redwood respectfully recognizes that the Staff may conclude otherwise.  If so, at the Staff’s request, Redwood will ensure that its future disclosures of REIT taxable income and total taxable income (both in the aggregate and on a per-share basis) comply with the requirements of Item 10(e) of Regulation S-K and Regulation G applicable to “non-GAAP financial measures.”

*          *          *

Should you have any further comments or questions about this letter, please contact me by telephone at 415-384-3827, by fax at 415-381-1773, or by email at brooke.carillo@redwoodtrust.com.

Very truly yours,

Redwood   Trust, Inc.

By:

/S/ BROOKE CARILLO

Brooke Carillo

Chief Financial Officer

3

United States securities and exchange commission logo
July 19, 2021
Collin L. Cochrane
Chief Financial Officer
Redwood Trust, Inc.
One Belvedere Place, Suite 300
Mill Valley, CA 94941
Re:Redwood Trust, Inc.
Form 10-K for the Fiscal Year Ended December 31, 2020
Form 8-K
Filed February 26, 2021 and April 28, 2021
File No. 001-13759
Dear Mr. Cochrane:
            We have reviewed your filing and have the following comments.  In some of our
comments, we may ask you to provide us with information so we may better understand your
disclosure.
            Please respond to these comments within ten business days by providing the requested
information or advise us as soon as possible when you will respond.  If you do not believe our
comments apply to your facts and circumstances, please tell us why in your response.
            After reviewing your response to these comments, we may have additional comments.
Form 10-K for the Fiscal Year Ended December 31, 2020
Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations
Differences between Estimated Total Taxable Income and GAAP Income, page 83
1.We note your tables that reconcile total taxable income (loss) and total taxable income
(loss) on a per share basis to GAAP income (loss) and GAAP income (loss) on a per share
basis, respectively, for the years ended December 31, 2020, 2019, and 2018, which appear
to be non-GAAP income statements reconciling non-GAAP measures to the most directly
comparable GAAP measures. Please tell us how you considered the guidance in Item
10(e)(1)(i)(A) and the guidance in Questions 102.10 and 102.05 of the Non-
GAAP Financial Measures Compliance and Disclosure Interpretations in your
presentation.

 FirstName LastNameCollin L. Cochrane
 Comapany NameRedwood Trust, Inc.
 July 19, 2021 Page 2
 FirstName LastName
Collin L. Cochrane
Redwood Trust, Inc.
July 19, 2021
Page 2

Form 8-K filed April 28, 2021
Exhibit 99.1 Press Release dated April 28, 2021, page 3
2.We note your discussion of REIT taxable income (estimated) and REIT taxable income
per share (estimated), which appear to be non-GAAP measures. Please tell us how you
have complied with the disclosure requirements of Regulation G and Item 10(e)(1)(i) of
Regulation S-K, including reconciliations to the most directly comparable GAAP financial
measures.
            We remind you that the company and its management are responsible for the accuracy
and adequacy of their disclosures, notwithstanding any review, comments, action or absence of
action by the staff.
            You may contact William Demarest, Staff Accountant at 202-551-3432 or Isaac
Esquivel, Staff Accountant at 202-551-3395 if you have any questions.
Sincerely,
Division of Corporation Finance
Office of Real Estate & Construction

Mailstop 3233

May 18, 2017

Via E -Mail
Christopher J. Abate
President and  Chief Financial Officer
Redwood Trust, Inc.
One Belvedere Place, Su ite 300
Mill Valley, CA  94941

Re: Redwood Trust, Inc.
 Form 10 -K for the fis cal year ended December 31, 2016
Filed February 24 , 201 7
File No. 001 -13759

Dear Mr. Abate :

We have completed our review of your filing .  We remind you that the company and its
management are responsible for the accuracy and adequacy of the ir disclosure s, notwithstanding
any review, comments, action or absence  of action  by the staff .

Sincerely,

 /s/ Kristi Marrone

Kristi Marrone
Staff Accountant
Office of Real Estate and
Commodities

CORRESP
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                                                                         One
                                         Belvedere Place

        Suite
        300

        Mill
        Valley, CA 94941

    Phone

Fax
    415.389.7373

415.381.1773

VIA EDGAR AND E-MAIL

May 4, 2017

Securities and Exchange Commission

Division of Corporation Finance

100 F Street, N.W.

Washington, D.C. 20549

    Attn:

        Kristi Marrone

        Staff Accountant

    Office of Real Estate and Commodities

    Re:
    Redwood Trust, Inc.

    Response to Comment on:

    Form 10-K for the Fiscal Year Ended December 31, 2016

    Filed on February 24, 2017

    File No. 001-13759

Dear Ms. Marrone,

On behalf of Redwood Trust, Inc. (“Redwood”),
I hereby provide the following response in reply to the Staff’s comment letter dated April 24, 2017 (the “Comment Letter”)
in connection with the above-referenced Annual Report on Form 10-K (the “2016 Form 10-K”). For your convenience, my
response is preceded with an italicized recitation of the comment set forth in the Comment Letter.

Form 10-K for the fiscal year ended December 31, 2016

General

    1.
    Please tell us what consideration you gave to including Schedule IV: Mortgage Loans on Real Estate in accordance with Rule 12-29 of Regulation S-X.

As discussed with the staff,
although we believe the text of Rule 5-04 of Regulation S-X is unclear with respect to the applicability of Rule 12-29 to our business,
we believe we have substantially complied with the disclosure requirements of Schedule IV in the notes to our consolidated financial
statements. We provide portfolio composition information on residential mortgage loans within Note 6 – Residential Loans,
and a reconciliation/rollforward of our mortgage loans within Note 5 – Fair Value of Financial Instruments.

Specifically, within Note 6:

 · Table 6.3 presents residential loans grouped by product types and
the accompanying loan characteristics. None of our loans are over 3% of our total loans.

May 4, 2017

Page 2 of 2

 · Table 6.1 presents the carrying values of residential loans for each
classification of loans presented in table 6.3.

 · Table 6.2 presents the geographic concentration
of residential loans recorded on our consolidated balance sheets.

The aggregate cost for Federal income tax
purposes of our mortgage loans held at Redwood approximates the carrying values reflected in Table 6.1 within Note 6, and, at December
31, 2016, was equal to $2.28 billion for our held-for-investment loans at Redwood and $0.84 billion for our held-for-sale loans
at Redwood. For our held-for-investment loans at consolidated Sequoia entities, the aggregate cost for Federal income tax purposes
at December 31, 2016 was zero, as the transfers of these loans into Sequoia securitizations were treated as sales for tax purposes.

As discussed with the staff, in future
filings, we will provide Schedule IV as a separate schedule within our consolidated financial statements.

*       *       *

On behalf of Redwood, I confirm that:

 · Redwood is responsible for the adequacy
and accuracy of the disclosure in the above-referenced filings;

 · Staff comments or changes to disclosure
in response to staff comments do not foreclose the Commission from taking any action with respect to the filings; and

 · Redwood may not assert staff comments
as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States.

Should you have any further comments or
questions about this letter, please contact me by telephone at 415-384-3584, by fax at 415-381-1773, or by email at chris.abate@redwoodtrust.com.

    Very truly yours,

    Redwood Trust, Inc.

    By:
    /s/ Christopher J. Abate

    Christopher J. Abate

    President and
    Chief     Financial Officer

Mailstop 3233

April 24, 2017

Via E -Mail
Christopher J. Abate
President and  Chief Financial Officer
Redwood Trust, Inc.
One Belvedere Place, Su ite 300
Mill Valley, CA  94941

Re: Redwood Trust, Inc.
 Form 10 -K for the fis cal year ended December 31, 2016
Filed February 24 , 201 7
File No. 001 -13759

Dear Mr. Abate :

We have limited our review  of your filing  to the financial statements and related
disclosures and have the following comment .  In our comment, we may ask you to provide us
with information so we may better understand your disclosure.

Please respond to this comment  within ten busine ss days by providing the requested
information or advis e us as soon as possible when you w ill respond.  If you do not believe our
comment applies to your facts and circumstances, please tell us why in your response.

After reviewing your response to this comment, we may have  additional comments.

Form 10 -K for fiscal year ended December  31, 2016

General

1. Please tell us what consideration you gave to including Schedule IV: Mortgage Loans on
Real Estate in accordance with Rule 12 -29 of Regulation S -X.

We remind you that the company and its management are responsible for the accuracy
and adequacy of their disclosures, notwithstanding any review, comments, action or absence of
action by the staff.

Christopher J. Abate
Redwood Trust, Inc.
April 24, 2017
Page 2

 You may contact Mark Rakip, Staff Accountant at 202.551.3573 or me at 202.551.3429
if you have questions regarding  the comment on the financial s tatements and related matters.

Sincerely,

 /s/ Kristi Marrone

Kristi Marrone
Staff Accountant
Office of R eal Estate and
Commodities

Mail Stop 3233

September 22, 2015

Via E -Mail
Christopher J. Abate
Chief Financial  Officer
Redwood Trust, Inc.
One Belvedere Place, Suite 300
Mill Valley , CA 94941

                 Re: Redwood Trust, Inc.
                        Form 10 -K for the Fiscal Ye ar Ended December  31, 20 14
Filed February 25, 201 5
File No. 001 -13759

Dear Mr. Abate :

We have completed our review of your filing.  We remind you that our comments
or changes to disclosure in response to our comments do not foreclose the Commission
from taking any action with respect to the company or the filing  and the company may
not assert staff comments as a defense in any proceeding initiated by the Commission or
any person under the federal securities laws of the United States.  We urge all persons
who are responsible for the accuracy and adequacy of the di sclosure in the filing to be
certain that the filing includes the information the Securities Exchange Act of 1934 and
all applicable rules require.

                                                                                    Sincerely,

        /s/ Jaime G. John

                                                                                                Jaime G. John
                                                                                     Branch Chief
                                                                                                Office of Real Estate and
                                                                                                Commodities

CORRESP
1
filename1.htm

August 24, 2015

VIA EDGAR AND E-MAIL

Securities and Exchange Commission

Division of Corporation Finance

100 F Street, N.W.

Washington, D.C. 20549

    Attn:
    Jaime G. John

    Branch Chief

    Division of Corporation Finance

    Re:
    Redwood Trust, Inc.

    Responses to Comments on:

    Form 10-K for the Fiscal Year Ended December 31, 2014

    Filed on February 25, 2015

    Form 10-Q for the Quarterly Period Ended March 31, 2015

    Filed on May 7, 2015

    File No. 1-13759

Dear Mr. John,

On behalf of Redwood Trust, Inc. (“Redwood”),
I hereby provide the following response in reply to the Staff’s comment letter dated August 14, 2015 (the “Comment
Letter”) in connection with the above-referenced Annual Report on Form 10-K (the “2014 Form 10-K”). For your
convenience, my response is preceded with an italicized recitation of the comment set forth in the Comment Letter.

Form 10-K for the fiscal year ended
December 31, 2014

Item 8. Financial Statements and
Supplementary Data

Note 5. Fair Value of Financial Instrument,
F-29

 1. We note in your response to comment 2 that the difference in fair value estimates implied by
pricing inputs obtained from market securitization activity versus from market whole loan transaction activity was minimal. Please
clarify whether fair value estimates for your residential loans held-for-investment are based upon pricing inputs for both the
securitization market and the whole loan market and if so, confirm that differences between fair value estimates based upon the
two markets are minimal as it relates specifically to residential loans held-for-investment. Also, explain to us why you adjust
the above pricing inputs and the nature of the adjustments.

Fair value estimates for our
residential loans held-for-investment are currently based only on whole loan pricing inputs. As such, there are not pricing differences
between whole loan and securitization pricing inputs for our held-for-investment loans.

In the description of our determination
of fair value in our Form 10-Q, we note that pricing inputs are “…adjusted as necessary for current market conditions.”
In certain cases, whole loan sales that provide comparative pricing inputs do not occur on the last day of the quarter and we must
consider how spreads or other pricing inputs may have changed between the time of the most recent comparative sale and quarter-end.
In certain cases, we will adjust pricing inputs from the most recent comparative sales to reflect changes in current market conditions
that we observe. Generally speaking, adjustments made to pricing inputs for this purpose have been minimal as we have typically
had sales that occurred close to quarter-end.

*	*	*

      -1-

As you have requested, we confirm that:

 · Redwood is responsible for the adequacy
and accuracy of the disclosure in the above-referenced filing;

 · Staff comments or changes to disclosure
in response to staff comments do not foreclose the Commission from taking any action with respect to the filings; and

 · Redwood may not assert staff comments
as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States.

Should you have any further comments or
questions about this letter, please contact me by telephone at 415-384-3584, by fax at 415-381-1773, or by email at chris.abate@redwoodtrust.com.

    Very truly yours,

    Redwood Trust, Inc.

    By:
    /s/ Christopher J. Abate

    Christopher J. Abate

    Chief Financial Officer

      -2-

August 14, 2015

Via E -Mail
Christopher J. Abate
Chief Financial  Officer
Redwood Trust,  Inc.
One Belvedere Place, Suite 300
Mill Valley , CA 94941

                 Re: Redwood Trust, Inc.
                        Form 10 -K for the Fiscal Ye ar Ended December  31, 20 14
Filed February 25, 201 5
File No. 001 -13759

Dear Mr. Abate :

We have reviewed  your July 22, 2015 response to our comment letter and have
the following comment .  In our comment , we may ask you to provide us with information
so we may better understand your disclosure.

Please respond to this comment  within ten busine ss days by providing the
requested information or advis e us as soon as possible when you will respond.  If you do
not believe our comment  applies to your facts and circumstances, please tell us why in
your response.

After reviewing your response to this comment , we may have  additional
comments.  Unless we note otherwise, our references to prior comments are to comments
in our June 24 , 2015 letter .

Form 10 -K for the fiscal year ended December 31, 2014

Item 8.  Financial Statements and Supplementary Data

Note 5.  Fair Value of Financial Instruments, F -29

1. We note in your response to comment 2 that the difference in fair value estimates
implied by pricing inputs obtained from market securitization activity versus from
market whole loan transaction activity was minimal.  Please clarify whether fair
value estimates for your residential loans held -for-investment are based upon
pricing inputs for both t he securitization market and the whole loan market and if
so, confirm that differences between fair value estimates based upon the two
markets are minimal as it relates specifically to residential loans held -for-

Christopher J. Abate
Redwood Trust , Inc.
August 14, 2015
Page 2

 investment.  Also, explain to us why you adj ust the above pricing inputs and the
nature of the adjustments.

If you have any questions, you may contact Jorge L. Bonilla at (202) 551 -3414 or
me at (202) 551 -3446 .

                                                                                    Sincerely,

        /s/ Jaime G. John

                                                                                                Jaime G. John
                                                                                     Branch Chief

CORRESP
1
filename1.htm

    One Belvedere Place

Suite 300

Mill Valley, CA 94941

July 22, 2015

VIA EDGAR AND E-MAIL

Securities and Exchange Commission

Division of Corporation Finance

100 F Street, N.W.

Washington, D.C. 20549

 Attn: Jaime G. John

Branch Chief

Division of Corporation Finance

 Re: Redwood Trust, Inc.

Responses to Comments on:

Form 10-K for the Fiscal Year Ended December 31,
        2014

Filed on February 25, 2015

Form 10-Q for the Quarterly Period Ended March 31,
        2015

Filed May 7, 2015

File No. 1-13759

Dear Mr. John,

On behalf of Redwood Trust, Inc. (“Redwood”),
I hereby provide the following response in reply to the Staff’s comment letter dated June 24, 2015 (the “Comment Letter”)
in connection with the above-referenced Annual Report on Form 10-K (the “2014 Form 10-K”) and Quarterly Report on Form
10-Q (the “2015 Q1 Form 10-Q”). For your convenience, each of my responses is preceded with an italicized recitation
of the comment set forth in the Comment Letter.

Form 10-K for the fiscal year ended
December 31, 2014

Item 7. Management’s Discussion
and Analysis of Financial Condition and Results of Operations

 1. Please provide us with additional details regarding your Mortgage Servicing Rights investments
(MSRs) including whether you have retained the basic MSR and excess MSR. Additionally, tell us the weighted average yield that
you have earned on these assets for all periods presented and whether you have any outstanding servicer advances. Please update
your disclosure in future filings accordingly.

We own MSRs associated with
both jumbo and conforming residential mortgage loans, which we refer to as “Jumbo MSRs” and “Conforming MSRs,”
respectively. Our MSRs are retained from the sale of loans or are purchased on a stand-alone basis, as outlined on page 63 of the
2014 Form 10-K.

Base and excess MSR

We distinguish base (or “basic”)
and excess MSRs in accordance with IRS specified “safe harbor” levels of servicing fees they consider to be reasonable
compensation (or “base” fees) for servicing various loan types. For conforming loans, the IRS considers fees up to
0.25% (of associated loan principal) to be base fees, and for jumbo loans, fees up to 0.375% (of associated loan principal) to
be base fees.

    Page 1 of 5

Our Jumbo MSRs entitle
us to a contractually specified servicing fee, with rates ranging from 0.25% to 0.375%, and are therefore all considered
base fees under the IRS safe harbor. As of December 31, 2014 and 2013, the weighted average servicing fee rate on our Jumbo
MSRs was 0.25%. Our Conforming MSRs entitle us to a contractually specified servicing fee, with rates ranging from 0.25% to
0.70%. As of December 31, 2014 and 2013, our portfolio of Conforming MSRs had a fair value of $81.3 million and $3.3 million,
respectively, and of these amounts MSRs with fair values of approximately $100,000 and $30,000, respectively, had servicing fees in excess of 0.25%.

MSR Yields

Our gross cash yield on MSRs
(calculated by dividing the annual gross servicing fees we received, by the weighted average notional balance of loans associated
with MSRs we owned during the year) was 0.23%, 0.23%, and 0.18% for the years ended December 31, 2014, 2013 and 2012, respectively.

Servicer Advances

At both December 31, 2014 and
December 31, 2013, we had approximately $1.0 million and $800,000, respectively, of servicer advances, primarily related to recoverable
escrow advances, presented in “Other assets” on our balance sheet.

In accordance with the comment
letter request, in future filings, we will update our disclosures to include the amount of MSRs we own with excess servicing and
the amount of servicing advances associated with MSRs as of each balance sheet date presented, as well as the gross cash yield
on our MSRs for each period presented in our statements of income.

Item 8. Financial Statements and
Supplementary Data

 2. We note your disclosure on page F-36 that the fair value for residential loans is determined
based on either an exit price to securitization or the whole loan market. Please tell us how you determine which of these two markets
to use for your residential loans and how you have concluded that the market used in your valuation is the principal or most advantageous
market.

We carry our jumbo residential
mortgage loans (“jumbo loans”) at fair value, as they have historically represented our loan inventory for our residential
mortgage banking activities. Our jumbo loans held-for-sale have typically been held on balance sheet from 30-60 days, until they
are sold or securitized. With the reasonably high turnover, quarter-end estimates of fair value for these loans are quickly realized
in subsequent quarters.

Since prices or quotes from
exchanges or listed markets are not available for jumbo loans, we estimate fair value for these loans using internal models that
incorporate various observable and unobservable inputs, including the transactional activity noted above. We have not viewed the
various purchasers of jumbo loans (e.g., whole loan investors, resellers, or securitization aggregators) as representative of separate
markets, but rather as part of a single “secondary market” for jumbo loans. In fact, many purchasers fall into more
than one of these categories and acquire jumbo loans for differing reasons. Similarly, sellers of jumbo loans typically seek bids
for jumbo loans from many different types of purchasers, rather than solely from one category of purchasers. We view this single
secondary market as the principal market, with various market participants providing varying pricing inputs each quarter. During
2014, the difference in fair value estimates implied by pricing inputs provided by different types of purchasers was minimal.

    Redwood Trust
    Page 2  of 5
    July 22, 2015

In considering the Staff’s
comment, we plan to update our disclosures in future filings to clarify the existence of a single principal market for jumbo loans,
as opposed to two distinct markets. The updated language we intend to use is as follows:

Estimated fair values for
residential loans are determined using models that incorporate various observable and unobservable inputs, including pricing information
from recent securitizations and whole loan sales. Certain significant inputs in these models are considered unobservable and are
therefore Level 3 in nature. Pricing inputs obtained from market securitization activity include indicative spreads to indexed
TBA prices for senior RMBS and indexed swap rates for subordinate RMBS, which are adjusted as necessary for current market conditions
(Level 3). Pricing inputs obtained from market whole loan transaction activity include indicative spreads to indexed swap rates,
adjusted as necessary for current market conditions (Level 3). Other observable inputs include Agency RMBS pricing, indexed swap
yields, credit rating agency guidance on expected credit support levels for newly issued RMBS transactions, benchmark interest
rates, and prepayment rates. These assets would generally decrease in value based upon an increase in the credit spread, prepayment
speed, or credit support assumptions.

Estimated fair values for
conforming loans are determined based upon quoted market prices (Level 2). Conforming loans are mortgage loans that conform to
Agency guidelines. As necessary, these values are adjusted for servicing value, market conditions and liquidity.

Form 10-Q for the quarterly period
ended March 31, 2015

Item 2. Management’s Discussion
and Analysis of Financial Condition and Results of Operations

 3. We note your disclosure on page 70 that you began to account for commitments to purchase jumbo
loans as derivatives as a result of amendments to the agreements governing these commitments. Please provide to us additional details
regarding the terms of the referenced amendments, how they qualify your loan purchase commitments to be accounted for as a derivative,
and quantify the impact to your financial statements. Also, tell us the accounting guidance upon you which you relied.

We purchase jumbo residential
mortgage loans (“jumbo loans”) from various bank and non-bank loan originators, which we refer to as “Sellers.”
Our purchases of jumbo loans from these Sellers are governed by mortgage loan purchase and sale agreements (or “MLPSAs”).
Prior to January 1, 2015, our MLPSAs were drafted such that there was no legally enforceable commitment by us to purchase a jumbo
loan that we and the Seller had specified until a purchase price and terms letter (“PPTL”) relating to that loan was
executed by both parties. Once the PPTL was executed by both parties, a contractual purchase and sale commitment between the parties
was established; and, consequently, it was only at the time the PPTL was executed that a commitment to purchase a jumbo loan could
be assessed under derivatives accounting guidance. Of note, this commitment does not represent an “Interest Rate Lock Commitment”
to a borrower as we do not originate any residential loans ourselves.

Prior to January 1, 2015, we
generally entered into PPTLs on the same day we purchased the related jumbo loan – i.e., on the same day we wired
the purchase price to the Seller and the Seller conveyed ownership of the loan to us. Under this framework, even if an executed
PPTL were to qualify as a derivative, we did not have open PPTLs at any quarter-end (because commitments to purchase jumbo loans
were made and fulfilled on the same day) and, therefore, had no jumbo loan purchase commitments to assess as derivatives for financial
reporting purposes.

    Redwood Trust
    Page 3   of 5
    July 22, 2015

During the latter part of 2014,
we executed amendments to the MLPSAs we had in place with Sellers to affect certain new terms relating to purchase and sale commitments.
Under the amendments, these new terms became effective on January 1, 2015. In addition, we changed our standard form MLPSA to affect
the same new terms in new MLPSAs we entered into with new Sellers on and after January 1, 2015.

As of January 1, 2015, all of
our MLPSAs specify that our commitment to purchase a jumbo loan (and the Seller’s corresponding commitment to sell us that
loan) is established when we deliver a confirmation to the Seller relating to that loan. We now typically deliver a confirmation
30-45 days prior to when we expect to fulfill our commitment to purchase a loan. Because a contractual commitment is established
well before a jumbo loan will be purchased, beginning with the quarter ended March 31, 2015, we assessed our open commitments to
purchase jumbo loans under derivative accounting guidance to determine if these open commitments qualified as derivatives.

In analyzing these open commitments,
we looked to ASC 815-10-15, paragraphs 69-71, which discuss the accounting treatment for “Certain Loan Commitments.”
In accordance with paragraph 70 (formerly DIG C13), all commitments to purchase or sell mortgage loans must be evaluated under
the definition of a derivative. Therefore, we have evaluated open commitments to purchase jumbo loans using the guidance in ASC
815-10-15-83, “Derivatives and Hedging – Definition of Derivative Instrument.” In accordance with this guidance,
we determined that our current MLPSAs and associated confirmations are contractual commitments and evaluated the following required
criteria to assess whether they meet the definition of a derivative:

 a. Underlying, notional amount, payment provision requirement

With respect to our jumbo
loans, the related MLPSA and confirmation evidence a purchase and sale obligation (a settlement requirement), specify the principal
amount of the loan to be purchased, and specify the purchase price for the loan.

This satisfies the first
criterion under ASC 815-10-15-83’s definition of a derivative.

 b. Initial net investment requirement

With respect to our jumbo
loans, the related MLPSA and confirmation require no initial net investment.

This satisfies the second
criterion under ASC 815-10-15-83’s definition of a derivative.

 c. Net settlement requirement

ASC 815-10-15 paragraphs
99-139 discuss net settlement provisions. We evaluated each of the three means by which the net settlement criterion can be satisfied
and determined that our underlying jumbo loans are readily convertible into cash.

This satisfies the third
criterion under ASC 815-10-15-83’s definition of a derivative.

Accordingly, as we meet the
specified criteria in ASC 815-10-15, we concluded that our current jumbo loan purchase commitments are considered derivatives in
accordance with GAAP and we began to account for commitments entered into under our amended MLPSAs as derivatives beginning on
January 1, 2015.

    Redwood Trust
    Page 4   of 5
    July 22, 2015

At March 31, 2015, we had
$5.3 million of derivative assets and $0.8 million of derivative liabilities associated with jumbo loan purchase commitments recorded
on our balance sheet. These amounts are included in our disclosures on page 37 of our 2015 Q1 Form 10-Q.

*     	*	     *

As you have requested, we confirm that:

 • Redwood is responsible for the adequacy and accuracy
of the disclosure in the above-referenced filings;

 • Staff comments or changes to disclosure in response
to staff comments do not foreclose the Commission from taking any action with respect to the filings; and

 • Redwood may not assert staff comments as a defense
in any proceeding initiated by the Commission or any person under the federal securities laws of the United States.

Should you have any further comments or
questions about this letter, please contact me by telephone at 415-384-3584, by fax at 415-381-1773, or by email at chris.abate@redwoodtrust.com.

    Very truly yours,

    Redwood Trust, Inc.

    By:
    /s/ Christopher J. Abate

    Christopher J. Abate

    Chief Financial Officer

    Redwood Trust
    Page 5   of 5
    July 22, 2015

June 24, 2015

Via E -Mail
Christopher J. Abate
Chief Financial  Officer
Redwood Trust, Inc.
One Belvedere Place, Suite 300
Mill Valley , CA 94941

                 Re: Redwood Trust, Inc.
                        Form 10 -K for the Fiscal Ye ar Ended December  31, 20 14
Filed February 25, 201 5
Form 10 -Q for the Quarterly Period Ended March 31, 2015
Filed May 7, 2015
File No. 001 -13759

Dear Mr. Abate :

We have limited our review of your filing to the financial statements and related
disclosures and have the following comment s.  In our comment s, we ask you to provide
us with information so we may better understand your disclosure.

Please respond to these comment s within ten busine ss days by providing the
requested information or advis e us as soon as possible when you will respond.  If you do
not believe our co mment s apply to your facts and circumstances, please tell us why in
your response.

After reviewing your response to these comment s, we may have  additional
comments.

Christopher J. Abate
Redwood Trust , Inc.
June 24, 2015
Page 2

 Form 10 -K for the fiscal year ended December 31, 2014

Item 7.  Management’ s Discussion and Analysis of Financial Condition and Results of
Operations

Mortgage Servicing Rights Investments, page 60

1. Please provide  us with  additional details regarding your Mortgage Servicing Rights
investments (MSRs) including whether you have retained the basic MSR and excess
MSR.  Additionally , tell us the weighted average yield that you have earned on these
assets for all periods present ed and whether you have any outstanding servicer
advances.  Please update your disclosure in future filings accordingly.

Item 8.  Financial Statements and Supplementary Data

Note 5.  Fair Value of Financial Instruments, F -29

2. We note your disclosure on page F -36 that the fair value for residential loans is
determined based on either an exit price to securitization or the whole loan market.
Please tell us how you determine which of these two markets to use for your
residential loans an d how you have concluded that the market used in your valuation
is the principal or most advantageous market.

Form 10 -Q for the quarterly period  ended March  31, 2015

Item 2.  Management’s Discussion and Analysis of Financial Condition and Re sults of
Operations

Mortgage Banking Activities, Net, page 69

3. We note your disclosure on page 70 that you began to account for commitments to
purchase jumbo loans as derivatives as a result of amendments to the agreements
governing these commitme nts.  Please provide to us additional details regarding the
terms of the referenced amendments, how they qualify your loan purchase
commitments to be accounted for as a derivative, and quantify the impact to your
financial statements.  Also, tell us t he accounting guidance upon you which you
relied.

We urge all persons who are responsible for the accuracy and adequacy of the
disclosure in the filing to be certain that the filing includes the information the Securities
Exchange Act of 193 4 and all applicable Exchange Act rules require.   Since the company
and its management are in possession of all facts relating to a company’s disclosure, they
are responsible for the accuracy and adequacy of the disclosures they have made.

Christopher J. Abate
Redwood Trust , Inc.
June 24, 2015
Page 3

 In responding to our comment s, please provide a written statement from the company
acknowledging that:

 the company is responsible for the adequacy and accuracy of the disclosure in the
filing;

 staff comments or changes to disclosure in response to staff comments do not
foreclose the Commission from taking any action with respect to the filing; and

 the company may not assert staff comments as a defense in any proceeding
initiated by the Commission or any person under the federal securities laws of t he
United States.

If you have any questions, you may contact Jorge L. Bonilla at (202) 551 -3414 or
me at (202) 551 -3446 .

                                                                                    Sincerely,

        /s/ Jaime G. John

                                                                                                Jaime G. John
                                                                                     Branch Chief

May 24 , 2013

Via E -mail
Christopher J. Abate
Chief Financial and Accounting  Officer
Redwood Trust, Inc.
One Belvedere Place , Suite 300
Mill Valley, CA  94941

Re: Redwood Trust, Inc.
 Form 10 -K for the Fiscal Y ear Ended December 31, 201 2
 Filed February 26 , 2013
File No. 001-13759

Dear Mr. Abate :

We have completed our review of your filing.  We remind you that our comments or
changes to disclosure in response to our comments do not foreclose the Commission from taking
any action with respect to the company or the filing and the company may not assert staff
comments as a defense in any proceeding initiated by the Commission or any person under the
federal securities laws of the United  States.  We urge all persons who are responsible for the
accuracy and adequacy of the disclosure in the filing to be certain that the filing includes the
information the Securities Exchange Act of 1934 and all applicable rules require.

Sincerely,

 /s/ Daniel L. Gordon

Daniel L. Gordon
Branch Chief

CORRESP
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May 9, 2013

VIA EDGAR AND E-MAIL

Securities and Exchange Commission

Division of Corporation Finance

450 Fifth Street, N.W.

Washington, D.C. 20549

    Attn:
    Daniel L. Gordon

    Branch Chief

    Division of Corporation Finance

    Re:
    Redwood Trust, Inc.

        Responses to Comments on:

        Form 10-K for the Fiscal Year Ended December 31, 2012

        Filed on February 26, 2013

    File No. 1-13759

Dear Mr. Gordon,

On behalf of Redwood Trust, Inc. (“Redwood”),
I hereby provide the following response in reply to the Staff’s comment letter dated April 26, 2013 (the “Comment
Letter”) in connection with the above-referenced Annual Report on Form 10-K (the “2012 Form 10-K”). For your
convenience, each of my responses is preceded with an italicized recitation of the comment set forth in the Comment Letter.

Form 10-K for the fiscal year ended
December 31, 2012

Changes in Book Value and Estimated
Non-GAAP Economic Value, page 50

 1. We have reviewed your
                                                                       response to comment 1, and note that you have adjusted
                                                                       all components of your balance sheet that do not approximate
                                                                       fair value to their fair values in order to calculate Estimated
                                                                       Non-GAAP Economic Value. We also note that while the Estimated
                                                                       Non-GAAP Economic Value was approximately $44 million greater
                                                                       than GAAP Book Value, your disclosure of the fair values
                                                                       of financial instruments in Note 5 indicates that the difference
                                                                       between the carrying values and the fair values of your
                                                                       net assets presented in the table is only a fair value
                                                                       of $1.9 million in excess of carrying value. Please reconcile
                                                                       this difference to the difference in Estimated Non-GAAP
                                                                       Economic Value, and present us with a tabular reconciliation
                                                                       of Estimated Non-GAAP Economic Value to book value.

As the result of the continued convergence
of GAAP Book Value and Estimated Non-GAAP Economic Value, we did not include this disclosure in our Quarterly Report on Form 10-Q
for the three months ended March 31, 2013, and do not currently plan to include such disclosure in our future filings. Although
we have removed the disclosure in question, to fully respond to the Staff’s comment, we provide the following tabular reconciliation
of Estimated Non-GAAP Economic Value to GAAP Book Value. Each of the adjustments in the table below is reconciled in text on page
50 of our 2012 Form 10-K.

    -1-

Components of Book Value (1)

    Estimate of

    December 31, 2012
    GAAP

    Non-GAAP

    (In Millions, Except per
    Share Data)
    Book Value
    Adjustments
    Economic Value

    Cash and cash equivalents
    $ 81
    $ 1
    $ 81

    Real estate loans at Redwood
      592

      592

    Real estate securities at Redwood
      784

      784

    Investments in Sequoia
      88
      1
      89

    Investments in Commercial Securitization
      118
      1
      119

    Investments in Residential Resecuritization
      161
      (7 )
      154

    Other assets
      86

      86

    Total assets
      1,911

      1,906

    Short-term debt
      (552 )

      (552 )

    Long-term debt
      (140 )
      49
      (91 )

    Other liabilities
      (80 )

      (80 )

    Stockholders' Equity
    $ 1,140
      44
    $ 1,183

    Book Value Per Share
    $ 13.95
      0.53
    $ 14.48

 (1) Totals may not foot due to rounding.

The difference between the GAAP book values
and fair values presented in Note 5 ($1.9 million) and those presented in the table above ($44 million), is almost entirely attributable
to the Investments in Sequoia line item. We consolidate certain Sequoia entities in accordance with GAAP and in Note 5 we disclose
the fair values of the consolidated residential loans and the ABS issued at those entities. These amounts are estimated independently,
through their respective markets, on a gross basis in accordance with GAAP. However, we do not utilize these fair values to determine
the non-GAAP economic value of our Investments in Sequoia (i.e., the securities we retain in each consolidated Sequoia entity),
as we believe market participants would determine the economic value of these securities relative to comparable securities in
the market. Using this approach, we determined the non-GAAP economic value of our retained Investments in Sequoia to be $89 million,
which is included in the table above and in our disclosure on page 50 of our 2012 Form 10-K.

Cash and Cash Equivalents, page
51

 2. We note your response
                                                                       to comment 2. We believe this is a cash flow statement
                                                                       and it is not in accordance with GAAP and it places undue
                                                                       prominence on the non-GAAP information. It starts with
                                                                       beginning cash and shows cash inflows and outflows and
                                                                       reconciles to ending cash. Please remove this measure in
                                                                       future filings. For reference see Question 102.10 of the
                                                                       Compliance and Disclosure Interpretations. Question 102.10
                                                                       references the income statement but applies to any financial
                                                                       statement.

While we respectfully continue to believe
that the presentation of sources and uses of cash is not non-GAAP information, in accordance with the Staff’s request, we
removed the sources and uses of cash table in our Quarterly Report on Form 10-Q for the three months ended March 31, 2013 and
will not include this table in future filings.

*	*	*

    -2-

As you have requested, we confirm that:

 · Redwood
                                                                                                               is responsible
                                                                                                               for the adequacy
                                                                                                               and accuracy of
                                                                                                               the disclosure
                                                                                                               in the above-referenced
                                                                                                               filing;

 · Staff
                                                                                                               comments or changes
                                                                                                               to disclosure in
                                                                                                               response to staff
                                                                                                               comments do not
                                                                                                               foreclose the Commission
                                                                                                               from taking any
                                                                                                               action with respect
                                                                                                               to the above-referenced
                                                                                                               filing; and

 · Redwood
                                                                                                               may not assert
                                                                                                               staff comments
                                                                                                               as a defense in
                                                                                                               any proceeding
                                                                                                               initiated by the
                                                                                                               Commission or any
                                                                                                               person under the
                                                                                                               federal securities
                                                                                                               laws of the United
                                                                                                               States.

Should you have any further comments or
questions about this letter, please contact me by telephone at 415-384-3584, by fax at 415-381-1773, or by email at chris.abate@redwoodtrust.com.

    Very truly
    yours,

    Redwood Trust,
    Inc.

    By:
    /s/
    Christopher J. Abate

    Christopher J. Abate

    Chief Financial Officer

    -3-

April 26, 2013

Via E -mail
Christopher J. Abate
Chief Financial and Accounting  Officer
Redwood Trust, Inc.
One Belvedere Place , Suite 300
Mill Valley, CA  94941

Re: Redwood Trust, Inc.
 Form 10 -K for the Fiscal Y ear Ended December 31, 201 2
 Filed February 26 , 2013
File No. 001-13759

Dear Mr. Abate :

We have reviewed your filing an d have the following comments.  In some of our
comments, we may ask you to provide us with information so we  may better understand your
disclosure.

Please respond to this letter within ten business days by amending your filing, by
providing the requested information, or by advising us when you will provide the requested
response.   If you do not believe our comm ents apply to your facts and circumstances or do not
believe an amendment is appropriate, please tell us why in your response.

After reviewing any amendment to your filing and the information you provide in
response to these  comments, we may have  additi onal comments.

Form 10 -K for the Fiscal Year Ended December 31, 2012

Changes in Book Value and Estimated Non -GAAP Economic Value, page 50

1. We have reviewed your response to comment 1, and note that you have adjusted all
components of your balance shee t that do not approximate fair value to their fair values
in order to calculate Estimated Non -GAAP Economic Value.  We also note that while the
Estimated Non -GAAP Economic Value was approximately $44 million greater than
GAAP Book Value, your disclosure of  the fair values of financial instruments in Note 5
indicates that the difference between the carrying values and the fair values of your net
assets presented in the table is only a fair value of $1.9 million in excess of carrying
value.  Please reconcile this difference to the difference in Estimated Non -GAAP
Economic Value, and present us with a tabular reconciliation of Estimated Non -GAAP
Economic Value to book value.

Christopher J. Abate
Redwood Trust, Inc.
April 26, 2013
Page 2

 Cash and Cash Equivalents, page 51

2. We note your response to comment 2.  We believe this is a cash flow statement and it is
not in accordance with GAAP and it places undue prominence on the non -GAAP
information.  It starts with beginning cash and shows cash inflows and outflows and
reconciles to ending cash.  Please remove this measure in  future filings.  For reference
see Question 102.10 of the Compliance and Disclosure Interpretations.  Question 102.10
references the income statement but applies to any financial statement.

We urge all persons who are responsible for the accuracy and ade quacy of the disclosure
in the filing to be certain that the filing includes the information the Securities Exchange Act of
1934 and all applicable Exchange Act rules require.   Since the company and its management are
in possession of all facts relating to  a company’s disclosure, they are responsible for the accuracy
and adequacy of the disclosures they have made.

 In responding to our comments, please provide  a written statement from the company
acknowledging that:

 the company is responsible for the adequacy and accuracy of the disclosure in the filing;

 staff comments or changes to disclosure in response to staff comments do not foreclose
the Commission from taking any action with respect to the filing; and

 the company may not assert staff comments as a defense in any proceeding initiated by
the Commission or any person under the federal securities laws of the United States.

If you have any questions, you may contact Eric McPhee at (202) 551 -3693 or me at
(202) 551 -3486.

Sincerely,

 /s/ Daniel L. Gordon

Daniel L.  Gordon
Branch Chief

CORRESP
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April 11, 2013

VIA EDGAR AND E-MAIL

Securities and Exchange Commission

Division of Corporation Finance

450 Fifth Street, N.W.

Washington, D.C. 20549

 Attn: Daniel L. Gordon

Branch Chief

Division of Corporation Finance

 Re: Redwood Trust, Inc.

Responses to Comments
on:

Form 10-K for the Fiscal Year Ended December 31,
        2012

Filed on February 26, 2013

File No. 1-13759

Dear Mr. Gordon,

On behalf of Redwood Trust, Inc. (“Redwood”),
I hereby provide the following response in reply to the Staff’s comment letter dated April 1, 2013 (the “Comment Letter”)
in connection with the above-referenced Annual Report on Form 10-K (the “2012 Form 10-K”). For your convenience, each
of my responses is preceded with an italicized recitation of the comment set forth in the Comment Letter.

Form 10-K for the fiscal year ended
December 31, 2012

Changes in Book Value and Estimated
Non-GAAP Economic Value, page 50

 1. Please tell us why management believes the measure Estimated Non-GAAP Economic Value provides
useful information to investors. Please discuss in detail how the measure is calculated, and explain the reasons why adjustments
are made to certain assets and liabilities to get to their fair values, and not others. For any adjustments, please also discuss
any significant assumptions that were made. We may have further comment.

Management believes Estimated Non-GAAP
Economic Value is useful to investors in that it shows a measure of shareholder value where all components of the balance sheet
are reflected at their estimated economic values. To determine the economic value of shareholders equity, we adjusted components
of our balance sheet that are held at amortized cost (or a combination of fair value and amortized cost) that otherwise may not
approximate fair values. The carrying value of all other components of GAAP Book Value approximate fair values, and therefore are
not adjusted.

Estimated Non-GAAP Economic Value is derived
by adjusting four components of our Consolidated GAAP Balance Sheet: (i) long-term debt; (ii) net investments in consolidated Sequoia
securitization entities, (iii) the net investment in our consolidated commercial securitization entity; and, (iv) the net investment
in our consolidated residential resecuritization entity. For each of these components, the related assets or liabilities may not
be reflected at their estimated fair values based on the accounting elections we apply under GAAP. We include the following detailed
reconciliation of our GAAP book value per share to our Non-GAAP Economic Value per share in a narrative format on Page 50 of the
2012 Form 10-K within Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”):

    -1-

“Changes in Book
Value and Estimated Non-GAAP Economic Value

At December 31, 2012, our estimate
of non-GAAP economic value per share was $14.48, or $0.53 per share higher than our reported GAAP book value per share. This difference
is made up of the following components: The economic valuation of our long-term debt of $91 million (without giving effect to interest
rate agreements designated as cash flow hedges with respect to long-term debt), was $49 million, or $0.60 per share, below the
unamortized cost basis used to determine GAAP book value; the economic valuation of our net investment in Sequoia of $89 million
was $1 million, or $0.01 per share, above the net unamortized cost basis used to determine GAAP book value; the economic valuation
of our net investment in the Commercial Securitization of $119 was $1 million, or $0.01 per share, above the net unamortized cost
basis used to determine GAAP book value; and, the economic valuation of our investment in the Residential Resecuritization of $154
million, was $7 million, or $0.09 per share, below the net unamortized cost basis used to determine GAAP book value. A further
discussion of our estimate of non-GAAP economic value is set forth below under ‘Investments in Consolidated Entities’
and ‘Factors Affecting Management’s Estimate of Economic Book Value.’”

The fair values used to calculate estimated
non-GAAP economic values that differed by more than $0.01 per share from their associated GAAP values (i.e., long-term debt and
the residential resecuritization) are the same fair values reported in Note 5, Fair Value of Financial Instruments, to the
Financial Statements in the 2012 Form 10-K. The significant assumptions used to determine these estimated fair values are disclosed
in that footnote. Additionally, page 50 of the 2012 Form 10-K, describes the methodology used to calculate each component of estimated
economic values, as follows:

“Factors Affecting
Management’s Estimate of Economic Book Value

Our estimated non-GAAP economic
value is calculated using bid-side asset marks (or estimated bid-side values) and offer-side marks for our financial liabilities
(or estimated offered-side values), when available, using the same valuation process used to estimate the fair values of our other
financial assets and liabilities under GAAP. When quoted market prices or observable market data are not available to estimate
fair value, we rely on Level 3 inputs. Because assets and liabilities classified as Level 3 are generally based on unobservable
inputs, the process of calculating economic value is generally subjective and involves a high degree of management judgment and
assumptions. These assumptions may have a significant effect on our estimates of economic value, and the use of different assumptions
as well as changes in market conditions could have a material effect on our results of operations or financial condition.”

Finally, we note that Estimated Non-GAAP
Economic Value at December 31, 2012, differed by less than 4% from our GAAP book value. We plan to evaluate the need for this non-GAAP
disclosure in future Form 10-Q and Form 10-K filings to the extent we believe that our GAAP book value closely approximates our
estimated Non-GAAP Economic Value.

Cash and Cash Equivalents, page 51

 2. Please revise your disclosure of the non-GAAP measures contained within your sources and uses
of cash table to discuss why management believes these measures provide useful information to investors. Additionally, these measures
should be presented with the most directly comparable GAAP measures and reconciled to those measures. Refer to Item 10(e) of Regulation
S-K.

    -2-

As further detailed below, management respectfully
submits that the presentation of sources and uses of cash in Table 8 on page 51 of the 2012 Form 10-K does not include non-GAAP
financial measures within the meaning of Item 10(e)(2) of Regulation S-K. The reported sources and uses of cash within Table 8
are not measures of Redwood’s historical or future financial performance, financial position, or cash flows that exclude
or include (or are subject to adjustments that have the effect of excluding or including) any amounts that are within, or not within,
respectively, the aggregate sources and uses of cash that are recorded by Redwood in accordance with GAAP. Rather, as described
on page 51 of the 2012 Form 10-K, these figures represent a tabular presentation of Redwood’s sources and uses of cash organized
in a manner that is consistent with the way management analyzes them – i.e., by aggregating and netting all sources and uses
of cash during the periods presented. As discussed in the Adopting Release for Item 10(e) of Regulation S-K, the definition of
non-GAAP financial measures was not intended to include “financial information that does not have the effect of providing
numerical measures that are different from the comparable GAAP measure.” The figures presented in Table 8 are the aggregate
sources and uses of cash recorded by Redwood in accordance with GAAP and, as described on page 51 of the 2012 Form 10-K, Table
8 begins and ends with Redwood’s GAAP cash balances for the periods presented.

We believe the presentation of Table 8
and the related discussion on page 51 of the 2012 Form 10-K is useful for investors in analyzing our business, because it presents
our sources and uses of cash in a manner that is consistent with the way management analyzes our business. In addition, the information
in the table presents net sources and uses of cash relating to consolidated securitization entities, rather than the gross cash
amounts received by these consolidated entities and the gross cash amounts distributed by these entities, which are not available
for use in Redwood’s business. For both of these reasons, we believe that investors appreciate this MD&A disclosure and
the insight it provides into how management analyzes this aspect of Redwood’s business and operations.

In preparing the presentation of Redwood’s
sources and uses of cash in Table 8, we did not intend for it to be comparable to Redwood’s GAAP Consolidated Statements
of Cash Flows. For example, Redwood’s GAAP Consolidated Statements of Cash Flows follow the “indirect method”
and reconcile Redwood’s GAAP net income for a given period to the net increase or decrease in cash for that period and include
adjustments for non-cash items that impact net income. By contrast, Table 8 presents solely information about sources and uses
of cash, does not present adjustments for non-cash items, and does not reconcile to net income or any other financial measure comparable
to net income. Furthermore, because there is no overall exclusion or inclusion of any non-GAAP cash amounts in Table 8, due to
the fact that the aggregate sources of cash available to Redwood and the aggregate uses of cash by Redwood are included in the
table, the primary rationale for any type of reconciliation to Redwood’s GAAP Consolidated Statements of Cash Flows is absent.

We recognize, however, that the presentation
of sources and uses of cash in Table 8 in broadly captioned sub-sections that, in some respects, are similar to the broadly captioned
subsections of Redwood’s GAAP Consolidated Statement of Cash Flows, could result in a conclusion that Table 8 is intended
to be comparable to the GAAP Consolidated Statements of Cash Flows – which was not our intention. We also recognize that
our reference in the prefatory language to Table 8 to “non-GAAP amounts”, which was included out of an abundance of
caution, may also result in confusion. Consequently, and in response to the Staff’s comment, we plan to enhance Table 8,
the related footnotes and prefatory disclosures in any future Form 10-Q or Form 10-K filings in which they or comparable MD&A
disclosures are included. These enhancements are intended to more clearly articulate the objective of these disclosures and how
they should be interpreted by investors and other readers of Redwood’s MD&A. Please see Annex A to this comment
response for the proposed MD&A disclosure, which proposed disclosure has been drafted assuming it would be included in our
Form 10-Q for the three months ended March 31, 2013.

*	     *	     *

    -3-

As you have requested, we confirm that:

 • Redwood is responsible for the adequacy and accuracy
of the disclosure in the above-referenced filing;

 • Staff comments or changes to disclosure in response
to staff comments do not foreclose the Commission from taking any action with respect to the filings; and

 • Redwood may not assert staff comments as a defense
in any proceeding initiated by the Commission or any person under the federal securities laws of the United States.

Should you have any further comments or
questions about this letter, please contact me by telephone at 415-384-3584, by fax at 415-381-1773, or by email at chris.abate@redwoodtrust.com.

    Very truly yours,

    Redwood Trust, Inc.

    By:
    /s/ Christopher J. Abate

    Christopher J. Abate

    Chief Financial Officer

    -4-

Annex A

Form of Disclosures Relating to Sources
and Uses of Cash

The following table presents Redwood’s
sources and uses of cash during the three months ended March 31, 2013 in a manner consistent with the way management analyzes them.
We believe this table is useful for investors in analyzing our business, because it presents our sources and uses of cash in a
manner that is consistent with the way management analyzes our business. In addition, the information in the table presents
the net cash distributed to Redwood as a result of our investments in consolidated Sequoia securitization entities, the Commercial
Securitization entity, and the Residential Resecuritization entity, rather than the gross cash amounts received by these consolidated
entities and the gross cash amounts distributed by these entities.

The beginning and ending cash balances
presented in the table below are GAAP amounts. The following table is not a presentation of Redwood’s cash flows for the
three months ended March 31, 2013. Our GAAP Consolidated Statements of Cash Flows are presented on page [xx] of this Quarterly
Report on Form 10-Q.

      Three Months Ended

    (In Millions)
      March 31, 2013

    Beginning
Cash Balance
    $ x

    Business sources and uses
(1)

    Loans, securities, and investments
(2)
      x

    Cash uses for operations
      x

    Interest paid on other borrowed
funds (3)
      x

    Dividends
      x

    Net business sources and
uses of cash
      x

    Origination and acquisition
sources and uses

    Acquisition of residential
loans
      x

    Origination/acquisition of commercial loans
      x

    Acquisition of third-party securities
      x

    Sale of third-party securities
      x

    Acquisitions
of investments in Sequoia entities, net (4)
      x

    Net origination and acquisition sources and uses of cash
      x

    Borrowing and other sources and uses

    Proceeds from residential
loan sales
      x

    Proceeds from commercial
securitization
      x

    Proceeds from short-term
debt, net
      x

    Proceeds from (repayments
of) warehouse debt, net
      x

    Margin returned, net
      x

    Derivative pair-off/premiums
paid
      x

    Proceeds from share issuance
      x

    Changes
in working capital
      x

    Net borrowing and other sources and uses of cash
      x

    Ending Cash Balance
    $ x

(1)	Sources and uses of cash from loans,
securities, and investments can be volatile from quarter to quarter depending on the level of invested capital, the timing of credit
losses, acquisitions, sales, and changes in prepayments and interest rates. Therefore, (i) amounts generated by these investments
in a given period is not necessarily reflective of the long-term economic return we will earn on the investments and (ii) it is
difficult to determine what portion of the cash received from an investment is a return “of” principal and what portion
is a return “on” principal in a given period.

    A-1

Annex A

(2)	We consolidate certain Sequoia securitization
entities, the Commercial Securitization, and the Residential Resecuritization for financial reporting purposes. Sources of cash
from loans, securities, and investments includes, among other things, the gross cash received from the loans and securities held
at these entities, net of the principal and interest payments made to third parties in respect of ABS issued by these entities,
thus representing the net cash received from these entities that is available to Redwood.

(3)	Other borrowed funds consist of
short-term repurchase and warehouse debt, and long term debt.

(4)	Total acquisitions of investments
in Sequoia entities in the first quarter of 2013 were $x million. Total sales of investments in Sequoia entities the first quarter
of 2013 were $x million.

    A-2

April 1, 2013

Via E -mail
Christopher J. Abate
Chief Financial and Accounting  Officer
Redwood Trust, Inc.
One Belvedere Place , Suite 300
Mill Valley, CA  94941

Re: Redwood Trust, Inc.
 Form 10 -K for the Fiscal Y ear Ended December 31, 201 2
 Filed February 26 , 2012
File No. 001-13759

Dear Mr. Abate :

We have reviewed your filing an d have the following comments.  In some of our
comments, we may ask you to provide us with information so we may better understand your
disclosure.

Please respond to this letter within ten business days by amending your filing, by
providing the requested information, or by advising us when you will provide the requested
response.   If you do not believe our comme nts apply to your facts and circumstances or do not
believe an amendment is appropriate, please tell us why in your response.

After reviewing any amendment to your filing and the information you provide in
response to these  comments, we may have  additio nal comments.

Form 10 -K for the Fiscal Year Ended December 31, 2012

Changes in Book Value and Estimated Non -GAAP Economic Value, page 50

1. Please tell us  why management believes th e measure Estimated Non -GAAP Economic
Value  provide s useful information to investors. Please discuss in detail how the measure
is calculated, and explain the reasons why adjustments are made to certain assets and
liabilities to get to their fair values, and not others.  For any adjustments, please also
discuss any significant assumptions that were made.  We may have further comment.

Cash and Cash Equivalents, page 51

2. Please revise your disclosure of the non -GAAP measures contained within your sources
and uses of cash table to discuss why management believes these measures p rovide
useful information to investors.  Additionally, these measures should be presented with

Christopher J. Abate
Redwood Trust, Inc.
April 1, 2013
Page 2

 the most directly comparable GAAP measures and reconciled to those measures.  Refer
to Item 10(e) of Regulation S -K.

We urge all persons who are responsible for the accuracy and adequacy of the disclosure
in the filing to be certain that the filing includes the information the Securities Exchange Act of
1934 and all applicable Exchange Act rules require.   Since the company and its management are
in possession of all facts relating to a company’s disclosure, they are responsible for the accuracy
and adequacy of the disclosures they have made.

 In responding to our comments, please provide  a written statement from the company
acknowledging that:

 the company is responsible for the adequacy and accuracy of the disclosure in the filing;

 staff comments or changes to disclosure in response to staff comments do not foreclose
the Commission from taking any action with respect to the filing; and

 the company may not  assert staff comments as a defense in any proceeding initiated by
the Commission or any person under the federal securities laws of the United States.

If you have any questions, you may contact Eric McPhee at (202) 551 -3693 or me at
(202) 551 -3486.

Sincerely,

 /s/ Daniel L. Gordon

Daniel L. Gordon
Branch Chief

August 8, 2012

Via E -mail
Mr. Christopher J. Abate
Chief Financial Officer
Redwood Trust
One Belvedere Place, Suite 300
Mill Valley, CA 94941

 RE: Redwood Trust
Form 10 -K for the Fiscal Year Ended December 31, 2011
  Filed February 27, 2012
  File No. 1 -13759

Dear Mr. Abate:

We have completed our review of your filing .  We remind you that our comments or
changes to disclosure in response to our comments do not foreclose the Commission from taking
any action with respect to the company or the filing and the company may not assert staff
comments as a defense in any proceeding initiated by the Commission or any person under the
federal securities laws of the United States.  We u rge all persons who are responsible for the
accuracy and adequacy of the disclosure in the filing to be certain that the filing includes the
information the Securities Exchange Act of 1934 and all applicable rules require.

Sincerely,

 /s/ Daniel L. Gordon

Daniel L. Gordon
        Branch Chief

CORRESP
1
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August 7, 2012

VIA EDGAR

Securities and Exchange Commission

Division of Corporation Finance

450 Fifth Street, N.W.

Washington, D.C. 20549

    Attn:
    Duc Dang

    Staff Attorney

    Division of Corporation Finance

    Re:

        Redwood Trust, Inc.

        Responses to Comments on:

        Form 10-K for the Fiscal Year Ended December 31,
        2011

        Filed on February 27, 2012

        Form 10-Q for the Quarterly Period Ended March 31,
        2012

        Filed on May 8, 2012

        File No. 1-13759

Dear Mr. Duc Dang,

On behalf of Redwood Trust, Inc. (“Redwood”),
I hereby provide the following supplement to the original response dated July 9, 2012, which was in reply to the Staff’s
comment letter dated June 25, 2012 (the “Comment Letter”). The Staff’s comment letter was issued in connection
with the above-referenced Annual Report on Form 10-K and Quarterly Report on Form 10-Q.

Part of the original response to Comment
#3 described the asset-specific measures used at Redwood to evaluate risks associated with our residential loans and securities.
While our analysis of these instruments entails a wide range of factors, we do not currently employ asset-specific internal risk
rating metrics (other than those described in the original response) to rank the credit risk associated with our residential loans
and securities or prospective investments. We employ a broader approach to understanding and managing credit risk based on factors
outlined in the original response. As an active investor in credit sensitive mortgage-related investments since 1994, we have used
this approach to assess the risks associated with our residential loans and securities without relying on internal or third-party
credit ratings. For our commercial loan portfolio, we do employ an internal risk rating methodology to assess asset-specific risks
within this portfolio, as summarized in the original response. We disclose this methodology along with our evaluation of our commercial
loan portfolio in our quarterly and annual Exchange Act reports.

Part of the original response to Comment
#6 described additional disclosures we planned to include in future quarterly and annual Exchange Act reports relating to financial
covenants we make to creditors. As a supplement to the original response, Redwood confirms that if at any quarter end (or if at
the date of the filing of a quarterly or annual report) management determines there is material risk of noncompliance with a financial
covenant, we will disclose in that quarterly or annual report the relevant financial covenant, a quantification of the most recent
level of compliance with that financial covenant, any expected trend in our operations and financial condition that would be meaningful
in assessing the likelihood of continued compliance (or non-compliance) with that covenant, and the material impacts on our business
and operations if a breach of that covenant were to occur. Of course, in the case of a breach of a financial covenant, we would
disclose the nature of the breach and the material impacts on our business and operations in that quarterly or annual Exchange
Act report. Similarly, any breach of a financial covenant that was to occur during a future quarter, but which was subsequently
cured or waived prior to the end of that quarter, would also be disclosed in that quarterly or annual Exchange Act report.

*   	*	   *

On behalf of Redwood, I confirm that:

 ● Redwood is responsible for the adequacy and accuracy
of the disclosure in the above-referenced filings;

 ● Staff comments or changes to disclosure in response
to staff comments do not foreclose the Commission from taking any action with respect to the filings; and

 ● Redwood may not assert staff comments as a defense
in any proceeding initiated by the Commission or any person under the federal securities laws of the United States.

Should you have any further comments or
questions about this letter, please contact me by telephone at 415-389-7373, by fax at 415-381-1773, or by email at chris.abate@redwoodtrust.com.

    Very truly yours,

    Redwood Trust, Inc.

    By:
    /s/ Christopher J.
    Abate

    Christopher J.  Abate

    Chief Financial Officer

 cc: Keith Benson, Latham & Watkins LLP

CORRESP
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July 9, 2012

VIA EDGAR AND FACSIMILE TRANSMISSION – 202-772-9209

Securities and Exchange Commission

Division of Corporation Finance

450 Fifth Street, N.W.

Washington, D.C. 20549

    Attn:
    William Demarest

Staff Accountant

Division of Corporation Finance

    Re:

        Redwood Trust, Inc.

        Responses to Comments on:

        Form 10-K for the Fiscal Year Ended December 31,
        2011

        Filed on February 27, 2012

        Form 10-Q for the Quarterly Period Ended March 31,
        2012

        Filed on May 8, 2012

        File No. 1-13759

Dear Mr. Demarest,

On behalf of Redwood Trust, Inc. (“Redwood”),
I hereby provide the following response in reply to the Staff’s comment letter dated June 25, 2012 (the “Comment Letter”)
in connection with the above-referenced Annual Report on Form 10-K and Quarterly Report on Form 10-Q. For your convenience, each
of my responses is preceded with an italicized recitation of the comment set forth in the Comment Letter.

Form 10-K for the fiscal year ended
December 31, 2011

Legal Proceedings, page 37

 1. Please tell us if you are able to quantify the remedy that FHLP-Seattle is seeking. If so, also
include the amount in future Exchange Act reports.

As disclosed in our Annual Report on
Form 10-K for the year ended December 31, 2011 (our “2011 Form 10-K”), on July 19, 2011, the FHLB-Seattle’s
claims against Redwood and its subsidiary, Sequoia Residential Funding, Inc., were dismissed for lack of personal
jurisdiction. As a result of the dismissal, FHLB-Seattle is currently pursuing claims only against the underwriters of the
Sequoia mortgage-backed securities at issue in the litigation. Our current potential exposure to those claims is indirect and
is a result of the indemnities we provided to those underwriters at the time of the issuance of those mortgage-backed
securities. The mortgage-backed securities at issue in the original complaint continue to perform and, as a result, the
FHLB-Seattle continues to receive all principal and interest payments to which it is contractually entitled under the terms
of the securities. Because of these and other factors, including the nature of the claims that the FHLB-Seattle is pursuing
against the underwriters, equitable considerations that may limit the availability of any potential remedy against those
underwriters, and potential limits on the underwriters’ indemnity claims against us, we are not able to quantify the
remedy that the FHLB-Seattle is seeking or the amount to which we, indirectly, could be exposed as a result of this
litigation. We believe that any quantification that is premised on various assumptions regarding these factors may be
materially inaccurate and, therefore, would not be useful to investors or other readers of our quarterly and annual Exchange
Act reports.

    -1-

We have and will continue to disclose in
our quarterly and annual Exchange Act reports the original principal amount of the securities at issue (which is equivalent to
the purchase price paid by the FHLB-Seattle for those securities), as well as the current principal balance of those securities,
which we believe aids readers of our Exchange Act reports by providing information that is helpful in assessing the magnitude of
any loss that could be associated with a rescission remedy. In addition, we will also provide in future quarterly and annual Exchange
Act reports, the aggregate amount of interest payments made to the FHLB-Seattle in respect of those securities, which will provide
readers of our Exchange Act reports with additional information that will be helpful in assessing the magnitude of any loss that
could be associated with a rescission remedy.

Earning Assets – Redwood (Parent),
page 65

 2. Please tell us if you allocated specific borrowings to specific asset classes. If so, please
disclose, in future Exchange Act reports, the spread between the yield on your different assets and their specific financing costs.

We allocate specific borrowings to specific
asset classes in certain circumstances – namely through our consolidation of various securitization entities for financial
reporting purposes. Beginning on Page 44 of our 2011 Form 10-K, Management’s Discussion and Analysis of Financial Condition
and Results of Operations (“MD&A”) summarizes our securitization activities and how we account for consolidated
entities. Contributing to our reported income is net interest income earned at these entities that consists of interest income
on real estate related assets less the interest expenses incurred on the debt secured by those assets. On Page 57 of MD&A,
we present a disaggregated version of our GAAP consolidated income that separates income earned at Redwood from income earned at
consolidated securitization entities with associated assets and borrowings. Additionally, we believe that Tables 22 and 25 beginning
on Page 71 illustrate the spread between the yield on our securitized assets and their specific financing costs.

In addition to our ongoing
securitization activities, we had accumulated residential mortgage loans and residential mortgage-backed securities that were
funded with a combination of short-term debt and equity. Short-term debt includes warehouse facilities for residential
mortgage loans and repurchase facilities for residential securities. On Page F-49 of our 2011 Form 10-K, we highlight the
outstanding short-term debt by collateral type (residential loans and real estate securities) as well as the weighted average
interest rate on the debt for the periods presented. Additionally, in MD&A of our 2011 10-K, we provide information on
Page 60 highlighting yields on our loans and securities, some of which are funded with short-term debt. In addition, we will
also provide in future quarterly and annual Exchange Act reports, a table that sets forth the spread between the yield on
unsecuritized loans and securities and their specific debt financing costs.

 3. We note the reference to a weighted average FICO score on page F-34. Please tell us of any other
measures management uses to evaluate the risk associated with your assets, such as credit ratings or some internal risk rating
metric.

Management uses asset-specific measures
to evaluate risk associated with our real estate loans and securities, and our risk management derivatives. Set forth below is
a summary of these measures and references to related disclosures made in our 2011 Form 10-K. As disclosed on Page 12 of our 2011
Form 10-K, credit ratings assigned to debt securities by the credit rating agencies may not accurately reflect the risks associated
with the securities we own. As a result, we generally do not consider credit ratings in assessing risks associated with our assets.

    -2-

Real Estate Loans

For loans held at fair value or
the lower of cost or fair value, our risk assessment associated with these assets is reflected in their estimated fair
values. The factors used to determine the fair value of our residential loans are summarized in our 2011 Form 10-K, in Note
5, on Page F-29. For loans held-for-investment, we assess the risk of these loans as part of our initial underwriting and
recurring loss reserving analyses. In addition to the weighted average FICO score and weighted average original loan to value
noted on Page F-34, we consider the following factors, as disclosed in Note 3 on Page F-13, to evaluate our residential
loans held-for-investment on an ongoing basis:

 · The age of loans and year of origination,
underwriting standards, business climate, economic conditions, and other observable data;

 · Historical loss rates and past performance
of similar loans;

 · Relevant environmental factors;

 · Relevant market research and publicly
available third-party reference loss rates;

 · Trends in delinquencies and charge-offs;

 · Effects and changes in credit concentrations;

 · Information supporting a borrower’s
ability to meet obligations;

 · Ongoing evaluations of fair values of
collateral using current appraisals and other valuations; and

 · Discounted cash flow analyses.

For commercial loans held-for-investment,
our risk analysis is based on an internal risk assessment process by which we assign an internal risk rating of “Pass,”
“Watch List,” “or “Workout,” to each loan. As disclosed in our 2011 Form 10-K in Note 3 on Pages
F-14 through F-15, we consider the following factors to assign ratings and establish loss reserves for these commercial loans on
an ongoing basis:

 · Loan to value ratios upon origination
or acquisition of the loan;

 · Ongoing analysis of the most recent financial
information for each loan and associated properties, including net operating income, debt service coverage ratios, occupancy rates,
rent rolls, as well as any other loss factors we consider relevant, such as, but not limited to, specific loan trigger events that
would indicate an adverse change in expected cash flows or payment delinquency;

 · Ongoing analysis of economic trends, both
macroeconomic as well as those directly affecting the properties associated with our loans, and the supply and demand of competing
projects in the sub-market in which the subject property is located;

 · Ongoing evaluation of each commercial
loan sponsor’s ability to ensure that properties associated with the loan are managed and operated sufficiently;

 · Historical loss rates and past performance
of similar loans in our own portfolio, if any;

 · Publicly available third-party reference
loss rates on similar loans; and

 · Trends in delinquencies and charge-offs
in our own portfolio and among industry participants.

Real Estate Securities

Our risk assessment associated with real
estate securities we own is reflected in their estimated fair values. The factors used to determine the fair value of our residential
securities are summarized in Note 5, on Page F-30 of our 2011 Form 10-K. We also use the “prime” or “non-prime”
designations to categorize our residential securities based upon the general credit characteristics of the residential loans underlying
each security at the time of origination as described in Note 3 on Page F-15. For residential securities, which comprise 94% of
the fair value of our securities portfolio, we consider the credit quality at time of origination of the underlying loans as well
as the serious delinquencies on those loans at the balance sheet date as part of our ongoing risk assessment. As noted above, we
generally do not assess the risks associated with our securities based on their credit ratings or changes in credit ratings. Instead,
we focus on the rights of our securities to principal and interest cash flows based upon their seniority within a securitization
capital structure (e.g., senior, subordinate, etc.) as discussed in Note 8 on Page F-40 of our 2011 Form 10-K.

    -3-

Derivative Instruments

Our derivative instruments are generally
used for risk management purposes and constitute interest rate and other derivatives for which there are active markets. In addition
to changes in observed fair values (summarized in Note 5 on Page F-30 of our 2011 Form 10-K), we assess the risk of these derivatives
based upon our assessment of counterparty nonperformance risk, as disclosed in Note 9 on Page F-48 of our 2011 Form 10-K. This
risk is largely addressed through adherence to International Swaps and Derivatives Association (“ISDA”) agreements
with bank counterparties. Each party must maintain compliance with these agreements (or receive a waiver of non-compliance after
a specific assessment) in order to conduct derivative transactions with us. Additionally, derivative counterparty credit standings
are reviewed on a daily basis and in the case of a deterioration of credit worthiness, appropriate remedial action is taken.

We mitigate counterparty nonperformance
risk by exiting derivatives contracts with counterparties that (i) do not maintain compliance with (or obtain a waiver from) the
terms of their ISDA agreements with us; or (ii) do not maintain their status as a primary government dealer or affiliate by the
U.S. Department of Treasury or do not meet internally established guidelines regarding credit worthiness. Our ISDA agreements currently
require full bilateral collateralization of unrealized loss exposures with our derivative counterparties. Through a margin posting
process, our positions are revalued with counterparties each business day and cash margin is transferred to either Redwood or our
derivative counterparties as collateral based upon the directional changes in fair value of the positions. The risk posed by counterparty
nonperformance should generally be limited to operational delays (24 hours) in posting collateral. At December 31, 2011, we assessed
this risk as remote and did not record a specific valuation adjustment.

 4. Please clarify to us how you determined that the transfers to SEMT 2012-1 and SEMT 2012-2 met
all of the criteria of ASC 860-10-40-5 to be accounted for as sales.

As discussed in Note 4 of our
Quarterly Report on Form 10-Q for the quarter ended March 31, 2012 (our “Q1 2012 Form 10-Q”), during
the three months ended March 31, 2012, we transferred residential loans to SEMT 2012-1 and SEMT 2012-2, and accounted for
these transfers as sales under GAAP. We sponsored these securitizations to provide investors with the ability to invest in a
pool of residential mortgage loans, thereby allowing us to invest in the subordinate interests in the securitizations
and access liquidity to finance our acquisition of additional loans.

In performing our consolidation analysis,
we considered whether or not Redwood, as transferor, had surrendered control over the transferred financial assets in accordance
with Accounting Standards Codification (“ASC”) 860. Control was considered to be surrendered upon the completion of
each securitization once we determined that all three of the following conditions were met:

 i. The assets had been isolated.

At the time of the issuance of
the securitizations, we obtained legal true sale opinions from our outside securitization counsel. These opinions concluded that
the transactions are true sales at law, and that the securitization entities are bankruptcy remote from Redwood and its affiliates,
regardless of whether the securitizations are accounted for as sales or secured financings. Additionally, each entity qualified
as a real estate mortgage investment conduit (“REMIC”) for federal tax purposes. Based on these factors, we concluded
the criteria for legal isolation with regard to these securitizations had been met.

    -4-

 ii. The transferee had the ability to pledge or exchange the assets.

The SEMT 2012-1 and SEMT 2012-2
securitization trusts that were transferees of the financial assets were established with the limited purpose of engaging in securitization
or asset-backed financing activities. Because the securitization entities are established as trusts, ownership of the securities
issued by the securitization entities represents ownership of the beneficial interests in the underlying assets of the trusts.
Accordingly, we determined that it was appropriate to look through each of the limited purpose securitization entities and analyze
whether holders of these beneficial interests (i.e., holders of the securities issued by the securitization trusts) have the right
to pledge or exchange their beneficial interests.

After evaluating this criterion
with respect to the terms and conditions placed on each third-party holder of the beneficial interests, we concluded that there
are no material restrictions or constraints on the rights of a holder of the securities issued by the SEMT 2012-1 or SEMT 2012-2
securitization trusts to monetize the cash inflows (the primary economic benefits of the beneficial interests in the residential
mortgage loans) by pledging or selling those beneficial interests. As such, we co

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

       DIVISION OF
CORPORATION FINANCE

 June 25, 2012
 Mr. Christopher J. Abate Chief Financial Officer Redwood Trust One Belvedere Place, Suite 300 Mill Valley, CA 94941   RE:  Redwood Trust
Form 10-K for the Fiscal Ye ar Ended December 31, 2011
  Filed February 27, 2012   File No. 1-13759

Dear Mr. Abate:
We have reviewed your filing and have the following comments.  In some of our
comments, we may ask you to provide us with information so we may better understand your
disclosure.
Please respond to this letter within ten business days by amending your filing, by
providing the requested information, or by advisi ng us when you will provide the requested
response.  If you do not believe our comment s apply to your facts and circumstances or do not
believe an amendment is appropriate, please tell us why in your response.
 After reviewing any amendment to your filing and the information you provide in
response to these comments, we may have additional comments.  Legal Proceedings, page 37

1. Please tell us if you are able to quantify the remedy that FHLP-Seattle is seeking.  If so,
also include the amount in future Exchange Act reports.

Earning Assets – Redwood (Parent), page 65
2. Please tell us if you allocated specific borrowings to specific asset classes.  If so, please
disclose, in future Exchange Act reports, the spread between the yield on your different assets and their specific financing costs.
3. We note the reference to a weighted average FICO score  on page F-34.  Please tell us of
any other measures management uses to ev aluate the risk associated with your assets,
such as credit ratings or some internal risk rating metric.

Mr. Christopher J. Abate
Redwood Trust June 25, 2012 Page 2
Form 10-Q for the Quarterly Period ended March 31, 2012 filed May 8, 2012

Note 4. Principals of Consolidation, page 17
4. Please clarify to us how you determined that the transfers to SEMT 2012-1 and SEMT
2012-2 met all of the criteria of ASC 860- 10-40-5 to be accounted for as sales.
5. Related to the comment above, please tell us  whether your receipt of either servicing fee
income or interest income is subject to  any covenants as well as the impact of rating
downgrades on any such covenants.  Also t ell us how any such covenants affect your
valuation of the related mortgage servicing rights.
Note 11. Short-Term Debt, page 42 and Note. 13 Long-Term Debt, page 44
6. We note the disclosure of short and long term debt on pages 42 and 45.  In future
Exchange Act reports, please discuss the f inancial covenants, including any ratios, that if
breached, would restrict or impact your oper ations.  Alternatively, please tell us why such
disclosure is not material.
7. In future Exchange Act reports, please discuss the margin call provisions for your short-
term debt or tell us why such disclosure is not material.
We urge all persons who are responsible for the  accuracy and adequacy of the disclosure
in the filing to be certain that the fili ng includes the information the Securities Exchange Act of
1934 and all applicable Exchange Act rules require.  Since the company and its management are
in possession of all facts relating to a company’s disc losure, they are responsible for the accuracy
and adequacy of the disclosures they have made.
In responding to our comments, please pr ovide a written statement from the company
acknowledging that
 the company is responsible for the adequacy and accuracy of the disclosure in the filing;
 staff comments or changes to disclosure in respo nse to staff comments do not foreclose
the Commission from taking any action with respect to the filing; and
 the company may not assert staff comments as a defense in any proceeding initiated by
the Commission or any person under t he federal securities laws of the United States.

Mr. Christopher J. Abate
Redwood Trust June 25, 2012 Page 3
 You may contact William Demarest, Staff Accountant, at (202) 551-3432 or me at (202)
551-3486 with any questions on the financial statem ents or related matters.  Please contact Duc
Dang, Staff Attorney at (202) 551- 3386 with any other questions.
         Sincerely,          /s/ Daniel L. Gordon          Daniel L. Gordon         Branch Chief

February 5, 2019

Mail Stop 3010  Mr. Martin S. Hughes Chief Financial Officer Redwood Trust, Inc. One Belvedere Place, Suite 300 Mill Valley, CA  94941

Re: Redwood Trust, Inc.
  Form 10-K for the year ended December 31, 2008
Forms 10-Q for the quarters ended March 31, June 30 and
September 30, 2009 File No. 001-13759

Dear Mr. Hughes:
We have completed our review of your Form 10-K and related filings and do not, at this
time, have any further comments.

       S i n c e r e l y ,
   Daniel L. Gordon Branch Chief

CORRESP
1
filename1.htm

    Unassociated Document

                    VIA EDGAR

                    January 13,
2010

    Securities
and Exchange Commission

    Division
of Corporation Finance

    450 Fifth
Street, N.W.

    Washington,
D.C. 20549

              Attn:

              Kristi
      Marrone

    Staff
Accountant

    Division of Corporation
Finance

                Re:

                Redwood
      Trust, Inc.

                Amended
      Response to Comment on:

                Form
      10-K for the year ended December 31, 2008

                Filed
      on February 17, 2009

                Forms
      10-Q for the quarters ended March 31, June 30, and September 30,
      2009

                Filed
      on May 5, August 5, and November 4, 2009, respectively

                  File
      No. 001-13759

      Please
note: On January 12, 2010, we filed a comment response letter relating to the
above-captioned SEC Comment Letter. We are hereby amending our response to
correct an error in the following sentence:

      “As of
September 30, 2009, $2.95 billion of Sequoia loans (77% of outstanding principal
balances) were originated in 2005 or prior and have many years of demonstrated
payment histories.”

      This
sentence should read as follows:

      “As of
September 30, 2009, $3.53 billion of Sequoia loans (92% of outstanding principal
balances) were originated in 2005 or prior and have many years of demonstrated
payment histories.”

      The full
text of our comment response, as amended to correct the above referenced-error,
is set forth below.

    Dear Ms.
Marrone:

    On behalf
of Redwood Trust, Inc. (“Redwood”), I hereby provide the following response to
the Staff’s comment letter (the “Comment Letter”) dated December 29, 2009, in
connection with the above-referenced Annual Report on Form 10-K and Quarterly
Reports on Form 10-Q. For your convenience, our response is preceded with an
italicized recitation of the Staff’s comment.

    Form 10-Q for the quarter
ended September 30, 2009

    Note 7. Allowance for Loan
Losses, page 24

              1.

              We
      note that serious delinquencies on consolidated Sequoia loans were $145
      million as of September 30, 2009 but an allowance of only $50 million has
      been recorded. With a view towards disclosure in filings, please explain
      to us how you determined that this reserve is
  adequate.

        Page 1 of
4

    To
respond to the Staff’s comment, I will reference one of our existing disclosures
that describes the systematic methodology we use in determining the Allowance
for Loan Losses (“Allowance”) and also summarize the relevant factors we
considered as part of our quarterly process to conclude that the Allowance we
recorded at September 30, 2009 was adequate.

    But
first, I wish to note that our Allowance covers all inherent losses in our
Sequoia loan portfolio in accordance with GAAP, including ASC 310 (formerly FAS
5 and SAB 102). This portfolio consists of $3.82 billion of prime-quality,
seasoned residential loans made to borrowers with demonstrated credit histories.
Approximately $3.76 billion (or 98%) of our outstanding Sequoia loan balance
represents first-lien prime loans collateralized by residential properties. The
remaining $61 million are second-lien prime loans also collateralized by
residential properties. As of September 30, 2009, $3.53 billion of Sequoia loans
(92% of outstanding principal balances) were originated in 2005 or prior and
have many years of demonstrated payment histories. The weighted average FICO
score for our Sequoia loans outstanding was 740 and the weighted average
original loan-to-value ratio (LTV) was 68%.

    We do not
consider any of our Sequoia loans to be “higher-risk” loans, such as subprime
and option arm products – many of which are currently owned at other financial
institutions.  We believe that our existing disclosures, including
those in our most recent Form 10-K for the year ended December 31, 2008,
completely and robustly detail the primary characteristics and risks associated
with this portfolio for users of our financial statements.

    Turning
to the process we use to determine our Allowance, I would like to reference the
following disclosure included in our Form 10-Q for the quarter ended September
30, 2009, which describes our systematic methodology:

    Notes to
Financial Statements, Note 3, Page 8, “Real Estate Loans – Allowance for Loan
Losses”

    “For real
estate loans classified as held-for-investment, we establish and maintain an
allowance for loan losses based on our estimate of credit losses inherent in our
loan portfolios at the reporting date. To calculate the allowance for loan
losses, we assess inherent losses by determining loss factors (defaults, the
timing of defaults, and loss severities upon defaults) that can be specifically
applied to each of the consolidated loans or pool of loans.

    We
consider the following factors in making such determinations:

              ·

              Ongoing
      analyses of loans, including, but not limited to, the age of loans,
      underwriting standards, business climate, economic conditions, and other
      observable data;

              ·

              Historical
      loss rates and past performance of similar
  loans;

              ·

              Relevant
      environmental factors;

              ·

              Relevant
      market research and publicly available third-party reference loss
      rates;

              ·

              Trends
      in delinquencies and charge-offs;

              ·

              Effects
      and changes in credit
concentrations;

              ·

              Information
      supporting a borrower’s ability to meet
  obligations;

              ·

              Ongoing
      evaluations of fair values of collateral using current appraisals and
      other valuations; and,

              ·

              Discounted
      cash flow analyses.

    Once we
determine the amount of defaults, the timing of the defaults, and severity of
losses upon the defaults, we estimate expected losses for each individual loan
or pool of loans over its expected life. We then estimate the timing of these
losses and the losses probable to occur over an appropriate loss confirmation
period. This period is defined as the range of time between the occurrence of a
credit loss (such as the initial deterioration of the borrower’s financial
condition) and the confirmation of that loss (the actual impairment or
charge-off of the loan). The losses expected to occur within the estimated loss
confirmation period are the basis of our allowance for loan losses, since we
believe these losses exist as of the reported date of the financial statements.
We re-evaluate the adequacy of our allowance for loan losses on at least a
quarterly basis.”

        Page 2 of
4

    This
systematic methodology is performed in accordance with applicable GAAP and
reassessed each quarter to ensure that it continues to provide management with a
reasonable and adequate estimate. The $145 million of serious delinquencies at
September 30, 2009, which includes all loans delinquent more than 90 days and in
foreclosure, were reserved for as part of this process. Some of the specific
factors that we considered to conclude that our $50 million Allowance was
adequate included the following:

              ·

              We
      validated the assumptions used to determine our Allowance and then
      reviewed both internal and external qualitative factors to conclude that
      the Allowance was adequate at September 30, 2009. The process we followed
      was completed in accordance with our Allowance policy and our internal
      controls. Senior Management played an active role in this
      process.

              ·

              We
      did not acquire any new loans during the third quarter of 2009, nor have
      we since 2007. The loans that we assessed for impairment have been on our
      books for years and have demonstrated performance trends and
      characteristics. We therefore believe that the loss factors considered for
      our Allowance were complete and predictive of inherent losses within our
      consolidated Sequoia portfolio at September 30,
  2009.

              ·

              Through
      the first nine months of 2009, total charge-offs on our Sequoia loan
      portfolio totaled $11.6 million, or 0.30% of outstanding loan
      balances.  These charge-offs were generated by $41.37 million of
      serious delinquencies for an implied loss severity of 28%. We believe that
      our Allowance at September 30, 2009, of $50 million adequately provides
      for all inherent losses remaining in the Sequoia portfolio, including
      anticipated losses on the $145 million of serious
      delinquencies.

              ·

              Since
      our Sequoia loans have been underwritten to similar credit standards, the
      next most relevant risk attributes that we use to determine loss
      severities include year of origination (i.e., “vintage”) and lien type
      (i.e., “first lien vs. second lien”). During September 2009, we analyzed
      the actual loss severities incurred on our consolidated Sequoia loans over
      the past twelve months in comparison to the loss severity assumptions we
      forecasted for each vintage and lien type. Available industry data and
      trends were also used for this analysis. The results supported our
      conclusion that the loss severity assumptions we applied to anticipated
      loan defaults at September 30, 2009, were
  reasonable.

              ·

              During
      the third quarter of 2009, there were no changes in the practices we
      followed to determine our Allowance, such as our non-accrual and
      charge-off policies, economic factors utilized, or the level of
      specificity we used to group loans. We are not aware of any trends,
      demands, commitments, events or uncertainties regarding our consolidated
      Sequoia loans that would cause us to expect to have a material favorable
      or unfavorable impact on our results of operations, liquidity, and capital
      resources.

              ·

              Entity-specific
      factors were also considered as part of our Allowance process, such as our
      size, organizational structure, business environment and strategy,
      management style, and loan portfolio characteristics. No significant
      organizational changes occurred during the third quarter of 2009; nor did
      loan portfolio characteristics materially
  change.

    In
summary, we believe that our Allowance for Loan Losses of $50 million is
adequate to cover all inherent losses within our consolidated Sequoia loan
portfolio, including the $145 million of serious delinquencies cited in the
Staff’s comment. These loans were assessed as part of our extensive quarterly
analysis using loss reserving assumptions that were validated by senior
management. We also believe that we adequately disclosed our process, relevant
loan characteristics, and other Allowance information in the notes accompanying
our financial statements in our most recent quarterly Form 10-Q and annual Form
10-K filings.

        Page 3 of
4

    As you
have requested, we confirm that:

              ·

              Redwood
      is responsible for the adequacy and accuracy of the disclosure in the
      above-referenced filings;

              ·

              Staff
      comments or changes to disclosure in response to staff comments do not
      foreclose the Commission from taking any action with respect to the
      filings; and

              ·

              Redwood
      may not assert staff comments as a defense in any proceeding initiated by
      the Commission or any person under the federal securities laws of the
      United States.

    Should
you have any further comments or questions about this letter, please contact me
by telephone
at          415-380-3455, by
fax at 415-381-1773, or by email at marty.hughes@redwoodtrust.com.

                    Very
      truly yours,

                    Redwood
      Trust, Inc.

                      By:

                    /s/
      Martin S. Hughes

                      Martin
      S. Hughes

                    Chief
      Financial Officer

        Page 4 of
4

CORRESP
1
filename1.htm

                VIA EDGAR

                January
      12, 2010

    Securities
and Exchange Commission

    Division
of Corporation Finance

    450 Fifth
Street, N.W.

    Washington,
D.C. 20549

              Attn:

              Kristi
      Marrone

    Staff
Accountant

    Division of Corporation
Finance

              Re:

              Redwood
      Trust, Inc.

    Response
to Comment on:

    Form 10-K
for the year ended December 31, 2008

    Filed on
February 17, 2009

    Forms
10-Q for the quarters ended March 31, June 30, and September 30,
2009

    Filed on
May 5, August 5, and November 4, 2009, respectively

    File No.
001-13759

    Dear Ms.
Marrone:

    On behalf
of Redwood Trust, Inc. (“Redwood”), I hereby provide the following response to
the Staff’s comment letter (the “Comment Letter”) dated December 29, 2009, in
connection with the above-referenced Annual Report on Form 10-K and Quarterly
Reports on Form 10-Q. For your convenience, our response is preceded with an
italicized recitation of the Staff’s comment.

    Form 10-Q for the quarter
ended September 30, 2009

    Note 7. Allowance for Loan
Losses, page 24

              1.

              We
      note that serious delinquencies on consolidated Sequoia loans were $145
      million as of September 30, 2009 but an allowance of only $50 million has
      been recorded. With a view towards disclosure in filings, please explain
      to us how you determined that this reserve is
  adequate.

    To
respond to the Staff’s comment, I will reference one of our existing disclosures
that describes the systematic methodology we use in determining the Allowance
for Loan Losses (“Allowance”) and also summarize the relevant factors we
considered as part of our quarterly process to conclude that the Allowance we
recorded at September 30, 2009, was adequate.

    But
first, I wish to note that our Allowance covers all inherent losses in our
Sequoia loan portfolio in accordance with GAAP, including ASC 310 (formerly FAS
5 and SAB 102). This portfolio consists of $3.82 billion of prime-quality,
seasoned residential loans made to borrowers with demonstrated credit histories.
Approximately $3.76 billion (or 98%) of our outstanding Sequoia loan balance
represents first-lien prime loans collateralized by residential properties. The
remaining $61 million are second-lien prime loans also collateralized by
residential properties. As of September 30, 2009, $2.95 billion of Sequoia loans
(77% of outstanding principal balances) were originated in 2005 or prior and
have many years of demonstrated payment histories. The weighted average FICO
score for our Sequoia loans outstanding was 740 and the weighted average
original loan-to-value ratio (LTV) was 68%.

        Page 1 of
4

    We do not
consider any of our Sequoia loans to be “higher-risk” loans, such as subprime
and option arm products – many of which are currently owned at other financial
institutions.  We believe that our existing disclosures, including
those in our most recent Form 10-K for the year ended December 31, 2008,
completely and robustly detail the primary characteristics and risks associated
with this portfolio for users of our financial statements.

    Turning
to the process we use to determine our Allowance, I would like to reference the
following disclosure included in our Form 10-Q for the quarter ended September
30, 2009, which describes our systematic methodology:

    Notes to
Financial Statements, Note 3, Page 8, “Real Estate Loans – Allowance for Loan
Losses”

    “For real
estate loans classified as held-for-investment, we establish and maintain an
allowance for loan losses based on our estimate of credit losses inherent in our
loan portfolios at the reporting date. To calculate the allowance for loan
losses, we assess inherent losses by determining loss factors (defaults, the
timing of defaults, and loss severities upon defaults) that can be specifically
applied to each of the consolidated loans or pool of loans.

    We
consider the following factors in making such determinations:

                ·

                Ongoing
      analyses of loans, including, but not limited to, the age of loans,
      underwriting standards, business climate, economic conditions, and other
      observable data;

                ·

                Historical
      loss rates and past performance of similar
  loans;

                ·

                Relevant
      environmental factors;

                ·

                Relevant
      market research and publicly available third-party reference loss
      rates;

                ·

                Trends
      in delinquencies and
charge-offs;

                ·

                Effects
      and changes in credit
concentrations;

                ·

                Information
      supporting a borrower’s ability to meet
  obligations;

                ·

                Ongoing
      evaluations of fair values of collateral using current appraisals and
      other valuations; and,

                ·

                Discounted
      cash flow analyses.

    Once we
determine the amount of defaults, the timing of the defaults, and severity of
losses upon the defaults, we estimate expected losses for each individual loan
or pool of loans over its expected life. We then estimate the timing of these
losses and the losses probable to occur over an appropriate loss confirmation
period. This period is defined as the range of time between the occurrence of a
credit loss (such as the initial deterioration of the borrower’s financial
condition) and the confirmation of that loss (the actual impairment or
charge-off of the loan). The losses expected to occur within the estimated loss
confirmation period are the basis of our allowance for loan losses, since we
believe these losses exist as of the reported date of the financial statements.
We re-evaluate the adequacy of our allowance for loan losses on at least a
quarterly basis.”

    This
systematic methodology is performed in accordance with applicable GAAP and
reassessed each quarter to ensure that it continues to provide management with a
reasonable and adequate estimate. The $145 million of serious delinquencies at
September 30, 2009, which includes all loans delinquent more than 90 days and in
foreclosure, were reserved for as part of this process. Some of the specific
factors that we considered to conclude that our $50 million Allowance was
adequate included the following:

                ·

                We
      validated the assumptions used to determine our Allowance and then
      reviewed both internal and external qualitative factors to conclude that
      the Allowance was adequate at September 30, 2009. The process we followed
      was completed in accordance with our Allowance policy and our internal
      controls. Senior Management played an active role in this
      process.

        Page 2 of
4

              ·

              We
      did not acquire any new loans during the third quarter of 2009, nor have
      we since 2007. The loans that we assessed for impairment have been on our
      books for years and have demonstrated performance trends and
      characteristics. We therefore believe that the loss factors considered for
      our Allowance were complete and predictive of inherent losses within our
      consolidated Sequoia portfolio at September 30,
  2009.

              ·

              Through
      the first nine months of 2009, total charge-offs on our Sequoia loan
      portfolio totaled $11.6 million, or 0.30% of outstanding loan
      balances.  These charge-offs were generated by $41.37 million of
      serious delinquencies for an implied loss severity of 28%. We believe that
      our Allowance at September 30, 2009, of $50 million adequately provides
      for all inherent losses remaining in the Sequoia portfolio, including
      anticipated losses on the $145 million of serious
      delinquencies.

              ·

              Since
      our Sequoia loans have been underwritten to similar credit standards, the
      next most relevant risk attributes that we use to determine loss
      severities include year of origination (i.e., “vintage”) and lien type
      (i.e., “first lien vs. second lien”). During September 2009, we analyzed
      the actual loss severities incurred on our consolidated Sequoia loans over
      the past twelve months in comparison to the loss severity assumptions we
      forecasted for each vintage and lien type. Available industry data and
      trends were also used for this analysis. The results supported our
      conclusion that the loss severity assumptions we applied to anticipated
      loan defaults at September 30, 2009, were
  reasonable.

              ·

              During
      the third quarter of 2009, there were no changes in the practices we
      followed to determine our Allowance, such as our non-accrual and
      charge-off policies, economic factors utilized, or the level of
      specificity we used to group loans. We are not aware of any trends,
      demands, commitments, events or uncertainties regarding our consolidated
      Sequoia loans that would cause us to expect to have a material favorable
      or unfavorable impact on our results of operations, liquidity, and capital
      resources.

              ·

              Entity-specific
      factors were also considered as part of our Allowance process, such as our
      size, organizational structure, business environment and strategy,
      management style, and loan portfolio characteristics. No significant
      organizational changes occurred during the third quarter of 2009; nor did
      loan portfolio characteristics materially
  change.

    In
summary, we believe that our Allowance for Loan Losses of $50 million is
adequate to cover all inherent losses within our consolidated Sequoia loan
portfolio, including the $145 million of serious delinquencies cited in the
Staff’s comment. These loans were assessed as part of our extensive quarterly
analysis using loss reserving assumptions that were validated by senior
management. We also believe that we adequately disclosed our process, relevant
loan characteristics, and other Allowance information in the notes accompanying
our financial statements in our most recent quarterly Form 10-Q and annual Form
10-K filings.

    As you
have requested, we confirm that:

              ·

              Redwood
      is responsible for the adequacy and accuracy of the disclosure in the
      above-referenced filings;

              ·

              Staff
      comments or changes to disclosure in response to staff comments do not
      foreclose the Commission from taking any action with respect to the
      filings; and

        Page 3 of
4

              ·

              Redwood
      may not assert staff comments as a defense in any proceeding initiated by
      the Commission or any person under the federal securities laws of the
      United States.

    Should
you have any further comments or questions about this letter, please contact me
by telephone at 415-380-3455, by fax at 415-381-1773, or by email at marty.hughes@redwoodtrust.com.

              Very
      truly yours,

              Redwood
      Trust, Inc.

              By:

              /s/ Martin S. Hughes

              Martin
      S. Hughes

              Chief
      Financial Officer

        Page 4 of
4

September 29, 2008

 Mail Stop 4561
 Martin S. Hughes Chief Financial Officer Redwood Trust, Inc. One Belvedere Place, Suite 300 Mill Valley, CA 94941

Re: Redwood Trust, Inc.
 Form 10-K and Schedule 14A
Filed March 5, 2008 and April 22, 2008
 File No. 1-13759

Dear Mr. Hughes:

We have completed our review of your Form 10-K and related filings and do not, at this
time, have any further comments.

        S i n c e r e l y ,

Kristi Marrone  Staff Accountant

CORRESP
1
filename1.htm

      Unassociated Document

    September
      16, 2008

    VIA
      FACSIMILE TRANSMISSION - 202-772-9209

    Securities
      and Exchange Commission

    Division
      of Corporation Finance

    450
      Fifth
      Street, N.W.

    Washington,
      D.C. 20549

            Attn:

              William
                H. Demarest IV

                Staff
                  Accountant

                Division
                  of Corporate Finance

              Re:

                Redwood
                  Trust, Inc.

                  Responses
                    to Comments on Form 10-K and Schedule 14A

                  Filed
                    on March 5, 2008 and April 22, 2008, respectively

                  File
                    No. 1-13759

    Dear
      Mr.
      Demarest,

    On
      behalf
      of Redwood Trust, Inc. (“Redwood”), I hereby provide the following responses in
      reply to the Staff’s comment letter dated September, 3, 2008 (the “Comment
      Letter”) in connection with the above-referenced Annual Report on Form 10-K and
      Definitive Proxy Statement on Schedule 14A.

    The
      responses to the Staff’s comments are numbered to relate to the corresponding
      comments in the Comment Letter. For your convenience, each of our responses
      is
      preceded with an italicized recitation of the corresponding comment set forth
      in
      the Comment Letter.

    Form
      10-K for the year ended December 31, 2007

    Item
      9A. Controls and Procedures

    Management’s
      Report on Internal Control over Financial Reporting, page
      90

              1.

              We
                note that you have concluded that your internal controls over financial
                reporting were ineffective as of December 31, 2007 because you were
                unable
                to obtain the necessary evidence to support your initial conclusion
                that
                unrealized losses are recoverable. Please clarify to us how all such
                unrealized losses have been accounted for in your audited financial
                statements.

    As
      part
      of our financial reporting process, we are required to assess whether declines
      in the fair value of available-for-sale (AFS) securities below their amortized
      cost should be reflected as other-than-temporary (OTT) impairments. The diagram
      below highlights the three step process we follow.

    Our
      internal controls, processes, and assessments for OTT impairments were
      appropriate under steps one and two shown above. It was during our evaluation
      under step three, which is highly subjective, that in certain circumstances
      we
      were unable to obtain the necessary evidence as prescribed under SAB 59 to
      support our initial conclusions that these securities were not
      other-than-temporarily impaired. As a consequence, we determined that our
      internal controls over financial reporting as applied to this specific process
      were ineffective. We have since made enhancements to our internal controls
      relating to this process to improve their effectiveness going forward.

    In
      all
      circumstances where we were unable to obtain sufficient evidence under SAB
      59,
      we treated all of those AFS securities as other-than-temporarily impaired.
      We
      recorded these impairments as negative market valuation adjustments, which
      were
      recognized in our income statement for the quarter and year ended December
      31,
      2007.

    Note
      6. Real Estate Securities, page F-26

              2.

              We
                note that you have recorded losses in the amount of $132 million
                for real
                estate securities that have been in a loss position for greater than
                twelve months. Please tell us what evidence exists to support the
                recoverability of the fair value of these securities and why the
                losses
                have not been recognized into earnings. Refer to SAB Topic
                5:M.

    The
      table
      below summarizes the results of our impairment analysis on AFS securities as
      of
      December 31, 2007. This summary includes the $132 million of unrealized losses
      for securities that have been in a loss position for greater than twelve months,
      and also illustrates the significant amounts of OTT impairment recognized in
      our
      income statement for the quarter ended December 31, 2007.

      Impairment
        Summary - Q4 2007

                Amount
                  of Impairment

                in
                  millions

                <
                  12 months

                >
                  12 months

                Total

                Impairments
                  on AFS Securities at 12/31/2007

                $

                (1,357

                )

                $

                (273

                )

                $

                (1,630

                )

                Other-Than-Temporary
                  (OTT) Impairment Test:

                Step
                  1: Adverse Cash Flows

                (268

                )

                (28

                )

                (296

                )

                Step
                  2: Intent and Ability to Hold

                -

                -

                -

                Step
                  3: Recoverability

                (660

                )

                (113

                )

                (773

                )

                Impairments
                  Deemed OTT

                $

                (928

                )

                $

                (141

                )

                $

                (1,069

                )

                Remaining
                  Unrealized Losses

                $

                (429

                )

                $

                (132

                )

                $

                (561

                )

    As
      noted
      above, we employ a systematic three step testing process to determine whether
      an
      impairment is other-than-temporary and we consider all available information,
      positive and negative. The third and final step in this process is to consider
      the recoverability of the realizable value of the security in a reasonable
      amount of time in light of market conditions.

    For
      impaired securities (especially those that have been in a loss position for
      greater than twelve months), we considered the following evidence to support
      our
      conclusion that an OTT impairment had not occurred.

              ·

              The
                length of time that fair value has been less than
                cost:

    The
      AFS
      securities we own are real estate securities, most of which
      have
      below investment grade (rated BB, B, or nonrated) credit ratings. These
      securities are illiquid in nature with a limited secondary market. Although
      GAAP disclosures distinguish between securities that have had unrealized losses
      for periods of more than and less than twelve months, we share the SEC staff’s
      view that this one-year time period is not an automatic line of demarcation
      for
      inferring when unrealized losses become other-than-temporary impairments.
As
      evidenced historically, we believe a reasonable period of time to observe a
      recovery in value for illiquid real estate securities is often a longer period
      than one year. We intend to hold these securities through their longer, yet
      reasonable, forecasted recovery periods.

    As
      a REIT
      established in 1994, we act as a long term investor with the intent and ability
      to hold investment securities through their recovery periods. We fund AFS
      securities with equity or through bankruptcy remote securitization entities
      and
      we have very little recourse debt. At December 31, 2007, we had $8 million
      of
      short-term recourse debt and $290 million in unrestricted cash.

            ·

              The
                extent to which fair value has been less than
                cost:

    We
      believe each security’s fair value reflected the market's most recent evaluation
      of the total mix of available information, despite historically low liquidity
      and pricing transparency for real estate securities. As part of our testing
      process, we considered the severity of the decline in fair value relative to
      the
      amortized cost basis of each security. As this severity increased, we weighted
      it higher in our overall assessment of recoverability.

    In
      reviewing the severities of declines in fair values, we also considered the
      trending of bid/ask spreads required by market makers for these illiquid real
      estate securities. These spreads were at historical highs at the time we filed
      our Form 10-K, contributing to a significant portion of the decline in fair
      values we observed during the second half of 2007. A narrowing of this bid/ask
      spread due to an increase in the number of active market participants should
      help to recover much of these unrealized losses for temporarily impaired
      securities.

    Our
      review generally resulted in OTT impairments on securities with significant
      declines in fair value, with final determination based upon facts and
      circumstances specific to each security. This included $113 million of OTT
      impairments on securities with
      unrealized losses for periods of more than twelve months.
      The
      remaining securities generally had less severe declines in fair value and strong
      cash flows, which allowed us to conclude that they should recover in
      value.

            ·

              Characteristics
                specific to each security:

    We
      considered the characteristics specific to each impaired security and the
      general health of the market for that security as part of our assessment of
      recoverability. We observed a general deterioration in underwriting quality
      for
      residential loans originated during 2006 and 2007, which collateralize some
      of
      our real estate securities. Specifically, loan-to-value ratios, debt-service
      ratios, and borrower representations had become very aggressive relative to
      prior vintages. Loans originated prior to 2006 generally exhibited less
      aggressive underwriting standards and benefited from lower leverage due in
      part
      to significant home price appreciation. The CDO securities we own are complex
      structured products that are primarily backed by residential real estate loans
      and securities.

    As
      the
      following table shows, our assessment process resulted in OTT impairment on
      most
      residential securities originated during 2006 and 2007 and all CDO securities.
      We also recognized OTT impairment on a significant portion of non-prime
      residential securities originated in 2005 and prior years.

                Summary
                  of Impairments>
                  12 months at 12/31/2007

                (in
                  millions)

                Type
                  of Impairment

                 Other-Than-Temporary

                Temporary

                Total
                  Impairments > 12 months

                By
                  Vintage

                2000-2005

                2006-2007

                Total

                2000-2005

                2006-2007

                Total

                2000-2005

                2006-2007

                Total

                Real
                  Estate Securities:

                Residential
                  Prime

                $

                -

                $

                (10

                )

                $

                (10

                )

                $

                (54

                )

                $

                (12

                )

                $

                (66

                )

                $

                (54

                )

                $

                (22

                )

                $

                (76

                )

                Residential
                  Non-Prime

                (28

                )

                (83

                )

                (111

                )

                (27

                )

                (2

                )

                (29

                )

                $

                (55

                )

                $

                (85

                )

                $

                (140

                )

                CDO

                (15

                )

                (4

                )

                (19

                )

                -

                -

                -

                $

                (15

                )

                $

                (4

                )

                $

                (19

                )

                Commercial

                -

                (1

                )

                (1

                )

                (27

                )

                (10

                )

                (37

                )

                $

                (27

                )

                $

                (11

                )

                $

                (38

                )

                Total

                $

                (43

                )

                $

                (98

                )

                $

                (141

                )

                $

                (108

                )

                $

                (24

                )

                $

                (132

                )

                $

                (151

                )

                $

                (122

                )

                $

                (273

                )

    Of
      our
      securities with unrealized losses greater than 12 months at December 31, 2007,
      a
      significant portion consisted of residential mortgage-backed securities (RMBS)
      collateralized with prime and non-prime residential loans originated in 2005
      and
      prior years. They were generally purchased at significant discounts and are
      sensitive to small changes in valuation assumptions (e.g., prepayment speeds)
      in
      the near-term. We determined that the performance of the underlying loans to
      date, the market’s outlook for future performance, and the projected receipt of
      principal and interest provided us with sufficient support to anticipate that
      fair values on these specific securities would recover within a reasonable
      period of time.

    The
      other
      significant portion of our securities with unrealized losses greater than 12
      months at December 31, 2007, consisted of commercial mortgage-backed securities
      (CMBS). These securities are the lower rated securities within a commercial
      mortgage securitization and most are backed by loans originated in 2005 and
      prior years. Over the prior six months, we saw an increase in yields required
      by
      the market for CMBS in line with other structured real estate securities.
      However, the CMBS market seemed to be healthy with new securitizations planned
      at that time and little evidence that the cash flows on underlying commercia

Mail Stop 4561         September 3, 2008  Martin S. Hughes Chief Financial Officer Redwood Trust, Inc. One Belvedere Place, Suite 300 Mill Valley, CA 94941

Re: Redwood Trust, Inc.
 Form 10-K and Schedule 14A
Filed March 5, 2008 and April 22, 2008
 File No. 1-13759

Dear Mr. Hughes:
 We have reviewed your filings and have the following comments.  Where indicated, we
think you should revise your documents in response to these comments in future filings.  If you disagree, we will consider your explanation as to why our comment is inapplicable or a revision is unnecessary.  Please be as detailed as necessary in your explanation.  In some of our comments, we may ask you to provide us with information so we may better understand your disclosure.  After reviewing this information, we may raise additional comments.   Please understand that the purpose of our review process is to assist you in your compliance with the applicable disclosure requirements and to enhance the overall disclosure in your filing.  We look forward to working with you in these respects.  We welcome any questions you may have about our comments or any other aspect of our review.  Feel free to call us at the
telephone numbers listed at the end of this letter.   Form 10-K

 Item 9A. Controls and Procedures

 Management’s Report on Internal Control Over Financial Reporting, page 90

1. We note that you have concluded that your internal controls over financial reporting were
ineffective as of December 31, 2007 because you were unable to obtain the necessary evidence to support your initial conclusion that unrealized losses are recoverable.  Please

Mr. Martin S. Hughes
Redwood Trust, Inc. September 3, 2008 Page 2
clarify to us how all such unrealized losses have been accounted for in your audited financial statements.

Note 6. Real Estate Securities, page F-26

2. We note that you have recorded unrealized losses in the amount $132 million for real
estate securities that have been in a loss position for greater than twelve months.  Please tell us what evidence exists to support the recoverability of the fair value of these securities and why the losses have not been recognized into earnings.  Refer to SAB Topic 5:M.

Exhibit 31

3. We note that the certifications are not in the proper form.  Specifically, you have omitted
the parenthetical disclosure from paragraph 4(d).  The required certifications must be in the exact form prescribed; the wording of the required certifications may not be changed in any respect.  In future filings, please ensure that the certifications of your current Principal Executive Officer and Principal Financial Officer are in the exact form currently set forth in Item 601(b)(31) of Regulation S-K.
 Schedule 14A

 Base Salary, page 15

4. In future filings, please provide a more detailed analysis of the reasons for any material
changes in named executive officer base salaries.  For example, we note that in 2007 almost all named executive officers received material increases in base salary.
 Performance-Based Compensation, page 15

5. In future filings, with respect to individual performance awards, please provide a more
detailed analysis of how the company determined the awards for each named executive officer.  Please discuss how the factors, which you list on the bottom of page 15, were analyzed and how such analysis resulted in the actual payout amounts.

 As appropriate, please respond to these comments within 10 business days or tell us
when you will provide us with a response.  Please furnish a cover letter with your proposed revisions that keys your responses to our comments and provides any requested information.  Detailed cover letters greatly facilitate our review.  Please understand that we may have additional comments after reviewing your amendment and responses to our comments.    We urge all persons who are responsible for the accuracy and adequacy of the disclosure in the filing to be certain that the filing includes all information required under the Securities Exchange Act of 1934 and that they have provided all information investors require for an

Mr. Martin S. Hughes
Redwood Trust, Inc. September 3, 2008 Page 3  informed investment decision.  Since the company and its management are in possession of all facts relating to a company’s disclosure, they are responsible for the accuracy and adequacy of the disclosures they have made.     In connection with responding to our comments, please provide, in writing, a statement from the company acknowledging that:  ‚ the company is responsible for the adequacy and accuracy of the disclosure in the filing;

‚ staff comments or changes to disclosure in response to staff comments do not foreclose the
Commission from taking any action with respect to the filing; and
‚ the company may not assert staff comments as a defense in any proceeding initiated by the
Commission or any person under the federal securities laws of the United States.

In addition, please be advised that the Division of Enforcement has access to all
information you provide to the staff of the Divisi on of Corporation Finance in our review of your
filing or in response to our comments on your filing.     You may contact William Demarest, Sta ff Accountant at 202-551-3432 or me at 202-
551-3429 if you have questions regarding comments on the financial statements and related matters.  Please contact Angela McHale, Staff Attorney at 202-551-3402 with any other questions.
Sincerely,

Kristi Marrone  Staff Accountant

Mail Stop 4561
June 5, 2007

VIA U.S. MAIL AND FAX (415) 381-1773

Mr. George E. Bull, III
Chief Executive Officer
Redwood Trust, Inc.
One Belvedere Place, Suite 300
Mill Valley, CA 94941

Re: Redwood Trust, Inc.
 Form 10-K for the year ended December 31, 2006
 Filed February 20, 2007
File No. 001-13759

Dear Mr. Bull:

We have completed our review of your Form 10-K and do not, at this time, have any
further comments.

        S i n c e r e l y ,

Daniel L. Gordon
Branch Chief

CORRESP
1
filename1.htm

      Unassociated Document

      VIA
        FACSIMILE TRANSMISSION - 202-772-9210

                Mr.
                  Daniel L. Gordon

                Branch
                  Chief

                Division
                  of Corporation Finance

                Securities
                  and Exchange Commission

                100
                  F Street, N.E.

                Washington,
                  D.C. 20549

                 May
                  15,
                  2007

                    Re:

                    Redwood
                      Trust, Inc.

                    Form
                      10-K for the year ended December 31,
                      2006

                    Filed
                      February 20, 2007

                    File
                      No. 001-13759

      Dear
        Mr.
        Gordon:

      We
        are
        responding to your comments in your letter of May 2, 2007 with respect to
        the
        above-referenced Annual Report on Form 10-K. For your convenience, your comments
        are set forth below in italics before each response.

      Form
        10-K for the year ended December 31, 2006

      Item
        1A. Risk Factors page 6

      We
        have exposure under representations and warranties…. page
        10

            1.

              We
                note from your disclosure that you may be obligated to repurchase
                certain
                loans from securitization entities. Provide us with more detail regarding
                your obligation to repurchase loans including your obligation to
                repurchase loans that go into default, the time frame for this obligation
                (e.g., loans that go into default in the first 90 days after origination),
                and a description of the breaches in representations and warranties
                that
                would allow the purchaser of the loans to require the company to
                repurchase the loans. Please
                tell us whether or not you have established a reserve to account
                for
                anticipated losses reasonably estimated to occur over the life of
                such
                obligations, and if so, the amount of the reserve at December 31,
                2006.
                Additionally, tell us the total amount of loans you have securitized
                that
                you may be required to repurchase, and tell us the dollar amount
                of loans
                you have been required to repurchase for each of the past five years,
                and
                the dollar amount of losses recognized in each of the past five years
                related to the loans repurchased.

      May
        15,
        2007

      Mr.
        Daniel L. Gordon

      Page
        Two

      We
        do not
        originate residential loans. We purchase loans from originators and transfer
        the
        mortgage loans to a securitization entity. At the time of transfer, we make
        certain representations and warranties concerning those loans. A breach of
        these
        representations and warranties that materially and adversely affects the
        value
        of, or the interest of the securitization entity in, a mortgage loan would
        obligate us to repurchase the loan from the securitization entity. The
        representations and warranties generally address facts and conditions in
        effect
        as of the date of transfer to the securitization entity and not future events
        such as future payment defaults. We obtain representations and warranties
        from
        the counterparties from which we acquire the mortgage loans that generally
        parallel those given to the securitization entities. Thus a breach of a
        representation and warranty that would obligate us to repurchase a mortgage
        loan
        from a securitization entity would give rise to an obligation of the
        counterparty to repurchase the loan from us. A description of the
        representations and warranties we provide to securitization entities is set
        forth in the attached Appendix.

      Our
        agreements with counterparties from which we acquire mortgage loans usually
        require the counterparty to repurchase any mortgage loan that has a payment
        default on the first or second payment due after origination or, in some
        cases,
        after the date on which we purchase the loan from the counterparty. We assign
        our rights under the agreements with the counterparties to the securitization
        entity and thus the rights arising upon an early payment default may be
        exercised by the securitization entity on behalf of its investors. We do
        not
        give any independent early payment default undertakings to the securitization
        entities, however, so we have no exposure to those defaults.

      At
        December 31, 2006, we did not reasonably expect to incur any mortgage loan
        repurchase losses over the life of the repurchase obligations described above
        and thus we did not establish a reserve at that date to account for repurchase
        losses. During the five-year period ended December 31, 2006, we were not
        required to repurchase any loans from securitization entities and thus incurred
        no losses from repurchased loans.

            2.

              In
                addition, please include in future filings an accounting policy related
                to
                your potential obligation to repurchase certain loans from securitization
                transactions. This policy should be included in your critical accounting
                policies and in the summary of significant accounting policies in
                your
                footnotes to your financial statements. Also, please provide us with
                your
                proposed disclosure in your response.

      May
        15,
        2007

      Mr.
        Daniel L. Gordon

      Page
        Three

      We
        have
        included the following disclosure in our Quarterly Report on Form 10-Q for
        the
        quarter ended March 31, 2007, which we filed on May 9, 2007, and will include
        similar disclosure in our future filings:

      “We
        do
        not maintain a loan repurchase reserve, as any risk of loss due to loan
        repurchases (i.e., due to breach of representations) would normally be covered
        by recourse to the companies from whom we acquired the loans.”

      Item
        7. Management’s Discussion and Analysis of Financial Condition and Results of
        Operations, page 22

            3.

              You
                disclose that you own $518 million in subprime investment-grade securities
                at year-end 2006. Please tell us the amount of defaults that you
                have
                incurred in the past two years related to subprime loans and provide
                us
                with the allowance that you have recorded as of December 31, 2006.
                Also,
                provide us with the amount of subprime loans sold in securitizations
                that
                you could be required to repurchase.

      We
        own
        third party subprime investment grade securities backed by subprime loan
        collateral. Therefore we do not own or report under GAAP these subprime loans
        on
        our consolidated balance sheet and consequently did not provide for an allowance
        for loan losses as of December 31, 2006. We are affected by future losses
        for
        the entire pool of loan collateral to the extent attributable to our investment
        grade securities in accordance with the loss priority assigned to those
        securities. We have never incurred a loss on an investment grade security
        and
        therefore have not recorded any credit reserves.

      We
        have
        never owned subprime loans and have sold no subprime loans in securitizations
        and therefore we have no subprime loans that we may be required to repurchase.

      *
        * *
        *

      May
        15,
        2007

      Mr.
        Daniel L. Gordon

      Page
        Four

      As
        you
        have requested, this will confirm that:

            ·

              Redwood
                Trust is responsible for the adequacy and accuracy of the disclosure
                in
                the above-referenced filing;

            ·

              staff
                comments or changes to disclosure in response to staff comments do
                not
                foreclose the Commission from taking any action with respect to the
                filing; and

            ·

              Redwood
                Trust may not assert staff comments as a defense in any proceeding
                initiated by the Commission or any person under the federal securities
                laws of the United States.

                Sincerely
                  yours,

                /s/
                  Martin S. Hughes

                Martin
                  S. Hughes

                Chief
                  Financial Officer

      APPENDIX

      Representations
        by Sellers; Repurchases

      In
        the
        mortgage loan purchase and sale agreement, pursuant to which the depositor
        will
        purchase the mortgage loans from the seller, the seller will make certain
        representations and warranties to the depositor concerning the mortgage loans.
        The trustee will be assigned all right, title and interest in the mortgage
        loan
        purchase and sale agreement insofar as they relate to such representations
        and
        warranties made by the seller.  The seller will be obligated to repurchase
        (or, within the period provided in the Agreement, to substitute a replacement
        mortgage loan for) any mortgage loan as to which there exists an uncured
        breach
        of certain of its representations and warranties, which breach materially
        and
        adversely affects the value of, or interest of the securityholders in, the
        mortgage loan.

      These
        representations and warranties will include the following as to each mortgage
        loan, among others, unless otherwise specified in the prospectus
        supplement:

            ·

              The
                information set forth in the mortgage loan schedule is true and correct
                in
                all material respects and the information provided to the rating
                agencies,
                including the loan level detail, is true and correct according to
                the
                rating agency requirements;

            ·

              Immediately
                prior to the sale of the mortgage loan pursuant to the mortgage loan
                purchase and sale agreement, the seller was a sole owner and holder
                of the
                mortgage loan.  The mortgage loan is not assigned or pledged, and the
                seller has good and marketable title thereto, and has full right
                to
                transfer and sell the mortgage loan to the depositor free and clear
                of any
                encumbrance, equity, lien, pledge, charge, claim or security interest
                not
                specifically set forth in the related mortgage loan schedule and
                has full
                right and authority subject to no interest or participation of, or
                agreement with, any other party, to sell and assign the mortgage
                loan
                pursuant to the terms of the mortgage loan purchase and sale
                agreement;

            ·

              The
                mortgage is a valid, existing and enforceable first lien on the mortgaged
                property, including all improvements on the mortgaged property, subject
                only to (i) the lien of current real property taxes and assessments
                not
                yet due and payable; (ii) covenants, conditions and restrictions,
                rights
                of way, easements and other matters of public record as of the date
                of
                recording that are acceptable to mortgage lending institutions generally
                and specifically referred to in lender’s title insurance policy delivered
                to the originator of the mortgage loan and that do not adversely
                affect
                the appraised value (as evidenced by an appraisal referred to in
                such
                definition) of the mortgaged property; and (iii) other matters to
                which
                like properties are commonly subject that do not materially interfere
                with
                the benefits of the security intended to be provided by the mortgage
                or
                the use, enjoyment, value or marketability of the related mortgage
                property.

            ·

              As
                of the closing date, there is no default, breach, violation or event
                of
                acceleration existing under the mortgage or the mortgage note and
                no event
                which, with the passage of time or with notice and the expiration
                of any
                grace or cure period, would constitute a default, breach, violation
                or
                event permitting acceleration, and the seller and its affiliates
                have not
                waived any default, breach, violation or event permitting
                acceleration;

            ·

              No
                fraud, error, omission, misrepresentation, negligence or similar
                occurrence with respect to the mortgage loan has taken place on the
                part
                of the seller or any originator or servicer or the mortgager or on
                the
                part of any other party involved in the origination of the mortgage
                loan;

            ·

              Each
                mortgage loan secured by a first priority mortgage is covered by
                an ALTA
                lender’s title insurance policy acceptable to an Agency, issued by a title
                insurer acceptable to an Agency and qualified to do business in the
                jurisdiction where the mortgaged property is
                located;

            ·

              All
                payments due on each mortgage loan have been made and no mortgage
                loan was
                delinquent months (i.e., was more than 30 days past due) more than
                once in
                the preceding 12 months and any such delinquency did not exceed one
                payment;

            ·

              There
                are no delinquent assessments or taxes outstanding against any mortgaged
                property;

            ·

              There
                is no offset, defense, counterclaim to any mortgage note, except
                as stated
                in the mortgage loan purchase and sale
                agreement;

            ·

              Each
                mortgaged property is free of material damage and in good
                repair;

            ·

              Each
                mortgage loan at the time of origination compiled in all material
                respects
                with applicable state and federal laws i