Exhibit 11.1

Redwood Trust, Inc.
Computation of Per Share Earnings

				Three Months				Three Months
				Ended				Ended
				March 31, 2002				March 31, 2001
Basic:
	Average common shares outstanding				13,658,443				8,838,964
		Total			13,658,443				8,838,964
	Net Income			$	11,218,789			$	6,679,775
	Per Share Amount			$	0.82			$	0.76
Diluted:
	Average common shares outstanding				13,658,443				8,838,964
	Net effect of dilutive stock options outstanding during the period — based on the treasury stock method				418,962				226,257
		Total			14,077,405				9,065,220
	Net Income			$	11,218,789			$	6,679,775
	Per Share Amount			$	0.80			$	0.74