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This supplemental information package is designed to provide investors with information regarding Redwood Trust that is more detailed than can be found in our quarterly press release or SEC disclosures. If you have suggestions about how we could improve this supplemental financial information package, please call Nicole Klock at 415-380-2321 or email her at [email protected].

NON-GAAP MEASURES

A number of non-GAAP measures are presented in this supplemental information package, including Core Earnings, Core Equity, Core Return on Core Equity, and others. Non-GAAP measures are reconciled to our reported GAAP financials. Information is also provided on taxable income, which is our income as calculated for tax purposes.

GAAP attempts to present economic activity using a common format with a common set of rules for all companies. For this reason, GAAP is an important tool for investors. Each company, however, is different, and there are other measures of economic activity – ones that are more tailored to the individual circumstances of each business – that can also be useful for investors. In this supplement, we try to present a wide variety of information that might be useful to investors.

CORE GAAP EARNINGS

Core GAAP earnings are not a measure of earnings in accordance with GAAP. We attempt to strip some of the elements out of GAAP earnings that are temporary, one-time, or non-economic in nature or that relate to the past rather than the future, so that the underlying on-going “core” trend of earnings is more clear, at least in certain respects. We also exclude realized gains (and losses) from asset sales and calls. We sell assets from time to time as part of our on-going portfolio management activities. These occasional sales can produce material gains and losses that could obscure the underlying trend of our long-term portfolio earnings, so we exclude them from core earnings. Similarly, we exclude gains from calls of residential credit-enhancement securities, as these are essentially sales of assets that produce a highly variable stream of income that may obscure some underlying income generation trends. GAAP earnings include mark-to-market income and expenses for certain of our assets and interest rate agreements. These are unrealized market value fluctuations – we exclude them from core GAAP earnings. Similarly, we have issued certain stock options that are “variable” and thus are marked-to-market for GAAP purposes. When our stock price goes up, it is a GAAP expense. When our stock price goes down, GAAP income is created. We exclude all this from core GAAP earnings. Management believes that core GAAP earnings provide relevant and useful information regarding results from operations in addition to GAAP measures of performance. This is, in part, because market valuation adjustments on only a portion of the company’s assets and stock options and none of its liabilities are recognized through the income statement under GAAP and thus GAAP valuation adjustments may not be fully indicative of changes in market values on the balance sheet as a whole or a reliable guide to current operating performance. Furthermore, gains or losses realized upon sales of assets vary based on portfolio management decisions; a sale of an asset for a gain or a loss may or may not affect on going earnings from operations. Because all companies and analysts do not calculate non-GAAP measures such as core GAAP earnings in the same fashion, core GAAP earnings as calculated by the company may not be comparable to similarly titled measures reported by other companies.

CORE EQUITY

Core equity is not a measure calculated in accordance with GAAP. A reconciliation of core equity to GAAP equity appears in the table presenting balance sheet data. GAAP equity includes mark-to-market adjustments for certain of our assets and interest rate agreements. This can be useful as a measure that approximates liquidation value (at least for those assets), but for other purposes GAAP equity is less useful, we believe. For instance, return on equity calculated using GAAP equity does not make much sense to us. When our assets that are marked-to-market through our balance sheet equity account appreciate (which is a good thing), our GAAP return on equity goes down because our equity base is larger but these particular mark-to-market gains are not recognized in GAAP income. Core equity GAAP equity with mark-to-market gains and losses (“accumulated other comprehensive income”) excluded. It is, we believe, a good measure of the amount of capital we have to run our business.

CORE RETURN ON CORE EQUITY

Core return on core equity, or core ROE, is core earnings divided by core equity. This is return on equity with mark-to-market gains and losses and one-time events stripped out.

ADJUSTED CORE EQUITY

We have minimum dividend distribution requirements as a REIT. We thus have future payment obligations, but these are not recognized in GAAP accounting until dividends are declared. Cash that we have earned but that we must pay out as dividends is not cash that will be available to us to acquire long-term assets and build our business. So when we try to answer questions such as “how much equity per share do we have available to build our business and to generate dividends in the long-term?” we use adjusted core equity per share. Adjusted core equity is core equity less undistributed REIT taxable income that is still undeclared but that will need to be paid out.

TAXABLE INCOME

Taxable income is the pre-tax income we earn calculated using calculation methods appropriate for tax purposes. Taxable income calculations differ significantly from GAAP. REIT taxable income is that portion of our taxable income that is subject to REIT tax rules. We must distribute at least 90% of this income as dividends to shareholders over time. As a REIT we are not subject to corporate income taxes on the REIT taxable income we distribute. The remainder of our taxable income (the non-REIT taxable income) is income we earn in taxable subsidiaries. We pay income tax on this income and we generally retain the after-tax income at the subsidiary level.

CORE TAXABLE INCOME

Core taxable income is defined by Redwood management. Core taxable income is the pre-tax income we earn at the REIT and our taxable subsidiaries before gains and losses on asset sales and call and certain other expenses such as deductions for stock option exercises.

REDWOOD EARNING ASSETS

Redwood’s real earning assets in an economic sense (real assets that are sitting in our custodial account) totaled approximately $1.0 billion at the end of the third quarter of 2005. Included in this amount are securities we have acquired from securitizations we have sponsored with a cost basis of approximately $211 million. All of the $18 billion of assets and asset-backed securities liabilities of the securitization entities we have sponsored are shown on our consolidated GAAP balance sheet, even though we do not own these assets and we are not responsible for the payment of these liabilities. For some analytical tasks (such as determining how much financial leverage Redwood carries on its balance sheet) we believe it makes more sense to consider the assets Redwood actually owns and the debt Redwood actually owes rather than including all GAAP assets and liabilities consolidated from securitization entities that are independent of Redwood.

REDWOOD DEBT

Redwood’s real economic debt — the money we have to pay back to a lender — was $162 million at the end of the third quarter of 2005. Our GAAP balance sheet shows liabilities of $18 billion because all of the assets and liabilities of the independent securitization entities we have sponsored are consolidated.

LEVERAGE RATIOS

Because of the consolidation of independent securitization entities, it appears from our GAAP financial statements that Redwood is highly leveraged, with liabilities greater than eighteen times equity. In fact, Redwood has $162 million of true debt and $1.0 billion of GAAP equity supporting $1.0 billion of earning assets and $1.2 billion of total assets (as of September 30, 2005). We only use debt to finance on a temporary basis the accumulation of assets prior to sale to a securitization entity. Our permanent asset portfolio, the assets we have acquired or created to own on a long-term basis, is financed entirely with equity capital.

PROFITABILITY RATIOS

Many financial institution analysts use asset-based profitability ratios such as interest rate spread and interest rate margin in their work analyzing financial institutions. Because of our consolidation of securitization entities for GAAP, we believe equity-based profitability ratios are more appropriate for Redwood. Net interest income as a percentage of equity is a useful measure, we believe. For operating expenses, we believe a useful measure is the efficiency ratio, or operating expenses as a percentage of net interest income.

Table 1: GAAP Earnings (all $ in thousands, except per share data)

Table 1
GAAP Earnings
(all $ in thousands, except per share data)


																						Nine			Nine
																						Months			Months
	Q3:2005			Q2:2005			Q1:2005			Q4:2004			Q3:2004			Q2:2004			Q1:2004			Q3:2005			Q3:2004
Interest income (Redwood and consolidated trusts)	$	245,735		$	248,669		$	236,957		$	204,834		$	171,804		$	144,865		$	130,158		$	731,361		$	446,827
Discount amortization income		12,714			8,395			9,316			9,146			9,012			9,077			8,836			30,425			26,925
Premium amortization expense		(15,698	)		(10,203	)		(8,082	)		(7,105	)		802			(14,463	)		(11,646	)		(33,983	)		(25,307	)
Provision for credit losses		805			1,527			(1,025	)		(1,697	)		(1,528	)		(1,500	)		(2,511	)		1,307			(5,539	)

Total GAAP Interest Income		243,556			248,388			237,166			205,178			180,090			137,979			124,837			729,110			442,906

Interest expense on Redwood Trust’s debt		(3,845	)		(1,825	)		(2,728	)		(2,560	)		(2,312	)		(2,490	)		(2,571	)		(8,398	)		(7,373	)

ABS expenses consolidated from trusts		(191,035	)		(191,985	)		(173,182	)		(143,078	)		(108,237	)		(78,809	)		(69,069	)		(556,202	)		(256,115	)
ABS issuance expense amortization		(5,162	)		(5,386	)		(5,273	)		(4,783	)		(4,197	)		(4,305	)		(3,543	)		(15,821	)		(12,045	)
ABS interest agreement expense		623			876			1,469			606			(2,888	)		(5,988	)		(4,965	)		2,968			(13,841	)
ABS issuance premium amortization income		2,733			3,140			3,747			2,644			2,823			1,233			571			9,620			4,627

Total consolidated ABS expense		(192,841	)		(193,355	)		(173,239	)		(144,611	)		(112,499	)		(87,869	)		(77,006	)		(559,435	)		(277,374	)

GAAP net interest income		46,870			53,208			61,199			58,007			65,279			47,620			45,260			161,277			158,159

Fixed compensation expense		(2,802	)		(2,623	)		(2,778	)		(2,009	)		(1,959	)		(1,842	)		(2,230	)		(8,203	)		(6,031	)
Variable compensation expense		(4,304	)		(4,824	)		(4,279	)		(2,908	)		(3,443	)		(4,722	)		(4,022	)		(13,407	)		(12,187	)
Fair value of stock options granted		47			(348	)		(370	)		(299	)		(133	)		(547	)		(310	)		(671	)		(990	)
Other operating expense		(3,866	)		(3,179	)		(3,322	)		(2,565	)		(2,512	)		(1,781	)		(1,735	)		(10,367	)		(6,028	)

Operating expenses		(10,925	)		(10,974	)		(10,749	)		(7,781	)		(8,047	)		(8,892	)		(8,297	)		(32,648	)		(25,236	)

Excise taxes		(285	)		(308	)		(307	)		165			(301	)		(190	)		(300	)		(900	)		(791	)
Variable stock option market value change		16			(2	)		84			3			(213	)		621			(1,429	)		98			(1,021	)

Total GAAP operating expenses		(11,194	)		(11,284	)		(10,972	)		(7,613	)		(8,561	)		(8,461	)		(10,026	)		(33,450	)		(27,048	)

Realized gains on calls of residential CES		2,914			4,421			7,548			11,205			20,472			15,246			11,816			14,883			47,534
Realized gains on asset sales		23,053			516			8,347			—			489			971			6,255			31,916			7,715
Loss on repurchase of ABS issued		—			—			—			—			—			—			—			—			—
Valuation write-downs for EITF 99-20		(1,158	)		(1,710	)		(391	)		(1,573	)		(422	)		(3,846	)		(558	)		(3,259	)		(4,826	)
Interest rate agreements valuation adjustments		107			(182	)		(492	)		(411	)		47			(113	)		(1	)		(567	)		(67	)
Valuation adjustments on real estate loans		—			—			—			(375	)		—			—			(75	)		—			(75	)

Net gains and valuation adjustments		24,916			3,045			15,012			8,846			20,586			12,258			17,437			42,973			50,281

Dividends on and earnings allocated to preferred stock		—			—			—			—			—			—			—			—			—
Deferred tax benefit (one time Q2:2004)		—			—			—			—			—			5,180			—			—			5,180
Provision for income taxes		(4,693	)		(4,054	)		(4,677	)		(4,826	)		(4,962	)		(1,509	)		(1,880	)		(13,424	)		(8,351	)

GAAP Net Income		55,899		$	40,915		$	60,562		$	54,414		$	72,342		$	55,088		$	50,791		$	157,376		$	178,221


Diluted shares for GAAP (000)		25,314			25,196			25,021			24,491			22,728			21,325			20,399			25,160			21,486
GAAP earnings per share	$	2.21		$	1.62		$	2.42		$	2.22		$	3.18		$	2.58		$	2.49		$	6.26		$	8.29

Table 2: Core Earnings (all $ in thousands, except per share data)

Table 2
Core Earnings
(all $ in thousands, except per share data)


																						Nine			Nine
																						Months			Months
	Q3:2005			Q2:2005			Q1:2005			Q4:2004			Q3:2004			Q2:2004			Q1:2004			Q3:2005			Q3:2004
GAAP income items not included in CORE
Variable stock option market value change		16			($2	)	$	84		$	3			($213	)	$	621			($1,429	)	$	98			($1,021	)

Realized gains on calls of residential CES		2,914			4,421			7,548			11,205			20,472			15,246			11,816			14,883			47,534
Realized gains on asset sales		23,053			516			8,347			—			489			971			6,255			31,916			7,715
Loss on repurchase of ABS issued		—			—			—			—			—			—			—			—			—
Valuation write-downs for EITF 99-20		(1,158	)		(1,710	)		(391	)		(1,573	)		(422	)		(3,846	)		(558	)		(3,259	)		(4,826	)
Interest rate agreements valuation adjustments		107			(182	)		(492	)		(411	)		47			(113	)		(1	)		(567	)		(67	)
Commercial real estate valuation adjustments		—			—			—			(375	)		—			—			(75	)		—			(75	)

Net gains and valuation adjustments		24,916			3,045			15,012			8,846			20,586			12,258			17,437			42,973			50,281

Deferred tax benefit (one time Q2:2004)		—						—			—			—			5,180			—			—			5,180

Total GAAP / CORE differences		24,932			3,043			15,096			8,849			20,373			18,059			16,008			43,071			54,440

Core earnings		30,967			37,872			45,466			45,565			51,969			37,029			34,783			114,305			123,781
GAAP / CORE differences		24,932			3,043			15,096			8,849			20,373			18,059			16,008			43,071			54,440

GAAP Net Income		55,899		$	40,915		$	60,562		$	54,414		$	72,342		$	55,088		$	50,791		$	157,376		$	178,221


Per Share Analysis
Variable stock option market value change	$	0.00			($0.00	)	$	0.00		$	0.00			($0.01	)	$	0.03			($0.07	)	$	0.00			($0.05	)
Realized gains on calls of residential CES		0.12			0.18			0.30			0.46			0.90			0.71			0.58			0.59			2.21
Realized gains on asset sales		0.91			0.02			0.33			0.00			0.02			0.05			0.30			1.27			0.36
Loss on repurchase of ABS issued		0.00			0.00			0.00			0.00			0.00			0.00			0.00			0.00			0.00
Valuation write-downs for EITF 99-20		(0.05	)		(0.07	)		(0.02	)		(0.06	)		(0.02	)		(0.18	)		(0.03	)		(0.13	)		(0.22	)
Interest rate agreements valuation adjustments		0.00			(0.01	)		(0.01	)		(0.02	)		0.00			0.00			(0.00	)		(0.02	)		(0.00	)
Commercial real estate valuation adjustments		0.00			0.00			0.00			(0.02	)		0.00			(0.01	)		0.00			0.00			(0.00	)
Deferred tax benefit (one time Q2:2004)		0.00			0.00			0.00			0.00			0.00			0.24			0.00			0.00			0.24

GAAP / CORE differences per share	$	0.98		$	0.12		$	0.60		$	0.36		$	0.89		$	0.84		$	0.78		$	1.71		$	2.53

CORE earnings per share		1.22			1.50			1.82			1.86			2.29			1.74			1.71			4.54			5.76
GAAP / CORE differences per share		0.98			0.12			0.60			0.36			0.89			0.84			0.78			1.71			2.53

GAAP earnings per share		2.21		$	1.62		$	2.42		$	2.22		$	3.18		$	2.58		$	2.49			6.25		$	8.29

Diluted shares outstanding (000)		25,314			25,196			25,021			24,491			22,728			21,325			20,399			25,160			21,486

Table 3: GAAP / TAX Differences (all $ in thousands, except per share data)

Table 3
GAAP/TAX Differences
(all $ in thousands, except per share data)


																												Estimated
																												Nine			Nine
	Estimated			Estimated			Estimated															Actual			Actual			Months			Months
	Q3:2005			Q2:2005			Q1:2005			Q4:2004			Q3:2004			Q2:2004			Q1:2004			2004			2003			2005			2004
GAAP net income	$	55,899		$	40,915		$	60,562		$	54,414		$	72,342		$	55,088		$	50,791		$	232,635		$	131,698		$	157,376		$	178,221
Interest income and expense differences		1,353			(4,868	)		(20,091	)		(7,519	)		(23,527	)		5,208			(1,150	)		(26,988	)		22,324			(23,606	)		(19,469	)
Provision for credit losses — GAAP		(805	)		(1,527	)		1,025			1,697			1,528			1,500			2,511			7,236			8,646			(1,307	)		5,539
Tax deductions for realized credit losses		(562	)		(737	)		(438	)		(247	)		(127	)		(506	)		(4	)		(884	)		(825	)		(1,737	)		(637	)
Long-term compensation differences		2,892			2,138			1,969			(1,775	)		402			2,428			2,904			3,959			7,522			6,999			5,734
Stock option exercise deduction differences		(2,944	)		(143	)		(477	)		(3,094	)		(745	)		(109	)		(12,073	)		(16,021	)		(2,483	)		(3,564	)		(12,927	)
Depreciation of fixed asset differences		60			166			151			(176	)		(589	)		46			(6	)		(725	)		(686	)		377			(549	)
Other operating expense differences		283			(31	)		69			(2,495	)		(34	)		5			(16	)		(2,540	)		885			321			(45	)
Sale of assets to third parties differences		(8,041	)		(2,476	)		(967	)		1,428			(576	)		(536	)		(566	)		(250	)		(69	)		(11,484	)		(1,678	)
Call income of residential CES differences		(319	)		120			(2,324	)		(2,872	)		(3,961	)		(2,157	)		(1,899	)		(10,889	)		(8,402	)		(2,523	)		(8,017	)
Tax gain on securitizations		(392	)		808			2,558			10,749			11,153			10,303			—			32,205			—			2,974			21,456
Tax gain on intercompany sales and transfers		170			2,371			3,260			3,256			28			(71	)		7,546			10,759			2,823			5,801			7,503
GAAP market valuation write downs (EITF 99-20)		2,048			820			391			1,572			422			3,846			558			6,398			7,646			3,259			4,826
Interest rate agreements differences		216			53			202			(688	)		(278	)		502			50			(414	)		(229	)		471			274
Provision for excise tax — GAAP		285			308			307			(165	)		301			190			300			626			1,203			900			791
Provision for income tax differences		5,013			3,035			134			4,827			2,834			(3,672	)		1,881			5,870			5,502			8,182			1,043
Preferred dividend — GAAP		—			—			—			—			—			—			—			—			696			—			—


Total taxable income (pre-tax)		55,156			40,952			46,331			58,912			59,173			72,065			50,827			240,977			176,251			142,439			182,065

Earnings from taxable subsidiaries		(8,038	)		(1,715	)		(1,170	)		(8,903	)		(10,143	)		(11,721	)		(8,337	)		(39,104	)		(7,861	)		(10,923	)		(30,201	)


REIT taxable income (pre-tax)		47,118		$	39,237		$	45,161			50,009		$	49,030		$	60,344		$	42,490			201,873		$	168,390			131,516			151,864


Common shares outstanding at period end (000)		24,764			24,647			24,514			24,154			23,346			21,511			19,796			24,154			19,063			24,764			23,346
Total taxable income per share	$	2.23		$	1.66		$	1.89		$	2.44		$	2.53		$	3.35		$	2.57		$	10.89		$	9.64		$	5.78		$	8.45
REIT taxable income per share	$	1.91		$	1.59		$	1.84		$	2.07		$	2.10		$	2.81		$	2.15		$	9.12		$	9.21		$	5.34		$	7.05

Table 4: Taxable Income Estimates (all $ in thousands, except per share data)

Table 4
Taxable Income Estimates
(all $ in thousands, except per share data)


																												Estimated
																												Nine			Nine
	Estimated			Estimated			Estimated															Actual			Actual			Months			Months
	Q3:2005			Q2:2005			Q1:2005			Q4:2004			Q3:2004			Q2:2004			Q1:2004			2004			2003			Q3:2005			Q3:2004
Taxable income in taxable subs (pre-tax)		8,038		$	1,715		$	1,170		$	8,903		$	10,143		$	11,721		$	8,337		$	39,104		$	7,861			10,923		$	30,201
REIT taxable income (pre-tax)		47,118			39,237			45,161			50,009			49,030			60,344			42,490			201,873			168,390			131,516			151,864

Total taxable income (pre-tax)	$	55,156		$	40,952		$	46,331		$	58,912		$	59,173		$	72,065		$	50,827		$	240,977		$	176,251			142,439		$	182,065

Core income (loss) in taxable subs (pre-tax)	$	7,931			($611	)		($1,996	)		($2,185	)		($1,275	)	$	1,741		$	910			($809	)	$	7,192		$	5,324		$	1,376
Income from calls and sales in taxable subs (pre-tax)	$	107			2,326			3,166			11,088			11,418			9,980			7,427			39,913			669			5,599			28,825

Taxable income in taxable subs (pre-tax)	$	8,038		$	1,715		$	1,170		$	8,903		$	10,143		$	11,721		$	8,337		$	39,104		$	7,861		$	10,923		$	30,201
Income tax for taxable subs (actual tax due)		(3,652	)		(870	)		(830	)		(5,773	)		(4,574	)		(1,600	)		(1,150	)		(13,097	)		(873	)		(5,352	)		(7,324	)

After-tax income in taxable subs	$	4,386		$	845		$	340		$	3,130		$	5,569		$	10,121		$	7,187		$	26,007		$	6,988		$	5,571		$	22,877

Core REIT taxable income	$	33,065		$	36,198		$	30,741		$	42,544		$	34,272		$	47,040		$	39,708		$	163,564		$	128,522		$	100,004		$	121,020
Other ordinary REIT taxable income (expense)		(2,160	)		3,166			(565	)		(3,094	)		(745	)		(109	)		(12,073	)		(16,021	)		(5,477	)		441			(12,927	)

Ordinary REIT taxable income	$	30,905		$	39,364		$	30,176		$	39,450		$	33,527		$	46,931		$	27,635		$	147,543		$	123,045		$	100,445		$	108,093
Net long-term capital gain REIT taxable income		16,213			(127	)		14,985			10,559			15,503			13,413			14,855			54,330			45,345			31,071			43,771

REIT taxable income (pre-tax)	$	47,118		$	39,237		$	45,161		$	50,009		$	49,030		$	60,344		$	42,490		$	201,873		$	168,390			131,516			151,864

Total core taxable income	$	40,996		$	35,587		$	28,745		$	40,359		$	32,997		$	48,781		$	40,618		$	162,755		$	135,714		$	105,328		$	122,396
Income from calls, sales and stock option exercises		14,160			5,365			17,586			18,553			26,176			23,284			10,209			78,222			40,537			37,111			59,669

Total taxable income (pre-tax)	$	55,156		$	40,952		$	46,331		$	58,912		$	59,173		$	72,065		$	50,827		$	240,977		$	176,251		$	142,439		$	182,065

REIT taxable income (pre-tax)		47,118		$	39,237		$	45,161		$	50,009		$	49,030		$	60,344		$	42,490		$	201,873		$	168,390			131,516		$	151,864
Excise taxes due to deferrals		(285	)		(308	)		(307	)		293			(301	)		(190	)		(300	)		(498	)		(1,305	)		(900	)		($791	)
Income taxes due to earnings retention (actual tax due)		(1,641	)		(1,830	)		(1,450	)		14			(1,537	)		(2,151	)		(1,267	)		(4,941	)		(5,619	)		(4,921	)		(4,955	)

REIT taxable income available for distribution		45,192		$	37,099		$	43,404		$	50,316		$	47,192		$	58,003		$	40,923		$	196,434		$	161,466			125,695			146,118

After-tax income in taxable subs	$	4,386		$	845		$	340		$	3,130		$	5,569		$	10,121		$	7,187		$	26,007		$	6,988		$	5,571		$	22,877
REIT taxable income available for distribution		45,192			37,099			43,404			50,316			47,192			58,003			40,923			196,434			161,466			125,695			146,118

Total taxable income (after-tax)	$	49,578		$	37,944		$	43,744		$	53,446		$	52,761		$	68,124		$	48,110		$	222,441		$	168,454		$	131,266		$	168,995

Regular dividend per share	$	0.70		$	0.70		$	0.70		$	0.67		$	0.67		$	0.67		$	0.67		$	2.68		$	3.36		$	2.10		$	2.01
Special dividend per share		—			—			—			5.50			—			—			0.50			6.00			4.75			—			0.50

Total dividends per share	$	0.70		$	0.70		$	0.70		$	6.17		$	0.67		$	0.67		$	1.17		$	8.68		$	8.11		$	2.10		$	2.51

Shares at period end (000)		24,764			24,647			24,514			24,154			23,346			21,511			19,796			24,154			19,063			24,764			21510.6

Dividends declared	$	17,335		$	17,253		$	17,160		$	146,707		$	15,642		$	14,412		$	23,162		$	199,923		$	137,436			51,748		$	53,216
Dividend deduction on stock issued through DRIP		128			112			56			1,048			844			712			655			3,259			1,161			296			2,211

Total dividend deductions	$	17,463		$	17,365		$	17,216		$	147,755		$	16,486		$	15,124		$	23,817		$	203,182		$	138,597			52,044		$	55,427

Taxable income (after-tax) retained in tax subs	$	4,386		$	845		$	340		$	3,130		$	5,569		$	10,121		$	7,187		$	26,007		$	6,988		$	5,571		$	22,877
REIT retained taxable income (after-tax) (1)		1,165			1,798			1,261			4,252			1,515			2,352			1,197			9,315			5,381			4,224			5,063

Total retained taxable earnings (after-tax)	$	5,551		$	2,643		$	1,601		$	7,382		$	7,084		$	12,473		$	8,384		$	35,322		$	12,369		$	9,795		$	27,940
Per share outstanding at quarter end
Core taxable income (pre-tax)	$	1.66		$	1.44		$	1.17		$	1.67		$	1.41		$	2.27		$	2.05		$	7.40		$	7.49		$	4.27		$	5.73
REIT taxable income (pre-tax)	$	1.91		$	1.59		$	1.84		$	2.07		$	2.10		$	2.81		$	2.15		$	9.12		$	9.21		$	5.34		$	7.05
Total taxable income (pre-tax)	$	2.23		$	1.66		$	1.89		$	2.44		$	2.53		$	3.35		$	2.57		$	10.89		$	9.64		$	5.78		$	8.45
Total retained taxable earnings (after-tax)	$	0.22		$	0.11		$	0.07		$	0.31		$	0.30		$	0.58		$	0.42		$	1.61		$	0.65		$	0.40		$	1.30

(1) REIT retained taxable income equals 10% of ordinary REIT taxable income less income and excise taxes.

Table 5: Retention and Distribution of Taxable Income (all $ in thousands, except per share data)

Table 5
Retention and Distribution of Taxable Income
(all $ in thousands, except per share data)


	Estimated			Estimated			Estimated															Actual			Actual
	9/30/2005			6/30/2005			3/31/2005			12/31/2004			9/30/2004			6/30/2004			3/31/2004			2004			2003
Undistributed REIT taxable income (pre-tax): begin	$	80,166		$	62,218			37,291		$	138,981		$	109,790		$	69,263		$	53,354		$	53,354		$	35,865
REIT taxable income (pre-tax)		47,118			39,237			45,161			50,009			49,030			60,344			42,490			201,873			168,390
Permanently retained (pre-tax)		(3,102	)		(3,924	)		(3,018	)		(3,944	)		(3,353	)		(4,693	)		(2,764	)		(14,754	)		(12,305	)
Dividend of 2003 income		—			—			—			—			(14,413	)		(15,124	)		(23,817	)		(53,354	)		(102,732	)
Dividend of 2004 income		(2,710	)		(17,365	)		(17,216	)		(147,755	)		(2,073	)		—			—			(149,828	)		—
Dividend of 2005 income		(14,753	)		—			—			—			—			—			—			—			—

Undistributed REIT taxable income (pre-tax): end	$	106,719		$	80,166			62,218		$	37,291		$	138,981		$	109,790		$	69,263		$	37,291		$	53,354

Shares outstanding at period end		24,764			24,647			24,514			24,154			23,346			21,511			19,796			24,154			19,063
Undistributed REIT taxable income (pre-tax) per share outstanding	$	4.31		$	3.25		$	2.54		$	1.54		$	5.95		$	5.10		$	3.50		$	1.54		$	2.80

Undistributed REIT taxable income (pre-tax) From 2003’s income											—			—			14,413			29,537			—			53,354
From 2004’s income		—			2,710			20,075			37,291			138,981			95,377			39,727			37,291			—
From 2005’s income		106,716			77,456			42,143			—			—			—			—			—			—

Total	$	106,716		$	80,166		$	62,218			37,291		$	138,981		$	109,790		$	69,263		$	37,611		$	53,354

Table 6: Assets (all $ in millions)

Table 6
Assets
(all $ in millions)


	Q3:2005			Q2:2005			Q1:2005			Q4:2004			Q3:2004			Q2:2004			Q1:2004			Q4:2003			Q3:2003
Residential loans owned by Redwood	$	17		$	300		$	256		$	193		$	259		$	161		$	97		$	43		$	406
Residential loans consolidated from entities		16,324			19,083			21,237			22,015			21,299			19,755			17,989			16,196			13,407

Total GAAP residential loans		16,341			19,383			21,493			22,208			21,558			19,916			18,086			16,239			13,813

HELOC loans owned by Redwood		—			—			—			—			—			—			—			—			—
HELOC loans consolidated from entities		215			247			279			296			317			327			—			—			—

Total GAAP HELOC loans		215			247			279			296			317			327			—			—			—

Commercial loans owned by Redwood		21			16			22			32			21			25			14			14			15
Commercial loans consolidated from entities		35			26			35			22			12			8			8			9			9

Total GAAP commercial loans		56			42			57			54			33			33			22			23			24

Residential CES owned by Redwood		338			469			373			351			327			312			256			251			204
Residential CES consolidated from entities		326			237			238			211			170			131			119			128			169

Total GAAP residential CES		664			706			611			562			497			443			375			379			373

Commercial CES owned by Redwood		44			29			29			14			9			2			2			—			—
Commercial CES consolidated from entities		—

Total GAAP Commercial CES		44			29			29			14			9			2			2			—			—

Other securities owned by Redwood		234			208			70			115			161			213			237			167			125
Other securities consolidated from entities		1,549			1,441			1,435			1,266			1,069			881			698			678			480

Total GAAP other securities		1,783			1,649			1,505			1,395			1,239			1,096			937			845			605

Cash owned by Redwood		163			72			65			57			76			38			58			58			32
Restricted cash consolidated from entities		59			48			58			36			45			20			14			22			14
Accrued interest receivable		80			85			82			72			62			49			44			40			33
Principal receivable		2			—			—			3			1			12			—			13			2
Interest rate agreements		25			13			29			16			10			17			1			2			—
Deferred tax asset		8			7			8			11			9			5			—			—			—
Deferred asset-backed security issuance costs		56			59			63			61			58			53			47			44			36
Other assets		9			6			6			7			7			7			6			5			5

Total GAAP assets	$	19,505		$	22,317		$	24,256		$	24,778		$	23,912		$	22,016		$	19,590		$	17,670		$	14,937


Residential loans owned by Redwood	$	17		$	300		$	256		$	193		$	259		$	161		$	97		$	43		$	406
HELOC loans owned by Redwood		—			—			—			—			—			—			—			—			—
Commercial loans owned by Redwood		21			16			22			32			21			25			14			14			15
Residential CES owned by Redwood		338			469			373			351			327			312			256			251			204
Commercial CES owned by Redwood		44			29			29			14			9			2			2			—			—
Other securities owned by Redwood		234			208			70			129			170			215			239			167			125
Cash owned by Redwood		163			72			65			57			76			38			58			58			32
Assets of securitizations for GAAP		18,449			21,034			23,224			23,810			22,867			21,102			18,814			17,011			14,065
ABS liabilities of entities for GAAP		(18,238	)		(20,815	)		(23,057	)		(23,630	)		(22,680	)		(20,923	)		(18,630	)		(16,826	)		(13,818	)

Redwood earning assets — GAAP basis	$	1,028		$	1,313		$	982		$	956		$	1,049		$	932		$	850		$	718		$	1,029


Table 7: Liabilities (all $ in millions)

Table 7
Liabilities
(all $ in millions)
	Q3:2005			Q2:2005			Q1:2005			Q4:2004			Q3:2004			Q2:2004			Q1:2004			Q4:2003			Q3:2003
Redwood Trust debt: short-term	$	162		$	453		$	199		$	203		$	246		$	270		$	278		$	236		$	500
Redwood Trust debt: long-term		—			—			—			—			—			—			—			—			—

Total Redwood Trust debt	$	162		$	453		$	199		$	203		$	246		$	270		$	278		$	236		$	500

ABS issued, consolidated from entities		18,049			20,598			22,821			23,383			22,449			20,724			18,458			16,661			13,743
Unamortized IO issuance premium		163			186			202			210			185			161			162			153			66
Unamortized ABS issuance premium		25			31			34			37			46			38			10			12			9

ABS obligations of entities	$	18,237		$	20,815		$	23,057		$	23,630		$	22,680		$	20,923		$	18,630		$	16,826		$	13,818

Accrued interest payable		42			43			38			35			29			22			18			17			10
Interest rate agreements		1			3			—			1			7			1			12			4			4
Accrued expenses and other liabilities		30			23			26			29			32			28			21			22			27
Dividends payable		17			17			17			16			16			14			23			12			12

Total GAAP liabilities	$	18,489		$	21,354		$	23,337		$	23,914		$	23,010		$	21,258		$	18,982		$	17,117		$	14,371

Preferred Stock		—			—			—			—			—			—			—			—			—
Common stock		808			803			795			773			727			625			549			518			489
Accumulated other comprehensive income		117			137			125			105			97			111			79			82			91
Cumulative GAAP earnings		639			583			542			482			427			355			299			249			179
Cumulative distributions to shareholders		(548	)		(531	)		(514	)		(496	)		(349	)		(333	)		(319	)		(296	)		(193	)

GAAP stockholders’ equity		1,016			992			948			864			902			758			608			553			566

Total GAAP liabilities and equity	$	19,505		$	22,346		$	24,285		$	24,778		$	23,912		$	22,016		$	19,590		$	17,670		$	14,937


Total Redwood Trust debt	$	162		$	453		$	199		$	203		$	246		$	270		$	278		$	236		$	500
GAAP stockholders’ equity		1,016			992			948			864			902			758			608			553			566

Redwood capital	$	1,178		$	1,445		$	1,147		$	1,067		$	1,148		$	1,028		$	886		$	789		$	1,066

Redwood debt to equity ratio		16	%		46	%		21	%		23	%		27	%		36	%		46	%		43	%		88	%
Debt to capital ratio		14	%		31	%		17	%		19	%		21	%		26	%		31	%		30	%		47	%

Redwood earning assets	$	1,028		$	1,313		$	982		$	942		$	1,040		$	930		$	848		$	718		$	1,029
Redwood debt		162			453			199			203			246			270			278			236			500

Redwood net earning assets (GAAP basis)	$	866		$	860		$	783		$	739		$	794		$	660		$	570		$	482		$	529

Equity to earning assets		99	%		76	%		97	%		92	%		87	%		82	%		72	%		77	%		55	%


Table 8: Book Value and Profitability (all $ in thousands, except per share data)

Table 8
Book Value and Profitability
(all $ in thousands, except per share data)																												Nine			Nine
																												Months			Months
	Q3:2005			Q2:2005			Q1:2005			Q4:2004			Q3:2004			Q2:2004			Q1:2004			Q4:2003			Q3:2003			Q3:2005			Q3:2004
BOOK VALUE

GAAP equity	$	1,016,065		$	991,757		$	948,001		$	864,156		$	901,841		$	757,940		$	608,122		$	553,328		$	566,134		$	1,016,065			901,841
Balance sheet mark-to-market adjustments		117,043			137,380			124,784			105,357			96,452			111,221			78,517			82,179			90,592			117,043			96,452

Core equity	$	899,022		$	854,377		$	823,217		$	758,799		$	805,389		$	646,719		$	529,605		$	471,149		$	475,542			899,022			805,389

Core equity		899,022			854,377			823,217			758,799			805,389			646,719			529,605			471,149			475,542			899,022			805,389
REIT taxable income to be paid as dividends		106,716			80,166			62,218			37,611			138,982			109,790			69,263			53,354			83,212			106,716			138,982

Adjusted core equity		792,306		$	774,211		$	760,999		$	721,188		$	666,407		$	536,929		$	460,342		$	417,796		$	392,330			792,306			666,407

Shares outstanding at quarter end		24,764			24,647			24,514			24,154			23,346			21,511			19,796			19,063			18,468			24,764			23,346

GAAP equity per share	$	41.03		$	40.24		$	38.67		$	35.78		$	38.63		$	35.24		$	30.72		$	29.03		$	30.65		$	41.03		$	38.63
Core equity per share		36.30			34.66			33.58			31.42			34.50			30.06			26.75			24.72			25.75		$	36.30			34.50
Adjusted core equity per share		31.99			31.39			31.03			29.86			28.55			24.96			23.25			21.92			21.24		$	31.99			28.55

PROFITABILITY
Net interest income	$	46,870		$	53,208		$	61,199		$	58,007		$	65,279		$	47,620		$	45,260		$	39,668		$	34,631		$	161,277		$	158,159
Net interest income / average core equity		21	%		25	%		31	%		30	%		38	%		33	%		36	%		34	%		30	%		26	%		35	%

Operating expenses (before excise and VSOE)		10,925			10,974			10,749			7,781			8,047			8,892			8,297			7,680			8,585		$	32,648		$	25,236
Efficiency ratio: op exp / core net interest income		23	%		21	%		18	%		13	%		12	%		19	%		18	%		19	%		25	%		20	%		16	%

Core earnings		30,967			37,872			45,466		$	45,565		$	51,969		$	37,029		$	34,783		$	30,485		$	24,481			114,305			123,781
Core return on average core equity		14	%		18	%		23	%		23	%		30	%		25	%		27	%		26	%		21	%		18	%		28	%


Table 10: Average Balance Sheet (all $ in thousands)

Table 10
Average Balance Sheet																			Nine		Nine
(all $ in thousands)																			Months		Months
	Q3:2005		Q2:2005		Q1:2005		Q4:2004		Q3:2004		Q2:2004		Q1:2004		Q4:2003		Q3:2003		2005		2004
Average residential real estate loans	$	17,373,023	$	20,054,970	$	21,640,501	$	21,716,898	$	20,484,287	$	18,754,200	$	16,916,295	$	14,381,270	$	10,958,059	$	19,673,866	$	18,724,707
Average residential HELOC		224,884		257,515		285,142		303,119		323,100		124,053		—		—		—		255,626		149,686
Average residential loan CES		585,663		550,460		493,412		424,879		368,887		317,235		287,078		272,999		270,991		543,516		324,563
Average commercial loan CES		32,192		25,130		19,255		10,836		7,372		2,075		677		—		—		25,558		3,389
Average commercial real estate loans		47,703		45,214		56,080		39,836		33,461		26,129		22,316		23,464		30,471		49,635		27,324
Average securities portfolio		1,687,506		1,548,085		1,423,487		1,267,692		1,141,456		978,014		861,328		709,867		602,622		1,553,993		994,139
Average cash and cash equivalents		134,422		124,707		124,685		126,556		101,937		81,450		70,641		116,265		49,053		127,974		84,739

Average earning assets		20,085,393		22,606,081		24,042,562		23,889,816		22,460,500		20,283,156		18,158,335		15,503,865		11,911,196		22,230,168		20,308,547

Average other assets		905,906		759,472		520,622		430,219		416,736		327,205		227,634		254,552		220,420		730,136		324,197

Average total assets	$	20,991,299	$	23,365,553	$	24,563,184	$	24,320,035	$	22,877,236	$	20,610,361	$	18,385,969	$	15,758,417	$	12,131,616	$	22,960,304	$	20,632,744


Average Redwood debt	$	297,788	$	216,639	$	277,423	$	348,177	$	404,589	$	539,231	$	447,931	$	410,631	$	344,424	$	264,024	$	463,700
Average asset-backed securities issues		19,542,413		22,067,276		23,324,111		22,956,247		21,606,164		19,350,833		17,299,503		14,708,963		11,197,470		21,630,747		19,426,816

Average total obligations		19,840,201		22,283,915		23,601,534		23,304,424		22,010,753		19,890,064		17,747,434		15,119,594		11,541,894		21,894,771		19,890,516
Average other liabilities		136,769		111,294		66,188		145,752		64,916		56,424		54,150		79,750		37,077		105,053		58,522

Average total liabilities		19,976,970		22,395,209		23,667,722		23,450,176		22,075,669		19,946,488		17,801,584		15,199,344		11,578,971		21,999,824		19,949,038

Average core equity		880,482		840,098		794,866		776,833		695,488		583,875		506,445		469,857		458,304		838,824		595,635
Average balance sheet mark-to-market adjustments		133,847		130,246		100,596		93,026		106,079		79,998		77,940		89,216		94,341		121,656		88,071

Average total equity		1,014,329		970,344		895,462		869,859		801,567		663,873		584,385		559,073		552,645		960,480		683,706

Average total liabilities and equity	$	20,991,299	$	23,365,553	$	24,563,184	$	24,320,035	$	22,877,236	$	20,610,361	$	18,385,969	$	15,758,417	$	12,131,616	$	22,960,304	$	20,632,744

Table 11: Balances & Yields (all $ in thousands)

Table 11
Balances & Yields
(all $ in thousands)


		At period end													For period ended
				Unamortized						Unrealized			Net
		Current		Premium/			Credit			Gain/			Book		Average		Interest
		Face		(Discount)			Protection			(loss)			Value		Balance*		Income		Yield
Total Earning Assets (GAAP)
	Q3: 2003	$	14,969,841	$	(14,918	)	$	(191,264	)	$	91,992			14,847,510	$	11,911,196	$	90,163		3.03	%
	Q4: 2003		17,657,339		29,495			(225,947	)		82,600			17,543,487		15,503,865		108,262		2.79	%
	2003		17,657,339		21,354			(217,806	)		82,600			17,543,487		10,858,311		330,976		3.05	%
	Q1: 2004		19,595,182		47,341			(252,587	)		87,874			19,477,810		18,158,335		124,837		2.75	%
	Q2: 2004		21,975,772		57,582			(272,698	)		91,454			21,852,110		20,283,156		137,979		2.72	%
	Q3: 2004		23,883,198		102,744			(356,371	)		90,818			23,720,389		22,460,500		180,090		3.21	%
	Q4: 2004		24,863,331		104,063			(420,757	)		95,396			24,572,723		23,889,816		205,178		3.44	%
	2004		24,863,331		55,841			(372,535	)		95,396			24,572,723		21,208,757		648,084		3.06	%
	Q1: 2005		24,301,644		122,952			(487,952	)		102,711			24,039,355		24,042,562		237,166		3.95	%
	Q2: 2005		22,414,482		103,779			(522,490	)		133,210			22,128,981		22,606,081		248,388		4.40	%
	Q3: 2005		19,625,979		94,058			(551,562	)		98,874			19,267,349		20,085,393		243,556		4.85	%

Residential Real Estate Loans
	Q3: 2003	$	13,703,475	$	123,392		$	(13,617	)	$	0		$	13,813,250	$	10,958,059	$	63,638		2.32	%
	Q4: 2003		16,110,748		144,748			(16,336	)		—			16,239,160		14,381,270		82,727		2.30	%
	2003		16,110,748		144,748			(16,336	)		—			16,239,160		9,932,961		235,978		2.38	%
	Q1: 2004		17,950,901		154,451			(18,847	)		—			18,086,505		16,916,295		98,826		2.34	%
	Q2: 2004		19,766,481		169,174			(20,080	)		—			19,915,575		18,754,200		109,880		2.34	%
	Q3: 2004		21,381,784		197,472			(21,344	)		—			21,557,912		20,484,287		147,974		2.89	%
	Q4: 2004		22,023,888		207,607			(23,078	)		—			22,208,417		21,716,898		168,831		3.11	%
	2004		22,023,888		207,607			(23,078	)		—			22,208,417		19,476,842		525,511		2.70	%
	Q1: 2005		21,307,080		210,375			(24,231	)		—			21,493,224		21,640,501		194,877		3.60	%
	Q2: 2005		19,202,109		203,480			(22,396	)		—			19,383,193		20,054,970		203,743		4.06	%
	Q3: 2005		16,176,357		185,814			(20,991	)		—			16,341,180		17,373,023		191,914		4.42	%

Home Equity Lines of Credit
	Q3: 2003	$	0	$	0		$	0		$	0		$	0	$	0	$	0		0.00	%
	Q4: 2003		—		—			—			—			—		—		—		—
	2003		—		—			—			—			—		—		—		—
	Q1: 2004		—		—			—			—			—		—		—		—
	Q2: 2004	$	317,045	$	10,043		$	(267	)		—		$	326,821	$	124,053	$	536		1.73	%
	Q3: 2004		308,697		9,029			(531	)		—			317,195		303,119		1,618		2.00	%
	Q4: 2004		288,954		8,087			(693	)		—			296,348		303,119		2,177		2.87	%
	2004		288,954		8,087			(693	)		—			296,348		188,254		4,331		2.30	%
	Q1: 2005		272,591		7,477			(596	)		—			279,472		285,142		2,558		3.59	%
	Q2: 2005		241,278		6,657			(563	)		—			247,372		257,515		2,467		3.83	%
	Q3: 2005		210,476		5,699			(1,038	)		—			215,137		224,884		1,696		3.02	%

Residential Loan Credit-Enhancement Securities
	Q3: 2003	$	603,855	$	(145,356	)	$	(177,647	)	$	92,559		$	373,411	$	270,991	$	19,027		28.09	%
	Q4: 2003		623,692		(123,329	)		(200,970	)		79,334			378,727		272,999		17,394		25.49	%
	2003		623,692		(123,329	)		(200,970	)		79,334			378,727		275,308		68,091		24.73	%
	Q1: 2004		634,000		(110,994	)		(216,924	)		68,534			374,616		287,078		15,533		21.64	%
	Q2: 2004		712,908		(121,808	)		(235,535	)		86,674			442,239		317,235		16,077		20.27	%
	Q3: 2004		830,524		(109,367	)		(298,925	)		74,577			496,809		368,887		16,007		17.36	%
	Q4: 2004		933,772		(108,141	)		(342,706	)		78,733			561,658		424,879		16,985		15.99	%
	2004		933,772		(108,141	)		(342,706	)		78,733			561,658		349,779		64,602		18.47	%
	Q1: 2005		978,878		(89,405	)		(365,998	)		87,919			611,394		493,412		19,624		15.91	%
	Q2: 2005		1,103,737		(96,488	)		(404,180	)		103,126			706,195		550,460		19,439		14.13	%
	Q3: 2005		1,052,813		(89,429	)		(382,862	)		84,279			664,801		585,663		24,368		16.64	%

Commercial Loan Credit-Enhancement Securities
	Q3: 2003	$	0	$	0		$	0		$	0		$	0	$	0	$	0		0.00	%
	Q4: 2003		—		—			—			—			—		—		—		0.00	%
	2003		—		—			—			—			—		—		—		0.00	%
	Q1: 2004		8,175		2,053			(8,175	)		95			2,148		677		35		20.46	%
	Q2: 2004		8,175		2,084			(8,175	)		10			2,094		2,075		61		11.67	%
	Q3: 2004		26,930		8,456			(26,930	)		686			9,142		7,372		346		18.80	%
	Q4: 2004		45,639		12,883			(45,639	)		1,615			14,498		10,836		233		13.64	%
	2004		45,639		12,883			(45,639	)		1,615			14,498		5,261		675		15.42	%
	Q1: 2005		88,671		25,344			(88,671	)		3,226			28,570		19,255		356		7.40	%
	Q2: 2005		87,210		24,847			(87,210	)		4,549			29,396		25,130		881		14.02	%
	Q3: 2005		138,530		41,127			(138,530	)		2,413			43,540		32,192		453		5.63	%

Commercial Real Estate Loans
	Q3: 2003	$	31,211	$	538		$	(8,141	)	$	0		$	23,608	$	30,471	$	939		12.33	%
	Q4: 2003		31,180		(120	)		(8,641	)		—			22,419		23,464		244		4.16	%
	2003		31,180		(120	)		(8,641	)		—			22,419		29,473		2,959		10.04	%
	Q1: 2004		31,136		(318	)		(8,641	)		—			22,177		22,316		701		12.56	%
	Q2: 2004		43,448		(1,261	)		(8,641	)		—			33,546		26,129		868		13.29	%
	Q3: 2004		43,410		(1,380	)		(8,641	)		—			33,389		33,461		1,038		12.40	%
	Q4: 2004		65,598		(2,478	)		(8,641	)		—			54,479		39,836		1,162		11.67	%
	2004		65,598		(2,478	)		(8,641	)		—			54,479		30,469		3,769		12.37	%
	Q1: 2005		67,365		(2,305	)		(8,456	)		—			56,604		56,080		1,587		11.32	%
	Q2: 2005		51,778		(1,843	)		(8,141	)		—			41,794		45,214		1,208		10.68	%
	Q3: 2005		66,348		(2,105	)		(8,141	)		—			56,102		47,703		1,209		10.14	%

Securities
	Q3: 2003	$	599,144	$	6,508		$	0		$	(567	)	$	605,085	$	602,622	$	6,478		4.30	%
	Q4: 2003		833,252		8,196			—			3,266			844,714		709,867		7,803		4.40	%
	2003		833,252		8,196			—			3,266			844,714		532,683		23,530		4.42	%
	Q1: 2004		913,104		2,149			—			19,245			934,498		861,328		9,576		4.45	%
	Q2: 2004		1,089,254		(650	)		—			4,770			1,093,374		978,014		10,484		4.29	%
	Q3: 2004		1,215,847		(1,466	)		—			15,555			1,229,936		1,141,456		12,932		4.53	%
	Q4: 2004		1,378,924		(13,895	)		—			15,048			1,380,077		1,267,692		15,282		4.82	%
	2004		1,378,924		(13,895	)		—			15,048			1,380,077		1,062,901		48,949		4.54	%
	Q1: 2005				1,522,345			(28,534	)		11,566			1,505,377		1,423,487		17,584		4.94	%
	Q2: 2005		1,656,177		(32,874	)		—			25,535			1,648,838		1,548,085		19,846		5.13	%
	Q3: 2005		1,818,295		(47,048	)		—			12,182			1,783,429		1,687,506		22,926		5.43	%

Cash & Equivalents
	Q3: 2003	$	32,156	$	0		$	0		$	0		$	32,156			$	81
	Q4: 2003		58,467		—			—			—			58,467				94
	2003		58,467		—			—			—			58,467				418
	Q1: 2004		57,866		—			—			—			57,866				166
	Q2: 2004		38,461		—			—			—			38,461				73
	Q3: 2004		76,006		—			—			—			76,006				175
	Q4: 2004		126,556		—			—			—			57,246				508
	2004		95,251		—			—			—			57,246				922
	Q1: 2005		64,714		—			—			—			64,714				580
	Q2: 2005		72,193		—			—			—			72,193				804
	Q3: 2005		163,160		—			—			—			163,160				990

* Average excludes unrealized gains(losses) from mark-to-market adjustments.

Table 12: Portfolio Activity (all $ in thousands)

Table 12
Portfolio Activity
(all $ in thousands)


										Discount/						Net			Net			Net
							Principal			(Premium)			Credit			Charge-offs/			Mark-to-Mkt			Increase/
		Acquisitions		Sales			Payments			Amortization			Provision			(Recoveries)			Adjustment			(Decrease)
Residential Real Estate Loans (GAAP)	Q3: 2003	$	4,996,403	$	0		$	(420,395	)	$	(8,720	)	$	(1,458	)	$	0		$	0		$	4,565,830
	Q4: 2003		2,897,863		(605	)		(458,957	)		(9,684	)		(2,769	)		50			12			2,425,910
	2003		11,401,367		(73,742	)		(1,266,702	)		(29,615	)		(8,146	)		81			738			10,023,981
	Q1: 2004		2,321,706		—			(460,334	)		(11,516	)		(2,511	)		—			—			1,847,345
	Q2: 2004		2,703,443		—			(859,148	)		(13,992	)		(1,233	)		—			—			1,829,070
	Q3: 2004		2,898,165		(112,811	)		(1,144,320	)		2,078			(1,264	)		—			489			1,642,337
	Q4: 2004		1,791,951		(865	)		(1,132,854	)		(5,993	)		(1,535	)		176			(375	)		650,505
	2004		9,715,265		(113,676	)		(3,596,656	)		(29,423	)		(6,543	)		176			114			5,969,257
	Q1: 2005		832,383		—			(1,539,387	)		(7,036	)		(1,307	)		154			—			(715,193	)
	Q2: 2005		426,806		(3,378	)		(2,526,236	)		(8,937	)		1,494			(34	)		254			(2,110,031	)
	Q3: 2005		332,049		(263,079	)		(3,098,691	)		(13,479	)		1,315			90			(218	)		(3,042,013	)

Home Equity Line of Credit
	Q3: 2003	$	0	$	0		$	0		$	0		$	0		$	0		$	0		$	0
	Q4: 2003		—		—			—			—			—			—			—			—
	2003		—		—			—			—			—			—			—			—
	Q1: 2004		—		—			—			—			—			—			—			—
	Q2: 2004	$	335,044		—		$	(7,706	)	$	(250	)	$	(267	)		—			—		$	326,821
	Q3: 2004		—		—			(8,290	)		(1,072	)		(264	)		—			—			(9,626	)
	Q4: 2004		—		—			(19,743	)		(942	)		(162	)		—			—			(20,847	)
	2004		335,044		—			(35,739	)		(2,264	)		(693	)		—			—			296,348
	Q1: 2005		—		—			(16,365	)		(608	)		97			—			—			(16,876	)
	Q2: 2005		127		—			(31,439	)		(821	)		33			—			—			(32,100	)
	Q3: 2005		—		—			(30,801	)		(959	)		(510	)		35			—			(32,235	)

Residential Loan Credit-Enhancement Securities
	Q3: 2003	$	23,164	$	0		$	(37,647	)	$	11,432		$	0		$	0		$	(16,949	)	$	(20,000	)
	Q4: 2003		77,367		—			(116,575	)		10,188			—			—			34,336			5,316
	2003		148,873		(1,248	)		(216,207	)		37,189			—			—			57,641			26,248
	Q1: 2004		37,608		(22,416	)		(34,640	)		8,637			—			—			6,700			(4,111	)
	Q2: 2004		75,027		—			(46,997	)		8,847			—			—			30,746			67,623
	Q3: 2004		82,918		—			(44,822	)		8,181			—			—			8,293			54,570
	Q4: 2004		72,976		—			(30,900	)		8,443			—			—			14,330			64,849
	2004		268,529		(22,416	)		(157,359	)		34,108			—			—			60,069			182,931
	Q1: 2005		67,809		(27,293	)		(23,932	)		8,727			—			—			24,425			49,736
	Q2: 2005		87,849		—			(20,400	)		7,775			—			—			19,577			94,801
	Q3: 2005		57,481		(98,775	)		(18,403	)		11,193			—			—			7,110			(41,394	)

Commercial Loan Credit-Enhancement Securities
	Q3: 2003	$	0	$	0		$	0		$	0		$	0		$	0		$	0		$	0
	Q4: 2003		—		—			—			—			—			—			—			—
	2003		—		—			—			—			—			—			—			-
	Q1: 2004		2,053		—			—			—			—			—			94			2,147
	Q2: 2004		74		—			—			(42	)		—			—			(85	)		(53	)
	Q3: 2004		6,311		—			—			60			—			—			677			7,048
	Q4: 2004		4,770		—			—			(343	)		—			—			929			5,356
	2004		13,208		—			—			(325	)		—			—			1,615			14,498
	Q1: 2005		12,870		—			—			(409	)		—			—			1,611			14,072
	Q2: 2005		—		—			—			(346	)		—			—			1,173			827
	Q3: 2005		17,182		—			—			(902	)		—			—			(2,136	)		14,144

Commercial Real Estate Loans
	Q3: 2003	$	1,023	$	(774	)	$	(11,220	)	$	(33	)	$	0		$	0		$	130		$	(10,914	)
	Q4: 2003		—		—			(31	)		(198	)		(500	)		—			(500	)		(1,189	)
	2003		6,442		(774	)		(11,353	)		(298	)		(500	)		—			(368	)		(6,851	)
	Q1: 2004		—		—			(45	)		(122	)		—			—			(75	)		(242	)
	Q2: 2004		17,066		(2,339	)		(3,233	)		(102	)		—			—			(23	)		11,369
	Q3: 2004		—		—			(29	)		(128	)		—			—			—			(157	)
	Q4: 2004		21,305		—			(83	)		(132	)		—			—			—			21,090
	2004		38,371		(2,339	)		(3,390	)		(484	)		—			—			(98	)		32,060
	Q1: 2005		6,732		—			(5,267	)		(30	)		185			—			505			2,125
	Q2: 2005		—		(11,192	)		(3,769	)		(99	)		—			—			250			(14,810	)
	Q3: 2005		14,219		(17	)		158			(69	)		—			—			17			14,308

Securities
	Q3: 2003	$	28,702	$	0		$	(12,677	)	$	(96	)	$	0		$	0		$	(6,421	)	$	9,508
	Q4: 2003		256,588		—			(17,658	)		(343	)		—			—			1,042			239,629
	2003		565,760		(4,051	)		(53,790	)		(547	)		—			—			1,645			509,017
	Q1: 2004		84,225		(142	)		(9,807	)		(484	)		—			—			15,993			89,785
	Q2: 2004		192,626		(8,333	)		(10,069	)		(663	)		—			—			(14,686	)		158,875
	Q3: 2004		144,753		—			(18,489	)		(146	)		—			—			10,444			136,562
	Q4: 2004		176,341		—			(25,189	)		39			—			—			(1,050	)		150,141
	2004		597,945		(8,475	)		(63,554	)		(1,254	)		—			—			10,701			535,363
	Q1: 2005		168,337		(12,362	)		(27,070	)		115			—			—			(3,720	)		125,300
	Q2: 2005		156,182		(3,012	)		(22,333	)		151			—			—			12,472			143,460
	Q3: 2005		190,160		—			(41,618	)		566			—			—			(14,517	)		134,591

Table 13: Residential Credit Results (all $ in thousands)

Table 13
Residential Credit Results
(all $ in thousands)


										Total											Losses To
				Internally-				(1)		Credit											Securities		Redwood's			Total Credit
				Designated		External		Total		Protection			Seriously		Seriously			Total			Junior To		Share of Net			Losses As %
		Underlying		Credit		Credit		Credit		As % of			Delinquent		Delinquent			Credit			Redwood's		Charge Offs			of Loans
		Loans		Reserves		Enhancement		Protection		Loans			Loans		Loan %			Losses			Interest		(Recoveries)			(Annualized)
Total Managed Residential Portfolio
	Q3: 2003	$	57,383,627	$	191,264	$	51,985	$	243,249		0.42	%		179,871		0.31	%	$	986		$	38	$	948			<0.01	%
	Q4: 2003		84,243,923		217,306		46,476		263,782		0.31	%		137,978		0.16	%		1,645			357		1,288			<0.01	%
	2003		84,243,923		217,306		46,476		263,782		0.31	%		137,978		0.16	%		4,186			1,003		3,183			<0.01	%
	Q1: 2004		89,312,471		235,771		43,797		279,568		0.31	%		146,055		0.16	%		103			—		103			<0.01	%
	Q2: 2004		116,871,703		255,615		70,460		326,075		0.28	%		136,654		0.12	%		1,781			75		1,706			<0.01	%
	Q3: 2004		142,967,137		320,269		69,244		389,513		0.27	%		185,023		0.13	%		730			196		534			<0.01	%
	Q4: 2004		148,510,685		365,784		67,650		433,434		0.29	%		163,554		0.11	%		689			—		689			<0.01	%
	2004		148,510,685		365,784		67,650		433,434		0.29	%		163,554		0.11	%		3,303			271		3,032			<0.01	%
	Q1: 2005		151,434,189		390,229		92,467		482,696		0.32	%		217,159		0.14	%		1,377			—		1,377			<0.01	%
	Q2: 2005		183,248,239		426,576		141,970		568,546		0.31	%		245,399		0.13	%		740			196		544			<0.01	%
	Q3: 2005		195,243,546		403,853		134,967		538,820		0.28	%		282,850		0.14	%		1,812			220		1,592			<0.01	%
Residential Real Estate Loans
	Q3: 2003	$	13,703,475	$	13,617	$	0	$	13,617		0.10	%		1,598		0.01	%	$	0		$	0	$	0			<0.01	%
	Q4: 2003		16,110,748		16,336		—		16,336		0.10	%		5,419		0.03	%		50			—		50			<0.01	%
	2003		16,110,748		16,336		—		16,336		0.10	%		5,419		0.03	%		81			—		81			<0.01	%
	Q1: 2004		17,950,901		18,847		—		18,847		0.10	%		3,439		0.02	%		—			—		—			0.00	%
	Q2: 2004		19,766,481		20,080		—		20,080		0.10	%		5,362		0.03	%		—			—		—			0.00	%
	Q3: 2004		21,381,784		21,344		—		21,344		0.10	%		10,785		0.05	%		—			—		—			0.00	%
	Q4: 2004		22,023,888		23,078		—		23,078		0.10	%		13,338		0.06	%		176			—		176			<0.01	%
	2004		22,023,888		23,078		—		23,078		0.10	%		13,338		0.06	%		176			—		176			<0.01	%
	Q1: 2005		21,307,080		24,231		—		24,231		0.11	%		16,066		0.08	%		154			—		154			<0.01	%
	Q2: 2005		19,202,109		22,396		—		22,396		0.12	%		16,514		0.09	%		(34	)		—		(34	)		0.00	%
	Q3: 2005		16,176,357		20,991		—		20,991		0.13	%		22,956		0.14	%		90			—		90			<0.01	%
Residential Loan Credit-Enhancement Securities
	Q3: 2003	$	43,680,152	$	177,647	$	51,985	$	229,632		0.53	%		178,273		0.41	%	$	986		$	38	$	948			<0.01	%
	Q4: 2003		68,133,175		200,970		46,476		247,446		0.36	%		132,559		0.19	%		1,595			357		1,238			<0.01	%
	2003		68,133,175		200,970		46,476		247,446		0.36	%		132,559		0.19	%		4,105			1,003		3,102			<0.01	%
	Q1: 2004		71,361,570		216,924		43,797		260,721		0.37	%		142,616		0.20	%		103			—		103			<0.01	%
	Q2: 2004		97,105,222		235,535		70,460		305,995		0.32	%		131,292		0.14	%		1,781			75		1,706			<0.01	%
	Q3: 2004		121,585,353		298,925		69,244		368,169		0.30	%		174,238		0.14	%		730			196		534			<0.01	%
	Q4: 2004		126,486,797		342,706		67,650		410,356		0.32	%		150,216		0.12	%		513			—		513			<0.01	%
	2004		126,486,797		342,706		67,650		410,356		0.32	%		150,216		0.12	%		3,127			271		2,856			<0.01	%
	Q1: 2005		130,127,109		365,998		92,467		458,465		0.35	%		201,093		0.15	%		1,223			—		1,223			<0.01	%
	Q2: 2005		164,046,130		404,180		141,970		546,150		0.33	%		228,885		0.14	%		774			196		578			<0.01	%
	Q3: 2005		179,067,189		382,862		134,967		517,829		0.29	%		259,894		0.15	%		1,722			220		1,502			<0.01	%

(1) The credit reserve on residential real estate loans owned is only available to absorb losses on the residential real estate loan portfolio. The internally-designated credit reserves on loans credit enhanced and the external credit enhancement on loans credit enhanced are only available to absorb losses on the residential loan credit-enhancement portfolio. This table excludes the residential home equity lines of credit.

Table 14: Residential Real Estate Loan Characteristics (at period end, all $ in thousands)

Table 14
Residential Real Estate Loan Characteristics
(at period end, all $ in thousands)


	Sept. 2005			Jun. 2005			Mar. 2005			Dec. 2004			Sep. 2004			Jun. 2004			Mar. 2004			Dec. 2003
Residential Loans	$	16,176,357		$	19,202,109		$	21,307,080		$	22,023,888		$	21,381,784		$	19,766,481		$	17,950,901		$	16,110,748
Number of loans		48,578			56,653			62,059			63,236			60,859			55,679			49,619			43,917
Average loan size	$	333		$	339		$	343		$	348		$	351		$	355		$	362		$	367
Adjustable %		100	%		100	%		100	%		100	%		100	%		100	%		100	%		100	%
Hybrid %		0	%		0	%		0	%		0	%		0	%		0	%		0	%		0	%
Fixed %		0	%		0	%		0	%		0	%		0	%		0	%		0	%		0	%
Negam%		0	%		0	%		0	%		0	%		0	%		0	%		0	%		0	%
Interest Only%		100	%		100	%		100	%		100	%		100	%		100	%		100	%		100	%

LIBOR 1 M %		26	%		25	%		24	%		24	%		22	%		21	%		22	%		23	%
LIBOR 6 M%		74	%		75	%		76	%		76	%		78	%		79	%		78	%		77	%
HYBRID %		0	%		0	%		0	%		0	%		0	%		0	%		0	%		0	%

Northern CA		11	%		12	%		12	%		13	%		13	%		12	%		12	%		12	%
Southern CA		11	%		12	%		12	%		13	%		13	%		14	%		13	%		13	%
Florida		12	%		11	%		11	%		11	%		11	%		11	%		11	%		11	%
New York		5	%		5	%		5	%		5	%		5	%		5	%		5	%		6	%
Georgia		5	%		5	%		5	%		5	%		5	%		5	%		5	%		5	%
New Jersey		4	%		4	%		4	%		4	%		4	%		4	%		4	%		5	%
Texas		4	%		4	%		4	%		4	%		4	%		4	%		4	%		4	%
Arizona		4	%		4	%		4	%		4	%		4	%		4	%		4	%		4	%
Illinois		4	%		3	%		3	%		3	%		3	%		3	%		3	%		4	%
Colorado		3	%		4	%		4	%		4	%		4	%		4	%		4	%		4	%
Virginia		3	%		3	%		3	%		3	%		3	%		3	%		3	%		3	%
Other states		34	%		33	%		32	%		32	%		31	%		31	%		31	%		31	%

Year 2005 origination		5	%		4	%		3	%		0	%		0	%		0	%		0	%		0	%
Year 2004 origination		37	%		37	%		38	%		38	%		32	%		23	%		11	%		0	%
Year 2003 origination		39	%		40	%		40	%		42	%		46	%		52	%		60	%		66	%
Year 2002 origination		15	%		15	%		16	%		16	%		18	%		21	%		24	%		28	%
Year 2001 origination		2	%		2	%		2	%		2	%		3	%		3	%		3	%		4	%
Year 2000 origination		0	%		0	%		0	%		0	%		0	%		0	%		0	%		0	%
Year 1999 origination		0	%		0	%		0	%		0	%		0	%		1	%		1	%		1	%
Year 1998 origination or earlier		1	%		1	%		1	%		1	%		1	%		1	%		1	%		2	%

Wtg Avg Original LTV		68	%		69	%		68	%		68	%		68	%		68	%		68	%		68	%
Wtg Avg Original Effective LTV		67	%		67	%		67	%		67	%		66	%		66	%		66	%		65	%
Original LTV: 0% - 20%		1	%		1	%		1	%		1	%		1	%		1	%		1	%		1	%
Original LTV: 20% - 30%		2	%		2	%		2	%		2	%		2	%		2	%		2	%		2	%
Original LTV: 30% - 40%		4	%		4	%		4	%		4	%		4	%		4	%		5	%		5	%
Original LTV: 40% - 50%		8	%		7	%		7	%		7	%		8	%		8	%		8	%		8	%
Original LTV: 50% - 60%		11	%		11	%		11	%		12	%		11	%		12	%		12	%		13	%
Original LTV: 60% - 70%		20	%		20	%		20	%		20	%		20	%		20	%		20	%		20	%
Original LTV: 70% - 75%		14	%		14	%		15	%		15	%		14	%		14	%		14	%		13	%
Original LTV: 75% - 80%		32	%		33	%		32	%		31	%		31	%		30	%		29	%		28	%
Original LTV: 80% - 90%		3	%		2	%		2	%		2	%		2	%		2	%		2	%		3	%
Original LTV: 90% - 100%		6	%		6	%		6	%		6	%		7	%		7	%		7	%		7	%

Wtg Avg FICO		731			731			731			731			731			731			731			731
FICO: <= 600		1	%		1	%		1	%		1	%		1	%		1	%		1	%		1	%
FICO: 601 -620		1	%		1	%		1	%		1	%		1	%		1	%		1	%		1	%
FICO: 621 - 640		1	%		1	%		1	%		1	%		2	%		2	%		2	%		2	%
FICO: 641 -660		3	%		3	%		3	%		3	%		3	%		3	%		3	%		4	%
FICO: 661 - 680		8	%		8	%		8	%		8	%		8	%		8	%		8	%		7	%
FICO: 681 - 700		12	%		12	%		12	%		12	%		12	%		12	%		11	%		11	%
FICO: 701 - 720		14	%		14	%		14	%		14	%		14	%		14	%		14	%		14	%
FICO: 721 - 740		14	%		14	%		14	%		14	%		14	%		14	%		14	%		14	%
FICO: 741 - 760		15	%		15	%		16	%		16	%		16	%		16	%		16	%		16	%
FICO: 761 - 780		17	%		17	%		17	%		17	%		17	%		17	%		17	%		17	%
FICO: 781 - 800		11	%		11	%		11	%		11	%		11	%		11	%		11	%		12	%
FICO: >= 801		2	%		2	%		2	%		2	%		2	%		2	%		2	%		2	%

Conforming at Origination %		37	%		37	%		36	%		36	%		36	%		35	%		34	%		34	%
% balance in loans > $1mm per loan		14	%		13	%		13	%		14	%		14	%		14	%		15	%		16	%

2nd Home %		10	%		10	%		10	%		10	%		10	%		10	%		10	%		10	%
Investment Home %		2	%		2	%		2	%		2	%		2	%		2	%		2	%		2	%

Purchase		33	%		33	%		34	%		33	%		33	%		31	%		31	%		30	%
Cash Out Refi		34	%		34	%		34	%		34	%		35	%		36	%		36	%		35	%
Rate-Term Refi		32	%		32	%		31	%		31	%		31	%		31	%		31	%		32	%
Construction		0	%		0	%		0	%		0	%		0	%		0	%		0	%		0	%
Other		1	%		1	%		1	%		1	%		1	%		1	%		2	%		2	%

This table only includes loans shown under “residential real estate loans” on our GAAP balance sheet. These are the loans securitized by Sequoia securitization entities sponsored by Redwood.
Not included are loans underlying residential credit-enhancement securities by Redwood from securitizations sponsored by others.

Table 15: Residential Loan Credit-Enhancement Securities — Underlying Collateral Characteristics (all $ in thousands)

Table 15
Residential Loan Credit-Enhancement Securities — Underlying Collateral Characteristics
(all $ in thousands)


	Sep. 2005			Jun. 2005			Mar. 2005			Dec. 2004			Sep. 2004			Jun. 2004			Mar. 2004			Dec. 2003
First loss position, principal value	$	433,557		$	425,080		$	375,646		$	352,752		$	320,975		$	279,927		$	262,329		$	255,570
Second loss position, principal value		231,837			306,145			265,639			276,720			244,042			197,403			176,672			174,592
Third loss position, principal value		387,419			372,512			337,593			304,300			265,507			235,578			194,999			193,530

Total principal value	$	1,052,813		$	1,103,737		$	978,878		$	933,772		$	830,524		$	712,908		$	634,000		$	623,692

First loss position, reported value	$	152,470		$	150,621		$	126,694		$	110,933		$	99,783		$	102,088		$	75,769		$	78,030
Second loss position, reported value		171,398			228,737			191,962			195,536			174,371			145,211			133,167			134,225
Third loss position, reported value		340,933			326,837			292,738			255,189			222,655			194,940			165,680			166,472

Total reported value	$	664,801		$	706,195		$	611,394		$	561,658		$	496,809		$	442,239		$	374,616		$	378,727

Internal Designated Credit Reserves	$	382,862		$	404,180		$	365,998		$	340,123		$	298,925		$	235,535		$	216,924		$	200,970
External Credit Enhancement		134,967			141,970			92,467			67,650			69,244			70,460			43,797			46,476

Total Credit Protection	$	517,829		$	546,150		$	458,465		$	407,773		$	368,169		$	305,995		$	260,721		$	247,446
As % of Total Portfolio		0.29	%		0.33	%		0.35	%		0.32	%		0.30	%		0.32	%		0.37	%		0.36	%

Underlying Residential Real Estate Loans		179,067,189		$	164,046,130		$	130,127,109		$	126,486,797		$	121,585,353		$	97,105,222		$	71,361,570		$	68,133,175
Number of credit-enhanced loans		527,048			492,513			343,928			332,130			281,543			222,725			158,904			150,031
Average loan size	$	340		$	333		$	378		$	381		$	432		$	436		$	449		$	454

Adjustable %		7	%		7	%		9	%		9	%		8	%		8	%		7	%		8	%
Negam %		18	%		18	%		18	%		17	%		14	%		12	%		11	%		12	%
Hybrid %		32	%		30	%		28	%		28	%		29	%		33	%		37	%		42	%
Fixed %		43	%		45	%		45	%		46	%		49	%		47	%		45	%		38	%

Interest Only %		24	%		23	%		24	%		24	%		24	%		24	%		22	%		25	%

Northern California		20	%		20	%		20	%		19	%		21	%		22	%		23	%		23	%
Southern California		24	%		24	%		23	%		22	%		23	%		23	%		23	%		24	%
Florida		5	%		5	%		5	%		6	%		5	%		5	%		4	%		4	%
New York		5	%		5	%		5	%		5	%		5	%		5	%		5	%		5	%
New Jersey		4	%		4	%		4	%		4	%		4	%		4	%		4	%		4	%
Virginia		4	%		4	%		4	%		4	%		4	%		4	%		4	%		4	%
Texas		3	%		3	%		3	%		3	%		3	%		3	%		3	%		3	%
Colorado		3	%		3	%		3	%		3	%		3	%		3	%		3	%		3	%
Illinois		3	%		3	%		3	%		3	%		3	%		3	%		3	%		3	%
Other states (none greater than 3%)		29	%		29	%		30	%		31	%		29	%		28	%		28	%		27	%

Year 2005 origination		15	%		15	%		6	%		0	%		0	%		0	%		0	%		0	%
Year 2004 origination		41	%		51	%		55	%		55	%		51	%		39	%		16	%		0	%
Year 2003 origination		35	%		26	%		29	%		32	%		36	%		44	%		59	%		64	%
Year 2002 origination		6	%		5	%		6	%		7	%		7	%		9	%		14	%		19	%
Year 2001 origination		2	%		2	%		2	%		3	%		3	%		4	%		6	%		9	%
Year 2000 origination		0	%		0	%		0	%		0	%		0	%		1	%		1	%		1	%
Year 1999 origination		0	%		0	%		0	%		1	%		1	%		1	%		1	%		2	%
Year 1998 or earlier origination		1	%		1	%		2	%		2	%		2	%		2	%		3	%		5	%

Wtg Avg Original LTV		68	%		68	%		68	%		68	%		68	%		67	%		67	%		67	%
Original LTV: 0% - 20%		1	%		0	%		0	%		0	%		0	%		0	%		0	%		0	%
Original LTV: 20% - 30%		2	%		2	%		2	%		2	%		2	%		2	%		2	%		2	%
Original LTV: 30% - 40%		3	%		3	%		3	%		3	%		3	%		3	%		4	%		4	%
Original LTV: 40% - 50%		8	%		8	%		8	%		8	%		8	%		8	%		8	%		8	%
Original LTV: 50% - 60%		12	%		12	%		12	%		12	%		13	%		13	%		13	%		13	%
Original LTV: 60% - 70%		22	%		23	%		23	%		23	%		23	%		24	%		24	%		23	%
Original LTV: 70% - 75%		15	%		15	%		15	%		15	%		15	%		15	%		15	%		15	%
Original LTV: 75% - 80%		34	%		33	%		33	%		33	%		33	%		32	%		31	%		31	%
Original LTV: 80% - 90%		2	%		3	%		3	%		3	%		2	%		2	%		2	%		3	%
Original LTV: 90% - 100%		1	%		1	%		1	%		1	%		1	%		1	%		1	%		1	%

Wtg Avg FICO		732			731			730			730			728			731			732			732
FICO: <= 600		0	%		0	%		0	%		0	%		0	%		0	%		0	%		0	%
FICO: 601 -620		0	%		0	%		0	%		0	%		0	%		0	%		0	%		0	%
FICO: 621 - 640		2	%		2	%		2	%		2	%		2	%		2	%		2	%		2	%
FICO: 641 -660		4	%		4	%		4	%		4	%		4	%		4	%		4	%		3	%
FICO: 661 - 680		7	%		7	%		7	%		7	%		7	%		7	%		7	%		6	%
FICO: 681 - 700		11	%		11	%		11	%		11	%		11	%		10	%		10	%		10	%
FICO: 701 - 720		13	%		13	%		13	%		13	%		13	%		13	%		13	%		13	%
FICO: 721 - 740		14	%		14	%		14	%		14	%		14	%		14	%		14	%		14	%
FICO: 741 - 760		15	%		15	%		16	%		16	%		16	%		16	%		16	%		16	%
FICO: 761 - 780		17	%		17	%		17	%		17	%		18	%		18	%		17	%		17	%
FICO: 781 - 800		12	%		12	%		11	%		11	%		11	%		11	%		11	%		11	%
FICO: >= 801		3	%		3	%		2	%		2	%		2	%		2	%		2	%		2	%
Unknown		2	%		2	%		2	%		2	%		2	%		3	%		4	%		5	%

Conforming at Origination %		23	%		22	%		20	%		17	%		15	%		17	%		11	%		9	%
% balance in loans > $1mm per loan		6	%		6	%		6	%		5	%		6	%		7	%		7	%		8	%

2nd Home %		6	%		5	%		5	%		5	%		5	%		6	%		5	%		5	%
Investment Home %		2	%		3	%		2	%		2	%		2	%		2	%		2	%		2	%

Purchase		37	%		40	%		36	%		34	%		33	%		32	%		30	%		31	%
Cash Out Refi		27	%		25	%		26	%		26	%		23	%		23	%		23	%		23	%
Rate-Term Refi		36	%		33	%		38	%		40	%		44	%		44	%		46	%		45	%
Construction		0	%		0	%		0	%		0	%		0	%		0	%		0	%		0	%
Other		0	%		2	%		0	%		0	%		0	%		1	%		1	%		1	%

This table includes loans underlying residential credit-enhancement securities acquired from securitizations sponsored by others. Not included are loans underlying residential credit-enhancement securities acquired from Sequoia entities sponsored by Redwood.


Table 17: Commercial Credit Results (all $ in thousands)
Table 17
Commercial Credit Results
(all $ in thousands)										Total										Losses To
				Internally-				(1)		Credit										Securities		Redwood's		Total Credit
				Designated		External		Total		Protection			Seriously		Seriously			Total		Junior To		Share of Net		Losses As %
		Underlying		Credit		Credit		Credit		As % of			Delinquent		Delinquent			Credit		Redwood's		Charge Offs		of Loans
		Loans		Reserves		Enhancement		Protection		Loans			Loans		Loan %			Losses		Interest		(Recoveries)		(Annualized)
Total Managed Commercial Portfolio
	Q3: 2003	$	31,211	$	8,141	$	0	$	8,141		26.08	%		—		0.00	%	$	0	$	0	$	0		0.00	%
	Q4: 2003		31,180		8,641		—		8,641		27.71	%		—		0.00	%		—		—		—		0.00	%
	2003		31,180		8,641		—		8,641		27.71	%		—		0.00	%		—		—		—		0.00	%
	Q1: 2004		1,355,451		16,816		—		16,816		1.24	%		—		0.00	%		—		—		—		0.00	%
	Q2: 2004		1,365,536		16,816		—		16,816		1.23	%		—		0.00	%		—		—		—		0.00	%
	Q3: 2004		22,285,400		35,571		1,655,482		1,691,053		7.59	%		389,611		1.75	%		389,611		389,611		779,222		6.99	%
	Q4: 2004		26,139,083		54,280		1,633,055		1,687,335		6.46	%		362,956		1.39	%		362,956		362,956		725,912		5.55	%
	2004		26,139,083		54,280		1,633,055		1,687,335		6.46	%		362,956		1.39	%		362,956		362,956		725,912		5.55	%
	Q1: 2005		30,996,417		97,127		1,610,628		1,707,755		5.51	%		288,581		0.93	%		288,581		288,581		577,162		3.72	%
	Q2: 2005		31,293,511		95,351		1,588,200		1,683,551		5.38	%		254,503		0.81	%		254,503		254,503		509,006		3.25	%
	Q3: 2005		39,368,505		146,671		1,565,773		1,712,444		4.35	%		267,612		0.68	%		267,612		267,612		535,224		2.72	%
Commercial Real Estate Loans
	Q3: 2003	$	31,211	$	8,141	$	0	$	8,141		26.08	%		—		0.00	%	$	0	$	0	$	0		<0.01	%
	Q4: 2003		31,180		8,641		—		8,641		27.71	%		—		0.00	%		—		—		50		<0.01	%
	2003		31,180		8,641		—		8,641		27.71	%		—		0.00	%		—		—		81		<0.01	%
	Q1: 2004		31,136		8,641		—		8,641		27.75	%		—		0.00	%		—		—		—		<0.01	%
	Q2: 2004		43,448		8,641		—		8,641		19.89	%		—		0.00	%		—		—		—		<0.01	%
	Q3: 2004		43,410		8,641		—		8,641		19.91	%		—		0.00	%		—		—		—		<0.01	%
	Q4: 2004		65,598		8,641		—		8,641		13.17	%		—		0.00	%		—		—		176		<0.01	%
	2004		65,598		8,641		—		8,641		13.17	%		—		0.00	%		—		—		176		<0.01	%
	Q1: 2005		67,365		8,456		—		8,456		12.55	%		—		0.00	%		—		—		154		<0.01	%
	Q2: 2005		51,778		8,141		—		8,141		15.72	%		—		0.00	%		—		—		—		0.00	%
	Q3: 2005		66,348		8,141		—		8,141		12.27	%		—		0.00	%		—		—		—		0.00	%
Commercial Loan Credit-Enhancement Securities
	Q3: 2003	$	0	$	0	$	0	$	0		0.00	%		—		0.00	%	$	0	$	0	$	0		0.00	%
	Q4: 2003		—		—		—		—		0.00	%		—		0.00	%		—		—		—		0.00	%
	2003		—		—		—		—		0.00	%		—		0.00	%		—		—		—		0.00	%
	Q1: 2004		1,324,315		8,175		—		8,175		0.62	%		—		0.00	%		—		—		—		0.00	%
	Q2: 2004		1,322,088		8,175		—		8,175		0.62	%		—		0.00	%		—		—		—		0.00	%
	Q3: 2004		22,241,990		26,930		1,655,482		1,682,412		7.56	%		389,611		1.75	%		1,351		1,351		—		0.02	%
	Q4: 2004		26,073,485		45,639		1,633,055		1,678,694		6.44	%		362,956		1.39	%		4,959		4,959		—		0.08	%
	2004		26,073,485		45,639		1,633,055		1,678,694		6.44	%		362,956		1.39	%		6,310		6,310		—		0.10	%
	Q1: 2005		30,929,052		88,671		1,610,628		1,699,299		5.49	%		288,581		0.93	%		45,493		45,493		—		0.59	%
	Q2: 2005		31,241,733		87,210		1,588,200		1,675,410		5.36	%		254,503		0.81	%		19,622		18,161		1,461		0.25	%
	Q3: 2005		39,302,157		138,530		1,565,773		1,704,303		4.34	%		267,612		0.68	%		1,043		1,040		3		0.01	%

(1) The credit reserve on commercial real estate loans owned is only available to absorb losses on the commercial real estate loan portfolio. The internally-designated credit reserves on commercial loans credit enhanced and the external credit enhancement on commercial loans credit enhanced are only available to absorb losses on the commercial loan credit-enhancement portfolio.


Table 18: Commercial Credit-Enhancement Securities - Underlying Collateral Characteristics (all $ in thousands)

Table 18
Commercial Credit-Enhancement Securities -
(all $ in thousands)
	Sep. 2005			Jun. 2005			Mar. 2005			Dec. 2004			Sep. 2004			Jun. 2004			Mar. 2004
Underlying Commercial Real Estate Loans	$	20,906,898		$	12,492,337		$	11,498,141		$	5,859,585		$	1,319,931		$	1,322,088		$	1,324,315
Number of credit-enhanced loans		1,428			801			717			392			93			93			93
Average loan size		14,640			15,595			16,036			14,948			14,193			14,216			14,240

State Distribution
CA		17	%		17	%		17	%		18	%		18	%		18	%		18	%
NY		14	%		15	%		14	%		10	%		0	%		0	%		0	%
TX		8	%		10	%		9	%		8	%		6	%		6	%		6	%
VA		4	%		1	%		1	%		2	%		6	%		6	%		6	%
FL		3	%		2	%		2	%		2	%		5	%		5	%		5	%
Other		54	%		55	%		57	%		60	%		65	%		65	%		65	%

Property Type Distribution
Office		40	%		45	%		44	%		42	%		28	%		28	%		27	%
Retail		32	%		34	%		33	%		31	%		41	%		41	%		41	%
Multi-Family		11	%		9	%		10	%		12	%		11	%		11	%		11	%
Hotel		6	%		6	%		8	%		6	%		4	%		4	%		4	%
Self-Storage		3	%		2	%		2	%		2	%		3	%		3	%		3	%
Industrial		3	%		2	%		1	%		2	%		4	%		4	%		4	%
Other		5	%		2	%		3	%		4	%		10	%		10	%		10	%

Weighted Average Current LTV		69	%		67	%		68	%		67	%		68	%		68	%		68	%

Weighted Average Debt Service Coverage Ratio		1.67			1.73			1.71			1.79			1.89			1.89			1.89

The information presented above represents collateral information on our non-rated commercial CES portfolio, and excludes loans underlying a non-rated CES investment in a re-REMIC interest.


Table 19: Securities Portfolio - Characteristics at September 30, 2005 (all $ in thousands)

Table 19
Securities Portfolio - Characteristics at September 30, 2005
(all $ in thousands)
			Rating:
	Total		AAA		AA		A		BBB		BB		B		Unrated
Commercial Real Estate	$	310,907	$	18,515	$	1,936	$	33,465	$	111,106	$	118,877	$	27,008	$	0
Residential Prime		647,781		28,298		261,770		154,243		203,470		—		—		—
Residential Subprime		477,266		—		90,009		302,872		84,385		—		—		—
Residential Second Lien		118,409		2,992		50,488		59,007		5,922		—		—		—
Manufactured Housing		14,695		3,023		—		5,581		—		—		6,091		—
Corporate REIT Debt		63,381		—		—		7,152		56,229		—		—		—
Real Estate CDOs		150,990		35,637		26,314		29,807		40,115		14,515		—		4,602

Total Securities Portfolio	$	1,783,429	$	88,465	$	430,517	$	592,127	$	501,227	$	133,392	$	33,099	$	4,602

Includes a portion of Redwood’s permanent investment portfolio, plus securities consolidated from Acacia CDO securitization entities sponsored by Redwood, plus securities held by Redwood temporarily prior to sale to Acacia.

Does not include securities purchased for Acacia or Redwood’s permanent investment portfolio from securitization entities sponsored by Redwood, as those securities are eliminated in the GAAP consolidation of the underlying entities.

Does not include residential credit-enhancement


Table 20: ABS Issued Characteristics - Residential Mortgage Loans (Sequoia) (all $ in thousands)

Table 20
ABS Issued Characteristics - Residential Mortgage Loans (Sequoia)
(all $ in thousands)
												Principal		Interest
					Original					Estimated		Outstanding At		Rate At
Sequoia	Debt		Issue		Issue			Stated		Callable		September 30,		September 30,
ABS Issued (1)	Rating		Date		Amount		Index	Maturity		Date		2005		2005
Sequoia 1 A1	AAA			07/29/97	$	334,347	1m LIBOR		2028	Called		$	0	NM
Sequoia 1 A2	AAA			07/29/97		200,000	Fed Funds		2028	Called			—	NM
Sequoia 2 A1	AAA			11/06/97		592,560	1y Treasury		2029	Called			—	NM
Sequoia 2 A2	AAA			11/06/97		156,600	1m LIBOR		2029	Called			—	NM
Sequoia 3 A1	AAA			06/26/98		225,459	Fixed to 12/02		2028	Retired			—	NM
Sequoia 3 A2	AAA			06/26/98		95,000	Fixed to 12/02		2028	Retired			—	NM
Sequoia 3 A3	AAA			06/26/98		164,200	Fixed to 12/02		2028	Retired			—	NM
Sequoia 3 A4	AAA			06/26/98		121,923	1m LIBOR		2028	Called			—	NM
Sequoia 3 M1	AA/AAA			06/26/98		16,127	1m LIBOR		2028	Called			—	NM
Sequoia 3 M2	A/AA			06/26/98		7,741	1m LIBOR		2028	Called			—	NM
Sequoia 3 M3	BBB/A			06/26/98		4,838	1m LIBOR		2028	Called			—	NM
Sequoia 1A A1	AAA			05/04/99		157,266	1m LIBOR		2028	Called			—	NM
Sequoia 4 A	AAA			03/21/00		377,119	1m LIBOR		2024		2007		120,811		4.18	%
Sequoia 5 A	AAA			10/29/01		496,667	1m LIBOR		2026		2009		200,678		4.14	%
Sequoia 5 B1	AA			10/29/01		5,918	1m LIBOR		2026		2009		5,218		4.59	%
Sequoia 5 B2		A		10/29/01		5,146	1m LIBOR		2026		2009		4,537		4.59	%
Sequoia 5 B3	BBB			10/29/01		2,316	1m LIBOR		2026		2009		2,042		4.59	%
Sequoia 6A	AAA			04/26/02		496,378	1m LIBOR		2027		2009		227,914		4.11	%
Sequoia 6B1	AA			04/26/02		5,915	1m LIBOR		2027		2009		5,915		4.49	%
Sequoia 7A	AAA			05/29/02		554,686	1m LIBOR		2032		2008		205,990		4.14	%
Sequoia 7B1	AA			05/29/02		8,080	1m LIBOR		2032		2008		6,486		4.55	%
Sequoia 8 1A-1	AAA			07/30/02		50,000	1m LIBOR		2032	Retired			—	NM
Sequoia 8 1A-2	AAA			07/30/02		61,468	Fixed to 12/04		2032		2008		6,599		5.12	%
Sequoia 8 2A	AAA			07/30/02		463,097	1m LIBOR		2032		2008		198,430		4.10	%
Sequoia 8 3A	AAA			07/30/02		49,973	6m LIBOR		2032		2008		12,266		5.13	%
Sequoia 8 B1	AA			07/30/02		9,069	1m LIBOR		2032		2008		7,303		4.47	%
Sequoia 9 1A	AAA			08/28/02		381,689	1m LIBOR		2032		2011		172,473		4.15	%
Sequoia 9 2A	AAA			08/28/02		168,875	1m LIBOR		2032		2011		47,285		5.15	%
Sequoia 9 B1	AA			08/28/02		7,702	1m LIBOR		2032		2011		6,911		4.55	%
Sequoia 10 1A	AAA			09/26/02		822,375	1m LIBOR		2027		2011		403,555		4.20	%
Sequoia 10 2A-1	AAA			09/26/02		190,000	1m LIBOR		2027		2011		90,484		4.18	%
Sequoia 10 2A-2	AAA			09/26/02		3,500	1m LIBOR		2027		2011		3,500		4.48	%
Sequoia 10 B1	AA			09/26/02		12,600	1m LIBOR		2027		2011		12,600		4.60	%
Sequoia 10 B2		A		09/26/02		8,400	1m LIBOR		2027		2011		8,400		4.60	%
Sequoia 10 B3	BBB			09/26/02		4,725	1m LIBOR		2027		2011		4,725		5.20	%
Sequoia 11 A	AAA			10/30/02		695,210	1m LIBOR		2032		2011		311,626		4.25	%
Sequoia 11 B1	AA			10/30/02		9,726	1m LIBOR		2032		2011		9,726		4.77	%
Sequoia 12 A	AAA			12/19/02		1,080,076	1m LIBOR		2033		2009		514,130		4.25	%
Sequoia 12 B1	AA			12/19/02		16,815	1m LIBOR		2033		2009		16,815		4.65	%
Sequoia 2003-1 A1	AAA			02/27/03		798,206	1m LIBOR		2033		2009		394,217		4.18	%
Sequoia 2003-1 A2	AAA			02/27/03		190,000	6m LIBOR		2033		2009		89,324		4.44	%
Sequoia 2003-1 B1	AA			02/27/03		15,905	1m LIBOR		2033		2009		15,905		4.68	%
Sequoia 2003-1 B2		A		02/27/03		8,210	Pass Through		2033		2009		8,210		4.81	%
Sequoia 2003-2 A1	AAA			04/29/03		500,000	1m LIBOR		2022		2009		261,603		4.13	%
Sequoia 2003-2 A2	AAA			04/29/03		303,600	6m LIBOR		2022		2009		150,777		3.67	%
Sequoia 2003-2 M1	AA			04/29/03		11,480	1m LIBOR		2016		2009		11,480		4.45	%
Sequoia 2003-3 A1	AAA			06/26/03		379,455	1m LIBOR		2023		2009		178,826		4.13	%
Sequoia 2003-3 A2	AAA			06/26/03		149,922	6m LIBOR		2023		2009		67,568		3.99	%
Sequoia 2003-3 B1	AA			06/26/03		9,075	1m LIBOR		2025		2009		9,075		4.45	%
MLCC 2003-C A1	AAA			06/26/03		773,795	1m LIBOR		2023		2012		395,563		4.16	%
MLCC 2003-C A2	AAA			06/26/03		200,002	6m LIBOR		2023		2012		104,405		4.00	%
MLCC 2003-C B1	AA			06/26/03		10,553	1m LIBOR		2025		2012		10,553		4.48	%
MLCC 2003-D A	AAA			07/29/03		992,833	1m LIBOR		2028		2012		533,450		4.14	%
MLCC 2003-D B1	AA			07/29/03		10,758	1m LIBOR		2028		2012		10,758		4.46	%
Sequoia 2003-4 1A1	AAA			07/29/03		148,641	1m LIBOR		2033		2009		91,246		4.11	%
Sequoia 2003-4 1A2	AAA			07/29/03		150,000	6m LIBOR		2033		2009		86,733		4.18	%
Sequoia 2003-4 1B1	AA			07/29/03		3,864	1m LIBOR		2033		2009		3,864		4.45	%
Sequoia 2003-4 2A1	AAA			07/29/03		189,415	1m LIBOR		2033		2011		130,855		4.15	%
Sequoia 2003-4 2M1	AA			07/29/03		9,986	1m LIBOR		2033		2011		9,986		4.27	%
Sequoia 2003-4 2B1	AA			07/29/03		2,367	1m LIBOR		2033		2011		2,367		4.45	%
Sequoia 2003-5 A1	AAA			08/27/03		675,596	1m LIBOR		2033		2009		324,675		4.11	%
Sequoia 2003-5 A2	AAA			08/27/03		149,609	6m LIBOR		2033		2009		73,831		4.37	%
Sequoia 2003-5 B1	AA			08/27/03		15,043	1m LIBOR		2033		2009		15,043		4.40	%
Sequoia 2003-6 A1	AAA			10/29/03		458,238	1m LIBOR		2033		2009		220,657		4.11	%
Sequoia 2003-6 A2	AAA			10/29/03		180,474	6m LIBOR		2033		2009		84,729		3.66	%


Table 20: ABS Issued Characteristics - Residential Mortgage Loans (Sequoia) - continued

Table 20
ABS Issued Characteristics - Residential Mortgage Loans (Sequoia)
(all $ in thousands)												Principal		Interest
					Original					Estimated		Outstanding At		Rate At
Sequoia	Debt		Issue		Issue			Stated		Callable		September 30,		September 30,
ABS Issued (1)	Rating		Date		Amount		Index	Maturity		Date		2005		2005
Sequoia 2003-6 B1	AA			10/29/03	$	11,287	1m LIBOR		2033		2009	$	11,287		4.38	%
Sequoia 2003-7 A1	AAA			11/25/03		290,000	1m LIBOR		2034		2009		144,216		4.12	%
Sequoia 2003-7 A2	AAA			11/25/03		505,100	6m LIBOR		2034		2009		240,863		3.84	%
Sequoia 2003-7 B1	AA			11/25/03		16,607	1m LIBOR		2034		2009		16,607		4.35	%
Sequoia 2003-8 A1	AAA			12/23/03		791,768	1m LIBOR		2034		2009		450,586		4.12	%
Sequoia 2003-8 A2	AAA			12/23/03		150,000	6m LIBOR		2034		2009		83,832		3.96	%
Sequoia 2003-8 B1	AA			12/23/03		14,166	1m LIBOR		2034		2009		14,166		4.39	%
Sequoia 2003-8 B2		A		12/23/03		8,304	1m LIBOR		2034		2009		8,304		5.05	%
MLCC 2003-E A1	AAA			08/28/03		823,305	1m LIBOR		2028		2012		465,323		4.14	%
MLCC 2003-E A2	AAA			08/28/03		150,000	6m LIBOR		2028		2012		78,143		3.41	%
MLCC 2003-E B1	AA			08/28/03		10,547	1m LIBOR		2028		2012		10,547		4.43	%
MLCC 2003-F A1	AAA			09/25/03		839,000	1m LIBOR		2028		2012		469,048		4.15	%
MLCC 2003-F A2	AAA			09/25/03		270,000	6m LIBOR		2028		2012		159,680		4.43	%
MLCC 2003-F A3	AAA			09/25/03		175,000	Pass Through		2028		2012		106,747		5.17	%
MLCC 2003-F B1	AA			09/25/03		13,913	1m LIBOR		2028		2012		13,913		4.43	%
MLCC 2003-H A1	AAA			12/22/03		365,708	1m LIBOR		2029		2012		218,718		4.15	%
MLCC 2003-H A2	AAA			12/22/03		240,000	6m LIBOR		2029		2012		146,062		3.99	%
MLCC 2003-H A3A	AAA			12/22/03		119,613	Pass Through		2029		2012		69,687		4.95	%
MLCC 2003-H B1	AA			12/22/03		7,875	1m LIBOR		2029		2012		7,875		4.38	%
MLCC 2003-H B2		A		12/22/03		6,000	1m LIBOR		2029		2012		6,000		5.08	%
Sequoia 2004-1 A1	AAA			01/28/04		601,250	6m LIBOR		2034		2010		329,728		4.18	%
Sequoia 2004-1 B1	AA			01/28/04		9,375	1m LIBOR		2034		2010		9,375		4.35	%
Sequoia 2004-1 B2		A		01/28/04		5,937	1m LIBOR		2034		2010		5,937		4.85	%
Sequoia 2004-2 A1	AAA			02/25/04		671,998	6m LIBOR		2034		2010		373,208		4.31	%
Sequoia 2004-2 B1	AA			02/25/04		11,550	1m LIBOR		2034		2010		11,550		4.30	%
Sequoia 2004-2 B2		A		02/25/04		7,000	1m LIBOR		2034		2010		7,000		4.78	%
Sequoia 2004-3 A1	AAA			03/30/04		894,673	6m LIBOR		2034		2010		479,990		4.27	%
Sequoia 2004-3 M1	AA			03/30/04		13,800	1m LIBOR		2034		2010		13,800		4.30	%
Sequoia 2004-3 M2		A		03/30/04		9,200	1m LIBOR		2034		2010		9,200		4.70	%
Sequoia 2004-4 A1	AAA			04/29/04		785,971	6m LIBOR		2010		2010		420,646		3.59	%
Sequoia 2004-4 B1	AA			04/29/04		14,612	1m LIBOR		2010		2010		14,612		4.30	%
Sequoia 2004-4 B2		A		04/29/04		8,350	1m LIBOR		2010		2010		8,350		4.70	%
Sequoia 2004-5 A1	AAA			05/27/04		547,657	Pass Through		2012		2012		303,440		4.65	%
Sequoia 2004-5 A2	AAA			05/27/04		185,613	1m LIBOR		2012		2012		102,829		4.06	%
Sequoia 2004-5 A3	AAA			05/27/04		74,897	6m LIBOR		2012		2012		41,493		3.77	%
Sequoia 2004-5 B1	AA			05/27/04		14,874	1m LIBOR		2012		2012		14,874		4.28	%
Sequoia 2004-5 B2		A		05/27/04		8,499	1m LIBOR		2012		2012		8,499		4.68	%
Sequoia 2004-6 A1	AAA			06/29/04		500,000	Pass Through		2012		2012		282,051		4.81	%
Sequoia 2004-6 A2	AAA			06/29/04		185,687	1m LIBOR		2012		2012		115,171		4.08	%
Sequoia 2004-6 A3a	AAA			06/29/04		196,500	6m LIBOR		2012		2012		110,717		3.94	%
Sequoia 2004-6 A3b	AAA			06/29/04		3,500	6m LIBOR		2012		2012		1,972		4.08	%
Sequoia 2004-6 B1	AA			06/29/04		15,725	1m LIBOR		2012		2012		15,725		4.30	%
Sequoia 2004-6 B2		A		06/29/04		9,250	1m LIBOR		2012		2012		9,250		4.68	%
SEMHT 2004-01 A	AAA			06/29/04		317,044	1m LIBOR		2014		2012		206,423		4.03	%
Sequoia 2004-7 A1	AAA			07/29/04		498,828	Pass Through		2034		2012		160,773		4.84	%
Sequoia 2004-7 A2	AAA			07/29/04		252,102	1m LIBOR		2034		2012		167,241		4.11	%
Sequoia 2004-7 A3a	AAA			07/29/04		247,874	6m LIBOR		2034		2012		151,121		4.18	%
Sequoia 2004-7 A3b	AAA			07/29/04		3,956	6m LIBOR		2034		2012		2,412		4.40	%
Sequoia 2004-7 B1	AA			07/29/04		18,900	1m LIBOR		2034		2012		18,900		4.35	%
Sequoia 2004-7 B2		A		07/29/04		11,025	1m LIBOR		2034		2012		11,025		4.74	%
Sequoia 2004-8 A1	AAA			08/27/04		365,049	1m LIBOR		2034		2012		248,557		4.15	%
Sequoia 2004-8 A2	AAA			08/27/04		418,050	6m LIBOR		2034		2012		260,159		4.41	%
Sequoia 2004-8 B1	AA			08/27/04		16,400	1m LIBOR		2034		2012		16,400		4.32	%
Sequoia 2004-8 B2		A		08/27/04		8,200	1m LIBOR		2034		2012		8,200		4.70	%
Sequoia 2004-9 A1	AAA			09/29/04		453,364	1m LIBOR		2034		2012		320,197		4.14	%
Sequoia 2004-9 A2	AAA			09/29/04		296,310	6m LIBOR		2034		2012		209,853		4.38	%
Sequoia 2004-9 B1	AA			09/29/04		14,915	1m LIBOR		2034		2012		14,915		4.31	%
Sequoia 2004-9 B2		A		09/29/04		8,242	1m LIBOR		2034		2012		8,242		4.68	%
Sequoia 2004-10 A-1A	AAA			10/28/04		110,000	1m LIBOR		2034		2012		82,065		4.11	%
Sequoia 2004-10 A-1B	AAA			10/28/04		12,225	1m LIBOR		2034		2012		9,120		4.17	%
Sequoia 2004-10 A-2	AAA			10/28/04		203,441	1m LIBOR		2034		2012		151,776		4.12	%
Sequoia 2004-10 A-3A	AAA			10/28/04		180,000	6m LIBOR		2034		2012		115,085		3.66	%
Sequoia 2004-10 A-3B	AAA			10/28/04		20,000	6m LIBOR		2034		2012		12,787		3.72	%
Sequoia 2004-10 A-4	AAA			10/28/04		126,799	6m LIBOR		2034		2012		81,070		3.67	%
Sequoia 2004-10 B-1	AA			10/28/04		14,042	1m LIBOR		2034		2012		14,042		4.30	%
Sequoia 2004-10 B-2		A		10/28/04		6,849	1m LIBOR		2034		2012		6,849		4.65	%


Table 20: ABS Issued Characteristics - Residential Mortgage Loans (Sequoia) - continued

Table 20
ABS Issued Characteristics - Residential Mortgage Loans (Sequoia)
(all $ in thousands)												Principal		Interest
					Original					Estimated		Outstanding At		Rate At
Sequoia	Debt		Issue		Issue			Stated		Callable		September 30,		September 30,
ABS Issued (1)	Rating		Date		Amount		Index	Maturity		Date		2005		2005
Sequoia 2004-11 A1	AAA			11/23/04	$	433,985	1m LIBOR		2034		2013	$	307,247		4.10	%
Sequoia 2004-11 A2	AAA			11/23/04		86,036	6m LIBOR		2034		2013		62,183		3.81	%
Sequoia 2004-11 A3	AAA			11/23/04		170,694	1m LIBOR		2034		2013		141,222		4.10	%
Sequoia 2004-11 B1	AA			11/23/04		8,947	1m LIBOR		2034		2013		8,947		4.30	%
Sequoia 2004-11 B2		A		11/23/04		6,084	1m LIBOR		2034		2013		6,084		4.65	%
Sequoia 2004-12 A1	AAA			12/22/04		380,510	1m LIBOR		2035		2013		287,723		4.07	%
Sequoia 2004-12 A2	AAA			12/22/04		208,392	6m LIBOR		2035		2013		152,139		3.93	%
Sequoia 2004-12 A3	AAA			12/22/04		218,331	6m LIBOR		2035		2013		138,665		3.96	%
Sequoia 2004-12 B1	AA			12/22/04		8,588	1m LIBOR		2035		2013		8,588		4.30	%
Sequoia 2004-12 B2		A		12/22/04		6,134	1m LIBOR		2035		2013		6,134		4.65	%
Sequoia 2005-1 A1	AAA			01/27/05		298,055	1m LIBOR		2035		2013		223,914		4.03	%
Sequoia 2005-1 A2	AAA			01/27/05		100,000	6m LIBOR		2035		2013		79,935		4.10	%
Sequoia 2005-1 B1	AA			01/27/05		7,067	1m LIBOR		2035		2013		7,067		4.22	%
Sequoia 2005-1 B2		A		01/27/05		3,949	1m LIBOR		2035		2013		3,949		4.50	%
Sequoia 2005-2 A1	AAA			02/24/05		202,462	1m LIBOR		2035		2013		154,268		4.02	%
Sequoia 2005-2 A2	AAA			02/24/05		126,737	6m LIBOR		2035		2013		91,512		4.29	%
Sequoia 2005-2 B1	AA			02/24/05		6,016	1m LIBOR		2035		2013		6,016		4.19	%
Sequoia 2005-2 B2		A		02/24/05		3,266	1m LIBOR		2035		2013		3,266		4.47	%
Sequoia 2005-3 A1	AAA			04/28/05		349,687	1m LIBOR		2035		2013		292,959		4.00	%
Sequoia 2005-3 B1	AA			04/28/05		6,208	1m LIBOR		2035		2013		6,208		4.17	%
Sequoia 2005-3 B2		A		04/28/05		3,287	1m LIBOR		2035		2013		3,287		4.44	%
Madrona 2005-A	BBB			08/25/05		5,400	1m LIBOR		2,008		2008		5,400		6.14	%
SEMT 2005-4 1-A1	AAA			09/29/05		133,459,000	1m LIBOR		2035		2013		133,459		4.06	%
SEMT 2005-4 1-A2	AAA			09/29/05		14,829,000	1m LIBOR		2035		2013		14,829		4.21	%
SEMT 2005-4 1-B1	AA			09/29/05		2,093,000	1m LIBOR		2035		2013		2,093		4.29	%
SEMT 2005-4 1-B2	AA			09/29/05		1,395,000	1m LIBOR		2035		2013		1,395		4.47	%
SEMT 2005-4 2-A1	AAA			09/29/05		160,096,000	Pass Through		2035		2013		160,096		4.08	%
SEMT 2005-4 2-A2	AAA			09/29/05		10,268,000	Pass Through		2035		2013		10,268		4.08	%
SEMT 2005-4 2-B1	AA			09/29/05		1,740,000	Pass Through		2035		2013		1,740		4.08	%
SEMT 2005-4 2-B2		A		09/29/05		696,000	Pass Through		2035		2013		696		4.08	%

Total Sequoia ABS Issuance					$	354,804,173						$	15,901,642		4.17	%

(1) Does not include Sequoia ABS acquired by Redwood or Acacia

Table 21: ABS Issued Characteristics — IO’s from Residential Real Estate Loans
Sequoia Interest-Only Certificates Issued (all $ in thousands)

Table 21
ABS Characteristics — IO’s from Residential Real Estate Loans — Sequoia Interest-Only Cerfiticates Issued
(all $ in thousands)


											Adjusted Issue		Interest
				Original					Estimated		Amount At		Rate At
Sequoia ABS	Debt	Issue		Issue			Stated		Callable		September 30,		September 30,
IO's Issued (1)	Rating	Date		Amount		Index	Maturity		Date		2005		2005
MLCC 2003-C X-A-2	AAA		06/26/03	$	12,662	Fixed		2007		2011	$	1,974		4.50	%
MLCC 2003-D X-A-1	AAA		07/29/03		22,371	Fixed		2007		2012		4,314		4.50	%
MLCC 2003-E X-A-1	AAA		08/28/03		16,550	Fixed		2007		2012		4,522		4.25	%
MLCC 2003-F X-A-1	AAA		09/25/03		18,666	Fixed		2007		2012		5,180		4.50	%
Sequoia 2003-6 X-1	AAA		10/29/03		8,220	Fixed		2007		2009		2,215		4.50	%
SMFC 2003A AX1	AAA		10/31/03		70,568	Fixed		2007		2007		16,040		4.50	%
Sequoia 2003-7 X-1	AAA		11/25/03		10,345	Fixed		2007		2012		2,964		4.25	%
Sequoia 2003-8 X-1	AAA		12/23/03		12,256	Fixed		2007		2009		3,782		4.50	%
Sequoia 2004-1 X-1	AAA		01/28/04		7,801	Fixed		2007		2009		2,590		4.00	%
Sequoia 2004-2 X-1	AAA		02/25/04		8,776	Fixed		2007		2009		3,089		3.75	%
SMFC 2004A AX1	AAA		02/26/04		10,626	Fixed		2007		2007		4,649		3.75	%
MLCC 2003-H X-A-1	AAA		12/22/03		10,430	Fixed		2007		2012		3,604		4.25	%
Sequoia 2004-4 X-1	AAA		05/28/04		9,789	Fixed		2010		2009		4,136		4.25	%
Sequoia 2004-5 X-1	AAA		05/27/04		3,371	Fixed		2012		2012		1,440		4.15	%
Sequoia 2004-6 X-A	AAA		06/29/04		10,884	Pass Through		2012		2012		7,419		N/A
Sequoia 2004-7 X-A	AAA		07/29/04		12,145	Pass Through		2034		2012		8,270		N/A
Sequoia 2004-8 X-A	AAA		08/27/04		18,270	Pass Through		2034		2012		13,078		N/A
Sequoia 2004-9 X-A	AAA		09/29/04		16,951	Pass Through		2034		2012		12,290		N/A
Sequoia 2004-10 X-A	AAA		10/28/04		14,735	Pass Through		2034		2012		10,930		N/A
Sequoia 2004-11 X-A-1	AAA		11/23/04		12,603	Pass Through		2034		2013		9,649		N/A
Sequoia 2004-11 X-A-2	AAA		11/23/04		4,697	Pass Through		2034		2013		3,632		N/A
Sequoia 2004-12 X-A-1	AAA		12/22/04		14,453	Pass Through		2035		2013		11,361		N/A
Sequoia 2004-12 X-A-2	AAA		12/22/04		4,619	Pass Through		2035		2013		5,081		N/A
Sequoia 2005-1 X-A	AAA		01/27/05		9,669	Pass Through		2035		2013		7,815		N/A
Sequoia 2005-2 X-A	AAA		02/24/05		7,484	Pass Through		2035		2013		6,142		N/A
Sequoia 2005-3 X-A	AAA		04/28/05		8,183	Pass Through		2035		2013		7,166		N/A

Total Sequoia Issuance				$	357,124						$	163,332		4.31	%

(1) Does not include Sequoia IO’s acquired by Redwood or Acacia

Table 23: CDO ABS Issued Characteristics
Collateralized Debt Obligations — Acacia (all $ in thousands)

Table 23
ABS Characteristics
Collateralized Debt Obligations — Acacia
(all $ in thousands)


												Principal		Interest
					Original					Estimated		Outstanding At		Rate At
	Debt		Issue		Issue			Stated		Callable		September 30,		September 30,
CDO Issuance (1)	Rating		Date		Amount		Index	Maturity		Date		2005		2005
Acacia CDO 1 A	AAA			12/10/02	$	224,250	3m LIBOR		2018		2010	$	154,845		4.34	%
Acacia CDO 1 B	AA			12/10/02		45,000	3m LIBOR		2037		2010		45,000		5.06	%
Acacia CDO 1 C	BBB			12/10/02		15,750	3m LIBOR		2037		2010		15,750		6.46	%
Acacia CDO 2 A	AAA			05/13/03		222,000	3m LIBOR		2023		2011		193,633		4.44	%
Acacia CDO 2 B	AA			05/13/03		45,375	3m LIBOR		2038		2011		45,375		5.09	%
Acacia CDO 2 C	BBB			05/13/03		16,500	3m LIBOR		2038		2011		16,500		7.04	%
Acacia CDO 3 A	AAA			11/04/03		222,000	3m LIBOR		2038		2011		214,099		4.34	%
Acacia CDO 3 B	AA			11/04/03		45,750	3m LIBOR		2038		2011		45,750		4.96	%
Acacia CDO 3 C	BBB			11/04/03		16,500	3m LIBOR		2038		2011		16,500		7.16	%
Acacia CDO 4 A	AAA			04/08/04		229,400	3m LIBOR		2039		2012		229,028		3.94	%
Acacia CDO 4 B1	AA			04/08/04		45,300	3m LIBOR		2039		2012		45,300		4.41	%
Acacia CDO 4 B2	AA			04/08/04		2,000	Fixed		2039		2012		2,000		4.81	%
Acacia CDO 4 C1	BBB			04/08/04		13,700	3m LIBOR		2039		2012		13,700		6.41	%
Acacia CDO 4 C2	BBB			04/08/04		3,000	Fixed		2039		2012		3,000		6.81	%
Acacia CDO 5 A	AAA			07/14/04		222,500	3m LIBOR		2039		2012		222,368		4.13	%
Acacia CDO 5 B	AA			07/14/04		42,250	3m LIBOR		2039		2012		42,250		4.60	%
Acacia CDO 5 C		A		07/14/04		9,000	3m LIBOR		2039		2012		9,000		5.20	%
Acacia CDO 5 D		A		07/14/04		3,000	3m LIBOR		2039		2012		3,000		5.75	%
Acacia CDO 5 E	BBB			07/14/04		5,375	3m LIBOR		2039		2012		5,375		6.55	%
Acacia CDO 6 A1	AAA			11/09/04		222,000	3m LIBOR		2040		2012		221,727		4.14	%
Acacia CDO 6 A2	AAA			11/09/04		15,000	3m LIBOR		2040		2012		15,000		4.43	%
Acacia CDO 6 B	AA			11/09/04		27,000	3m LIBOR		2040		2012		27,000		4.58	%
Acacia CDO 6 C		A		11/09/04		6,500	3m LIBOR		2040		2012		6,500		5.13	%
Acacia CDO 6 D		A		11/09/04		3,000	3m LIBOR		2040		2012		3,000		5.78	%
Acacia CDO 6 E1	BBB			11/09/04		1,500	3m LIBOR		2040		2012		1,500		6.58	%
Acacia CDO 6 E2	BBB			11/09/04		7,000	Fixed		2040		2012		7,000		6.95	%
Acacia CDO 7 A	AAA			03/10/05		231,700	3m LIBOR		2045		2013		231,700		3.85	%
Acacia CDO 7 B	AA			03/10/05		28,100	3m LIBOR		2045		2013		28,100		4.14	%
Acacia CDO 7 C		A		03/10/05		6,000	3m LIBOR		2045		2013		6,000		4.74	%
Acacia CDO 7 D	BBB			03/10/05		16,200	3m LIBOR		2045		2013		16,200		6.16	%
Acacia CDO 8 A1	AAA			07/14/05		175,000	3m LIBOR		2045		2013		175,000		3.84	%
Acacia CDO 8 A2	AAA			07/14/05		15,000	3m LIBOR		2045		2013		15,000		3.99	%
Acacia CDO 8 B	AA			07/14/05		22,000	3m LIBOR		2045		2013		22,000		4.11	%
Acacia CDO 8 C		A		07/14/05		20,000	3m LIBOR		2045		2013		20,000		4.76	%
Acacia CDO 8 D		A-		07/14/05		10,000	3m LIBOR		2045		2013		10,000		5.21	%
Acacia CDO 8 E	BBB			07/14/05		10,000	3m LIBOR		2045		2013		10,000		6.41	%

Total CDO Issuance					$	2,244,650						$	2,138,200		4.35	%

(1) Does not include ABS acquired by Redwood or Acacia

Table 24: ABS Resecuritization Characteristics
Other Resecuritizations — SMFC (all $ in thousands)

Table 24
ABS Characteristics
Collateralized Debt Obligations and Other Resecuritizations — SMFC
(all $ in thousands)


												Principal		Interest
Other					Original					Estimated		Outstanding At		Rate At
Resecuritization	Debt		Issue		Issue			Stated		Callable		September 30,		September 30,
Issuance (1)	Rating		Date		Amount		Index	Maturity		Date		2005		2005
SMFC 2002A A1	AAA			04/30/02	$	64,761	1m LIBOR		2030		2005	$	0		N/A
SMFC 2002A A2	AAA			04/30/02		15,861	1m LIBOR		2029		2005		—		N/A
SMFC 2002B I A1	AA			12/19/02		16,855	Fixed		2031		2005		572		5.43	%
SMFC 2002B I A2		A		12/19/02		18,274	Fixed		2031		2005		621		5.68	%
SMFC 2002B I A3	BBB			12/19/02		17,221	Fixed		2031		2005		585		6.38	%
SMFC 2002B I A4	BB			12/19/02		25,133	Fixed		2031		2005		853		6.75	%
SMFC 2002B II A1	AA			12/19/02		15,517	Fixed		2039		2005		725		4.82	%
SMFC 2002B II A2		A		12/19/02		18,345	Fixed		2039		2005		857		4.92	%
SMFC 2002B II A3	BBB			12/19/02		14,989	Fixed		2039		2005		701		5.35	%
SMFC 2002B II A4	BB			12/19/02		8,347	Fixed		2039		2005		390		6.00	%

Total Resecuritizations					$	215,303						$	5,304		5.64	%

(1) Does not include ABS acquired by Redwood or Acacia

End


Table 9: Asset / Liability Matching at September 30, 2005 (all $ in thousands) (1)

Table 9
Asset/Liability Matching at September 30, 2005
(all $ in thousands)
			One-		Six-				Non				Total
			Month		Month		Fixed/		Interest				Liabilities
Asset	Asset		LIBOR		LIBOR		Hybrid		Bearing				And
Type	Amount		Liabilities		Liabilities		Liabilities		Liabilities		Equity		Equity
Cash (unrestricted)	$	163,160	$	163,160	$	0	$	0	$	0	$	0	$	163,160
One-Month LIBOR		5,649,244		5,649,245		—		—		—		—		5,649,245
Six-Month LIBOR		11,964,939		—		11,955,668		—		—		9,273		11,964,941
Other ARM		259,180		206,423		—		—		—		52,757		259,180
Fixed / Hybrid < 1yr*		73,850		—		—		34,754		—		39,095		73,849
Fixed / Hybrid > 1yr		1,156,976		—		—		390,281		—		766,693		1,156,974
Non-Earning Assets		238,625		—		—		—		90,378		148,247		238,625

Total (1)	$	19,505,974	$	6,018,828	$	11,955,668	$	425,036	$	90,378	$	1,016,065	$	19,505,974


(1)		The credit reserve on residential real estate loans owned is only available to absorb losses on the residential real estate loan portfolio. The internally-designated credit reserves on loans credit enhanced and the external credit enhancement on loans credit enhanced are only available to absorb losses on the residential loan credit-enhancement portfolio. This table excludes the residential home equity lines of credit.