Exhibit 5.2

                          [PIPER & MARBURY LETTERHEAD]

                               November 19, 1996

Redwood Trust, Inc.
591 Redwood Highway, Suite 3100
Mill Valley, California 94941

Ladies and Gentlemen:

     We have acted as special Maryland counsel to Redwood Trust, Inc., a
Maryland corporation (the "Company"), in connection with the registration under
the Securities Act of 1933, as amended (the "Act"), pursuant to a Registration
Statement on Form S-3 of the Company (Registration No. 333-11665) (the
"Registration Statement") filed with the Securities and Exchange Commission (the
"Commission") for offering by the Company from time to time of up to
$200,000,000 aggregate initial offering price of: (i) shares of common stock,
par value $0.01 per share (the "Common Stock"); (ii) shares of preferred stock,
par value $0.01 per share (the "Preferred Stock"); (iii) warrants to purchase
Common Stock or Preferred Stock (the "Warrants"); (iv) rights to purchase shares
of Common Stock or Preferred Stock (the "Shareholder Rights"); and (v) any
combination of the foregoing types of securities. The Common Stock, the
Preferred Stock, the Warrants and the Shareholder Rights are collectively
referred to herein as the "Securities." The Registration Statement provides that
the Securities may be offered separately or together, in separate series, in
amounts, at prices, and on terms to be set forth in one or more supplements to
the Prospectus (each a "Prospectus Supplement"). This opinion is being provided
at your request in connection with the sale of up to 1,250,000 shares of the
Common Stock pursuant to a Prospectus Supplement.

     In rendering the opinion expressed herein, we have examined the
Registration Statement (and all amendments thereto), the Prospectus Supplement
relating to the Common Stock, the Charter and By-Laws of the Company, minutes of
the proceedings of the Company's Board of Directors or a committee thereof
authorizing the issuance of the Common Stock, and such other documents as we
have considered necessary. We have also examined a Certificate of Secretary of
the Company dated November 19, 1996 (the "Certificate"). In rendering our
opinion, we are

                                                  [PIPER & MARBURY LETTERHEAD]

Redwood Trust, Inc.
November 19, 1996
Page 2

relying as to factual matters on the Certificate and have made no independent
investigation or inquiries as to the matters set forth therein.

     Based upon the foregoing, we are of the opinion and so advise you that upon
the issuance and delivery of the Common Stock in accordance with the terms set
forth in the Prospectus Supplement and the underwriting agreement, the Common
Stock will have been duly and validly authorized and will be legally issued,
fully-paid, and non-assessable.

     The opinion expressed herein is solely for (i) the use of the Company in
connection with the Registration Statement, and (ii) the use of Tobin & Tobin in
giving their legality opinion to be filed as an exhibit to the Registration
Statement or in a Current Report on Form 8-K. This opinion may not be relied on
by any other person or in any other connection without our prior written
approval. This opinion is limited to the matters set forth herein, and no other
opinion should be inferred beyond the matters expressly stated.

     We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement or in a Current Report on Form 8-K and to the reference
to us under the heading "Legal Matters" in the Prospectus and the Prospectus
Supplement included in the Registration Statement. In giving our consent, we do
not thereby admit that we are in the category of persons whose consent is
required under Section 7 of the Act or the rules and regulations of the
Commission thereunder.


                                          Very truly yours,

                                          /s/ Piper & Marbury