Exhibit 10.1

AMENDMENT TO EMPLOYMENT AGREEMENT

THIS AMENDMENT TO EMPLOYMENT AGREEMENT (this “Agreement”), is entered into as of the 10th day of December  2008 by and between  GEORGE E. BULL, III  (the “Executive”) and  REDWOOD TRUST, INC., a Maryland Corporation (the “Company”).

WHEREAS, the Executive and the Company have entered into an Employment Agreement dated as of April 7, 2003 (as subsequently amended, the “Employment Agreement”); and

WHEREAS, the Executive and the Company desire to enter into this Agreement for purposes of amending the Employment Agreement to increase the Target Bonus specified in the Employment Agreement, effective January 1, 2009;

NOW, THEREFORE, for good and valuable consideration, the receipt and adequacy which is hereby acknowledged, the Executive and the Company hereby agree that Section 3(b) of the Employment Agreement is hereby amended to add the following sentence at the end of Section 3(b):  

Effective January 1, 2009, the Target Bonus shall be 175% of Base Salary.

IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by its duly authorized officer, and the Executive has executed this Agreement, as of the date first above written.
 
REDWOOD TRUST, INC.
 
     
     
By:
/s/ MARTIN S. HUGHES
 
 
Name: Martin S. Hughes
 
 
Title:   Chief Financial Officer and Secretary
 
     
     
GEORGE E. BULL, III
 
     
/s/ GEORGE E. BULL, III