Redwood Trust, Inc.
Computation of Earnings to Fixed Charges and
Earnings to Fixed Charges and Preferred Stock Dividends Ratios
(Dollars in thousands)

The ratio of earnings to fixed charges represents the number of times "fixed charges" are covered by "earnings." "Fixed charges" consist of interest on outstanding asset backed securities issued and debt and amortization of debt premiums and discount.  The proportion deemed representative of the interest factor of operating lease expense has not been deducted as the total operating lease expense in itself was de minimis and did not affect the ratios in a material way. "Earnings" consist of consolidated income before income taxes and fixed charges.

                                     
   
Six Months Ended
    
Years Ended December 31,
  
   
June 30,
                                
(Dollars In Thousands)
  
2010
    
2009
    
2008
    
2007
    
2006
    
2005
  
                                     
Earnings
                                    
                                     
Net income before provision for income taxes and non-controlling interest
   $ 75,667     $ 34,844     $ (449,532 )   $ (1,103,445 )   $ 137,502     $ 217,393  
Add:
                                                
Fixed charges
     39,346       132,003       416,669       651,762       701,704       757,270  
Earnings available to cover fixed charges
   $ 115,013     $ 166,847     $ (32,863 )   $ (451,683 )   $ 839,206     $ 974,663  
                                                 
Fixed charges
                                                
                                                 
Interest on indebtedness (including amortization of premium and financing costs)
     39,346       132,003       416,669       651,762       701,704       757,270  
Total fixed charges: (1)
   $ 39,346     $ 132,003     $ 416,669     $ 651,762     $ 701,704     $ 757,270  
                                                 
Ratio of earnings to fixed charges
     2.92       1.26       (0.08 )      (0.69 )      1.20       1.29  
Ratio of earnings to fixed charges and preferred stock dividends
     2.92       1.26       (0.08 )     (0.69 )     1.20       1.29  
                                                 
Deficiency amount for ratios less than one:
                   $ 449,532     $ 1,103,445                  

 
(1)
No preferred stock was outstanding during any of the period presented.