<SEC-DOCUMENT>0001144204-18-040595.txt : 20180730
<SEC-HEADER>0001144204-18-040595.hdr.sgml : 20180730
<ACCEPTANCE-DATETIME>20180730090034
ACCESSION NUMBER:		0001144204-18-040595
CONFORMED SUBMISSION TYPE:	8-K
PUBLIC DOCUMENT COUNT:		4
CONFORMED PERIOD OF REPORT:	20180730
ITEM INFORMATION:		Regulation FD Disclosure
ITEM INFORMATION:		Financial Statements and Exhibits
FILED AS OF DATE:		20180730
DATE AS OF CHANGE:		20180730

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			REDWOOD TRUST INC
		CENTRAL INDEX KEY:			0000930236
		STANDARD INDUSTRIAL CLASSIFICATION:	REAL ESTATE INVESTMENT TRUSTS [6798]
		IRS NUMBER:				680329422
		STATE OF INCORPORATION:			MD
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		8-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-13759
		FILM NUMBER:		18976226

	BUSINESS ADDRESS:	
		STREET 1:		ONE BELVEDERE PLACE
		STREET 2:		SUITE 300
		CITY:			MILL VALLEY
		STATE:			CA
		ZIP:			94941
		BUSINESS PHONE:		(415) 380-2317

	MAIL ADDRESS:	
		STREET 1:		ONE BELVEDERE PLACE
		STREET 2:		SUITE 300
		CITY:			MILL VALLEY
		STATE:			CA
		ZIP:			94941
</SEC-HEADER>
<DOCUMENT>
<TYPE>8-K
<SEQUENCE>1
<FILENAME>tv499606_8k.htm
<DESCRIPTION>FORM 8-K
<TEXT>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B></B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 14pt"><B>UNITED
STATES</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 14pt"><B>SECURITIES
AND EXCHANGE COMMISSION</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Washington, D.C. 20549</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 14pt"><B>FORM 8-K</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>CURRENT REPORT</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Pursuant to Section&nbsp;13 OR 15(d)
of The Securities Exchange Act of 1934</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Date of Report (Date of earliest event
reported): July 30, 2018</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 14pt"><B>REDWOOD
TRUST, INC.</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(Exact name of registrant as specified in
its charter)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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    <TD STYLE="vertical-align: top; padding-top: 2pt; padding-right: 1pt; padding-bottom: 2pt; text-align: center; width: 32%"><B>Maryland</B></TD>
    <TD STYLE="vertical-align: bottom; padding-top: 2pt; padding-bottom: 2pt; width: 2%">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-top: 2pt; padding-right: 1pt; padding-bottom: 2pt; text-align: center; width: 32%"><B>001-13759</B></TD>
    <TD STYLE="vertical-align: bottom; padding-top: 2pt; padding-bottom: 2pt; width: 2%">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-top: 2pt; padding-right: 1pt; padding-bottom: 2pt; text-align: center; width: 32%"><B>68-0329422</B></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-right: 3pt; padding-left: 3pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 1pt 0pt 0; text-align: center">(State or other&nbsp;jurisdiction</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 1pt 0pt 0; text-align: center">of incorporation)</P></TD>
    <TD STYLE="vertical-align: bottom; padding-top: 2pt; padding-bottom: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 3pt; padding-left: 3pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 1pt 0pt 0; text-align: center">(Commission</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 1pt 0pt 0; text-align: center">File Number)</P></TD>
    <TD STYLE="vertical-align: bottom; padding-top: 2pt; padding-bottom: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 3pt; padding-left: 3pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 1pt 0pt 0; text-align: center">(I.R.S. Employer</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 1pt 0pt 0; text-align: center">Identification No.)</P></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>One Belvedere Place</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Suite&nbsp;300</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Mill Valley, California 94941</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(Address of principal executive offices
and Zip Code)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>(415)&nbsp;389-7373</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(Registrant&rsquo;s telephone number, including
area code)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Not Applicable</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(Former name or former address, if changed
since last report)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Check the appropriate box below if the
Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions
(see General Instruction A.2. below):</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 4%; padding-top: 2pt; padding-bottom: 2pt; text-align: center"><FONT STYLE="font-family: Wingdings">o</FONT></TD>
    <TD STYLE="width: 96%; padding-top: 2pt; padding-right: 1pt; padding-bottom: 2pt; text-align: justify">Written communications pursuant to Rule&nbsp;425 under the Securities Act (17 CFR 230.425)</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 4%; padding-top: 2pt; padding-bottom: 2pt; text-align: center"><FONT STYLE="font-family: Wingdings">o</FONT></TD>
    <TD STYLE="width: 96%; padding-top: 2pt; padding-right: 1pt; padding-bottom: 2pt; text-align: justify">Soliciting material pursuant to Rule&nbsp;14a-12 under the Exchange Act (17 CFR 240.14a-12)</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 4%; padding-top: 2pt; padding-bottom: 2pt; text-align: center"><FONT STYLE="font-family: Wingdings">o</FONT></TD>
    <TD STYLE="width: 96%; padding-top: 2pt; padding-right: 1pt; padding-bottom: 2pt; text-align: justify">Pre-commencement communications pursuant to Rule&nbsp;14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 4%; padding-top: 2pt; padding-bottom: 2pt; text-align: center"><FONT STYLE="font-family: Wingdings">o</FONT></TD>
    <TD STYLE="width: 96%; padding-top: 2pt; padding-right: 1pt; padding-bottom: 2pt; text-align: justify">Pre-commencement communications pursuant to Rule&nbsp;13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Indicate by check mark whether the registrant is an emerging
growth company as defined in Rule 405 of the Securities Act of 1933 or Rule 12b-2 of the Securities Exchange Act of 1934.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right">Emerging growth company <FONT STYLE="font-family: Wingdings">o</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">If an emerging growth company, indicate by check mark if the
registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards
provided pursuant to Section 13(a) of the Exchange Act. <FONT STYLE="font-family: Wingdings">o</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>












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<TR STYLE="vertical-align: top">
    <TD STYLE="width: 13%; padding-top: 2pt; padding-right: 1pt; padding-bottom: 2pt"><B>Item&nbsp;7.01.</B></TD>
    <TD STYLE="width: 87%; padding-top: 2pt; padding-right: 1pt; padding-bottom: 2pt"><B>Regulation FD Disclosure.</B></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 23pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 23pt">On July 30, 2018, Redwood
Trust, Inc. published a copy of its Shareholder Letter for the second quarter of 2018 (the &ldquo;Shareholder Letter&rdquo;), a
copy of which is attached as Exhibit 99.1 to this Current Report on Form 8-K. The Shareholder Letter will also be included as part
of the Company&rsquo;s second quarter Redwood Review, which will be published at the same time the Company announces its second
quarter 2018 results.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 23pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 23pt">A link to the Shareholder
Letter is also available at the Company&rsquo;s website at www.redwoodtrust.com, in the Newsroom section of the website under &ldquo;Presentations.&rdquo;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 23pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><U>Cautionary Statement</U>: The second
quarter 2018 Shareholder Letter contains forward-looking statements within the meaning of the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995. Forward-looking statements involve numerous risks and uncertainties. Our actual results
may differ from our beliefs, expectations, estimates, and projections and, consequently, you should not rely on these forward-looking
statements as predictions of future events. Forward-looking statements are not historical in nature and can be identified by words
such as &ldquo;anticipate,&rdquo; &ldquo;estimate,&rdquo; &ldquo;will,&rdquo; &ldquo;should,&rdquo; &ldquo;expect,&rdquo; &ldquo;believe,&rdquo;
&ldquo;intend,&rdquo; &ldquo;seek,&rdquo; &ldquo;plan&rdquo; and similar expressions or their negative forms, or by references
to strategy, plans, or intentions. These forward-looking statements are subject to risks and uncertainties, including, among other
things, those described in our Annual Report on Form 10-K for the year ended December 31, 2017, under the caption &ldquo;Risk Factors.&rdquo;
Other risks, uncertainties, and factors that could cause actual results to differ materially from those projected may be described
from time to time in reports we file with the Securities and Exchange Commission (SEC), including reports on Forms 10-Q and 8-K.
We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events,
or otherwise.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 23pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 23pt">Important factors, among
others, that may affect our actual results include: the pace at which we redeploy our available capital into new investments and
initiatives; our ability to scale our platform and systems particularly with respect to our new initiatives; interest rate volatility,
changes in credit spreads, and changes in liquidity in the market for real estate securities and loans; changes in the demand from
investors for residential mortgages and investments, and our ability to distribute residential mortgages through our whole-loan
distribution channel; our ability to finance our investments in securities and our acquisition of residential mortgages with short-term
debt; changes in the values of assets we own; general economic trends, the performance of the housing, real estate, mortgage, credit,
and broader financial markets, and their effects on the prices of earning assets and the credit status of borrowers; federal and
state legislative and regulatory developments, and the actions of governmental authorities, including the new U.S. presidential
administration, and in particular those affecting the mortgage industry or our business (including, but not limited to, the Federal
Housing Finance Agency&rsquo;s rules relating to FHLB membership requirements and the implications for our captive insurance subsidiary&rsquo;s
membership in the FHLB); strategic business and capital deployment decisions we make; developments related to the fixed income
and mortgage finance markets and the Federal Reserve&rsquo;s statements regarding its future open market activity and monetary
policy; our exposure to credit risk and the timing of credit losses within our portfolio; the concentration of the credit risks
we are exposed to, including due to the structure of assets we hold and the geographical concentration of real estate underlying
assets we own; our exposure to adjustable-rate mortgage loans; the efficacy and expense of our efforts to manage or hedge credit
risk, interest rate risk, and other financial and operational risks; changes in credit ratings on assets we own and changes in
the rating agencies&rsquo; credit rating methodologies; changes in interest rates; changes in mortgage prepayment rates; changes
in liquidity in the market for real estate securities and loans; our ability to finance the acquisition of real estate-related
assets with short-term debt; the ability of counterparties to satisfy their obligations to us; our involvement in securitization
transactions, the profitability of those transactions, and the risks we are exposed to in engaging in securitization transactions;
exposure to claims and litigation, including litigation arising from our involvement in securitization transactions; ongoing litigation
against various trustees of RMBS transactions; whether we have sufficient liquid assets to meet short-term needs; our ability to
successfully compete and retain or attract key personnel; our ability to adapt our business model and strategies to changing circumstances;
changes in our investment, financing, and hedging strategies and new risks we may be exposed to if we expand our business activities;
our exposure to a disruption or breach of the security of our technology infrastructure and systems; exposure to environmental
liabilities; our failure to comply with applicable laws and regulations; our failure to maintain appropriate internal controls
over financial reporting and disclosure controls and procedures; the impact on our reputation that could result from our actions
or omissions or from those of others; changes in accounting principles and tax rules; our ability to maintain our status as a REIT
for tax purposes; limitations imposed on our business due to our REIT status and our status as exempt from registration under the
Investment Company Act of 1940; decisions about raising, managing, and distributing capital; and other factors not presently identified.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 23pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 23pt"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 23pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 23pt">The information contained
in this Item&nbsp;7.01 and the attached Exhibit 99.1 is furnished to and not filed with the Securities and Exchange Commission,
and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of
1933, as amended, or the Securities Exchange Act of 1934, as amended, except as shall be expressly set forth by specific reference
in such filing.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 13%; padding-top: 2pt; padding-right: 1pt; padding-bottom: 2pt"><B>Item&nbsp;9.01.</B></TD>
    <TD STYLE="width: 87%; padding-top: 2pt; padding-right: 1pt; padding-bottom: 2pt"><B>Financial Statements and Exhibits.</B></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR>
    <TD STYLE="vertical-align: top; width: 12%; padding-top: 2pt; padding-right: 1pt; padding-bottom: 2pt; text-align: justify">(d)</TD>
    <TD STYLE="vertical-align: bottom; width: 2%; padding-top: 2pt; padding-bottom: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; width: 86%; padding-top: 2pt; padding-right: 1pt; padding-bottom: 2pt; text-align: justify">Exhibits</TD></TR>
<TR>
    <TD STYLE="padding-top: 2pt; padding-bottom: 2pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="padding-top: 2pt; padding-bottom: 2pt">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-top: 2pt; padding-right: 1pt; padding-bottom: 2pt; text-align: justify"><A HREF="tv499606_ex99-1.htm" STYLE="-sec-extract: exhibit">Exhibit&nbsp;99.1</A></TD>
    <TD STYLE="vertical-align: bottom; padding-top: 2pt; padding-bottom: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-top: 2pt; padding-right: 1pt; padding-bottom: 2pt; text-align: justify"><A HREF="tv499606_ex99-1.htm" STYLE="-sec-extract: exhibit">Shareholder Letter dated July 30, 2018</A></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>SIGNATURES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 23pt">Pursuant to the requirements
of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-top: 2pt; padding-right: 1pt; padding-bottom: 2pt; text-align: justify">Date: July 30, 2018</TD>
    <TD COLSPAN="2" STYLE="padding-top: 2pt; padding-right: 3pt; padding-bottom: 2pt; text-align: justify"><B>REDWOOD TRUST, INC.</B></TD></TR>
<TR>
    <TD STYLE="padding-top: 2pt; padding-bottom: 2pt; width: 50%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-top: 2pt; padding-bottom: 2pt; width: 5%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-top: 2pt; padding-bottom: 2pt; width: 45%">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-top: 2pt; padding-bottom: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-top: 2pt; padding-bottom: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-top: 2pt; padding-bottom: 2pt">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-top: 2pt; padding-bottom: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-top: 2pt; padding-right: 1pt; padding-bottom: 2pt; text-align: justify">By:</TD>
    <TD STYLE="vertical-align: bottom; padding-top: 2pt; padding-right: 1pt; padding-bottom: 2pt; text-align: justify; border-bottom: Black 1pt solid">&nbsp;/s/ <FONT STYLE="font-variant: small-caps">Collin L. Cochrane</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-top: 2pt; padding-bottom: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-top: 2pt; padding-bottom: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-top: 2pt; padding-right: 1pt; padding-bottom: 2pt; text-align: justify">Collin L. Cochrane</TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-top: 2pt; padding-bottom: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-top: 2pt; padding-bottom: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-top: 2pt; padding-right: 1pt; padding-bottom: 2pt">Chief Financial Officer</TD></TR>
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    <TD STYLE="border-bottom: Black 1pt solid; padding-top: 2pt; padding-bottom: 2pt"><B>Exhibit&nbsp;No.</B></TD>
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    <TD STYLE="border-bottom: Black 1pt solid; padding-top: 2pt; padding-bottom: 2pt"><B>Exhibit Title</B></TD>
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<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-top: 2pt; padding-bottom: 2pt"><A HREF="tv499606_ex99-1.htm" STYLE="-sec-extract: exhibit">Exhibit 99.1</A></TD>
    <TD STYLE="padding-top: 2pt; padding-bottom: 2pt">&nbsp;</TD>
    <TD STYLE="padding-top: 2pt; padding-right: 1pt; padding-bottom: 2pt; text-align: justify"><A HREF="tv499606_ex99-1.htm" STYLE="-sec-extract: exhibit">Shareholder Letter dated July 30, 2018</A></TD>
    <TD STYLE="padding-top: 2pt; padding-bottom: 2pt">&nbsp;</TD></TR>
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<TYPE>EX-99.1
<SEQUENCE>2
<FILENAME>tv499606_ex99-1.htm
<DESCRIPTION>EXHIBIT 99.1
<TEXT>
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<P STYLE="margin: 0; text-align: right">&nbsp;</P>

<P STYLE="margin: 0; text-align: right"><B>Exhibit 99.1</B></P>

<P STYLE="margin: 0; text-align: right">&nbsp;</P>

<P STYLE="margin: 0; text-align: right"></P>

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    <TD STYLE="width: 100%; text-align: center; padding-top: 3pt; padding-bottom: 3pt"><FONT STYLE="color: White"><B>Q&nbsp;2 &nbsp;2&nbsp;0&nbsp;1&nbsp;8 &nbsp;- &nbsp;S
    H A R E H O L D E R&nbsp;&nbsp; L E T T E R</B></FONT></TD></TR>
</TABLE>

<P STYLE="margin: 0; text-align: right">&nbsp;</P>

<P STYLE="margin: 0; text-align: right">&nbsp;</P>

<P STYLE="margin: 0; text-align: right"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Dear Fellow Shareholders:</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">This year has marked the start of the next
new era for Redwood Trust, an era we plan to signify through our commitment to profitable growth. As always, there will be plenty
of ink dedicated to our metrics when we publish the second quarter Redwood Review. However, with our recent leadership transition
now complete, we thought we would focus in this letter on our vision for the future, and offer insight into how we&rsquo;ll lead
Redwood during this next chapter.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">To understand where we should be going,
we first had to reassess who we are and where we have been. With 24 years of organizational history, we had much to consider. This
assessment was a major aspect of our strategic planning sessions last December. Together with our Board, we reaffirmed our highest
competencies and competitive strengths, and ultimately defined how we can maximize the value we deliver to our business partners
while building shareholder wealth.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">So, who are we? Above all else, we are
a specialty finance company that plays a central role in the inner workings of housing finance. This is a rare combination at the
heart of our franchise value and corporate vision. It gives us a unique strategic relevance to the market and it has the capacity
to propel our growth initiatives and facilitate our continued role as a premier housing credit investor.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Through our mortgage loan acquisition and
structuring platform, our business helps facilitate the ultimate financing of homeowners through the capital markets. We work as
a direct partner to mortgage lenders throughout the country, rather than just as an end-investor. Through our conduit operations,
our platform has both the ability to generate repeatable, fee-based revenues and create long-term, differentiated investments.
Our brand value is heavily derived through the mortgage products and services we provide to the market, so we don&rsquo;t skimp
on infrastructure to compete on cost. Our platform does, however, have the capacity to create significant operating scale as we
grow. The quality of our people and processes remain the most critical factor to our success. Our people drive the business partnerships
and risk-minded approach that have made us one of the industry&rsquo;s longest standing firms.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Although we are organized as a real estate
investment trust (REIT) for federal income tax purposes and comply with the relevant rules, that structure does not define us.
Redwood&rsquo;s likeness to other mortgage REITs has decreased across a number of key areas such as our leverage profile, revenue
mix, and risk metrics (including exposure to interest rates). Our formula for profitability is straightforward: sound credit decisions;
crisp execution; and rational, risk-based pricing. Our earnings are not driven by the shape of the yield curve. How we further
differentiate our operating platform and revenue streams is a topic we&rsquo;ll continue to evaluate as our vision takes shape.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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    <TD STYLE="width: 100%; text-align: center; padding-top: 3pt; padding-bottom: 3pt"><FONT STYLE="color: White"><B>Q&nbsp;2 &nbsp;2&nbsp;0&nbsp;1&nbsp;8 &nbsp;- &nbsp;S
    H A R E H O L D E R&nbsp;&nbsp; L E T T E R</B></FONT></TD></TR>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We have an exceptional track record in
housing credit &ndash; both residential and multifamily. We are an expert at product structuring and customization. Our securitization
franchise is one of the most well-established in the industry. We have a strong balance-sheet and access to various sources of
capital (as evidenced by our recent convertible bond and common equity raises), often at a significantly lower cost than what&rsquo;s
available to originators who supply us with loans. We excel at speed and reliable execution, in marked contrast to less nimble
and much larger banks and other providers who compete primarily on price.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our business strategy going forward is
squarely focused on areas in which these strengths are expected to lead to long-term, sustainable earnings growth for Redwood.
Specifically, we plan to focus our operations on areas that achieve the following:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.5in; text-align: left">&ndash;</TD><TD STYLE="text-align: justify">Our capital is value-added to the marketplace</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.5in; text-align: left">&ndash;</TD><TD STYLE="text-align: justify">There is a long runway of durable revenues available
to us</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.5in; text-align: left">&ndash;</TD><TD STYLE="text-align: justify">Our core strengths are a competitive advantage</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.5in; text-align: left">&ndash;</TD><TD STYLE="text-align: justify">We can scale profitably and realize significant operating
efficiencies</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.5in; text-align: left">&ndash;</TD><TD STYLE="text-align: justify">We feel the risks associated with investing can be prudently
managed</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our strategic plan is responsive to trends
we view as secular rather than transitory. These trends reflect constraints on the supply of homes and attendant changes in demand
in household formation (i.e., renting versus owning). Our future success will depend on our ability to accurately predict where
capital will flow in response to these changes, along with the understanding that borrowers ultimately migrate to superior service.
This all requires nimble and thorough risk oversight, a demonstrated competency of our firm.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Fortunately, our efforts toward building
a differentiated and sustainable path for our business are well underway. Redwood Choice &ndash; our expanded-prime channel &ndash;
now represents almost one-third of our mortgage banking volumes. Our total volumes, meanwhile, remain on track to increase meaningfully
from last year amidst declining industry originations. Our investment portfolio continues to deepen its purchasing power by diversifying
into other housing investments, such as Freddie Mac-sponsored multifamily bonds. Most recently, our new partnership with 5 Arches
gives us access to an attractive pipeline of single-family rental and other &ldquo;business-purpose&rdquo; mortgage loans and a
growing stream of asset management revenues.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>


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    <TD STYLE="width: 100%; text-align: center; padding-top: 3pt; padding-bottom: 3pt"><FONT STYLE="color: White"><B>Q&nbsp;2 &nbsp;2&nbsp;0&nbsp;1&nbsp;8 &nbsp;- &nbsp;S
    H A R E H O L D E R&nbsp;&nbsp; L E T T E R</B></FONT></TD></TR>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Effective implementation of our vision
requires quantitative benchmarks, and we have laid out several key targets. Our goal is for annual mortgage banking volumes and
total shareholder capital deployed five years from now to be at least two to three times what they are today. We aim to diversify
our sources of revenue to achieve a more balanced mix of fee-based activities and income from portfolio investing. A prudent growth
trajectory to these benchmarks should drive our expense ratios meaningfully lower. As an internally-managed company, our investors
benefit directly from these efficiencies. If we are successful, we believe our valuation will reflect the quality and repeatability
of these earnings, not simply the latest move in our net worth. And our EPS, after the realization of significant untapped operating
leverage, should grow significantly with the potential to command a multiple commensurate with the highest-quality firms in the
financial services industry.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We have a long history of success at Redwood
and, as we begin a new chapter, we are committed to achieving much more. We have a clear plan in place to expand our strategic
footprint while staying true to our core principles. Through a well-reasoned commitment to profitable growth, we plan to continue
optimizing our role in the housing finance market. We believe the fruits of our labor will be powerful and measurable: diversified
and predictable earnings that, complemented by scale, will drive attractive shareholder returns.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We appreciate your support and confidence
in us.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Sincerely,</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 45%; padding-top: 2pt; padding-bottom: 2pt; text-align: center"><IMG SRC="image_001.jpg" ALT="" STYLE="height: 69px; width: 223px"></TD>
    <TD STYLE="width: 10%; padding-top: 2pt; padding-bottom: 2pt">&nbsp;</TD>
    <TD STYLE="width: 45%; padding-top: 2pt; padding-bottom: 2pt; text-align: center"><IMG SRC="image_002.jpg" ALT="" STYLE="height: 72px; width: 199px"></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-top: 2pt; padding-bottom: 2pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">Christopher J. Abate</FONT></TD>
    <TD STYLE="padding-top: 2pt; padding-bottom: 2pt">&nbsp;</TD>
    <TD STYLE="padding-top: 2pt; padding-bottom: 2pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">Dashiell I. Robinson</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-top: 2pt; padding-bottom: 2pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">Chief Executive Officer</FONT></TD>
    <TD STYLE="padding-top: 2pt; padding-bottom: 2pt">&nbsp;</TD>
    <TD STYLE="padding-top: 2pt; padding-bottom: 2pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">President</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><U>Cautionary Statement</U>: The second
quarter 2018 Shareholder Letter contains forward-looking statements within the meaning of the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995. Forward-looking statements involve numerous risks and uncertainties. Our actual results
may differ from our beliefs, expectations, estimates, and projections and, consequently, you should not rely on these forward-looking
statements as predictions of future events. Forward-looking statements are not historical in nature and can be identified by words
such as &ldquo;anticipate,&rdquo; &ldquo;estimate,&rdquo; &ldquo;will,&rdquo; &ldquo;should,&rdquo; &ldquo;expect,&rdquo; &ldquo;believe,&rdquo;
&ldquo;intend,&rdquo; &ldquo;seek,&rdquo; &ldquo;plan&rdquo; and similar expressions or their negative forms, or by references
to strategy, plans, or intentions. These forward-looking statements are subject to risks and uncertainties, including, among other
things, those described in our Annual Report on Form 10-K for the year ended December 31, 2017, under the caption &ldquo;Risk Factors.&rdquo;
Other risks, uncertainties, and factors that could cause actual results to differ materially from those projected may be described
from time to time in reports we file with the Securities and Exchange Commission (SEC), including reports on Forms 10-Q and 8-K.
We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events,
or otherwise.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Important factors, among others, that may
affect our actual results include: the pace at which we redeploy our available capital into new investments and initiatives; our
ability to scale our platform and systems particularly with respect to our new initiatives; interest rate volatility, changes in
credit spreads, and changes in liquidity in the market for real estate securities and loans; changes in the demand from investors
for residential mortgages and investments, and our ability to distribute residential mortgages through our whole-loan distribution
channel; our ability to finance our investments in securities and our acquisition of residential mortgages with short-term debt;
changes in the values of assets we own; general economic trends, the performance of the housing, real estate, mortgage, credit,
and broader financial markets, and their effects on the prices of earning assets and the credit status of borrowers; federal and
state legislative and regulatory developments, and the actions of governmental authorities, including the new U.S. presidential
administration, and in particular those affecting the mortgage industry or our business (including, but not limited to, the Federal
Housing Finance Agency&rsquo;s rules relating to FHLB membership requirements and the implications for our captive insurance subsidiary&rsquo;s
membership in the FHLB); strategic business and capital deployment decisions we make; developments related to the fixed income
and mortgage finance markets and the Federal Reserve&rsquo;s statements regarding its future open market activity and monetary
policy; our exposure to credit risk and the timing of credit losses within our portfolio; the concentration of the credit risks
we are exposed to, including due to the structure of assets we hold and the geographical concentration of real estate underlying
assets we own; our exposure to adjustable-rate mortgage loans; the efficacy and expense of our efforts to manage or hedge credit
risk, interest rate risk, and other financial and operational risks; changes in credit ratings on assets we own and changes in
the rating agencies&rsquo; credit rating methodologies; changes in interest rates; changes in mortgage prepayment rates; changes
in liquidity in the market for real estate securities and loans; our ability to finance the acquisition of real estate-related
assets with short-term debt; the ability of counterparties to satisfy their obligations to us; our involvement in securitization
transactions, the profitability of those transactions, and the risks we are exposed to in engaging in securitization transactions;
exposure to claims and litigation, including litigation arising from our involvement in securitization transactions; ongoing litigation
against various trustees of RMBS transactions; whether we have sufficient liquid assets to meet short-term needs; our ability to
successfully compete and retain or attract key personnel; our ability to adapt our business model and strategies to changing circumstances;
changes in our investment, financing, and hedging strategies and new risks we may be exposed to if we expand our business activities;
our exposure to a disruption or breach of the security of our technology infrastructure and systems; exposure to environmental
liabilities; our failure to comply with applicable laws and regulations; our failure to maintain appropriate internal controls
over financial reporting and disclosure controls and procedures; the impact on our reputation that could result from our actions
or omissions or from those of others; changes in accounting principles and tax rules; our ability to maintain our status as a REIT
for tax purposes; limitations imposed on our business due to our REIT status and our status as exempt from registration under the
Investment Company Act of 1940; decisions about raising, managing, and distributing capital; and other factors not presently identified.</P>

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