Exhibit 11.1

Redwood Trust, Inc.
Computation of Per Share Earnings

			Three Months		Three Months
			Ended		Ended
			March 31, 2002		March 31, 2001
Basic:
	Average common shares outstanding			13,658,443		8,838,964
		Total		13,658,443		8,838,964
	Net Income		$	11,218,789	$	6,679,775
	Per Share Amount		$	0.82	$	0.76
Diluted:
	Average common shares outstanding			13,658,443		8,838,964
	Net effect of dilutive stock options outstanding during the period — based on the treasury stock method			418,962		226,257
		Total		14,077,405		9,065,220
	Net Income		$	11,218,789	$	6,679,775
	Per Share Amount		$	0.80	$	0.74