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                UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-K/A
                               AMENDMENT NO. 1 TO

[ X ]      ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
           EXCHANGE ACT OF 1934

FOR THE FISCAL YEAR ENDED:  DECEMBER 31, 1996
                                       OR

[   ]      TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
           EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM _____ TO _____

COMMISSION FILE NUMBER:    0-26436

                               REDWOOD TRUST, INC.
             (Exact name of Registrant as specified in its Charter)

             MARYLAND                                        68-0329422
 (State or other jurisdiction of                         (I.R.S. Employer
 incorporation or organization)                          Identification No.)

  591 REDWOOD HIGHWAY, SUITE 3100
      MILL VALLEY, CALIFORNIA                                  94941
(Address of principal executive offices)                     (Zip Code)

                                 (415) 389-7373
              (Registrant's telephone number, including area code)

Securities registered pursuant to     Securities registered pursuant to Section
Section 12(b) of the Act:             12(g) of the Act: 

            NONE                      CLASS B 9.74 % CUMULATIVE CONVERTIBLE
                                      PREFERRED STOCK, PAR VALUE $0.01 PER 
                                      SHARE
                                                  (Title of Class)

                                      COMMON STOCK, PAR VALUE $0.01 PER SHARE
                                                  (Title of Class)

                                      STOCK PURCHASE WARRANTS, EXPIRING DECEMBER
                                      31, 1997
                                                  (Title of Class)

Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes [X] No [ ]

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]

At March 17, 1997 the aggregate market value of the voting stock held by
non-affiliates of the Registrant was $479,425,809.

The number of shares of the Registrant's Common Stock outstanding on March 17,
1997 was 11,797,753.

                       DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Registrant's definitive Proxy Statement issued in connection
with the 1997 Annual Meeting of Stockholders are incorporated by reference into
Part III.
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                               REDWOOD TRUST, INC.

                                     PART IV



Item 14.   EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON
                     FORM 8-K

                     (a)       Documents filed as part of this report:

                               (3)        Exhibits:

        Exhibit No.                                 Exhibit
        -----------                                 -------

            23.1                        Consent of Independent Accountants





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                                   SIGNATURES



Pursuant to the requirements of Section 13 of the Securities Act of 1934, the
Registrant has duly caused this amendment to its report on Form 10-K to be
signed on behalf of it by the undersigned thereunto duly authorized.


                                                REDWOOD TRUST, INC.

Dated:     April 3, 1997
                                                /s/ Vickie L. Rath
                                                ------------------
                                                Vickie L. Rath
                                                Principal Accounting Officer






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                                  EXHIBIT INDEX



Exhibit No.                          Exhibit                          Page No.
- - -----------                          -------                          --------

    23.1               Consent of Independent Accountants                5






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