EXHIBIT 99


                                                                        CONTACT:
                                                         Doug Hansen/George Bull
                                                             Redwood Trust, Inc.
                                                                  (415) 389-7373


          REDWOOD TRUST, INC. ANNOUNCES THE EFFECTIVENESS OF AMENDMENTS
            TO ITS CHARTER WHICH WERE APPROVED AT ITS ANNUAL MEETING

MILL VALLEY, CA JULY 16, 1998 - Redwood Trust, Inc. (NYSE:RWT), a Maryland
corporation, announced today that two amendments to the Company's charter,
previously approved by shareholders at the annual shareholder meeting, have
become effective.

First, certain technical amendments relating to stock transfers have been
effected as requested by the New York Stock Exchange in connection with the
Company's listing of its outstanding securities on the NYSE.

Second, the Company amended and clarified the definition of the term "Beneficial
Ownership" in the provisions of the Charter limiting the ownership of any
investor in the capital stock of the corporation. The definition of such
ownership now conforms to Rule 13d-3 of the Securities Exchange Act of 1934, as
amended.

The principal ownership limitation of the Charter is the requirement that no
person, corporation, partnership, estate or trust shall own in excess of 9.8% of
any class of capital stock of the Company unless, prior to such accumulation, a
waiver from this limitation was granted by the Company's Board of Directors.

The Charter amendment may limit opportunities for stockholders to receive a
premium for their securities that might otherwise exist if any person were to
attempt to assemble a block of shares in excess of the number of shares
permitted under the Charter. The forfeiture and other enforcement provisions of
the Charter operate automatically to any acquisition of shares in excess of the
limitation.

Thus, investors are cautioned to insure that their beneficial ownership of such
shares (as now defined in the Charter) does not exceed the 9.8% limitation or
the terms of any previously 


granted Board waiver. The amendment will not affect the validity or
transferability of stock certificates currently outstanding, nor will it change
the capital structure of the Company.

Redwood Trust, Inc. is a financial institution specializing in mortgages. From
its portfolio operations, the Company earns net income to the extent that the
interest income earned from its mortgage loan and security portfolio exceeds the
cost of borrowed funds, hedging, credit loss expenses and operating expenses.
The Company also operates mortgage-related, fee-generating businesses through
its taxable affiliate, RWT Holdings, Inc. The Company is a real estate
investment trust (REIT). Currently the Company has outstanding 13,796,333 shares
of common stock (New York Stock Exchange, Symbol "RWT") and 909,518 shares of
Class B Cumulative Convertible Preferred Stock (Symbol "RWT-PB"). The Company
has a Web site on the Internet at http://www.redwoodtrust.com.


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