FORM 10-Q
SECURITIES & EXCHANGE COMMISSION
WASHINGTON DC 20549
Quarterly Report Under Section 13 or 15 (d)
of the Securities Exchange Act of 1934
For Period Ended June 30, 2001
- --------------------------------------------------------------------------------
Commission file number 0-17573
- --------------------------------------------------------------------------------
REDWOOD MORTGAGE INVESTORS VI
(exact name of registrant as specified in its charter)
California 94-3031211
- --------------------------------------------------------------------------------
(State or other jurisdiction of I.R.S. Employer
incorporation or organization) Identification No.
650 El Camino Real, Suite G, Redwood City, CA. 94063
- --------------------------------------------------------------------------------
(address of principal executive office)
(650) 365-5341
- --------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
NOT APPLICABLE
- --------------------------------------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report)
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 reports), and (2) has been subject to such
filing requirements for the past 90 days.
YES XX NO
---------------- -------------
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 12, 13 or 15 (d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court.
YES NO NOT APPLICABLE XX
-------------- ---------------- ---------------------
APPLICABLE ONLY TO CORPORATE ISSUERS
Indicate the number of shares outstanding of each of the issuer's class
of common stock, as of the latest date.
NOT APPLICABLE
REDWOOD MORTGAGE INVESTORS VI
(A California Limited Partnership)
BALANCE SHEETS
DECEMBER 31, 2000 (audited) AND
JUNE 30, 2001 (unaudited)
ASSETS
June 30, December 31,
2001 2000
(unaudited) (audited)
--------------- ----------------
Cash $271,167 $354,860
--------------- ----------------
Accounts receivable
Loans, secured by deeds of trust 5,455,553 5,570,576
Accrued interest on loans 669,759 664,292
Advances on loans 191,996 133,647
Accounts receivables, unsecured 82,362 82,362
------------- ----------------
6,399,670 6,450,877
Less allowance for doubtful accounts 261,452 261,452
------------- ----------------
6,138,218 6,189,425
------------- ----------------
Note receivable - Redwood Mortgage Corp. 76,436 125,000
Real estate owned, held for sale, acquired
through foreclosure 747,205 767,583
Prepaid expenses 748 0
------------- ----------------
Total assets $7,233,774 $7,436,868
============= ================
LIABILITIES AND PARTNERS' CAPITAL
Liabilities
Accounts payable $13,068 $13,068
------------- ----------------
Total liabilities 13,068 13,068
------------- ----------------
Partners' capital
Limited Partners' capital, subject
to redemption, (note 4D): 7,210,940 7,414,034
General Partners' capital: 9,766 9,766
------------- ----------------
Total Partners' capital 7,220,706 7,423,800
------------- ----------------
Total liabilities and partners' capital $7,233,774 $7,436,868
============= ================
The accompanying notes are an integral part of the financial statements.
REDWOOD MORTGAGE INVESTORS VI
(A California Limited Partnership)
STATEMENTS OF INCOME
FOR THE SIX AND THREE MONTHS ENDED JUNE 30, 2001 AND 2000 (unaudited)
Six Months Six Months Three Months Three Months
Ended Ended Ended Ended
June 30, June 30, June 30, June 30,
2001 2000 2001 2000
--------------- ------------- --------------- ----------------
Revenues
Interest on loans $267,421 $293,154 $131,978 $151,050
Interest on bank deposits 7,943 6,620 6,810 3,755
Late charges, prepayment penalties, and fees 8,858 13,388 3,793 7,774
Interest on promissory note 1,436 10,000 0 10,000
--------------- ------------- --------------- ----------------
285,658 323,162 142,581 172,579
--------------- ------------- --------------- ----------------
Expenses
Loan servicing fees 21,853 16,681 11,890 7,622
Asset management fee 4,617 4,983 2,291 2,466
Clerical costs through Redwood Mortgage Corp. 15,252 10,075 7,540 4,928
Provision for doubtful accounts and losses
on real estate acquired through foreclosure 0 12,963 0 12,963
Professional services 16,123 25,558 8,153 19,393
Other 6,970 6,988 4,379 4,672
--------------- ------------- --------------- ---------------
64,815 77,248 34,253 52,044
--------------- ------------- --------------- ----------------
Net income $220,843 $245,914 $108,328 $120,535
=============== ============= =============== ================
Net income:
General Partners (1%) $2,208 $2,459 $1,083 $1,205
Limited Partners (99%) $218,635 $243,455 $107,245 $119,330
--------------- ------------- --------------- ----------------
$220,843 $245,914 $108,328 $120,535
=============== ============= =============== ================
Net income per $1,000 invested by Limited
Partners for entire period
-where income is reinvested and
Compounded $29.96 $30.93 $14.70 $15.20
=============== ============= =============== ================
-where partner receives income
in monthly distributions $29.60 $30.53 $14.63 $15.12
=============== ============= =============== ================
The accompanying notes are an integral part of these financial statements.
REDWOOD MORTGAGE INVESTORS VI
(A California Limited Partnership)
STATEMENTS OF CHANGES IN PARTNERS' CAPITAL
FOR THE THREE YEARS ENDED DECEMBER 31, 2000 (audited) and
THE SIX MONTHS ENDED JUNE 30, 2001 (unaudited)
PARTNERS' CAPITAL
-----------------------------------------------------------------------------------
LIMITED PARTNERS' CAPITAL
-------------------------------------------------
Capital Capital
Account Formation Account
Limited loan General
Partners Receivable Total Partners Total
------------- -------------- -------------- ------------- -------------
Balances at January 1, 1998 $9,481,208 $( 59,521 ) $9,421,687 $9,766 $9,431,453
Formation loan collections 0 53,291 53,291 0 53,291
Net income 507,380 0 507,380 5,125 512,505
Early withdrawal penalties ( 9,834 ) 6,230 ( 3,604 ) 0 ( 3,604 )
Partners' withdrawals ( 1,280,986 ) 0 ( 1,280,986 ) ( 5,125 ) ( 1,286,111 )
------------- -------------- -------------- ------------- --------------
Balances at December 31, 1998 $8,697,768 0 $8,697,768 $9,766 $8,707,534
Net income 515,700 0 515,700 5,209 520,909
Early withdrawal penalties ( 10,028 ) 0 ( 10,028 ) 0 ( 10,028 )
Partners' withdrawals ( 1,182,860 ) 0 ( 1,182,860 ) ( 5,209 ) ( 1,188,069 )
------------- -------------- -------------- ------------- ----------------
Balances at December 31, 1999 $8,020,580 0 $8,020,580 $9,766 $8,030,346
Net income 473,150 0 473,150 4,779 477,929
Early withdrawal penalties ( 16,335 ) 0 ( 16,335 ) 0 ( 16,335 )
Partners' withdrawals ( 1,063,361 ) 0 ( 1,063,361 ) ( 4,779 ) ( 1,068,140 )
------------- -------------- -------------- ------------- ---------------
Balances at December 31, 2000 7,414,034 0 7,414,034 9,766 7,423,800
Net income 218,635 0 218,635 2,208 220,843
Early withdrawal penalties ( 6,925 ) 0 ( 6,925 ) 0 ( 6,925 )
Partners' withdrawals ( 414,804 ) 0 ( 414,804 ) ( 2,208 ) ( 417,012 )
------------- -------------- -------------- ------------- ----------------
Balances at June 30, 2001 $7,210,940 0 $7,210,940 $9,766 $7,220,706
============= ============== ============== ============= ================
The accompanying notes are an integral part of these financial statements.
REDWOOD MORTGAGE INVESTORS VI
(A California Limited Partnership)
STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2001AND 2000 (unaudited)
SIX MONTHS ENDED
JUNE 30,
---------------------------------------
2001 2000
------------- --------------
Cash flows from operating activities:
Net income $220,843 $245,914
Adjustments to reconcile net income to net
cash provided by operating activities:
Provision for doubtful accounts 0 12,413
Provision for Losses (recovery) on real estate
held for sale 0 550
Early withdrawal penalty credited to income ( 6,925 ) ( 9,275 )
(Increase) decrease in assets:
Accrued interest & advances ( 63,816 ) ( 96,278 )
Increase (decrease) in liabilities:
Accounts payable and accrued expenses 0 13,423
Deferred Interest on loans 0 ( 15,676 )
(Increase) decrease in pre-paid expenses ( 748 ) 0
------------- ---------------
Net cash provided by operating activities 149,354 151,071
------------- ---------------
Cash flows from investing activities:
Principal collected on loans 1,328,058 836,565
Loans made ( 1,103,266 ) ( 958,062 )
Additions to real estate held for sale ( 149,736 ) ( 43,687 )
Dispositions of real estate held for sale 60,345 0
Proceeds from unsecured accounts receivable 0 0
------------- ---------------
Net cash provided by (used in) investing activities 135,401 ( 165,184 )
------------- ---------------
Cash flows from financing activities:
Partners withdrawals ( 417,012 ) ( 546,178 )
Note receivable - Redwood Mortgage Corp. 48,564 37,000
------------- ---------------
Net cash provided by (used in) financing activities ( 368,448 ) ( 509,178 )
------------- ---------------
Net increase (decrease) in cash ( 83,693 ) ( 523,291 )
Cash - beginning of period 354,860 1,120,295
------------- ---------------
Cash - end of period $271,167 $597,004
============= ===============
The accompanying notes are an integral part of these financial statements.
REDWOOD MORTGAGE INVESTORS VI
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2001
NOTE 1 - ORGANIZATION AND GENERAL
Redwood Mortgage Investors VI, (the "Partnership") is a California Limited
Partnership, of which the General Partners are D. Russell Burwell, Michael R.
Burwell and Gymno Corporation, a California corporation owned and operated by
the individual General Partners. The partnership was organized to engage in
business as a mortgage lender for the primary purpose of making loans secured by
Deeds of Trust on California real estate. Loans are being arranged and serviced
by Redwood Mortgage Corp., (Redwood Mortgage), an affiliate of the General
Partners. The offering of partnership units was closed with contributed capital
totaling $9,772,594.
Each month's income is distributed to partners based upon their
proportionate share of partners' capital. Some partners have elected to withdraw
income on a monthly, quarterly or annual basis.
A. Sales Commissions Formation Loan
Sales commissions ranging from 0% (units sold by General Partners) to 10%
of gross proceeds were paid by Redwood Mortgage Corp. an affiliate of the
General Partners that arranges and services the loans. To finance the sales
commissions, the Partnership loaned to Redwood Mortgage Corp. $623,255 (the
"formation loan") relating to contributed capital of $9,781,366. The formation
loan was unsecured, and was repaid without interest, over 10 years, commencing
December 31, 1989. The last payment was made in 1998.
B. Other Organizational and Offering Expenses
Organizational and offering expenses, other than sales commissions,
(including printing costs, attorney and accountant fees, and other costs), paid
by the Partnership from the offering proceeds totaled $360,885 or 3.69% of the
gross proceeds contributed by the Partners. Such costs have been fully amortized
and allocated to the Partners.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A. Accrual Basis
Revenues and expenses are accounted for on the accrual basis of accounting
wherein income is recognized as earned and expenses are recognized as incurred.
Once a loan is categorized as impaired, interest is no longer accrued thereon.
B. Management Estimates
In preparing the financial statements, management is required to make
estimates based on the information available that affect the reported amounts of
assets and liabilities as of the balance sheet date and revenues and expenses
for the related periods. Such estimates relate principally to the determination
of the allowance for doubtful accounts, including the valuation of impaired
loans, and the valuation of real estate acquired through foreclosure. Actual
results could differ significantly from these estimates.
REDWOOD MORTGAGE INVESTORS VI
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2001
C. Loans, Secured by Deeds of Trust
The Partnership has both the intent and ability to hold the loans to
maturity, i.e., held for long-term investment. They are therefore valued at cost
for financial statement purposes with interest thereon being accrued by the
simple interest method.
Financial Accounting Standards Board Statements (SFAS) 114 and 118
(effective January 1, 1995) provide that if the probable ultimate recovery of
the carrying amount of a loan, with due consideration for the fair value of
collateral, is less than the recorded investment and related amounts due and the
impairment is considered to be other than temporary, the carrying amount of the
investment (cost) shall be reduced to the present value of future cash flows. As
of June 30, 2001 and at December 31, 2000 and 1999, reductions in the cost of
loans categorized as impaired by the Partnership totaled $159,090, $159,090 and
$283,249, respectively. The reduction in stated value was accomplished by
increasing the allowances for doubtful accounts.
As presented in Note 9 to the financial statements as of June 30, 2001, the
average loan to appraised value of security at the time the loans were
consummated was 66.12%. When a loan is valued for impairment purposes, an
updating is made in the valuation of collateral security. However, a low loan to
value ratio tends to minimize reductions for impairment.
D. Cash and Cash Equivalents
For purposes of the statements of cash flows, cash and cash equivalents
include interest bearing and non-interest bearing bank deposits.
E. Real Estate Owned, Held for Sale
Real estate owned, held for sale, includes real estate acquired through
foreclosure and is stated at the lower of the recorded investment in the
property, net of any senior indebtedness, or at the property's estimated fair
value, less estimated costs to sell.
REDWOOD MORTGAGE INVESTORS VI
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2001
The following schedule reflects the costs of real estate acquired through
foreclosure and the recorded reductions to estimated fair values, less estimated
costs to sell as of June 30, 2001 and December 31, 2000 was as follows:
June 30, December 31,
2001 2000
--------------- ----------------
Costs of properties $1,190,132 $1,240,579
Reduction in value ( 442,927 ) ( 472,996 )
--------------- ----------------
Fair value reflected in
financial statements $747,205 $767,583
=============== ================
F. Income Taxes
No provision for Federal and State income taxes is made in the financial
statements since income taxes are the obligation of the partners if and when
income taxes apply.
G. Organization and Syndication Costs
The Partnership bears its own organization and syndication costs (other
than certain sales commissions and fees described above) including legal and
accounting expenses, printing costs, selling expenses, a 1% wholesale brokerage
fee and filing fees.
H. Allowance for Doubtful Accounts
Loans and the related accrued interest, fees and advances are analyzed on a
continuous basis for recoverability. Delinquencies are identified and followed
as part of the loan system. A provision is made for bad debt to adjust the
allowance for doubtful accounts to an amount considered by management to be
adequate with due consideration to collateral value to provide for unrecoverable
accounts receivable, including impaired loans, unspecified loans, accrued
interest and advances on loans, and other accounts receivable (unsecured). The
composition of the allowance for doubtful accounts as of June 30, 2001 and
December 31, 2000 was as follows: June 30, December 31, 2001 2000
- --------------- ----------------
Impaired loans $159,090 $159,090
Unspecified loans 20,000 20,000
Accounts receivable, unsecured 82,362 82,362
------------ -------------
$261,452 $261,452
============ =============
REDWOOD MORTGAGE INVESTORS VI
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2001
I. Net Income Per $1,000 Invested
Amounts reflected in the statements of income as net income per $1,000
invested by Limited Partners for the entire period are actual amounts allocated
to Limited Partners who held their investment throughout the period and have
elected to either leave their earnings to compound or have elected to receive
monthly distributions of their net income. Individual income is allocated each
month based on the Limited Partners' pro rata share of Partners' Capital.
Because the net income percentage varies from month to month, amounts per $1,000
will vary for those individuals who made or withdrew investments during the
period, or select other options.
NOTE 3 - GENERAL PARTNERS AND RELATED PARTIES
The following are commissions and/or fees, which are paid to the General
Partners and/or related parties.
A. Mortgage Brokerage Commissions
Mortgage brokerage commissions for services in connection with the review,
selection, evaluation, negotiation and extension of the loans were limited to
12% of the principal amount of the loans through the period ending 6 months
after the termination date of the offering. Thereafter, commissions are limited
to an amount not to exceed 4% of the total Partnership assets per year. Such
commissions are paid by the borrowers, thus, not an expense of the Partnership.
Such commissions totaled $33,206, $45,164, $46,527 and $36,700 for the six
months through June 30, 2001, and for the years ended December 31, 2000, 1999,
and 1998, respectively.
B. Loan Servicing Fees
Monthly loan servicing fees are paid to Redwood Mortgage up to 1/8 of 1%
(1.5% annual) of the unpaid principal, or such lesser amount as is reasonable
and customary in the geographic area where the property securing the loan is
located. Loan servicing fees of $21,853, $48,557, $50,150, and $70,630, were
incurred for six months through June 30, 2001, and for the years ended December
31, 2000, 1999, and 1998, respectively.
C. Asset Management Fee
The General Partners are authorized to receive monthly fees for managing
the Partnership's loan portfolio and operations of up to 1/32 of 1% (3/8 of 1%
annually). Management fees of $4,617, $9,780, $10,626, and $6,640 were incurred
during six months through June 30, 2001, and for the years 2000, 1999, and 1998,
respectively.
D. Other Fees
The Partnership Agreement provides for other fees such as reconveyance,
mortgage assumption and mortgage extension fees. These fees are paid by the
borrowers to parties related to the General Partners.
E. Income and Losses
All income and losses are credited or charged to partners in relation to
their respective partnership interests. The partnership interest of the General
Partners (combined) is a total of 1%.
REDWOOD MORTGAGE INVESTORS VI
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2001
F. Operating Expenses
The General Partners or their affiliate (Redwood Mortgage Corp.) are
reimbursed by the Partnership for all operating expenses actually incurred by
them on behalf of the Partnership, including without limitation, out-of-pocket
general and administration expenses of the Partnership, accounting and audit
fees, legal fees and expenses, postage and preparation of reports to Limited
Partners. As of June 30, 2001, and in the years 2000, 1999, and 1998, clerical
costs totaling $15,252, $19,647, $21,748, and $24,440, respectively, were
reimbursed to Redwood Mortgage Corp. and are included in expenses in the
Statements of Income.
NOTE 4 - OTHER PARTNERSHIP PROVISIONS
A. Term of the Partnership
The term of the Partnership is approximately 40 years, unless sooner
terminated as provided. The provisions provided for no capital withdrawal for
the first five years, subject to the penalty provision set forth in (D) below.
Thereafter, investors have the right to withdraw over a five-year period, or
longer.
B. Election to Receive Monthly, Quarterly or Annual Distributions
Upon subscriptions, investors elected either to receive monthly, quarterly
or annual distributions of earnings allocations, or to allow earnings to
compound for at least a period of 5 years.
C. Profits and Losses
Profits and losses are allocated monthly among the Limited Partners
according to their respective capital accounts after 1% is allocated to the
General Partners.
D. Withdrawal From Partnership
A Limited Partner had no right to withdraw, without penalty, from the
Partnership or to obtain the return of his capital account for at least five
years after such units are purchased which in all instances had occurred by
December 31, 1994. After that time, at the election of the Partner, capital
accounts can be returned over a five-year period in 20 equal quarterly
installments or such longer period as is requested.
Notwithstanding the above, in order to provide a certain degree of
liquidity to the Limited Partners, the General Partners will liquidate a Limited
Partner's entire capital account in four quarterly installments beginning on the
last day of the calendar quarter following the quarter in which the notice of
withdrawal is given. Such liquidations shall, however, be subject to a 10% early
withdrawal penalty applicable to any sums withdrawn prior to the time when such
sums otherwise could have been withdrawn pursuant to the liquidation procedure
set forth above. The 10% early withdrawal penalty will be received by the
Partnership, and a portion of the sums collected as such penalty will be applied
toward the next installment(s) of principal under the formation loan owed to the
Partnership by Redwood Mortgage Corp. Such portion shall be determined by the
ratio between the initial amount of formation loan and the total amount of other
organization and syndication costs incurred by the Partnership in this offering.
The balance of any such early withdrawal penalties shall be retained by the
Partnership for its own account and applied against syndication costs. Since the
syndication costs have been fully amortized as of December 31, 1993, and the
formation loan was paid in 1998, the early withdrawal penalties paid in the
future will be credited to income for the period received.
REDWOOD MORTGAGE INVESTORS VI
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2001
The Partnership will not establish a reserve from which to fund withdrawals
and, accordingly, the Partnership's capacity to return a Limited Partner's
capital account is restricted to the availability of Partnership cash flow.
Furthermore, no more than 20% of the total Limited Partners' capital accounts
outstanding at the beginning of any year shall be liquidated during any calendar
year.
NOTE 5 - NOTE RECEIVABLE - REDWOOD MORTGAGE CORP.
Redwood Mortgage Corp., an affiliate of the General Partners, which
arranges and services the loans of the Partnership, has subsidized certain loan
losses of the Partnership in the form of a note receivable. The note bears
interest at 8% and will be paid over a three-year period to the extent that
Partnership losses occur relative to certain identified properties. If the
identified properties recover from their write-downs, Redwood Mortgage Corp.
will be credited or reimbursed up to the amount of the note receivable.
NOTE 6 - LEGAL PROCEEDINGS
In the normal course of business the Partnership may become involved in
various types of legal proceedings such as assignments of rents, bankruptcy
proceedings, appointments of receivers, unlawful detainers, judicial
foreclosures, etc., to enforce the provisions of the deeds of trust, collect the
debt owed under the promissory notes or to protect/recoup its investment from
the real property secured by the deeds. As of the date hereof, the Partnership
is a defendant along with numerous other defendants, including a developer,
contractor, and other lenders, in a lawsuit involving a homeowners association's
attempt to recover "damages" for faulty construction. Management anticipates
that the ultimate outcome of the legal matters will not have a material adverse
effect on the net assets of the Partnership, with due consideration having been
given in arriving at the allowance for doubtful accounts.
NOTE 7 - INCOME TAXES
The following reflects a reconciliation from net assets (Partners' Capital)
reflected in the financial statements to the tax basis of those net assets:
June 30, December 31,
2001 2000
-------------- ----------------
Net assets - Partners' Capital per
financial statements $7,220,706 $7,423,800
Allowance for doubtful accounts 261,452 261,452
--------------- ----------------
Net assets tax basis $7,482,158 $7,685,252
=============== ================
In 2000, approximately 73% of taxable income was allocated to tax exempt
organizations i.e., retirement plans. Such plans do not have to file income tax
returns unless their "unrelated business income" exceeds $1,000. Applicable
amounts become taxable when distribution is made to participants.
REDWOOD MORTGAGE INVESTORS VI
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2001
NOTE 8 - FAIR VALUE OF FINANCIAL INSTRUMENTS
The following methods and assumptions were used to estimate the fair value
of financial instruments:
(a) Cash and cash equivalents - The carrying amount equals fair value. All
amounts, including interest-bearing accounts are subject to immediate
withdrawal.
(b) Loans (see note 2 (c))-Loan carrying values were $5,455,553 at June 30,
2001. The fair value of these investments of $5,286,529 was estimated based upon
projected cash flows discounted at the estimated current interest rates at which
similar loans would be made. The applicable amount of the allowance for doubtful
accounts along with accrued interest and advances related thereto should also be
considered in evaluating the fair value versus the carrying value.
NOTE 9 - ASSET CONCENTRATIONS AND CHARACTERISTICS
The loans are secured by recorded deeds of trust. At June 30, 2001, there were
30 loans outstanding with the following characteristics:
Number of loans outstanding 30
Total loans outstanding $5,455,553
Average loan outstanding $181,852
Average loan as percent of total 3.33%
Average loan as percent of Partners' Capital 2.52%
Largest loan outstanding $1,376,117
Largest loan as percent of Partners' Capital 19.06%
Number of counties where security is located (all California) 10
Largest percentage of loans in one county 37.87%
Average loan to appraised value of security at time
loan was consummated 66.12%
Number of loans in foreclosure 1
REDWOOD MORTGAGE INVESTORS VI
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2001
The following categories of loans were held at June 30, 2001 and December 31,
2000:
June 30, December 31,
2001 2000
----------- -------------
First Trust Deeds $3,986,379 $4,011,117
Second Trust Deeds 1,405,310 1,385,496
Third Trust Deeds 63,864 173,963
----------- -----------
Total loans 5,455,553 5,570,576
Prior liens due other lenders 6,446,044 8,467,477
----------- -----------
Total debt $11,901,597 $14,038,053
=========== ===========
Appraised property value at time of loan $18,000,250 $20,364,599
=========== ===========
Total investments as a percent of appraisals 66.12% 68.93%
=========== ===========
Investments by Type of Property
Owner occupied homes $883,700 $755,014
Non-Owner occupied homes 291,477 672,518
Apartments 569,290 575,407
Commercial 3,711,086 3,567,637
---------- -----------
5,455,553 $5,570,576
========== ===========
REDWOOD MORTGAGE INVESTORS VI
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2001
Scheduled maturity dates are as follows:
Year Ending
December 31, Amount
------------------ --------------
2001 $3,300,011
2002 341,171
2003 590,226
2004 733,700
2005 40,125
Thereafter 450,320
--------------
$5,455,553
==============
The scheduled maturities for 2001 include $2,937,010 in loans, which are
past maturity at June 30, 2001. $2,291,269 of those loans were categorized as
delinquent over 90 days.
The cash balance at June 30, 2001 of $271,167 was in one bank with interest
bearing balances totaling $223,946. The balances exceeded FDIC insurance limits
(up to $100,000 per bank) by $171,167. As and when deposits in the Partnership's
bank accounts increase significantly beyond the insured limit, the funds are
generally either placed in new loans or used to pay down on the line of credit
balance, if any.
Management's Discussion and Analysis of Financial Condition and
Results of Operations
As of September 2, 1989, the Partnership had sold 97,725.94 Units and its
contributed capital totaled $9,772,594 of the approved $12,000,000 issue, in
Units of $100 each. As of that date the offering was formally closed. On June
30, 2001, the Partnership's net capital totaled $7,220,706.
The Partnership began funding loans in October 1987. The Partnership's
loans outstanding for the years ended December 31, 1998, 1999, 2000, and six
months through June 30, 2001 were $7,969,735, $5,282,773, $5,570,576, and
$5,455,553 respectively. The decrease in loans outstanding from December 31,
1998 to June 30, 2001, was due primarily to the Partnership utilizing loan
payoffs to meet Limited Partner capital liquidations, line of credit pay-down,
uninvested cash in loans and an increase in Real Estate Owned or in process.
During the years 1998, 1999, 2000, and six months through June 30, 2001, loan
principal collections exceeded Limited Partner liquidations.
Since the fall of 1999, mortgage interest rates have been rising due
primarily to economic forces and by the Federal Reserve raising its core
interest rates. However, since January 2001, the Federal Reserve has been
dramatically cutting its core interest rates with five successive cuts, ranging
from .25% to .50%. The latest cut being June 27, 2001, which reduced the Federal
Funds Rate to 3.75%. The effect of the cuts has greatly reduced short-term
interest rates and to a lesser extent reduced long-term interest rates. New
loans will be originated at then existing interest rates. In the future,
interest rates likely will change from their current levels. The General
Partners cannot at this time predict at what levels interest rates will be in
the future. Although the rates charged by the Partnership are influenced by the
level of interest rates in the market, the General Partners anticipate that
rates charged by the Partnership to its borrowers will be somewhat lower than
the first half of 2001. The General Partners anticipate that new loans will be
placed at rates approximately 1% lower than similar loans during the first half
of 2001. The lowering of interest rates has encouraged those borrowers that hold
higher interest rate loans than those currently available to seek refinancing of
their existing obligations to take advantage of these lower rates. The
Partnership may face prepayments in the existing portfolio from borrowers taking
advantage of these lower rates. However, demand for loans from qualified
borrowers continues to be strong and as prepayments and new funds, which are
being generated from Partnership unit sales, occur, we expect to replace these
loans with loans at somewhat lower interest rates. At this time, we believe that
the average loan portfolio interest rate will decline approximately .25% to .50%
over the remainder of the year. Nevertheless, based upon the rates expected in
connection with the existing loans, and anticipated interest rates to be charged
by the Partnership and the General Partners' experience, the General Partners
anticipate that the annualized yield will range between 5.75% and 6.25% for the
remainder of 2001.
Previously the Partnership had a line of credit with a commercial bank,
which was secured by its loan portfolio. On December 31, 1999 the Partnership,
on its own accord, closed its line of credit with that bank and since that time
has not negotiated a similar credit line with any institution. Management felt
that the need for the credit line was not necessary as cash flows from loan
payments and payoffs have been in synchronization with loan opportunities and
Limited Partner liquidations.
The Partnership's operating results and delinquencies are within the normal
range of the General Partners expectations, based upon their experience in
managing similar Partnerships over the last twenty-four years. Foreclosures are
a normal aspect of partnership operations and the General Partners anticipate
that they will not have a material effect on liquidity. As of June 30, 2001,
there was one property in foreclosure. As of June 30, 2001 the Partnership's
Real Estate Owned account balance was $747,205. This account had a balance of
$169,922, $133,300 and $767,583 as of December 31, 1998, 1999, and 2000,
respectively. The increase was due to acquisition of a commercial property
through foreclosure recorded as REO in process in December 1999, and the
decrease as of June 30, 2001 was due to the sale of one piece of real estate
owned.
Cash is continually being generated from interest earnings, late charges,
prepayment penalties, and amortization and pay-off of notes. Currently, this
amount exceeds Partnership expenses and earnings and Partner liquidation
requirements. As loan opportunities become available, excess cash and available
funds are invested in new loans.
The General Partners regularly review the loan portfolio, examining the
status of delinquencies, the underlying collateral securing these loans, REO
expenses, sales activities, and borrower's payment records and other data
relating to the loan portfolio. Data on the local real estate market, and on the
national and local economy are studied. Based upon this information and more,
loan loss reserves and allowance for doubtful accounts are increased or
decreased. Because of the number of variables involved, the magnitude of
possible swings and the General Partners inability to control many of these
factors, actual results may and do sometimes differ significantly from estimates
made by the General Partners. Management provided $180,054, $437,558, $193,427,
and 0 as provision for doubtful accounts for the years ended December 31, 1998,
1999, 2000, and six months through June 30, 2001, respectively. The decrease in
the provision in 1998 reflects the decrease in the amount of REO, unsecured
receivables and the decreasing levels of delinquency within the portfolio. The
increase in allowance for 1999 and 2000 was to build up reserve for any
potential loss in the future. The Partnership acquired a piece of property
through foreclosure in 2000. In anticipation of this event, the Partnership
carried $668,132 in its balance sheet as Real Estate Owned in Process as of
December 31, 1999. This investment was reclassified into Real Estate Owned in
the year 2000. Management believes that reserves previously set aside in
anticipation of this acquisition are adequate. The decrease to $0 in doubtful
accounts provision for the six months through June 30, 2001 is due to
Managements belief that the current overall reserve balances of $261,452 are
adequate and additional reserves set aside are not currently warranted.
The Partnership makes loans primarily in Northern California. As of June
30, 2001, approximately 77%, ($4,226,859) of the loans held by the Partnership
were in the four San Francisco Bay Area Counties. The remainder of the loans
held were secured primarily by Northern California real estate outside the San
Francisco Bay Area.
The United States economy has slowed from the robust Gross Domestic Product
growth levels of 4.2% in 1999 and 5.0% in 2000 to a growth rate of 1.2% and .7%
for the 1st and 2nd quarter of 2001, respectively. In response to the slow down
in economic activity, the Federal Reserve has been acting primarily through
reductions in the Federal Funds rates to stimulate the United States economy.
Their interest rate cuts have lowered the Federal Funds rate from 6.5% to 3.75%
or 42% over the course of the first half of 2001.
Like the rest of the nation, the San Francisco Bay Area has also felt the
slow down in economic growth. The technology companies of Silicon Valley and
other industries are feeling the effects of the overall US economy slowdown,
which include lower earnings, losses and layoffs. The Northern California real
estate market and particularly the San Francisco Bay Area real estate
marketplace experienced increases in values of over 10% in 1999 and in 2000. In
the residential marketplace throughout 2000, offers for residential real estate
were often at or above asking price. The residential market has slowed and is
returning to a more normal market, wherein buyers and sellers negotiate the
terms of a sale without undue influence from other buyers desiring the property.
This has resulted in longer listing and transaction times. According to
DataQuick Information Systems, April 2001, the number of home sales for the San
Francisco Bay Area were 15.8% lower than the previous April, yet the median
sales price increased 9.4% to $394,000 during this same period. In our opinion
mid priced and lower end homes have continued to increase in value while the
high-end homes have begun to decrease in value. The Partnership may experience
higher delinquencies due to lay offs from borrowers who need to sell their homes
in order to repay their debt not anticipating currently existing longer
transaction times to sell a home or the lower prices of higher end homes.
For commercial properties vacancy rates continued to increase as space
absorption has slowed and sub lease space has been put on the market. According
to Grubb and Ellis, vacancy in Class A and B space in San Francisco reached 7.7
percent at the end of the first quarter of 2001. Vacancy rates for other cities
in the San Francisco Bay Area followed a similar trend. According to Grubb and
Ellis, one indication that the bottom of the market may be reached soon is that
the rate of increase in the vacancy rate has slowed. After increasing by nearly
2 percentage points a month during the first quarter, the vacancy rate increased
at less than 1 percent a month during the second quarter. The best news is that
according to Grubb and Ellis sales volumes are on par with last year and sales
prices per square foot have remained steady because banks never underwrote deals
at the rates at the peak of the market. However, Grubb and Ellis predict a
slowdown in investments until there is comfort that rents and vacancy have
bottomed. The Partnership may experience greater loan delinquencies if landlords
lose their tenants. The Partnership did not participate significantly in funding
of loans on speculative or vacant buildings. Currently, the commercial portion
of our portfolio is performing normally, without significant rises in
delinquencies.
The Partnership had an average loan to value ratio computed as of the date
the loan was made of 66.12%, as of June 30, 2001. This did not account for any
increases in property values for loans, which were acquired by the Partnership
during 1997, 1998, 1999, and 2000 when Northern California Real Estate
substantially increased in value. This low loan to value will assist the
Partnership in weathering downturns in real estate values if they materialize in
the coming months.
On April 6th 2001, Pacific Gas and Electric (PG&E) California's biggest
public utility company filed for Chapter 11 bankruptcy. The full effect of
PG&E's bankruptcy is unknown. Stockholders, other utility companies and banks
that loaned PG&E millions of dollars were particularly hit hard. When a company
like PG&E goes bankrupt, it has a ripple effect. This has not only affected the
hi-tech and manufacturing industries, professional and commercial businesses,
transportation and utilities sectors, but every household and individual as a
whole. The crisis, which means higher costs to consumers, could adversely affect
the economy, employment and the Partnership's lending in its commercial sector.
The state government, PG&E and others are working diligently to solve the power
crisis in California. The likely result is that electric and natural gas will
cost consumers more than ever before. This may have some effect upon real estate
values as demand for real estate could be reduced as companies make long term
plans to locate in areas without power delivery problems and lower cost power
availability.
The Partnership's interest in land located in East Palo Alto, CA was
acquired through foreclosure. The investment was previously classified as
Investment in Partnership in the Financial Statements and has been reclassified
into Real Estate Owned. The Partnership's basis of $98,181, $80,142, $20,377 and
$ 0, for the six months ended June 30, 2001 and the years ended December 31,
2000, 1999, and 1998, respectively, has been invested with that of two other
partnerships. In order to pursue development options, rezoning of the property's
existing residential zoning classification will be required. The Partnership is
continuing to explore remediation options available to mitigate the pesticide
contamination, which affects the property. This pesticide contamination appears
to be the result of agricultural operations by prior owners. The General
Partners do not believe at this time that remediation of the pesticide
contaminants will have a material adverse effect on the financial condition of
the Partnership.
The efforts of the General Partners to subdivide the land have met with
success. The arsenic contaminated portion of the property has been delivered to
the party responsible for the arsenic contamination. The remaining land will be
made available for development or sale by the Partnership. The General Partners
believe this to be a good result for the Partnership.
At the time of subscription to the Partnership, Limited Partners made an
irrevocable decision to either take distributions of earnings monthly, quarterly
or annually or to compound earnings in their capital account. For the years
ended December 31, 1998, 1999 and 2000, and six months through June 30, 2001,
the Partnership made distributions of earnings to Limited Partners after
allocation of syndication costs of $235,837, $217,526, $192,356, and $83,129,
respectively. Distribution of Earnings to Limited Partners after allocation of
syndication costs for the years ended December 31, 1998, 1999, and 2000, and six
months through June 30, 2001, to Limited Partners' capital accounts and not
withdrawn, was $271,543, $298,174, $280,794, and $135,506, respectively. As of
December 31, 1998, 1999, and 2000, Limited Partners electing to withdraw
earnings represented 43%, 42% and 41% respectively, of the Limited Partners
outstanding capital accounts.
The Partnership also allows the Limited Partners to withdraw their capital
account subject to certain limitations (see liquidation provisions of
Partnership Agreement). For the years ended December 31, 1998, 1999, and 2000,
and six months through June 30, 2001, $122,069, $128,295, $200,417, and $86,561,
respectively, were liquidated subject to the 10% and/or 8% penalty for early
withdrawal. These withdrawals are within the normally anticipated range that the
General Partners would expect in their experience in this and other
partnerships. The General Partners expect that a small percentage of Limited
Partners will elect to liquidate their capital accounts over one year with a 10%
and/or 8% early withdrawal penalty. In originally conceiving the Partnership,
the General Partners wanted to provide Limited Partners needing their capital
returned a degree of liquidity. Generally, Limited Partners electing to withdraw
over one year need to liquidate investments to raise cash. The trend the
Partnership is experiencing in withdrawals by Limited Partners electing a one
year liquidation program represents a small percentage of Limited Partner
capital as of December 31, 1998, 1999, 2000, and June 30, 2001, respectively,
and is expected by the General Partners to commonly occur at these levels.
Additionally, for the years ended December 31, 1998, 1999, 2000, and six
months through June 30, 2001, $938,040, $847,067, $686,923, and $252,039,
respectively, were liquidated by Limited Partners who have elected a liquidation
program over a period of five years or longer. Once the initial five-year hold
period has passed, the General Partners expect to see an increase in
liquidations due to the ability of Limited Partners to withdraw without penalty.
This ability to withdraw after five years by Limited Partners has the effect of
providing Limited Partner liquidity. The General Partners expect a portion of
the Limited Partners to take advantage of this provision. This has the
anticipated effect of the Partnership growing, primarily through reinvestment of
earnings in years one through five. The General Partners expect to see
increasing numbers of Limited Partner withdrawals in years five through eleven,
at which time the bulk of those Limited Partners who have sought withdrawal will
have been liquidated. After year eleven, liquidation generally subsides and the
Partnership capital again tends to increase.
Actual liquidation of both capital and earnings from year five (1992)
through year twelve (2000) and six months through June 30, 2001, is shown
hereunder, which confirms the General Partners theory on the liquidation habits
of the Limited Partners:
Years ended December 31,
1992 1993 1994 1995 1996
----------- ---------- ----------- ------------ -----------
Earnings $323,037 $377,712 $303,014 $303,098 $294,678
Capital *232,370 *528,737 *729,449 *892,953 *1,183,099
----------- ---------- ----------- ------------ -----------
Total $555,407 $906,449 $1,032,463 $1,196,051 $1,477,777
=========== ========== =========== ============ ===========
Six months
ended
1997 1998 1999 2000 June 30, 2001
----------- ---------- ----------- ------------ -------------
Earnings $257,670 $235,837 $217,526 $192,356 $83,129
Capital *1,297,410 *1,060,109 *975,362 *887,340 *338,600
----------- ---------- ----------- ------------ ------------
Total $1,555,080 $1,295,946 $1,192,888 $1,079,696 $421,729
============ ========== =========== ============ ============
*These amounts represent gross of early withdrawal penalties.
After 25 years of active participation in the mortgage business, D. Russell
Burwell, our founder and a General Partner of the Partnership has decided to
retire effective September 30, 2001. "Russ" has enjoyed a long and successful
career. His original business model, upon which our Partnership has its roots,
has withstood the test of time through varying economic cycles. Collectively,
the various Redwood Mortgage Investors Partnerships (I-VIII) have grown from an
idea to over $115,000,000 in assets and produced excellent results for the
Limited Partners. Under Russ' stewardship Redwood Mortgage Investor's VI
originally raised $9,772,594 in Limited Partner Capital contributions and at
June 30, 2001 had $7,210,940 in remaining Limited Partner Capital.
Over the last few years, Russ has been passing along his duties and
responsibilities to the remaining General Partners and certain senior
executives. The General Partners are Mr. Michael Burwell and Gymno Corporation,
a California Corporation. Mr. Michael Burwell has been a General Partner of
Redwood Mortgage Investors VI since its inception and has been employed by
Redwood Mortgage Corp, an affiliate of the Partnership, since 1979. The
Partnership through the remaining General Partners and the employees of its
affiliate Redwood Mortgage Corp., is well prepared for Russ's departure and
looks forward to emulating the steady consistent returns that the Limited
Partners have enjoyed during Russ' tenure.
The General Partners have determined that for purposes of establishing a
value for reporting purposes, including brokerage and trustee account
statements, the estimated value of the limited partnership interests on a per
unit basis is equal to the capital account balance of each investor in the
Partnership. Each investor's capital account balance is set forth periodically
on the Partnership account statement provided to investors. The amount of
Partnership earnings each investor is entitled to receive is determined by the
ratio that each investor's capital account bears to the total amount of all
investor capital accounts then outstanding. The capital account balance of each
investor should be included on any NASD member client account statement in
providing a per unit estimated value of the client's investment in the
Partnership in accordance with NASD Rule 2340.
While the General Partners have set an estimated value for the Partnership
units, such determination may not be representative of the ultimate price
realized by an Investor for such units upon sale. No public trading market
exists for the Partnership's units and none is likely to develop. Thus, the
ability of an investor to liquidate his or her investment is limited subject to
certain liquidation rights provided by the Partnership, which may include early
withdrawal penalties (See the section of the Prospectus entitled "Risk Factors -
Purchase of Units is a long term investment").
The accounting firm of Caporicci, Cropper & Larson, LLP ("CCL"), the
successor in interest to Parodi & Cropper, CPA's, was retained as the
Partnership's independent public accountants when the Partnership commenced
operations in 1993. Bruce Cropper and John Cropper, formerly partners at CCL,
were the Partnership's principal contacts at CCL. Bruce Cropper and John Cropper
have been performing audit and accounting services for the benefit of the
Partnership's General Partners and their affiliates for over 18 years. Effective
as of December 31, 2000, CCL resigned from its engagement as the Partnership's
independent public accountants due to the withdrawal of Bruce Cropper and John
Cropper from the CCL partnership, making it necessary for the Partnership to
retain new independent public accountants. Bruce Cropper and John Cropper
subsequently joined the accounting firm of Armanino McKenna, LLP ("Armanino").
Based upon the long-standing relationship between the Partnership and Bruce
Cropper and John Cropper, the Partnership's General Partner determined that it
was in the best interest of the Partnership to retain Armanino as the
Partnership's independent public accountants, effective as of January 1, 2001.
The Partnership believes, and has been advised by Mr. John Cropper that he
concurs, that for the two fiscal years ended December 31, 2000, the Partnership
and CCL, as well as Armanino, did not have any disagreement on any matter of
accounting principles or practices, financial statement disclosure, or auditing
scope or procedure, which disagreement, if not resolved to the satisfaction of
CCL, would have caused CCL to make reference in connection with its report on
the Partnership's financial statements to the subject matter of the
disagreement. The report of CCL on the Partnership's financial statements for
the years ending December 31, 1998 and December 31, 1999, as well as the report
of Armanino for the year ending December 31, 2000, did not contain an adverse
opinion or disclaimer of opinion, and was not qualified or modified as to
uncertainty, audit scope or accounting principles. During that period, there
were no "reportable events" within the meaning of Item 304(a)(1)(v) of
Regulation S-K promulgated under the Securities Act of 1933.
COMPENSATION OF THE GENERAL PARTNERS AND AFFILIATES BY PARTNERSHIP
The Partnership has no officers or directors. The Partnership is managed by
the General Partners. There are certain fees and other items paid to management
and related parties. A more complete description of management compensation is
found in the Prospectus, pages 11-12, under the section "Compensation of the
General Partners and the Affiliates," which is incorporated by reference. Such
compensation is summarized below.
The following compensation has been paid to the General Partners and their
affiliates for services rendered during the six months ended June 30, 2001. All
such compensation is in compliance with the guidelines and limitations set forth
in the Prospectus.
Entity Receiving Description of Compensation Amount
Compensation and Services Rendered
- --------------------------------------------------------------------------------
I.
Redwood Mortgage Loan Servicing Fee for servicing loans $21,853
Corp.
General Partners
&/or Affiliates Asset Management Fee for managing assets $4,617
General Partners 1% interest in profits $2,208
II. FEES PAID BY BORROWERS ON LOANS PLACED BY COMPANIES RELATED TO THE
GENERAL PARTNERS WITH THE PARTNERSHIP (EXPENSES OF BORROWERS NOT OF THE
PARTNERSHIP):
Redwood Mortgage Mortgage Brokerage Commissions for services
Corp. in connection with the review, selection,
evaluation, negotiation, and extension of the
loans paid by the borrowers
and not by the Partnership $33,206
Redwood Mortgage Processing and Escrow Fees for services in
Corp. connection with notary, document preparation,
credit investigation, and escrow fees payable by
the borrowers and not by the Partnership $1,750
Gymno Corp. Inc. Reconveyance Fee $614
III. IN ADDITION, THE GENERAL PARTNERS AND/OR RELATED COMPANIES PAY CERTAIN
EXPENSES ON BEHALF OF THE PARTNERSHIP FOR WHICH IT IS REIMBURSED AS NOTED IN THE
STATEMENT OF INCOME. . . . . . . . . . . . . . . . . . . . . . . . . . . $15,252
As of June 30, 2001, a summary of the Partnership's loan portfolio is set
forth below.
Loans as a Percentage of Total Loans
First Trust Deeds $3,986,379.15
Appraised Value of Properties 5,368,740.40
Total Investment as a % of Appraised Value 74.25%
First Trust Deeds 3,986,379.15
Second Trust Deed Loans 1,405,310.43
Third Trust Deed Loans 63,863.76
--------------------
5,455,553.34
First Trust Deeds due other Lenders 6,371,451.00
Second Trust Deeds due other Lenders 74,593.00
--------------------
Total Debt $11,901,597.34
Appraised Property Value $18,000,250.40
Total Investments as a % of Appraised Value 66.12%
Number of Loans Outstanding 30
Average Investment $181,851.78
Average Investment as a % of Net Assets 2.52%
Largest Investment Outstanding 1,376,117.03
Largest Investment as a % of Net Assets 19.05%
Loans as a Percentage of Total Loans
First Trust Deeds 73.07%
Second Trust Deeds 25.76%
Third Trust Deeds 1.17%
--------------------
Total 100.00%
Loans by Type of Property: Amount Percent
Owner Occupied Homes $883,700.00 16.20%
Non-Owner Occupied Homes 291,476.92 5.34%
Apartments 569,289.97 10.44%
Commercial 3,711,086.45 68.02%
---------------- ------------
Total 5,455,553.34 100.00%
The following is a distribution of loans outstanding as of June 30, 2001 by
Counties.
Santa Clara $2,065,835.78 37.87%
Alameda 998,908.89 18.31%
San Francisco 643,012.30 11.79%
San Mateo 519,102.51 9.51%
Sacramento 510,908.55 9.36%
Placer 247,707.28 4.54%
Stanislaus 177,377.94 3.25%
Tuolumne 170,000.00 3.12%
Shasta 78,930.45 1.45%
Sonoma 43,769.64 0.80%
---------------- ------------
Total $5,455,553.34 100.00%
Statement of Condition of Loans:
Number of Loans in Foreclosure 1
PART 2
OTHER INFORMATION
Item 1. Legal Proceedings
The Partnership is a defendant in a legal
action. Please refer to note (6) of financial
statements.
Item 2. Changes in the Securities
Not Applicable
Item 3. Defaults upon Senior Securities
Not Applicable
Item 4. Submission of Matters to a Vote of Security Holders
Not Applicable
Item 5. Other Information
Not Applicable
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Not Applicable
(b) Form 8-K
A Form 8-K was filed on February 13, 2001,
relating to the subsequent change in
accounting firms. On April 11, 2001, the
Partnership filed another form 8-K regarding
D. Russell Burwell's retirement as more
fully discussed earlier under "Management
Discussion" area. An Amended Form 8-K was
filed on August 3, 2001 regarding the
Partnership's change in Accountants as more
fully set forth under the section entitled
"Management Discussion and Analysis".
Signatures
Pursuant to the requirements of Section 13 or 15 (d) of the Securities
Exchange Act of 1934 the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereto duly authorized on the 7th day of August
2001.
REDWOOD MORTGAGE INVESTORS VI
By: /S/ D. Russell Burwell
---------------------------------------------
D. Russell Burwell, General Partner
By: /S/ Michael R. Burwell
---------------------------------------------
Michael R. Burwell, General Partner
By: Gymno Corporation, General Partner
By: /S/ D. Russell Burwell
---------------------------------------------
D. Russell Burwell, President
By: /S/ Michael R. Burwell
---------------------------------------------
Michael R. Burwell, Secretary/Treasurer
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following person on behalf of the registrant
and in the capacity indicated on the 7th day of August 2001.
Signature Title Date
/S/ D. Russell Burwell
- -----------------------------------
D. Russell Burwell General Partner August 7, 2001
/S/ Michael R. Burwell
- -----------------------------------
Michael R. Burwell General Partner August 7, 2001
/S/ D. Russell Burwell
- -----------------------------------
D. Russell Burwell President of Gymno Corporation, August 7, 2001
(Principal Executive Officer);
Director of Gymno Corporation
/S/ Michael R. Burwell
- -----------------------------------
Michael R. Burwell Secretary/Treasurer of Gymno August 7, 2001
Corporation (Principal Financial
and Accounting Officer);
Director of Gymno Corporation