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 March 31, 2002
- --------------------------------------------------------------------------------
Commission file number 33-12519
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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
1
REDWOOD MORTGAGE INVESTORS VI
(A California Limited Partnership)
BALANCE SHEETS
MARCH 31, 2002 (unaudited) and DECEMBER 31, 2001 (audited)
ASSETS
March 31, December 31,
2002 2001
-------------- --------------
(unaudited) (audited)
Cash $ 561,872 $ 190,414
-------------- --------------
Loans
Loans, secured by deeds of trust, held
to maturity 5,763,508 4,970,433
Loans, unsecured - 82,362
-------------- --------------
5,763,508 5,052,795
Less allowance for loan losses (438,423) (370,612)
-------------- --------------
Net loans 5,325,085 4,682,183
-------------- --------------
Interest and other receivables
Accrued interest and late fees 41,038 761,473
Advances on loans 108,726 197,946
-------------- --------------
Total interest and other receivables 149,764 959,419
-------------- --------------
Note receivable - Redwood Mortgage Corp. 178,200 178,200
Real estate owned, held for sale, net
of allowance 841,791 1,093,503
-------------- --------------
Total assets $7,056,712 $7,103,719
============== ==============
LIABILITIES AND PARTNERS' CAPITAL
Liabilities
Accounts payable $ 33,853 $ 20,261
Deferred interest 70,026 74,022
------------ ------------
Total liabilities 103,879 94,283
------------ ------------
Partners' capital
Limited partners' capital, subject
to redemption 6,943,067 6,999,670
General partners' capital 9,766 9,766
------------ ------------
Total partners' capital 6,952,833 7,009,436
------------ ------------
Total liabilities and partners' capital $7,056,712 $7,103,719
============ ============
The accompanying notes are an integral part of these financial statements.
2
REDWOOD MORTGAGE INVESTORS VI
(A California Limited Partnership)
STATEMENTS OF INCOME
FOR THE THREE MONTHS ENDED MARCH 31, 2002 and 2001 (unaudited)
THREE MONTHS ENDED MARCH 31,
-----------------------------------
2002 2001
-------------- -------------
Revenues
Interest - on loans $248,547 $ 135,443
Interest - interest bearing accounts 1,157 1,133
Interest on promissory note - 5,065
Late charges, prepayment penalties,
and fees 25,472 1,436
-------------- -------------
275,176 143,077
-------------- -------------
Expenses
Loan servicing fees 87,078 9,963
Asset management fees 2,196 2,326
Clerical costs through Redwood
Mortgage Corp. 5,954 7,712
Provisions for losses on loans and
real estate acquired through
foreclosure 67,811 -
Professional services 12,508 7,970
Other 1,836 2,591
-------------- -------------
177,383 30,562
-------------- -------------
Net income $97,793 $ 112,515
============== ==============
Net income
General partners (1%) $ 978 $ 1,125
Limited partners (99%) 96,815 111,390
-------------- -------------
$97,793 $112,515
============== =============
Net income per $1,000 invested by
limited partners for entire period:
-where income is reinvested and
compounded $14 $15
============== =============
-where partner receives income in
monthly distributions $14 $15
============== =============
The accompanying notes are an integral part of these financial statements.
3
REDWOOD MORTGAGE INVESTORS VI
(A California Limited Partnership)
STATEMENTS OF CHANGES IN PARTNERS' CAPITAL
FOR THE YEARS ENDED DECEMBER 31, 2001, and 2000 (audited)
and THREE MONTHS ENDED MARCH 31, 2002 (unaudited)
Limited General
Partners Partners Total
------------ ------------ -------------
Balances at December 31, 1999 $8,020,580 $ 9,766 $8,030,346
Net income 473,150 4,779 477,929
Early withdrawal penalties (16,335) - (16,335)
Partners' withdrawals (1,063,361) (4,779) (1,068,140)
------------ ------------ -------------
Balances at December 31, 2000 7,414,034 9,766 7,423,800
Net income 422,385 4,266 426,651
Early withdrawal penalties (15,024) - (15,024)
Partners' withdrawals (821,725) (4,266) (825,991)
------------ ------------- -------------
Balances of December 31, 2001 6,999,670 9,766 7,009,436
Net income 96,815 978 97,793
Early withdrawal penalties (2,273) - (2,273)
Partners' withdrawals (151,145) (978) (152,123)
------------ ------------- -------------
Balances of March 31, 2002 $6,943,067 $ 9,766 $ 6,952,833
============ ============= =============
The accompanying notes are an integral part of these financial statements.
4
REDWOOD MORTGAGE INVESTORS VI
(A California Limited Partnership)
STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 2002 and 2001 (unaudited)
THREE MONTHS ENDED MARCH 31,
-------------------------------
2002 2001
------------ -------------
Cash flows from operating activities
Net income $ 97,793 $ 112,515
Adjustments to reconcile net income to
net cash provided by operating activities
Provision for loan losses 67,811 -
Early withdrawal penalties credited to
income (2,273) (4,024)
Change in operating assets and liabilities
Accrued interest and advances 684,364 (16,637)
Accounts payable and accrued expenses 13,592 -
Deferred interest on loans 3,996 -
Pre-paid expenses - (1,830)
----------- -------------
Net cash provided by operating activities 865,283 90,024
----------- -------------
Cash flows from investing activities
Principal collected on loans 553,497 614,195
Loans made (896,911) (497,184)
Payments for real estate held for sale (3,479) (116,165)
Proceeds on sale of real estate held
for sale 5,191 59,060
----------- -------------
Net cash provided by (used in) investing
activities (341,702) 59,906
----------- -------------
Cash flows from financing activities
Partners' withdrawals (152,123) (221,554)
Note receivable - Redwood Mortgage Corp. - 48,564
----------- -------------
Net cash used in financing activities (152,123) (172,990)
----------- -------------
Net increase (decrease) in cash 371,458 (23,060)
Cash - beginning of year 190,414 354,860
----------- -------------
Cash - end of year $ 561,872 $ 331,800
=========== =============
Cash paid for interest $ - $ -
=========== ==============
The accompanying notes are an integral part of these financial statements.
5
REDWOOD MORTGAGE INVESTORS VI
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2002 (unaudited)
NOTE 1 - ORGANIZATION AND GENERAL
Redwood Mortgage Investors VI, (the "partnership") is a California Limited
Partnership, of which the general partners are Michael R. Burwell and Gymno
Corporation, a California corporation owned and operated on an equal 50/50%
basis by Michael R Burwell and by D. Russell Burwell, a former general partner.
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., an
affiliate of the general partners. The offering of partnership units was closed
in 1989, 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 the 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 during 1998.
B. Other Organizational and Offering Expenses
Organizational and offering expenses, other than sales commissions,
including printing costs, attorney and accountant expenses, and other costs,
paid by the partnership from the offering proceeds totaled $360,885 or 3.69% of
the gross proceeds contributed by the limited partners. Such costs have been
fully amortized and allocated to the limited 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.
Any subsequent payments on impaired loans are applied to the outstanding
balances on the partnership's books.
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 loan losses, including the valuation of impaired loans, and
the valuation of real estate acquired through foreclosure. Actual results could
differ significantly from these estimates.
6
REDWOOD MORTGAGE INVESTORS VI
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2002 (unaudited)
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
effective interest method.
Financial Accounting Standards Board Statements (SFAS) 114 and 118 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.
At March 31, 2002, December 31, 2001 and 2000, there were loans categorized
as impaired by the partnership of $752,619, $2,467,891, and $2,469,505,
respectively. In addition the impaired loans have accrued interest and advances
totaling ($4,429), $828,967, and $744,127 at March 31, 2002, December 31, 2001
and 2000. During the quarter under review, impaired loans including accrued
interest and advances thereon totaling $2,933,698 were paid-off through re-write
of new loans. The decrease in the carrying value of the impaired loans of
$38,634, $287,985, and $159,090 at March 31, 2002, December 31, 2001 and 2000,
respectively is included in the allowance for loan losses. The average recorded
investment in the impaired loans was $752,619, $2,468,698, and $2,470,686, as of
March 31, 2002, and for the years ended December 31, 2001, and 2000,
respectively. During three months through March 31, 2002, and the years ended
December 31, 2001 and 2000, $0, $189,690, and $158,761 was received as cash
payments on these loans, respectively.
As presented in Note 9 to the financial statements, the average loan to
appraised value of security at the time the loans were consummated at March 31,
2002 and at December 31, 2001 and 2000 was 81.68%, 71.27%, and 68.93%,
respectively. When a loan is valued for impairment purposes, an updating is made
in the valuation of collateral security. However, this loan to value ratio tends
to minimize reductions for impairment.
D. Cash and Cash Equivalents
The partnership considers all highly liquid financial instruments with a
maturity of three months or less to be cash equivalents.
The partnership maintains deposits in financial institutions that are in
excess of amounts that would be covered by federal insurance. The maximum amount
of loss based upon the deposits held in the bank that could result from this
risk at March 31, 2002, and at December 31, 2001 and 2000 was approximately
$769,814, $130,439, and $154,860, respectively, gross of uncleared deposits and
checks.
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.
7
REDWOOD MORTGAGE INVESTORS VI
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2002 (unaudited)
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:
March 31, December 31,
------------- ---------------------------------
2002 2001 2000
------------- -------------- -------------
Costs of properties $ 1,337,372 $ 1,627,696 $ 1,240,579
Reduction in value (495,581) (534,193) (472,996)
------------- -------------- -------------
Fair value reflected in
financial statements $ 841,791 $ 1,093,503 $ 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. Allowance for Loan Losses
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 loan losses 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 loan losses as of March 31, 2002, December 31, 2001 and 2000
was as follows:
March 31, December 31,
------------ -----------------------------
2002 2001 2000
------------ ----------- ------------
Impaired loans $ 38,634 $ 287,985 $ 159,090
Unspecified loans 399,789 265 20,000
Accounts receivable, unsecured - 82,362 82,362
------------ ----------- ------------
$ 438,423 $ 370,612 $ 261,452
============ =========== ============
Allowance for Loan Losses Reconciliation:
Activity in the allowance for loan losses is as follows for the three
months ending March 31, 2002, and for the years ending December 31:
3 months through
March 31, December 31,
-------------- ---------------------------------
2002 2001 2000
-------------- ------------- -------------
Beginning Balance $ 370,612 $ 261,452 $ 303,249
Provision for bad debt 67,811 109,160 34,738
Write-off of bad debt - - (76,535)
-------------- ------------- -------------
Ending Balance $ 438,423 $ 370,612 $ 261,452
============== ============= =============
8
REDWOOD MORTGAGE INVESTORS VI
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2002 (unaudited)
H. 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.
I. Late Fee Revenue
The partnership recognizes late fee revenue when it is earned. Late fees
are charged at 6% of the monthly balance, and are accrued net of an allowance
for uncollectible late fees. For the three months ended March 31, 2002 and for
the years ended December 31, 2001, and 2000 late fee revenue of $160, $27,748,
and $29,101, respectively, was recorded.
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
For fees in connection with the review, selection, evaluation, negotiation
and extension of the loans the partnership may collect an amount equivalent to
12% of the loaned amount until 6 months after the termination date of the
offering. Thereafter, loan brokerage commissions (points) will be limited to an
amount not to exceed 4% of the total partnership assets per year. The loan
brokerage commissions are paid by the borrowers, and thus, are not an expense of
the partnership. Such commissions totaled $0, $46,581, and $45,164 at March 31,
2002 and for the years ended December 31, 2001, and 2000, respectively.
B. Mortgage Servicing Fees
Redwood Mortgage Corp. receives monthly mortgage servicing fees of 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. Mortgage servicing fees of $87,078, $41,406, and $48,556, were
incurred for the three months through March 31, 2002, and for years ended
December 31, 2001, and 2000, respectively.
C. Asset Management Fee
The general partners receive monthly fees for managing the partnership's
loan portfolio and operations of up to 1/32 of 1% of the "net asset value" (3/8
of 1% annually). Management fees of $2,196, $9,115, and $9,780were incurred for
the three months through March 31, 2002, and for the years 2001, and 2000,
respectively.
D. Other Fees
The Partnership Agreement provides for other fees such as reconveyance,
mortgage assumption and mortgage extension fees. These fees are incurred by the
borrowers and paid 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%.
9
REDWOOD MORTGAGE INVESTORS VI
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2002 (unaudited)
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. During three months through March 31, 2002, and for the years 2001,
and 2000, clerical costs totaling $5,954, $28,156, and $19,647, respectively,
were reimbursed to Redwood Mortgage Corp. and are included in expenses in the
Statements of Income.
G. Contributed Capital
The general partners jointly or severally were to contribute 1/10 of 1% in
cash contributions as proceeds from the offerings are received from the limited
partners. As of December 31, 1989, a general partner, Gymno Corporation, had
contributed $9,772, 1/10 of 1% of limited partner contributions in accordance
with the Partnership Agreement.
NOTE 4 - OTHER PARTNERSHIP PROVISIONS
The partnership is a California limited partnership. The rights, duties and
powers of the general and limited partners of the partnership are governed by
the limited partnership agreement and Sections 15611 et seq. of the California
Corporations Code.
The general partners are in complete control of the partnership business,
subject to the voting rights of the limited partners on specified matters. Any
one of the general partners acting alone has the power and authority to act for
and bind the partnership.
A majority of the outstanding limited partnership interests may, without
the permission of the general partners, vote to: (i) terminate the partnership,
(ii) amend the limited partnership agreement, (iii) approve or disapprove the
sale of all or substantially all of the assets of the partnership and (iv)
remove or replace one or all of the general partners.
The approval of all limited partners is required to elect a new general
partner to continue the partnership business where there is no remaining general
partner after a general partner ceases to be a general partner other than by
removal.
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, partners 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. Subject to certain limitations, a
compounding investor may subsequently change his election, but an investor's
election to have cash distributions is irrevocable.
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.
10
REDWOOD MORTGAGE INVESTORS VI
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2002 (unaudited)
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 penalties collected by the partnership
are currently credited to income since the syndication costs have been fully
allocated and the formation loan has been entirely paid.
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. Mortgage servicer subsidies
for the years 2001, and 2000, were $178,200, and $125,000, respectively.
NOTE 6 - LEGAL PROCEEDINGS
The partnership is involved in various legal actions arising in the normal
course of business. In the opinion of management, such matters will not have a
material effect upon the financial position of the partnership.
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:
3 months through
March 31, December 31,
------------ ---------------------------
2002 2001 2000
------------ ------------ ------------
Net assets - partners' capital
per financial statements $6,952,833 $7,009,436 $7,423,800
Allowance for loan losses 438,423 370,612 261,452
------------ ------------ ------------
Net assets tax basis $7,391,256 $7,380,048 $7,685,252
============ ============ ============
In 2001 and 2000, approximately 73% and 73%, respectively, 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.
11
REDWOOD MORTGAGE INVESTORS VI
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2002 (unaudited)
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)) carrying value was $5,763,508, $4,970,433 and
$5,570,576 at March 31, 2002, December 31, 2001 and 2000, respectively. The fair
value of these investments of $4,986,389, $5,036,556 and $5,639,252 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 loan losses 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 March 31, 2002, and at
December 31, 2001 and 2000, there were 25, 27, and 31 loans outstanding,
respectively, with the following characteristics:
March 31, December 31,
------------ --------------------------
2002 2001 2000
------------ ----------- -----------
Number of loans outstanding 25 27 31
Total loans outstanding $5,763,508 $4,970,433 $5,570,576
Average loan outstanding $ 230,540 $ 184,090 $ 179,696
Average loan as percent of total 4.00% 3.70% 3.23%
Average loan as percent of partners'
capital 3.32% 2.63% 2.42%
Largest loan outstanding $2,103,300 $1,376,117 $1,376,117
Largest loan as percent of total 36.49% 27.69% 24.70%
Largest loan as percent of partners'
capital 30.25% 19.63% 18.54%
Number of counties where security is
located (all California) 9 10 9
Largest percentage of loans in one
county 40.38% 40.75% 38.75%
Average loan to appraised value of
security at time loan was consummated 81.68% 71.27% 68.93%
Number of loans in foreclosure 1 3 2
Amount of loans in foreclosure $300,854 $439,311 $354,195
12
REDWOOD MORTGAGE INVESTORS VI
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2002 (unaudited)
The following categories of loans were held at March 31, 2002 and at December
31, 2001 and 2000:
March 31, December 31,
------------------ --------------------------------------
2002 2001 2000
------------------ ---------------- ---------------
First Trust Deeds $ 4,911,516 $ 3,770,088 $ 4,011,117
Second Trust Deeds 788,128 1,136,481 1,385,496
Third Trust Deeds 63,864 63,864 173,963
------------------ ---------------- ---------------
Total loans 5,763,508 4,970,433 5,570,576
Prior liens due other lenders 3,282,997 5,627,002 8,467,477
------------------ ---------------- ---------------
Total debt $ 9,046,505 $10,597,435 $ 14,038,053
================== ================ ===============
Appraised property value at time of loan $11,075,761 $14,868,548 $ 20,364,599
================== ================ ===============
Total investments as a percent of appraisals 81.68% 71.27% 68.93%
================== ================ ===============
Investments by type of property
Owner occupied homes $ 526,044 $ 741,154 $ 755,014
Non-owner occupied homes 181,804 181,952 672,518
Apartments 558,076 562,015 575,407
Commercial 4,497,584 3,485,312 3,567,637
------------------ ---------------- ---------------
$ 5,763,508 $ 4,970,433 $ 5,570,576
================== ================ ===============
13
REDWOOD MORTGAGE INVESTORS VI
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2002 (unaudited)
Scheduled maturity dates of loans as of March 31, 2002 are as follows:
Year Ending
December 31,
-----------------------
2002 $ 984,971
2003 350,470
2004 526,044
2005 40,125
2006 96,716
Thereafter 3,765,182
--------------------
$ 5,763,508
====================
The scheduled maturities for 2002 include four loans totaling $615,385
(11%) which are past maturity at March 31, 2002. Of these loans, one loan
totaling $300,854 (5.22%) was categorized as delinquent over 90 days.
The bank cash balance at March 31, 2002 of $869,814, before clearing
deposits in transit and outstanding checks, was in one bank with interest
bearing balances totaling $679,600. The balances exceeded FDIC insurance limits
(up to $100,000 per bank) by $769,814.
Workout Agreements
The partnership has negotiated various contractual workout agreements with
borrowers whose loans are past maturity or who are delinquent in making
payments. The partnership is not obligated to fund additional money as of March
31, 2002.
14
REDWOOD MORTGAGE INVESTORS VI
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2002 (unaudited)
NOTE 10: SELECTED FINANCIAL INFORMATION (UNAUDITED)
Calendar Quarter
--------------------------------------------------------------
First Second Third Fourth Annual
------------- ------------ ------------- ------------ -------------
Revenues
2002 $ 275,176 - - - -
2001 $ 143,077 142,581 134,603 315,639 735,900
2000 $ 150,583 172,579 158,243 303,804 785,209
Expenses
2002 $ 177,383 - - - -
2001 $ 30,562 34,253 29,249 215,185 309,249
2000 $ 25,204 52,044 41,218 188,814 307,280
Net income allocated to general partners
2002 $ 978 - - - -
2001 $ 1,125 1,083 1,054 1,004 4,266
2000 $ 1,254 1,205 1,170 1,150 4,779
Net income allocated to limited partners
2002 $ 96,815 - - - -
2001 $ 111,390 107,245 104,300 99,450 422,385
2000 $ 124,125 119,330 115,855 113,840 473,150
Net income per $1,000 invested
where income is
Reinvested
2002 $ 14 - - - -
2001 $ 15 $ 15 $ 14 $ 15 $ 59
2000 $ 15 $ 15 $ 15 $ 17 $ 62
Withdrawn
2002 $ 14 - - - -
2001 $ 15 $ 15 $ 14 $ 14 $ 58
2000 $ 15 $ 15 $ 15 $ 16 $ 61
NOTE 11: RECENT PRONOUNCEMENTS
In October 2001, the FASB issued SFAS No. 144, "Accounting for the
Impairment or Disposal of Long-Lived Assets". SFAS 144 amends existing
accounting guidance on asset impairment and provides a single accounting model
for long-lived assets to be disposed of. Among other provisions, the new rules
change the criteria for classifying an asset as held-for-sale. The standard also
broadens the scope of business to be disposed of that qualify for reporting as
discontinued operations, and changes the timing of recognizing losses on such
operations. The partnership will adopt SFAS No. 144 in fiscal year 2002.
Management does not feel that the adoption of this standard will have a material
effect on the partnership's results of operations or financial position.
15
Management's Discussion and Analysis of Financial Condition and
Results of Operations
Critical Accounting Policies.
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. Such estimates relate
principally to the determination of (1) the allowance for doubtful accounts
(i.e. the amount of allowance established against loans receivable as an
estimate of potential loan losses) including the accrued interest and advances
that are estimated to be unrecoverable based on estimates of amounts to be
collected plus estimates of the value of the property as collateral and (2) the
valuation of real estate acquired through foreclosure.
Loans and 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. Provisions are 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 values and to provide for
unrecoverable accounts receivable, including impaired loans, other loans,
accrued interest, late fees and advances on loans, and other accounts receivable
(unsecured).
Recent trends in the economy have been taken into consideration in the
aforementioned process of arriving at the allowance for doubtful accounts.
Actual results could vary from the aforementioned provisions for losses.
Forward Looking Statements.
Some of the information in the Form 10-Q may contain forward looking
statements. Uses of words such as "will", "may", "anticipate", "estimate",
"continue" or other forward looking words, discuss future expectations or
predictions. The foregoing analysis of 2002 includes forward looking statements
and predictions about the possibility of future events, results of operations
and financial condition. As such, this analysis may prove to be inaccurate
because of assumptions made by the general partners or the actual development of
the future events. No assurance can be given that any of these statements or
predictions will ultimately prove to be correct or substantially correct.
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 March
31, 2002, the partnership's net capital totaled $6,952,833.
The partnership began funding loans in October 1987. The partnership's
loans outstanding for the years ended December 31, 2000, and 2001, and for three
months through March 31, 2002 were $5,570,576, $4,970,433, and 5,763,508,
respectively. The marginal increase in loans outstanding from December 31, 2000
to March 31, 2002, was due primarily to the partnership utilizing loan payoffs
and interest receivable collections to fund additional loans. During the years
2000, and 2001, and three months through March 31, 2002, loan principal
collections and net income exceeded limited partner liquidations.
Since January 2001, the Federal Reserve has been dramatically cutting its
core interest rates with eleven successive cuts, ranging from .25% to .50%. The
latest cut being December 11, 2001, which reduced the Federal Funds Rate to
1.75%. In May 2002, the Federal Reserve met and did not change interest rates.
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. 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 occur, we expect
to replace these loans with loans at somewhat lower interest rates. At this
time, the general partners believe that the average loan portfolio interest rate
will decline approximately .25% to .50% over the year 2002. 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 year 2002.
16
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-five 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 March 31, 2002,
there was one property in foreclosure totaling $300,854 or 5.22% of the loan
portfolio. As of March 31, 2002 the partnership's real estate owned account
balance was $841,791. This account had a balance of $767,583, and $1,093,503 as
of December 31, 2000, and 2001, respectively.
Cash is continually being generated from interest earnings, late charges,
prepayment penalties, and amortization of principal and loan pay-offs.
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 loan losses 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 $193,427, $201,036, and $67,811 as
provision for loan losses for the years ended December 31, 2000, and 2001, and
three months through March 31, 2002, respectively. The increase in allowance
from 2000 through March 31, 2002 was to build up reserve as needed for losses in
the future. The partnership acquired a piece of property through foreclosure in
2000. Management believes that reserves previously set aside in anticipation of
this acquisition are adequate. The modest provision of $67,811 in doubtful
accounts provision for the first quarter of 2002 is due to Managements belief
that the current overall reserve balances of $438,423 are adequate and
additional reserves set aside are not currently warranted.
The partnership makes loans primarily in Northern California. As of March
31, 2002, approximately 84%, ($4,821,253) 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. Like the rest of the nation, the San Francisco Bay Area has
also felt the recession and accompanying slow down in economic growth and
increasing unemployment. The technology companies of Silicon Valley, the airline
industry, the tourism industry and other industries are feeling the effects of
the overall United States recession, which includes lower earnings, losses and
layoffs.
The Northern California residential real estate market and particularly the
San Francisco Bay Area residential real estate market experienced increases in
values of over 10% in 1999 and 2000, respectively. In 2001, the residential real
estate marketplace slowed, this has resulted in longer listing and transaction
times and lower market prices in some segments. In spite of the U.S. recession,
the California Association of Realtors reported that in March 2002 the statewide
median home price had reached its highest point ever of $305,940 up 18.8% from a
year earlier and 6.3% higher than in February 2002. It also reported that
overall volume of pre-owned home sales surged 13.1% from the year earlier. In
spite of these numbers the general partners believe that lower-end and
mid-priced homes have continued to increase in value, although at a reduced rate
from 2000, while high end homes have decreased in value compared to 2001. This
situation is showing some signs of a turnaround. Inventories of homes available
for sale have decreased sharply from their highs in the spring of 2001. For
example, the supply of "for sale" homes, condominiums and townhomes in Santa
Clara County peaked the week of May 25, 2001, at more than 5,700, according to
Coldwell Banker Northern California statistics. As of January 18, 2002, fewer
than 2,500 homes were "for sale" countywide. Other counties in the San Francisco
Bay Area offer similar statistics. The number of single-family home sales in
Santa Clara County was 962 for December 2001 which is the greatest number of
homes sold since records became public in 1984. In Santa Clara County, the
median home price hit $535,000 in March 2002, up 1.9% from February but down
5.3% from March, 2001. The reduction in inventories and the strong sales may
indicate that the buyer's market that prevailed throughout most of 2001 may be
coming to an end and may indicate that a recovery is underway. A stabilization
of residential home prices or a recovery in home prices is good for the
Partnership since it depends more heavily than banks and other similar credit
type lenders on the value of a property.
17
Commercial property vacancy rates have continued to climb with the San
Francisco Bay Area office market surpassing 15% as a whole according to BT
Commercial Real Estate and Grubb and Ellis Co. As a result, rents have dropped
about 40% from last year's highs, giving up nearly all the gains made during the
past three years. Though vacancy rates have leaped from 2 percent in the third
quarter of 2000 to 15% at the end of 2001, landlords are bearing only about half
the pain, since nearly half the office space being offered is for sublease,
meaning landlords generally are still collecting money from the original
tenants. To the Partnership, the higher overall vacancy rates may mean that it
experiences greater delinquencies in its commercial portion of the portfolio if
landlord's existing leases expire or space becomes available through business
failures.
The partnership had an average loan to value ratio computed as of the date
the loan was made of 81.68%, as of March 31, 2002. This did not account for any
changes in property values for loans, which were acquired by the partnership
during 1998, 1999, 2000, and 2001 when Northern California Real Estate
substantially increased in value. This loan to value will assist the partnership
in weathering downturns in real estate values if they materialize in the coming
months.
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 $126,405, $128,443, and
$80,142, for three months through March 31, 2002 and for the years ended
December 31, 2001, and 2000, 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, 2000, and 2001, and three months through March 31, 2002, the
partnership made distributions of earnings to limited partners $192,356,
$164,787, and $33,661, respectively. Distribution of earnings to limited
partners for the years ended December 31, 2000, and 2001, and three months
through March 31, 2002, to limited partners' capital accounts and not withdrawn,
was $280,794, $257,598, and $63,154, respectively. As of December 31, 2000, and
2001, limited partners electing to withdraw earnings represented 41%, and 36%,
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, 2000, and 2001, and
three months through March 31, 2002, $200,417, $187,804, and $28,422,
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, 2000, and 2001, and three months through March 31,
2002, respectively, and is expected by the general partners to commonly occur at
these levels.
18
Additionally, for the years ended December 31, 2000, and 2001, and three
months through March 31, 2002, $686,923, $484,158, and $91,336, 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 thirteen (2001),and three months through March 31, 2002 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 1997
------------- -------------- ------------- ------------- ------------- -------------
Earnings $ 323,037 $ 377,712 $ 303,014 $ 303,098 $ 294,678 $ 257,670
Capital *232,370 *528,737 *729,449 *892,953 *1,183,099 *1,297,410
------------- -------------- ------------- ------------- ------------- -------------
Total $ 555,407 $ 906,449 $1,032,463 $1,196,051 $1,477,777 $1,555,080
============= ============== ============= ============= ============= =============
3 months through
March 31,
---------------
1998 1999 2000 2001 2002
------------- ------------- ------------- -------------- ---------------
Earnings $ 235,837 $ 217,526 $ 192,356 $ 164,787 $ 33,661
Capital *1,060,109 *975,362 *887,340 *671,962 *119,757
------------- ------------- ------------- -------------- ---------------
Total $1,295,946 $1,192,888 $1,079,696 $ 836,749 $ 153,418
============= ============= ============= ============== ===============
*These amounts represent gross of early withdrawal penalties.
In some cases in order to satisfy Broker Dealers and other reporting
requirements, the general partners have valued the limited partners' interest in
the partnership on a basis which utilizes a per unit system of calculation,
rather than based upon the investors' capital account. This information has been
reported in this manner in order to allow the partnership to integrate with
certain software used by the Broker Dealers and other reporting entities. In
those cases, the partnership will report to Broker Dealers, Trust Companies and
others a "reporting" number of units based upon a $1.00 per unit calculation.
The number of reporting units provided will be calculated based upon the limited
partner's capital account value divided by $1.00. Each investor's capital
account balance is set forth periodically on the partnership account statement
provided to investors. The reporting units are solely for Broker Dealers
requiring such information for their software programs and do not reflect actual
units owned by a limited partner or the limited partners' right or interest in
cash flow or any other economic benefit 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, there is
no certainty that the units can be sold at a price equal to the stated value of
the capital account. Furthermore, 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").
19
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 three months ended March 31, 2002.
All such compensation is in compliance with the guidelines and limitations set
forth in the Prospectus.
Entity Receiving Description of Compensation and Services Amount
Compensation Rendered
- --------------------------------------------------------------------------------
I.
Redwood Mortgage Loan Servicing Fee for servicing loans $ 87,078
Corp.
General Partners
&/or Affiliates Asset Management Fee for managing assets $ 2,196
General Partners 1% interest in profits $ 978
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 $ 0
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 $ 0
Gymno Corp. Inc. Reconveyance Fee $ 128
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. . . . . . . . . . . . . . . . . . . . . . .$5,954
20
As of March 31, 2002, a summary of the Partnership's loan portfolio is set
forth below.
Loans as a Percentage of Total Loans
First Trust Deeds $4,911,516.14
Appraised Value of Properties 4,713,704.40
Total Investment as a % of Appraised Value 104.20%
First Trust Deeds 4,911,516.14
Second Trust Deed Loans 788,128.02
Third Trust Deed Loans 63,863.76
-------------------
5,763,507.92
First Trust Deeds due other Lenders 3,208,404.00
Second Trust Deeds due other Lenders 74,593.00
-------------------
Total Debt $9,046,504.92
Appraised Property Value $11,075,761.40
Total Investments as a % of Appraised Value 81.68%
Number of Loans Outstanding 25
Average loan $ 230,540.32
Average loan as a % of loans outstanding 4.00%
Largest loan outstanding 2,103,300.00
Largest loan as a % of loans outstanding 36.49%
Loans as a Percentage of Total Loans
First Trust Deeds 85.22%
Second Trust Deeds 13.67%
Third Trust Deeds 1.11%
-------------------
100.00%
Total
Loans by Type of Property: Amount Percent
Owner Occupied Homes $ 526,044.44 9.13%
Non-Owner Occupied Homes 181,804.12 3.15%
Apartments 558,075.72 9.68%
Commercial 4,497,583.64 78.04%
---------------- ------------
Total $5,763,507.92 100.00%
21
The following is a distribution of loans outstanding as of March 31, 2002 by
Counties.
Santa Clara $2,327,143.29 40.38%
Alameda 1,662,311.42 28.84%
Sacramento 504,977.80 8.76%
San Francisco 416,797.92 7.23%
San Mateo 415,000.04 7.20%
Stanislaus 177,079.20 3.08%
Placer 138,456.63 2.40%
Shasta 78,394.13 1.36%
Sonoma 43,347.49 .75%
------------------- ------------
Total $5,763,507.92 100.00%
Statement of Condition of Loans:
Number of Loans in Foreclosure 1
22
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
Form 8-K was filed on February 7, 2000, relating
to a change by the Partnership's accountants in
accounting firms. Another Form 8-K was filed on
February 13, 2001, relating to the subsequent
change by the Partnership's accountants to
another accounting firm. On April 11, 2001, the
Partnership filed another Form 8-K regarding D.
Russell Burwell's retirement. An Amended Form 8-K
was filed on August 3, 2001 regarding the
Partnership's change in Accountants.
23
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 13th day of May,
2002.
REDWOOD MORTGAGE INVESTORS VI
By: /S/ Michael R. Burwell
------------------------------------------
Michael R. Burwell, General Partner
By: Gymno Corporation, General Partner
By: /S/ Michael R. Burwell
----------------------------------------------
Michael R. Burwell, President,
Secretary/Treasurer & Chief Financial Officer
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 13th day of May 2002.
Signature Title Date
/S/ Michael R. Burwell
- ------------------------
Michael R. Burwell General Partner May 13, 2002
/S/ Michael R. Burwell
- ------------------------
Michael R. Burwell President, Secretary/Treasurer & May 13, 2002
CFO of Gymno Corporation
(Principal Financial and
Accounting Officer);
Director of Gymno Corporation
24