<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM MARCH 31,
1996 QUARTERLY REPORT ON FORM 10-Q AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000930236
<NAME> REDWOOD TRUST, INC.
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
       
                             
<PERIOD-TYPE>                   3-MOS
<FISCAL-YEAR-END>                          DEC-31-1996
<PERIOD-START>                             JAN-01-1996
<PERIOD-END>                               MAR-31-1996
<EXCHANGE-RATE>                                  1,000
<CASH>                                           9,705
<SECURITIES>                                   566,392
<RECEIVABLES>                                    4,496
<ALLOWANCES>                                         0
<INVENTORY>                                          0
<CURRENT-ASSETS>                               581,313
<PP&E>                                               0
<DEPRECIATION>                                       0
<TOTAL-ASSETS>                                 581,313
<CURRENT-LIABILITIES>                          513,167
<BONDS>                                              0
<PREFERRED-MANDATORY>                                0
<PREFERRED>                                          0
<COMMON>                                        73,981
<OTHER-SE>                                     (5,835)
<TOTAL-LIABILITY-AND-EQUITY>                   581,313
<SALES>                                              0
<TOTAL-REVENUES>                                 9,131
<CGS>                                                0
<TOTAL-COSTS>                                        0
<OTHER-EXPENSES>                                   643
<LOSS-PROVISION>                                   332
<INTEREST-EXPENSE>                               6,202
<INCOME-PRETAX>                                  1,954
<INCOME-TAX>                                         0
<INCOME-CONTINUING>                                  0
<DISCONTINUED>                                       0
<EXTRAORDINARY>                                      0
<CHANGES>                                            0
<NET-INCOME>                                     1,954
<EPS-PRIMARY>                                     0.32
<EPS-DILUTED>                                     0.32