Net proceeds from the offering will be used to acquire residential

Net proceeds from the offering will be used to acquire residential andcommercial real estate loans and mortgage securities and may also be used toco-invest with third party investors in investment funds which we may sponsorand for other general corporate purposes The sole bookrunning manager for theoffering is J.P Morgan Securities Inc. A copy of the prospectus supplement and prospectus relating to thesesecurities may be obtained, when available, by contacting J.P. MorganSecurities Inc., Attn: Prospectus Department, 4 Chase Metrotech Center, CSLevel, Brooklyn, NY 11245 or by calling 1-718-242-8002.This press release does not constitute an offer to sell or a solicitation ofan offer to buy any securities, nor shall there be any sale of thesesecurities in any state or jurisdiction in which such an offer, solicitationor sale would be unlawful prior to registration or qualification under thesecurities laws of any such state or jurisdiction.CAUTIONARY STATEMENT: This press release contains forward-looking statementswithin the meaning of the safe harbor provisions of the Private SecuritiesLitigation Reform Act of 1995, such as statements related to the offering andthe expected use of the net proceeds. Forward-looking statements involvenumerous risks and uncertainties. Redwood's actual results may differ from ourexpectations, estimates, and projections and, consequently, you should notrely on these forward-looking statements as predictions of future events.Forward-looking statements are not historical in nature and can be identifiedby words such as "anticipate," "estimate," "will," "should," "expect,""believe," "intend," "seek," "plan," and similar expressions or their negativeforms, or by references to strategy, plans, or intentions.

Theseforward-looking statements are subject to risks and uncertainties, including,among other things, those described in Redwood's Preliminary ProspectusSupplement dated May 26, 2009, the accompanying Prospectus dated November 23,2007, and the documents incorporated in the Prospectus Supplement and theProspectus by reference. We undertake no obligation to update or revise anyforward-looking statements, whether as a result of new information, futureevents, or otherwise. Hughes, +1-415-389-7373, or Mike McMahon, +1-415-384-3805, both ofRedwood Trust, Inc.. OTTAWA, ONTARIO, May 26 (MARKET WIRE) -- Her Excellency the Right Honourable Michaelle Jean, Governor General andCommander-in-Chief of Canada, announced today the awarding of oneMeritorious Service Cross (Military Division) and five MeritoriousService Medals (Military Division) to individuals whose specificachievements have brought honour to the Canadian Forces and to Canada.The recipients will be invited to receive their decorations at apresentation ceremony to be held at a later date.The recipients' names and citations follow. For additional information onthe Meritorious Service Decorations, see Annex A.

RECIPIENTSMERITORIOUS SERVICE CROSS (Military Division)--------------------------------------------------------------------------Lieutenant-General Hans-Otto Budde, M.S.C.(German Army) Bonn, Germany--------------------------------------------------------------------------MERITORIOUS SERVICE MEDAL (Military Division)--------------------------------------------------------------------------Chief Petty Officer 1st Class Michael Patrick Gourley, M.M.M., M.S.M., C.D. Dartmouth and Halifax, N.S.--------------------------------------------------------------------------Major Trevor Gosselin, M.S.M., C.D North York, Ont. and Dawson Creek, B.C.--------------------------------------------------------------------------Major Christopher Robin Henderson, M.S.M., C.D Ottawa, Ont. andHalifax, N.S.--------------------------------------------------------------------------Colonel Bernd Horn, O.M.M., M.S.M., C.D.Ottawa, Ont. and Montreal, Que.--------------------------------------------------------------------------Commander Joseph Honore Patrick St-Denis,Victoria, B.C M.S.M., C.D.

(Retired)--------------------------------------------------------------------------CITATIONSLieutenant-General Hans-Otto Budde, M.S.C. (German Army)Bonn, GermanyMeritorious Service Cross (Military Division)Deployed in Afghanistan in 2008 as inspector of the Army,Lieutenant-General Budde's tireless efforts overcame the tremendouschallenges inherent with Canada's request for the loan of 20 German tanksand three armoured recovery vehicles. His exemplary determination ensuredthe closest intergovernmental and military co-operation, and resulted inthe successful delivery of this essential operational capability in theshortest possible time. The Canadian Forces have greatly benefitted fromLieutenant-General Budde's outstanding support.Chief Petty Officer 1st Class Michael Patrick Gourley, M.M.M., M.S.M.,C.D.Dartmouth and Halifax, Nova ScotiaMeritorious Service Medal (Military Division)Chief Petty Officer 1st Class Gourley was deployed to the Persian Gulf asthe coxswain aboard HMCS Charlottetown from December 2007 to April 2008.His organizational skills ensured the ship's seamless integration into aUnited States carrier strike group. His leadership and steadfastdedication enhanced both the operational readiness of the ship and moraleof the crew. Chief Petty Officer 1st Class Gourley's outstanding effortsplayed a vital role in the ship's notable contribution to the campaignagainst terrorism.Major Trevor Gosselin, M.S.M., C.D.North York, Ontario and Dawson Creek, British ColumbiaMeritorious Service Medal (Military Division)Major Gosselin commanded the Battle Group Tank Squadron in Afghanistan,from August 2007 to March 2008. During numerous combat missions, hispersonal example and dedication united soldiers from different units intoa seamless fighting force.

His extensive knowledge of armourcapabilities, limitations and tactics were key to the successfulintroduction of new equipment to theatre. Major Gosselin's inspirationalleadership and tactical acumen enhanced his squadron's combateffectiveness.Major Christopher Robin Henderson, M.S.M., C.D.Ottawa, Ontario and Halifax, Nova ScotiaMeritorious Service Medal (Military Division)Major Henderson was deployed to Afghanistan as the officer commanding CCompany, from February to August 2007. Responsible for establishingsecurity in the Panjwayi district, he conducted highly effectivecounter-insurgency operations and earned the trust and respect of thelocal population. His mentorship of Afghan National Security forcesgreatly improved their operational effectiveness. In the face ofadversity, his unwavering leadership ensured a Canadian presence in thedistrict.Colonel Bernd Horn, O.M.M., M.S.M., C.D.Ottawa, Ontario and Montreal, QuebecMeritorious Service Medal (Military Division)Between 2004 and 2007, during his tenure as director of the CanadianForces Leadership Institute, Colonel Horn developed this organizationinto a nationally and internationally recognized centre of militaryleadership, professionalism and ethics.