Filed
Pursuant to Rule 433
Registration
Statement No. 333-147604
Issuer
Free Writing Prospectus
Dated
November 28, 2007
Relating
to Prospectus
Dated
November 23, 2007
and
the Prospectus Supplement
Dated
November 23, 2007
November
28, 2007
|
TO:
|
PARTICIPANTS
IN THE REDWOOD TRUST, INC. DIRECT STOCK PURCHASE AND DIVIDEND REINVESTMENT
PLAN
|
Dear
Plan
Participant:
Effective
November 23, 2007, we amended the Redwood Trust, Inc. Direct Stock Purchase
and
Dividend Reinvestment Plan (the “Plan”). The amended Plan is set forth in the
enclosed Prospectus Supplement. New provisions of the amended Plan include,
among others, the following:
| · |
The
Optional Cash Payment Due Date is one business day before (i) the
relevant
Investment Date, in the case of Optional Cash Payments of $10,000
or less,
and (ii) the commencement of the relevant Investment Period, in the
case
of pre-approved Optional Cash Payments in excess of
$10,000.
|
| · |
Shares
will be purchased under the Plan at the applicable discount, if any,
from
the Market Price. The Market Price, in the case of shares purchased
directly from us, will be the volume weighted average stock price
on the
date of purchase. The Market Price, in the case of shares purchased
on the
open market, will be the weighted average of the actual prices paid
for
all of the common stock purchased by the Plan
Administrator.
|
| · |
Each
month, we may establish a discount of between 0% and 3% from the
Market
Price applicable to Optional Cash Payments of $10,000 or less or
dividend
reinvestments used to purchase shares, or between 0% and 5% from
the
Market Price applicable to pre-approved Optional Cash Payments in
excess
of $10,000.
|
| · |
Each
Optional Cash Payment is subject to a minimum per month purchase
of $100
if you are an existing stockholder or $500 per month if you are a
new
investor, and a maximum per month purchase of $10,000. Optional
Cash Payments in excess of $10,000 may be made only with our prior
approval.
|
The
terms
of the amended Plan are described in more detail in the Prospectus Supplement.
Please read the Prospectus Supplement thoroughly to make certain that you
understand all provisions of the amended Plan.
As
a
current participant in the Plan, you will automatically be enrolled in the
amended Plan. You may withdraw from the amended Plan by following the procedures
described in the amended Plan set forth in the Prospectus Supplement. If
you
have any questions about the Plan, please contact Computershare Trust Company,
N.A., at (888) 472-1955 or Redwood Trust’s investor relations department at
(415) 389-7373.
Redwood
Trust, Inc. has filed a registration statement (including the enclosed
Prospectus) and a Prospectus Supplement with the Securities and Exchange
Commission for the offering to which this communication relates. Before you
invest, you should read the Prospectus in that registration statement and
the
Prospectus Supplement and the other documents Redwood Trust, Inc. has filed
with
the SEC for more complete information about Redwood Trust, Inc. and this
offering. You may get these documents for free by visiting EDGAR on the SEC
website at www.sec.gov.
Alternatively, Redwood Trust, Inc. will arrange to send you the Prospectus
and
Prospectus Supplement if you request them by calling toll-free
1-866-269-4976.
Thank
you
for your continued interest in Redwood Trust, Inc.
Sincerely,
/s/
Martin S. Hughes
Chief
Financial Officer