(Letterhead of Cox, Castle & Nicholson LLP)







January 27, 2005


Securities and Exchange Commission
450 Fifth Street
Washington DC  20549

         Re:      Post Effective Amendment 3
                  SEC File No. 333-106900

Dear Sir or Madam:

     Enclosed for your review please find Post-Effective  Amendment No. 3 to the
S-11  Registration   Statement  (the  "Amendment").   The  Amendment  containing
Supplement No. 3 to the Prospectus (the  "Supplement")  was filed today in order
to update the financial  statement of and the General Partner,  Redwood Mortgage
Corp.

     Thank you for your  continued  assistance  in this matter.  If you have any
questions, please do not hesitate to call.



                                             Very Truly Yours,




                                             /s/ Anne R. Knowles
                                             Anne R. Knowles


cc:  Michael Burwell
Encl.