A company that anticipated the liquidity crunch and avoided it is Redwood Trust Inc., Mill Valley, Calif.

"We've always believed liquidity was one of main risks of the business," said Douglas Hansen, president of Redwood. We have replaced much of the short-term debt with long-term callable debt. As mortgages pay down, that's when you pay down callable debt. You don't want to have long-term debt that stays in place as loans prepay."

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