**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


Washington,
      D.C. 20549





**FORM
      10-Q**





(Mark
      One)


[X]
            **QUARTERLY
                REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                THE**


**SECURITIES
      EXCHANGE ACT OF 1934**





**For
      the Quarterly Period Ended June 30, 2007**





**OR**





[   ]
            **TRANSITION
                REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                THE**


**SECURITIES
      EXCHANGE ACT OF 1934**





**For
      the transition period from ______________ to
      ______________**





**Commission
      File Number:  000-19992**





**REDWOOD
      MORTGAGE INVESTORS VII,**


**a
      California Limited Partnership**


(Exact
      name of registrant as specified in its charter)





**California**
            
            **94-3094928**(State
                or other jurisdiction of incorporation
            
            (I.R.S.
                Employeror
                organization)
            
            Identification
                No.)





**900
                Veterans Blvd., Suite 500, Redwood City, CA**
            **94063-1743**(Address
                of principal executive offices)
            (Zip
                Code)





**(650)
                365-5341**


(Registrant’s
      telephone number, including area code)





**NOT
                APPLICABLE**


(Former
      name, former address and former fiscal year, if changed since last
      report)





Indicate
      by check mark whether the registrant (1) has filed all reports required to
      be
      filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
      the
      preceding 12 months (or for such shorter period that the registrant was required
      to file such reports), and (2) has been subject to such filing requirements
      for
      the past 90 days.





Yes
            XX
            
            No





Indicate
      by check mark whether the registrant is a large accelerated filer, an
      accelerated filer, or a non-accelerated filer. See definition of “accelerated
      filer and large accelerated filer” in Rule 12b-2 of the Exchange
      Act.





Large
      Accelerated
      Filer  [  ]                                                   Accelerated
      Filer  [  ]                                               Non-Accelerated
      Filer  [X]





Indicate
      by check mark whether the registrant is a shell company (as defined in Rule
      12b-2 of the Exchange Act).





Yes
            
            
            No
            XX


1


**Part
      I – Item 1.   FINANCIAL STATEMENTS**





**REDWOOD
      MORTGAGE INVESTORS VII**


**(A
      California Limited Partnership)**


**BALANCE
      SHEETS**


**JUNE
      30, 2007 (unaudited) AND DECEMBER 31, 2006 (audited)**





**ASSETS**





June
                30,
            
            
            December
                31,2007
            
            
            2006Cash
                and cash equivalents
            
            $
            503,594
            
            
            $
            584,114LoansLoans,
                secured by deeds of trust
            
            
            6,174,616
            
            
            
            6,218,439Loans,
                unsecured, net discount of $61,690 and $65,802for
                June 30, 2007 and December 31, 2006, respectively
            
            
            744,324
            
            
            
            714,6596,918,940
            
            
            
            6,933,098Allowance
                for loan losses
            
            
            (423,040
            )
            
            
            (454,417
            )Net
                loans
            
            
            6,495,900
            
            
            
            6,478,681Interest
                and other receivablesRelated
                party receivables
            
            
            18,775
            
            
            
            20,634Accrued
                interest and late fees
            
            
            83,452
            
            
            
            67,754Total
                interest and other receivables
            
            
            102,227
            
            
            
            88,388Investment
                in limited liability company
            
            
            890,598
            
            
            
            875,408Real
                estate held for sale, net
            
            
            1,371,401
            
            
            
            1,371,401Prepaid
                expenses
            
            
            4,926
            
            
            
            —Total
                assets
            
            $
            9,368,646
            
            
            $
            9,397,992





**LIABILITIES
      AND PARTNERS’ CAPITAL**





LiabilitiesPayable
                to affiliate
            
            $
            71,998
            
            
            $
            71,998Total
                liabilities
            
            
            71,998
            
            
            
            71,998Partners’
                capitalLimited
                partners’ capital, subject to redemption
            
            
            9,284,675
            
            
            
            9,314,021General
                partners’ capital
            
            
            11,973
            
            
            
            11,973Total
                partners’ capital
            
            
            9,296,648
            
            
            
            9,325,994Total
                liabilities and partners’ capital
            
            $
            9,368,646
            
            
            $
            9,397,992








The
      accompanying notes are an integral part of these financial
      statements.


2


**REDWOOD
      MORTGAGE INVESTORS VII**


**(A
      California Limited Partnership)**


**STATEMENTS
      OF INCOME**


**FOR
      THE THREE AND SIX MONTHS ENDED JUNE 30, 2007 AND 2006
      (unaudited)**





THREE
                MONTHS ENDED
            
            
            SIX
                MONTHS ENDEDJUNE
                30,
            
            
            JUNE
                30,2007
            
            
            2006
            
            
            2007
            
            
            2006RevenuesInterest
                on loans
            
            $
            123,163
            
            
            $
            141,887
            
            
            $
            262,272
            
            
            $
            271,076Interest-interest
                bearing accounts
            
            
            12,746
            
            
            
            3,975
            
            
            
            20,952
            
            
            
            5,800Late
                fees
            
            
            545
            
            
            
            2,105
            
            
            
            1,713
            
            
            
            3,108Other
            
            
            1,030
            
            
            
            1,537
            
            
            
            2,262
            
            
            
            3,025137,484
            
            
            
            149,504
            
            
            
            287,199
            
            
            
            283,009ExpensesClerical
                costs through Redwood Mortgage Corp.
            
            
            2,732
            
            
            
            3,115
            
            
            
            5,569
            
            
            
            6,379Asset
                management fees
            
            
            —
            
            
            
            —
            
            
            
            2,922
            
            
            
            —Recovery
                on losses on loans and real estateheld
                for sale
            
            
            (18,701
            )
            
            
            (15,310
            )
            
            
            (31,377
            )
            
            
            (39,601
            )Professional
                services
            
            
            15,235
            
            
            
            20,641
            
            
            
            38,364
            
            
            
            40,390Printing
                supplies and postage
            
            
            2,370
            
            
            
            3,482
            
            
            
            4,110
            
            
            
            4,295Other
            
            
            9,464
            
            
            
            11,449
            
            
            
            14,515
            
            
            
            19,29311,100
            
            
            
            23,377
            
            
            
            34,103
            
            
            
            30,756Net
                income
            
            $
            126,384
            
            
            $
            126,127
            
            
            $
            253,096
            
            
            $
            252,253Net
                income:  general partners (1%)
            
            $
            1,264
            
            
            $
            1,261
            
            
            $
            2,531
            
            
            $
            2,523limited
                partners (99%)
            
            
            125,120
            
            
            
            124,866
            
            
            
            250,565
            
            
            
            249,730$
            126,384
            
            
            $
            126,127
            
            
            $
            253,096
            
            
            $
            252,253Net
                income per $1,000 invested by limitedpartners
                for entire period-where
                income is compounded and retained
            
            $
            13
            
            
            $
            13
            
            
            $
            27
            
            
            $
            27-where
                partner receives income in monthlydistributions
            
            $
            13
            
            
            $
            13
            
            
            $
            27
            
            
            $
            27











The
      accompanying notes are an integral part of these financial
      statements.


3


**REDWOOD
      MORTGAGE INVESTORS VII**


**(A
      California Limited Partnership)**


**STATEMENTS
      OF CASH FLOWS**


**FOR
      THE SIX MONTHS ENDED JUNE 30, 2007 AND 2006 (unaudited)**








2007
            
            
            2006Cash
                flows from operating activitiesNet
                income
            
            $
            253,096
            
            
            $
            252,253Adjustments
                to reconcile net income to net cash providedby
                operating activitiesRecovery
                of losses on loans and real estate heldfor
                sale
            
            
            (31,377
            )
            
            
            (39,601
            )Early
                withdrawal penalty credited to income
            
            
            (1,891
            )
            
            
            (2,598
            )Amortization
                of discount on unsecured loans
            
            
            (4,113
            )
            
            
            (2,056
            )Change
                in operating assets and liabilitiesAccrued
                interest and late fees
            
            
            (15,698
            )
            
            
            (22,627
            )Related
                party receivables
            
            
            1,859
            
            
            
            —Prepaid
                expenses
            
            
            (4,926
            )Accounts
                payable and other liabilities
            
            
            —
            
            
            
            24,640Other
                assets
            
            
            —
            
            
            
            (25,804
            )Net
                cash provided by operating activities
            
            
            196,950
            
            
            
            184,207Cash
                flows from investing activitiesPrincipal
                collected on loans
            
            
            1,201,778
            
            
            
            1,847,586Loans
                originated
            
            
            (1,157,955
            )
            
            
            (2,977,851
            )Advances
                on unsecured loans
            
            
            (34,900
            )Payments
                on investment in limited liability company
            
            
            (15,191
            )
            
            
            (16,412
            )Proceeds
                from unsecured loans
            
            
            9,348
            
            
            
            10,925Net
                cash provided by (used in) investing activities
            
            
            3,080
            
            
            
            (1,135,752
            )Cash
                flows from financing activitiesPartners’
                withdrawals
            
            
            (280,550
            )
            
            
            (223,883
            )Net
                decrease in cash and cash equivalents
            
            
            (80,520
            )
            
            
            (1,175,428
            )Cash
                and cash equivalents - beginning of period
            
            
            584,114
            
            
            
            1,627,384Cash
                and cash equivalents - end of period
            
            $
            503,594
            
            
            $
            451,956








The
      accompanying notes are an integral part of these financial
      statements.


4


**REDWOOD
      MORTGAGE INVESTORS VII**


**(A
      California Limited Partnership)**


**NOTES
      TO FINANCIAL STATEMENTS**


**JUNE
      30, 2007 (unaudited)**








**NOTE
                1 – GENERAL**





In
      the
      opinion of the management of the Partnership, the accompanying unaudited
      financial statements contain all adjustments, consisting of normal, recurring
      adjustments, necessary to present fairly the financial information included
      therein.  These financial statements should be read in conjunction
      with the audited financial statements included in the Partnership’s Form 10-K
      for the fiscal year ended December 31, 2006 filed with the Securities and
      Exchange Commission.  The results of operations for the six month
      period ended June 30, 2007 are not necessarily indicative of the operating
      results to be expected for the full year.








**NOTE
                2 – SUMMARY OF SIGNIFICANT ACCOUNTING
                POLICIES**





**Loans,
                secured by deeds of
                trust**





As
      of
      June 30, 2007 and December 31, 2006, the Partnership had one and two loans,
      respectively, past due 90 days or more in interest payments and/or past
      maturity.  The outstanding principal balances of these loans at June
      30, 2007 and December 31, 2006 were $487,500 and $737,500,
      respectively.  In addition, accrued interest, advances and late
      charges on these loans totaled $30,537 and $26,250 at June 30, 2007 and December
      31, 2006, respectively.  In the opinion of management, the delinquent
      and/or past maturity loans as of June 30, 2007 have sufficient collateral to
      cover the outstanding amounts due to the Partnership and are still accruing
      interest.





**Allowance
      for loan losses**





The
      composition of the allowance for loan losses as of June 30, 2007 and December
      31, 2006 was as follows:





June
                30,
            
            
            December
                31,2007
            
            
            2006Percent
                of
            
            
            
            
            
            Percent
                ofloans
                in
            
            
            
            
            
            loans
                ineach
            
            
            
            
            
            eachcategory
            
            
            
            
            
            categoryto
                total
            
            
            
            
            
            to
                totalAmount
            
            
            loans
            
            
            Amount
            
            
            loansBalance
                at End of YearApplicable
                to:DomesticReal
                estate – mortgageSingle
                family (1-4 units)
            
            $
            69,681
            
            
            
            32.81
            %
            
            $
            68,548
            
            
            
            45.84
            %Apartments
            
            
            10,156
            
            
            
            11.13
            %
            
            
            10,156
            
            
            
            11.05
            %Commercial
            
            
            46,943
            
            
            
            41.39
            %
            
            
            37,182
            
            
            
            28.54
            %Land
            
            
            53,912
            
            
            
            14.67
            %
            
            
            52,492
            
            
            
            14.57
            %Total
                real estate – mortgage
            
            $
            180,693
            
            
            
            100
            %
            
            $
            168,378
            
            
            
            100
            %Unsecured
                loans
            
            $
            242,347
            
            
            
            100
            %
            
            $
            286,039
            
            
            
            100
            %Total
                unsecured loans
            
            $
            242,347
            
            
            
            100
            %
            
            $
            286,039
            
            
            
            100
            %Total
                allowance for loan losses
            
            $
            423,040
            
            
            
            100
            %
            
            $
            454,417
            
            
            
            100
            %





5


**REDWOOD
      MORTGAGE INVESTORS VII**


**(A
      California Limited Partnership)**


**NOTES
      TO FINANCIAL STATEMENTS**


**JUNE
      30, 2007 (unaudited)**








**NOTE
      2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
      (continued)**





**Allowance
      for loan losses (continued)**





Activity
      in the allowance for loan losses for the six month period ended June 30, 2007
      and the year ended December 31, 2006 was as follows:





June
                30,
            
            
            December
                31,2007
            
            
            2006Balance
                at beginning of period
            
            $
            454,417
            
            
            $
            700,536Charge-offsDomesticReal
                estate – mortgageSingle
                family (1-4 units)
            
            
            —
            
            
            
            —Apartments
            
            
            —
            
            
            
            —Commercial
            
            
            —
            
            
            
            (6,707
            )Land
            
            
            —
            
            
            
            ——
            
            
            
            6,707RecoveriesDomesticReal
                estate – mortgageSingle
                family (1-4 units)
            
            
            —
            
            
            
            —Apartments
            
            
            —
            
            
            
            —Commercial
            
            
            —
            
            
            
            —Land
            
            
            —
            
            
            
            —Net
                charge-offs
            
            
            —
            
            
            
            (6,707
            )Additions
                (recovery) charge to operations
            
            
            (31,377
            )
            
            
            (49,102
            )Transfer
                to real estate held for sale reserve
            
            
            —
            
            
            
            (190,310
            )Balance
                at end of period
            
            $
            423,040
            
            
            $
            454,417Ratio
                of net charge-offs duringthe
                period to average secured loansoutstanding
                during the period
            
            
            0.00
            %
            
            
            0.11
            %





At
      June
      30, 2007 and December 31, 2006 there was one unsecured loan totaling $606,394
      that was categorized as impaired by the Partnership.  Interest is no
      longer being accrued on this loan.





**Investment
      in limited liability company**





An
      investment in a limited liability company is accounted for using the equity
      method.  One of the Partnership’s general partners is the managing
      member of an LLC.  In February 2005, the Partnership acquired an 8%
      interest in Larkin Property Company, LLC (see note 5).


6


**REDWOOD
      MORTGAGE INVESTORS VII**


**(A
      California Limited Partnership)**


**NOTES
      TO FINANCIAL STATEMENTS**


**JUNE
      30, 2007 (unaudited)**








**NOTE
      2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
      (continued)**





**Income
      taxes**





No
      provision for federal and state income taxes (other than an $800 state minimum
      tax) is made in the financial statements since income taxes are the obligation
      of the partners if and when income taxes apply.





**Reclassifications**





Certain
      reclassifications, not affecting previously reported net income or total
      partners’ capital, have been made to the previously issued financial statements
      to conform to the current year classification.





**Profits
      and losses**





Profits
      and losses are allocated among the limited partners according to their
      respective capital accounts monthly after 1% of the profits and losses are
      allocated to the general partners.





**Management
      estimates**





The
      preparation of financial statements in conformity with accounting principles
      generally accepted in the United States of America requires management to make
      estimates and assumptions about the reported amounts of assets and liabilities,
      and disclosures of contingent assets and liabilities, at the dates of the
      financial statements and the reported amounts of revenues and expenses during
      the reported periods. Such estimates relate principally to the determination
      of
      the allowance for loan losses, including the valuation of impaired loans and
      the
      valuation of real estate held for sale. Actual results could differ
      significantly from these estimates.








**NOTE
      3 – GENERAL PARTNERS AND RELATED PARTIES**





The
                following are commissions and fees, which will be paid to the general
                partners.





**Mortgage
      brokerage commissions**





For
      fees
      in connection with the review, selection, evaluation, negotiation and extension
      of loans, Redwood Mortgage Corp., an affiliate of the general partners, may
      collect an amount equivalent to 12% of the loaned amount until six months after
      the termination date of the offering.  Thereafter, loan brokerage
      commissions (points) will be limited to an amount not to exceed 4% of the total
      Partnership assets per year.  The loan brokerage commissions are paid
      by the borrowers and thus, are not an expense of the Partnership.





**Mortgage
      servicing fees**





Monthly
      mortgage servicing fees of up to 1/8 of 1% (1.5% annual) of the unpaid principal
      are paid to Redwood Mortgage Corp., based on the unpaid principal balance of
      the
      loan portfolio, or such lesser amount as is reasonable and customary in the
      geographic area where the property securing the mortgage is
      located.  Once a loan is categorized as impaired, mortgage servicing
      fees are no longer accrued.  Additional service fees are recorded upon
      the receipt of any subsequent payments on impaired loans.  Redwood
      Mortgage Corp. waived $28,023 in mortgage servicing fees during the first half
      of 2007.





7


**REDWOOD
      MORTGAGE INVESTORS VII**


**(A
      California Limited Partnership)**


**NOTES
      TO FINANCIAL STATEMENTS**


**JUNE
      30, 2007 (unaudited)**








**NOTE
      3 – GENERAL PARTNERS AND RELATED PARTIES (continued)**





**Asset
      management fees**





The
      general partners receive monthly fees for managing the Partnership’s loan
      portfolio and operations in an amount up to 1/32 of 1% of the “*net asset
      value”* (3/8 of 1% annually).  The general partners partially
      waived asset management fees of $14,584 and received $2,922 in asset management
      fees during the first half of 2007





**Other
      fees**





The
      Partnership Agreement provides for other fees such as reconveyance, mortgage
      assumption and mortgage extension fees.  Such fees are incurred by the
      borrowers and are paid to parties related to the general partners.





**Operating
      expenses**





Redwood
      Mortgage Corp., an affiliate of the general partners, is reimbursed by the
      Partnership for all operating expenses actually incurred by it on behalf of
      the
      Partnership, including without limitation, out-of-pocket general and
      administration expenses of the Partnership, accounting and audit fees, legal
      fees and expenses, postage and preparation of reports to limited
      partners.








**NOTE
      4 – REAL ESTATE HELD FOR SALE**





In
      1993
      the Partnership, together with two other affiliates, acquired through
      foreclosure a parcel of land located in East Palo Alto, CA.  As of
      June 30, 2007 the Partnership’s investment in this property was
      $62,720.  This property was previously under contract for sale, but
      such contract was terminated by the potential buyer in July, 2007. It is
      anticipated that the property will be listed for sale in the near
      future.





In
      December 2004, the Partnership acquired undeveloped parcels of land through
      a
      deed in lieu of foreclosure.  The land is located in Stanislaus
      County, California.  The land was comprised of three separate lots,
      which totaled approximately 14 acres.  During the third quarter of
      2006, the Partnership sold one of the three parcels at a loss of approximately
      $28,336 for which the Partnership had provided a loss reserve.  The
      remaining parcels are held for sale.  As of June 30, 2007, the
      Partnership’s investment in this property totaled $1,308,681, including accrued
      interest and advances, and net of a valuation allowance of
      $161,974.  This property is jointly owned by two other affiliated
      partnerships.





In
      February 2005, the Partnership acquired another property through foreclosure
      (see Note 5).





The
      following schedule reflects the costs of real estate acquired through
      foreclosure and the recorded reductions to estimated fair values, including
      estimated costs to sell as of June 30, 2007 and December 31, 2006:





June
                30,
            
            
            December
                31,2007
            
            
            2006Costs
                of properties
            
            $
            1,533,375
            
            
            $
            1,533,375Reduction
                in value
            
            
            (161,974
            )
            
            
            (161,974
            )Real
                estate held for sale, net
            
            $
            1,371,401
            
            
            $
            1,371,401





8


**REDWOOD
      MORTGAGE INVESTORS VII**


**(A
      California Limited Partnership)**


**NOTES
      TO FINANCIAL STATEMENTS**


**JUNE
      30, 2007 (unaudited)**








**NOTE
      5 – INVESTMENT IN LIMITED LIABILITY COMPANY**





In
      February, 2005, the Partnership acquired a multi-unit property through
      foreclosure.  This property is located in an upscale neighborhood in
      San Francisco.  At the time the Partnership took ownership of the
      property, the Partnership’s investment totaled $836,702 including accrued
      interest and advances. This property is jointly owned by three other affiliated
      partnerships.  Upon acquisition, the Partnership transferred its
      interest (principally land and building) to Larkin Property Company, LLC
      (“Larkin”), which is 8% owned by the Partnership, and 92% owned by three other
      affiliates.  No allowance for loss has been set aside as management
      believes that the fair value of the property exceeds the combined partnerships’
investment in the property.  The Partnership intends to undertake
      additional improvements to the property.  As of June 30, 2007, the
      Partnership has capitalized approximately $88,212 in costs related to this
      property.  The Partnership pursued efforts to recover funds from the
      guarantors of the original loan and during the third quarter of 2006 obtained
      $34,316, representing the Partnership’s pro rata share of the recovery, from one
      of them.  These proceeds were applied to reduce the Partnership’s
      investment.  At June 30, 2007, the Partnership’s investment in Larkin
      totaled $890,598.








**NOTE
      6 – BANK LINE OF CREDIT**





The
      Partnership has a bank line of credit secured by its loan portfolio of up to
      $2,500,000 at .25% over prime.  There were no balances outstanding as
      of June 30, 2007 and December 31, 2006 and the interest rate was 8.50% (8.25%
      prime plus .25%) at June 30, 2007.  This line of credit expires in
      December 2011 and requires the Partnership to meet certain financial
      covenants.  The Partnership believes it was in compliance with all
      loan covenants for the six month period ended June 30, 2007 and for the year
      ended December 31, 2006.  The Partnership anticipates that the line of
      credit will be renewed at its maturity.  In the event that the line of
      credit is not renewed, the Partnership has the option to convert the balance
      owed on the line of credit to a three year term loan beginning December
      2011.








**NOTE
                7 – FAIR VALUE OF FINANCIAL
                INSTRUMENTS**





The
                following methods and assumptions were used to estimate the fair
                value of
                financial instruments:





(a)
            Cash
                and cash equivalents – The carrying amount equals fair
                value.  All amounts, including interest bearing accounts, are
                subject to immediate withdrawal.





(b)
            Secured
                loans had a carrying value of $6,174,616 and $6,218,439 at June 30,
                2007
                and December 31, 2006, respectively.  The fair value of these
                loans of $6,175,449 and $6,203,160, respectively, was estimated based
                upon
                projected cash flows discounted at the estimated current interest
                rates at
                which similar loans would be made.  The applicable amount of the
                allowance for loan losses along with accrued interest and advances
                related
                thereto should also be considered in evaluating the fair value versus
                the
                carrying value.





(c)
            Unsecured
                loans had a carrying value of $744,324 and $714,659 at June 30, 2007
                and
                December 31, 2006, respectively.  The fair value of these loans
                approximates their carrying value after consideration of the loan
                losses
                established by the general partners on these
                loans.








9


**REDWOOD
      MORTGAGE INVESTORS VII**


**(A
      California Limited Partnership)**


**NOTES
      TO FINANCIAL STATEMENTS**


**JUNE
      30, 2007 (unaudited)**








**NOTE
      8 – ASSET CONCENTRATIONS AND CHARACTERISTICS**





Loans
      are
      secured by recorded deeds of trust.  At June 30, 2007 and December 31,
      2006 there were 23 and 22 secured loans outstanding, respectively, with the
      following characteristics:





June
                30,
            
            
            December
                31,2007
            
            
            2006Number
                of secured loans outstanding
            
            
            23
            
            
            
            22Total
                secured loans outstanding
            
            $
            6,174,616
            
            
            $
            6,218,439Average
                secured loan outstanding
            
            $
            268,462
            
            
            $
            282,656Average
                secured loan as percent of total secured loans
            
            
            4.35
            %
            
            
            4.55
            %Average
                secured loan as percent of partners’ capital
            
            
            2.89
            %
            
            
            3.03
            %Largest
                secured loan outstanding
            
            $
            500,000
            
            
            $
            550,000Largest
                secured loan as percent of total secured loans
            
            
            8.10
            %
            
            
            8.84
            %Largest
                secured loan as percent of partners’ capital
            
            
            5.38
            %
            
            
            5.90
            %Largest
                secured loan as percent of total assets
            
            
            5.34
            %
            
            
            5.85
            %Number
                of counties where security is located (all California)
            
            
            13
            
            
            
            14Largest
                percentage of loans in one county
            
            
            31.38
            %
            
            
            25.53
            %Average
                secured loan to appraised value of security basedon
                appraised values and prior liens at time loan wasconsummated
            
            
            61.49
            %
            
            
            61.62
            %Number
                of secured loans in foreclosure status
            
            None
            
            
            NoneAmount
                of secured loans in foreclosure status
            
            None
            
            
            None





At
      times,
      loans may exceed 10% of the secured loan portfolio or Partnership assets as
      the
      loan portfolio and assets of the Partnership decrease due to limited partner
      withdrawals and/or loan payoffs.





10


**REDWOOD
      MORTGAGE INVESTORS VII**


**(A
      California Limited Partnership)**


**NOTES
      TO FINANCIAL STATEMENTS**


**JUNE
      30, 2007 (unaudited)**








**NOTE
      8 – ASSET CONCENTRATIONS AND CHARACTERISTICS
      (continued)**





The
      following categories of secured loans were held at June 30, 2007 and December
      31, 2006:





June
                30,
            
            
            December
                31,2007
            
            
            2006First
                trust deeds
            
            $
            5,026,457
            
            
            $
            5,011,682Second
                trust deeds
            
            
            1,058,253
            
            
            
            1,206,757Third
                trust deeds
            
            
            89,906
            
            
            
            —Total
                loans
            
            
            6,174,616
            
            
            
            6,218,439Prior
                liens due other lenders at time of loan
            
            
            2,308,163
            
            
            
            2,560,514Total
                debt
            
            $
            8,482,779
            
            
            $
            8,778,953Appraised
                property value at time of loan
            
            $
            13,796,010
            
            
            $
            14,247,048Total
                secured loans as percent of appraisals based onappraised
                values and prior liens at time loan wasconsummated
            
            
            61.49
            %
            
            
            61.62
            %Secured
                loans by type of propertySingle
                family homes (1-4 Units)
            
            $
            2,026,059
            
            
            $
            2,850,592Apartments
            
            
            687,500
            
            
            
            687,500Commercial
            
            
            2,555,459
            
            
            
            1,774,528Land
            
            
            905,598
            
            
            
            905,819$
            6,174,616
            
            
            $
            6,218,439





Scheduled
                maturity dates of secured loans as of March 31, 2007 are as
                follows:





Prior
                to December 31, 2007
            
            
            $
            1,475,000Between
                January 1, 2008 and December 31, 2008
            
            
            
            1,377,062Between
                January 1, 2009 and December 31, 2009
            
            
            
            1,197,118Between
                January 1, 2010 and December 31, 2010
            
            
            
            512,134Between
                January 1, 2011 and December 31, 2011
            
            
            
            600,753Thereafter
            
            
            
            1,012,549Total
            
            
            $
            6,174,616







The
      scheduled maturities for 2007 above had no loans past maturity at June 30,
      2007.







The
      Partnership places its cash and temporary cash investments with high credit
      quality institutions.  Periodically, such investments may be in excess
      of federally insured limits.





11




**REDWOOD
      MORTGAGE INVESTORS VII**




**(A
      California Limited Partnership)**




**NOTES
      TO FINANCIAL STATEMENTS**




**JUNE
      30, 2007 (unaudited)**














**NOTE
      9 – COMMITMENTS AND CONTINGENCIES**









**Workout
      agreements**







The
      Partnership occasionally negotiates a contractual workout agreement with
      borrowers who are delinquent in making payments or where loans are past
      maturity.  Under the terms of the workout agreement the Partnership is
      not obligated to make any additional monetary advances for the maintenance
      or
      repair of the collateral securing the loan.  As of June 30, 2007, the
      Partnership had one loan under a workout agreement totaling
      $487,500.









**Construction
      loans**







The
      Partnership makes construction and rehabilitation loans which are not fully
      disbursed at loan inception.  The Partnership approves the borrowers
      up to a maximum loan balance; however, disbursements are made periodically
      during completion phases of the construction or rehabilitation or at such other
      times as required under the loan documents.  At June 30, 2007, there
      were no undisbursed loan funds.  The Partnership does not maintain a
      separate cash reserve to hold the undisbursed obligations, which are intended
      to
      be funded.









**Legal
      proceedings**







The
      Partnership is involved in various legal actions arising in the normal course
      of
      business.  In the opinion of management, such matters will not have a
      material effect upon the financial position of the Partnership.














**Part
      I – Item 2.**









**MANAGEMENT’S
      DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION OF THE
      PARTNERSHIP**









**Critical
      Accounting Policies.**







In
      preparing the financial statements, management is required to make estimates
      based on the information available that affect the reported amounts of assets
      and liabilities as of the balance sheet dates and income and expenses during
      the
      reporting periods.  Such estimates relate principally to the
      determination of (1) the allowance for loan losses (i.e. the amount of allowance
      established against loans receivable as an estimate of potential loan losses)
      including the accrued interest and advances that are estimated to be
      unrecoverable based on estimates of amounts to be collected plus estimates
      of
      the value of the property as collateral and (2) the valuation of real estate
      acquired through foreclosure. At June 30, 2007, the Partnership owned four
      real
      estate properties.







Loans
      and
      the related accrued interest, late fees and advances are analyzed on a periodic
      basis for recoverability.  Delinquencies are identified and followed
      as part of the loan system.  A provision is made for loan losses to
      adjust the allowance for loan losses to an amount considered by management
      to be
      adequate, with due consideration to collateral value, to provide for
      unrecoverable loans and receivables, including impaired loans, other loans,
      accrued interest, late fees and advances on loans and other accounts receivable
      (unsecured).  The Partnership charges off uncollectible loans and
      related receivables directly to the allowance account once it is determined
      that
      the full amount is not collectible.





12


If
      the
      probable ultimate recovery of the carrying amount of a loan, with due
      consideration for the fair value of collateral, is less than amounts due
      according to the contractual terms of the loan agreement and the shortfall
      in
      the amounts due are not insignificant, the carrying amount of the investment
      shall be reduced to the present value of future cash flows discounted at the
      loan’s effective interest rate.  If a loan is collateral dependent, it
      is valued at the estimated fair value of the related collateral.  If
      events and or changes in circumstances cause management to have serious doubts
      about the further collectibility of the contractual payments, a loan may be
      categorized as impaired and interest is no longer accrued.  Any
      subsequent payments on impaired loans are applied to reduce the outstanding
      loan
      balances including accrued interest and advances.







Recent
      trends in the economy have been taken into consideration in the aforementioned
      process of arriving at the allowance for loan losses.  Actual results
      could vary from the aforementioned provisions for losses.







Real
      estate held for sale includes real estate acquired through foreclosure and
      is
      stated at the lower of the recorded investment in the loan, plus any senior
      indebtedness, or at the property’s estimated fair value, less estimated costs to
      sell.







The
      Partnership periodically compares the carrying value of real estate to expected
      undiscounted future cash flows for the purpose of assessing the recoverability
      of the recorded amounts.  If the carrying value exceeds future
      undiscounted cash flows, the assets are reduced to estimated fair
      value.









**Forward-Looking
      Statements.**







Certain
      statements in this Report on Form 10-Q which are not historical facts may be
      considered forward-looking statements within the meaning of Section 27A of
      the
      Securities Act of 1933, as amended, and Section 21E of the Securities and
      Exchange Act of 1934, as amended, including statements regarding the
      Partnership’s expectations, hopes, intentions, beliefs and strategies regarding
      the future.  Forward-looking statements include statements regarding
      future interest rates and economic conditions and their effect on the
      Partnership and its assets, real estate values and other trends in the
      California real estate market, estimates as to the allowance for loan losses,
      estimates of future limited partner withdrawals, 2007 annualized yield
      estimates, beliefs relating to the Partnership’s compliance with its loan
      covenants, beliefs relating to the effects of various legal actions arising
      in
      the normal course of business, the Partnership’s intention not to sell its loan
      portfolio, management’s beliefs relating to the sufficiency of collateral, and
      the healthy commercial real estate market increasing lending opportunities
      and
      the minimal impact on the Partnership of higher loan delinquencies in the “sub
      prime” lending market.  Actual results may be materially different
      from what is projected by such forward-looking statements.  Factors
      that might cause such a difference include unexpected material adverse changes
      in economic conditions and interest rates, including such conditions in
      California, a material adverse decline in the market for real estate in
      California, the impact of competition and competitive pricing and downturns
      in
      the real estate markets in which the Partnership has made loans.  All
      forward-looking statements and reasons why results may differ included in this
      Form 10-Q are made as of the date hereof, and we assume no obligation to update
      any such forward-looking statement or reason why actual results may
      differ.









**Related
      Parties.**







The
      general partners of the Partnership are Gymno Corporation and Michael R.
      Burwell. Most Partnership business is conducted through Redwood Mortgage Corp.,
      an affiliate of the general partner, which arranges, services, and maintains
      the
      loan portfolio for the benefit of the Partnership. Michael R. Burwell is
      President and Chief Financial Officer of Gymno Corporation and Redwood Mortgage
      Corp.  The fees received by the affiliate to the general partners are
      paid pursuant to the Partnership Agreement and are determined at the sole
      discretion of the affiliate to the general partner subject to limitations
      imposed by the Partnership Agreement. In the past, the affiliate to the general
      partners has elected not to take the maximum compensation.  The
      following is a list of various Partnership activities for which related parties
      are compensated.


13







·
            ***Mortgage
                Brokerage Commissions***For fees in
                connection with the review, selection, evaluation, negotiation and
                extension of loans, Redwood Mortgage Corp. may collect an amount
                equivalent to 12% of the loaned amount until 6 months after the
                termination date of the offering.  Thereafter, the loan
                brokerage commissions (points) will be limited to an amount not to
                exceed
                4% of the total Partnership assets per year.  The loan brokerage
                commissions are paid by the borrowers, and thus, are not an expense
                of the
                Partnership.  Loan brokerage commissions paid by the borrowers
                were $34,350 and $63,662 for the six month periods ended June 30,
                2007 and
                2006, and $34,350 and $35,012 for the three month periods ended June
                30,
                2007 and 2006, respectively.







·
            ***Mortgage
                Servicing Fees***   Monthly mortgage servicing
                fees of up to 1/8 of 1% (1.5% on an annual basis) of the unpaid principal
                of the Partnership’s loans are paid to Redwood Mortgage Corp., or such
                lesser amount as is reasonable and customary in the geographic area
                where
                the property securing the mortgage is located.  Redwood Mortgage
                Corp. waived all of the mortgage servicing fees, which totaled $28,023
                and
                $27,625 during the six month periods and $12,937 and $14,183 for
                the three
                month periods ended June 30, 2007 and 2006,
                respectively.







·
            ***Asset
                Management Fees***The general partners
                receive monthly fees for managing the Partnership’s portfolio and
                operations of up to 1/32 of 1% of the *‘net asset value’* (3/8 of
                1% on an annual basis).  Management fees to the general partners
                of $2,922 and $0 were incurred for the six month periods ended June
                30,
                2007 and 2006, respectively, and no fees were incurred for each of
                the
                three month periods ended June 30, 2007 and 2006.  The general
                partners waived $14,584 and $17,448 in asset management fees during
                the
                six month periods ended June 30, 2007 and 2006, respectively, and
                $8,741
                and $8,725 during the three month periods ended June 30, 2007 and
                2006,
                respectively.







·
            ***Other
                Fees***   The Partnership Agreement provides
                that the general partners may receive other fees such as processing
                and
                escrow, reconveyance, mortgage assumption and mortgage extension
                fees.  Such fees are incurred by the borrowers and are paid to
                the general partners.  Such fees aggregated $1,992 and $2,320
                for the six month periods ended June 30, 2007 and 2006, respectively,
                and
                $1,941 and $1,020 for the three month periods ended June 30, 2007
                and
                2006, respectively.







·
            ***Income
                and Losses***All income and losses are
                credited or charged to partners in relation to their respective
                Partnership interests.  The allocation to the general partners
                (combined) is a total of 1%, which was $2,531 and $2,523 for the
                six month
                periods ended June 30, 2007 and 2006, respectively, and $1,264 and
                $1,261
                for the three month periods ended June 30, 2007 and 2006,
                respectively.







·
            ***Operating
                Expenses***An affiliate of the Partnership,
                Redwood Mortgage Corp., is reimbursed by the Partnership for all
                operating
                expenses actually incurred by it on behalf of the Partnership, including
                without limitation, out-of-pocket general and administration expenses
                of
                the Partnership, accounting and audit fees, legal fees and expenses,
                postage and preparation of reports to limited partners.  Such
                reimbursements are reflected as expenses in the statements of
                income.  Operating expenses totaled $5,569 and $6,379 for the
                six month periods ended June 30, 2007 and 2006, respectively, and
                $2,732
                and $3,115 for the three month periods ended June 30, 2007 and 2006,
                respectively.







·
            ***Contributed
                Capital***The general partners jointly and
                severally contribute 1/10 of 1% in cash contributions as proceeds
                from the
                offerings are received from the limited partners.  As of each of
                June 30, 2007 and 2006, a general partner, Gymno Corporation, had
                contributed $11,973 as capital in accordance with the Partnership
                Agreement.





14


**Results
      of Operations**– For the six and three months ended June 30, 2007 and
      2006





Changes
      in the Partnership’s operating results for the six and three month periods ended
      June 30, 2007 as compared to 2006 are discussed below:





Changes
                during the
              six
                months ended
              June
                30, 2007
              versus
                2006
            
            Changes
                during the
              three
                months ended
              June
                30, 2007
              versus
                2006Net
                income
            
            $
            843
            
            
            
            $
            257RevenueInterest
                on loans
            
            $
            (8,804
            )
            
            
            $
            (18,724
            )Interest
                – interest bearing accounts
            
            
            15,152
            
            
            
            
            8,771Late
                fees
            
            
            (1,395
            )
            
            
            
            (1,560
            )Other
            
            
            (763
            )
            
            
            
            (507
            )4,190
            
            
            
            
            (12,020
            )ExpensesMortgage
                servicing fees
            
            
            —
            
            
            
            
            —Clerical
                costs through Redwood Mortgage Corp.
            
            
            (810
            )
            
            
            
            (383
            )Asset
                management fees
            
            
            2,922
            
            
            
            
            —Recovery
                of losses on loans and real estateheld
                for sale
            
            
            8,224
            
            
            
            
            (3,391
            )Professional
                services
            
            
            (2,026
            )
            
            
            
            (5,406
            )Printing
                supplies and postage
            
            
            (185
            )
            
            
            
            (1,112
            )Other
            
            
            (4,778
            )
            
            
            
            (1,985
            )3,347
            
            
            
            
            (12,277
            )Net
                income
            
            $
            843
            
            
            
            $
            257





The
      decrease in interest on loans of $8,804 (3.25%) for the six month period and
      $18,724 (13.20%) for the three month period ended June 30, 2007 as compared
      to
      the same periods in 2006 was primarily due to a decrease in the average loan
      portfolio outstanding to $5,687,068 as of June 30, 2007 from an average balance
      of $5,944,797 as of June 30, 2006.  The decrease in interest was also
      a result of a decrease in the average interest rate, which stood at 9.22% as
      of
      June 30, 2007 as compared to 9.28% as of June 30, 2006.  The decline
      in outstanding loans is primarily due to the lack of appropriate lending
      opportunities that the Partnership could use to replace loan pay-offs in the
      first half of 2007 compared to the same period in 2006.  During the
      six months ended June 30, 2007, the Partnership collected $1,201,778 in loan
      pay-offs and funded $1,157,955 in new loans, as compared to pay-offs totaling
      $1,847,586 and funded loans of $2,977,851 for the same period in
      2006.





The
      increase in interest from interest bearing accounts of $15,152 (261.24%) for
      the
      six month period and $8,771 (220.65%) for the three month period ended June
      30,
      2007 as compared to the same periods in 2006 was primarily due to an overall
      average higher cash balance the Partnership maintained in its money market
      account of $1,059,198 during the first half of 2007 as compared to an average
      balance of $950,000 during the first half of 2006.  The increase was
      also due to an increase in the average interest rate of 3.96% that the
      Partnership earned in its money market account during the first six months
      of
      2007 as compared to an average interest rate of 1.22% during the same period
      in
      2006.





The
      decrease in late fees of $1,395 (44.88%) for the six month period and $1,560
      (74.11%) for the three month period ended June 30, 2007 as compared to the
      same
      periods in 2006 was primarily due to a reduction in late mortgage payments
      by
      the borrowers.





15


The
      decrease in other income of $763 (25.22%) for the six month period and $507
      (32.99%) for the three month period ended June 30, 2007 as compared to the
      same
      periods in 2006 was primarily due to a decrease in miscellaneous income of
      $56
      and $156 for the six and three month periods ended June 30, 2007, respectively,
      and a decrease in early withdrawal penalties of $707 and $351 for the six and
      three month periods ended June 30, 2007, respectively, as compared to the same
      periods in 2006.





Mortgage
      servicing fees for the six and three month periods ended June 30, 2007 and 2006
      were waived by the servicing agent, Redwood Mortgage Corp.  These fees
      would have otherwise cost the Partnership $28,023 and $27,625 for the six month
      periods and $12,937 and $14,183 for the three month periods ended June 30,
      2007
      and 2006, respectively.





The
      decrease in clerical costs of $810 (12.70%) for the six month period and $383
      (12.30%) for the three month period ended June 30, 2007 as compared to the
      same
      periods in 2006 was primarily due to lower servicing costs.





The
      increase in asset management fees of $2,922 (100%) for the six month period
      ended June 30, 2007 as compared to the same period in 2006 was due to a partial
      waiver of $14,584 and a full waiver of $17,448 in management fees by the general
      partners during the six month periods and a full waiver of $8,741 and $8,725
      for
      the three month periods ended June 30, 2007 and 2006, respectively.





The
      increase in recovery of losses on loans and real estate held for sale of $8,224
      (20.77%) for the six month period and decrease of $3,391 (22.15%) for the three
      month period ended June 30, 2007 as compared to the same periods in 2006 is
      due
      to management’s determination that the allowance for losses on loans and real
      estate held for sale of $585,014 as of June 30, 2007 was adequate.  In
      addition, the Partnership received $9,348 and $1,151 during the six and three
      month periods ended June 30, 2007 and 2006, respectively, in recoveries from
      unsecured debtors whose balance has been fully provided for in the loan loss
      reserve.





The
      decrease in professional fees of $2,026 (5.02%) for the six month period and
      $5,406 (26.19%) for the three month period ended June 30, 2007 as compared
      to
      the same periods in 2006 was due to the timing of billing and
      payments.  We anticipate the cost of professional services will
      increase during the remainder of 2007 due to compliance work in accordance
      with
      the Sarbanes-Oxley Act of 2002.





The
      decrease in other expenses of $4,778 (27.77%) for the six month period and
      $1,985 (17.34%) for the three month period ended June 30, 2007 as compared
      to
      the same periods in 2006 was primarily due to a decrease in upkeep costs for
      the
      real estate held for sale.  The Partnership spent $13,083 and $17,893
      during the six month periods and $8,041 and $10,049 for the three month periods
      ended June 30, 2007 and 2006, respectively.





Partnership
      capital decreased by $29,346 during the first six months of 2007 as the
      aggregate of earnings distributions and capital liquidations was higher than
      the
      net income level of the Partnership.  For the six month period ended
      June 30, 2007, limited partners’ net income was $250,565 versus earnings
      distributions of $95,657 and capital liquidations of $184,254, which totaled
      $279,911, as compared to limited partners’ net income of $249,730 versus
      earnings distributions of $89,368 and capital liquidations of $134,590, which
      totaled $223,958 for the corresponding period in 2006.  Earnings and
      capital liquidations are a factor of limited partner elections and limited
      partners seeking liquidations of earnings or their capital account increased
      during the first half of 2007, which resulted in  a decline in
      partners’ capital from $9,325,994 as of December 31, 2006, to $9,296,648 as of
      June 30, 2007.





At
      June
      30, 2007, there were no outstanding loans with a filed notice of
      default.





Redwood
      Mortgage Corp., an affiliate of the general partners, received mortgage
      brokerage commissions from loan borrowers of $34,350 and $63,662 for the six
      month periods and $34,350 and $35,012 for the three month periods ended June
      30,
      2007 and 2006, respectively.  The decrease of $29,132 (45.76%) and
      $662 (1.89%) for the six and three month periods ended June 30, 2007,
      respectively, as compared to the same periods in 2006 was due to fewer loans
      being funded totaling $1,157,955 and $2,986,448 in the six month periods and
      $1,157,955 and $1,672,500 for the three month periods ended June 30, 2007 and
      2006, respectively.





16


**Allowance
      for Losses.**





The
      general partners regularly review the loan portfolio, examining the status
      of
      delinquencies, the underlying collateral securing these loans, borrowers’
payment records, etc.  Based upon this information and other data, the
      allowance for loan losses is increased or decreased. Borrower foreclosures
      are a
      normal aspect of Partnership operations.  The Partnership is not a
      credit based lender and hence while it reviews the credit history and income
      of
      borrowers, and if applicable, the income from income producing properties,
      the
      general partners expect that we will on occasion take back real estate
      security.  At June 30, 2007, the Partnership had one loan totaling
      $487,500, which was past due 90 days or more in interest payments.  No
      loans were past maturity as of June 30, 2007.  One unsecured loan
      totaling $606,394 was impaired at June 30, 2007.





Periodically,
      the Partnership enters into workout agreements with borrowers who are past
      maturity or delinquent in their regular payments.  The Partnership has
      one loan totaling $487,500 in a workout agreement with a borrower as of June
      30,
      2007.  Typically, a workout agreement allows the borrower to extend
      the maturity date of the balloon payment and/or allows the borrower to make
      current monthly payments while deferring for periods of time, past due payments
      and balloon payments and allows time to pay the loan in full.  Workout
      agreements and foreclosures generally exist within our loan portfolio to varying
      degrees, depending primarily on the health of the economy.  The number
      of foreclosures and workout agreements will generally rise during difficult
      economic times and conversely fall during good economic
      times.  Workout agreements and foreclosures are considered when
      management arrives at an appropriate allowance for loan losses, and based on
      our
      experience; they are reflective of our loan marketplace segment. In the
      remainder of 2007, we may initiate foreclosure by filing notices of default
      on
      delinquent borrowers or borrowers who become delinquent during the
      year.  Borrower foreclosures are a normal aspect of Partnership
      operations and the general partners anticipate that they will not have a
      material effect on liquidity.  As a safeguard against potential
      losses, the general partners have made provisions for losses on loans and real
      estate held for sale through foreclosure of $585,014 at June 30,
      2007.  These provisions for losses were made to guard against
      collection losses.  The total provision for losses on loans and real
      estate of $585,014 as of June 30, 2007 is considered by the general partners
      to
      be adequate. Because of the number of variables involved, the magnitude of
      the
      swings possible and the general partners’ inability to control many of these
      factors, actual results may and do sometimes differ significantly from estimates
      made by the general partners.





As
      of
      June 30, 2007, the Partnership had an average loan to value ratio of 61.49%
      computed based on appraised values and prior liens as of the date the loan
      was
      made.  This percentage does not account for any increases or decreases
      in property values since the date the loan was made, nor does it include any
      reductions in principal through amortization of payments after the loan was
      made.  This low loan to value ratio should assist the Partnership in
      weathering loan delinquencies and foreclosures in the event they
      occur.





**PORTFOLIO
      REVIEW**– For the six months ended June 30, 2007 and
      2006





**Loan
      Portfolio**





The
      Partnership’s loan portfolio consists primarily of short-term (one to five
      years), fixed rate loans secured by real estate. As of June 30, 2007 and 2006,
      the Partnership’s loans secured by real property collateral in the nine San
      Francisco Bay Area counties (San Francisco, San Mateo, Santa Clara, Alameda,
      Marin, Napa, Solano, Sonoma and Contra Costa) represented $4,688,365 (75.93%)
      and $4,316,518 (78.21%), respectively, of the outstanding secured loan
      portfolio.  The remainder of the portfolio represented loans secured
      by real estate located primarily in Northern California.





17


As
      of
      June 30, 2007 and 2006, the Partnership held 23 and 22 loans, respectively,
      in
      the following categories:





June
                30,2007
            
            
            2006Single
                Family Homes (1-4 units)
            
            $
            2,026,059
            
            
            
            33
            %
            
            $
            3,911,499
            
            
            
            60
            %Commercial
            
            
            2,555,459
            
            
            
            41
            %
            
            
            1,186,957
            
            
            
            18
            %Apartments
                (5+ units)
            
            
            687,500
            
            
            
            11
            %
            
            
            812,500
            
            
            
            12
            %Land
            
            
            905,598
            
            
            
            15
            %
            
            
            661,002
            
            
            
            10
            %Total
            
            $
            6,174,616
            
            
            
            100
            %
            
            $
            6,571,958
            
            
            
            100
            %





As
      of
      June 30, 2007, the Partnership held 23 loans secured by deeds of
      trust.  The following table sets forth the priorities, asset
      concentrations and maturities of the loans held by the Partnership as of June
      30, 2007:





**PRIORITIES,
      ASSET CONCENTRATIONS AND MATURITIES OF LOANS**


**As
      of June 30, 2007**





#
                of Loans
            
            
            Amount
            
            
            Percent1st
                Mortgages
            
            
            18
            
            
            $
            5,026,457
            
            
            
            81
            %2nd
                Mortgages
            
            
            4
            
            
            
            1,058,253
            
            
            
            17
            %3rd
                Mortgages
            
            
            1
            
            
            
            89,906
            
            
            
            2
            %Total
            
            
            23
            
            
            $
            6,174,616
            
            
            
            100
            %Maturing
                prior to 12/31/07
            
            
            4
            
            
            $
            1,475,000
            
            
            
            24
            %Maturing
                between 01/01/08 and 12/31/08
            
            
            6
            
            
            
            1,377,062
            
            
            
            22
            %Maturing
                between 01/01/09 and 12/31/09
            
            
            4
            
            
            
            1,197,118
            
            
            
            19
            %Maturing
                after 12/31/09
            
            
            9
            
            
            
            2,125,436
            
            
            
            35
            %Total
            
            
            23
            
            
            $
            6,174,616
            
            
            
            100
            %Average
                Secured Loan
            
            
            
            
            
            $
            268,462
            
            
            
            4
            %Largest
                Secured Loan
            
            
            
            
            
            
            500,000
            
            
            
            8
            %Smallest
                Secured Loan
            
            
            
            
            
            
            89,906
            
            
            
            1
            %Average
                Loan-to-Value based upon appraisals andprior
                liens at time loan was consummated
            
            
            
            
            
            
            
            
            
            
            61.49
            %





The
      Partnership’s largest loan in the principal amount of $500,000 represents 8.10%
      of outstanding secured loans and 5.34% of Partnership assets.  Over
      time, loans may increase above 10% of the secured loan portfolio or Partnership
      assets as the loan portfolio and assets of the Partnership decrease due to
      limited partner withdrawals and/or loan payoffs.





18


**Borrower
      Liquidity and Capital Resources**.





The
      Partnership relies upon loan payoffs, borrowers’ mortgage payments, and, to a
      lesser degree, its line of credit for the source of funds for
      loans.  Over the past several years, mortgage interest rates have
      decreased somewhat from those available at the inception of the
      Partnership.  If interest rates were to increase substantially, the
      yield of the Partnership’s loans may provide lower yields than other comparable
      debt-related investments.  Additionally, since the Partnership has
      made primarily fixed rate loans, if interest rates were to rise, the likely
      result would be a slower prepayment rate for the Partnership.  This
      could cause a lower degree of liquidity as well as a slowdown in the ability
      of
      the Partnership to invest in loans at the then current interest
      rates.  Conversely, in the event interest rates were to decline, the
      Partnership could see significant borrower prepayments, which, if the
      Partnership can only obtain the then existing lower rates of interest, may
      cause
      a dilution of the Partnership’s yield on loans, thereby lowering the
      Partnership’s overall yield to the limited partners.  The Partnership
      to a lesser degree relies upon its line of credit to fund
      loans.  Generally, the Partnership’s loans are fixed rate, whereas the
      credit line is a variable rate loan.  In the event of a significant
      increase in overall interest rates, the credit line rate of interest could
      increase to a rate above the average portfolio rate of
      interest.  Should such an event occur, the general partners would
      desire to pay off the line of credit.  Retirement of the line of
      credit would reduce the overall liquidity of the Partnership.  Cash is
      constantly being generated from borrower payments of interest, principal and
      loan payoffs.  Currently, cash flow exceeds Partnership expenses and
      earnings distribution requirements.  Excess cash flow is invested in
      new loan opportunities, when available, and is used to reduce the Partnership
      credit line or for other Partnership business.





At
      the
      time of subscription to the Partnership, limited partners made an irrevocable
      decision to either take distributions of earnings monthly, quarterly or annually
      or to compound earnings in their capital account.  For the six and
      three month periods ended June 30, 2007 and 2006, respectively, the Partnership
      made the following allocations of earnings both to the limited partners who
      elected to compound their earnings, and those that chose to
      distribute:





Six
                months ended June 30,
            
            
            Three
                months ended June 30,2007
            
            
            2006
            
            
            2007
            
            
            2006Compounding
            
            $
            154,908
            
            
            $
            160,362
            
            
            $
            77,413
            
            
            $
            80,250Distributing
            
            $
            95,657
            
            
            $
            89,368
            
            
            $
            47,707
            
            
            $
            44,616





As
      of
      June 30, 2007 and 2006, limited partners electing to withdraw earnings
      represented 38% and 37%, respectively, of the limited partners’
capital.





The
      Partnership agreement also allows the limited partners to withdraw their capital
      account subject to certain limitations.  For the six month periods
      ended June 30, 2007 and 2006, $22,459 and $32,481, respectively, was liquidated
      subject to the 10% penalty for early withdrawal.  For the three month
      periods ended June 30, 2007 and 2006, $11,374 and $15,755, respectively, was
      liquidated subject to the 10% penalty for early withdrawal.  These
      withdrawals are within the normally anticipated range that the general partners
      would expect in their experience in this and other partnerships. The general
      partners expect that a small percentage of limited partners will elect to
      liquidate their capital accounts over one year with a 10% early withdrawal
      penalty.  In originally conceiving the Partnership, the general
      partners wanted to provide limited partners needing their capital returned
      a
      degree of liquidity.  Generally, limited partners electing to withdraw
      over one year need to liquidate their investment to raise cash.  The
      trend the Partnership is experiencing in withdrawals by limited partners
      electing a one year liquidation program represents a small percentage of limited
      partner capital as of June 30, 2007 and 2006, respectively.





Additionally,
      for the six month periods ended June 30, 2007 and 2006, $161,795 and $102,109,
      respectively, was liquidated by limited partners who have elected a liquidation
      program over a period of five years or longer.  For the three month
      periods ended June 30, 2007 and 2006, $70,085 and $40,731, respectively, was
      liquidated by limited partners who have elected a liquidation program over
      a
      period of five years or longer.  This ability to withdraw after five
      years by limited partners has the effect of providing limited partner
      liquidity.  The general partners expect a portion of the limited
      partners to take advantage of this provision.  This has the
      anticipated effect of the Partnership growing, primarily through reinvestment
      of
      earnings in years one through five.  The general partners expect to
      see increasing numbers of limited partner withdrawals in years five through
      eleven, after which time the bulk of those limited partners who have sought
      withdrawal have been liquidated.  After year eleven, liquidation
      generally subsides.





19


Earnings
      and capital liquidations, including early withdrawals, during the six and three
      months ended June 30, 2007 and 2006 were:





Six
                months ended June 30,
            
            
            Three
                months ended June 30,2007
            
            
            2006
            
            
            2007
            
            
            2006Earnings
                liquidation
            
            $
            95,657
            
            
            $
            89,368
            
            
            $
            47,707
            
            
            $
            44,616Capital
                liquidation*
            
            $
            184,254
            
            
            $
            134,590
            
            
            $
            81,459
            
            
            $
            56,486Total
            
            $
            279,911
            
            
            $
            223,958
            
            
            $
            129,166
            
            
            $
            101,102





*
      These
      are gross amounts, which are not net of early withdrawal penalties.





In
      some
      cases in order to satisfy broker-dealers and other reporting requirements,
      the
      general partners have valued the limited partners’ interest in the Partnership
      on a basis which utilizes a per Unit system of calculation, rather than based
      upon the investors’ capital account.  This information has been
      reported in this manner in order to allow the Partnership to integrate with
      certain software used by the broker-dealers and other reporting
      entities.  In those cases, the Partnership will report to
      broker-dealers, trust companies and others a “reporting” number of Units based
      upon a $1.00 per Unit calculation.  The number of reporting Units
      provided will be calculated based upon the limited partner’s capital account
      value divided by $1.00.  Each investor’s capital account balance is
      set forth periodically on the Partnership account statement provided to
      investors.  The reporting Units are solely for broker-dealers
      requiring such information for their software programs and do not reflect actual
      Units owned by a limited partner or the limited partners’ right or interest in
      cash flow or any other economic benefit in the Partnership.  Each
      investor’s capital account balance is set forth periodically on the Partnership
      account statement provided to investors.  The amount of Partnership
      earnings each investor is entitled to receive is determined by the ratio that
      each investor’s capital account bears to the total amount of all investor
      capital accounts then outstanding.  The capital account balance of
      each investor should be included on any NASD member client account statement
      in
      providing a per Unit estimated value of the client’s investment in the
      Partnership in accordance with NASD Rule 2340.





While
      the
      general partners have set an estimated value for the Partnership Units, such
      determination may not be representative of the ultimate price realized by an
      investor for such Units upon sale.  No public trading market exists
      for the Partnership’s Units and none is likely to develop.  Thus,
      there is no certainty that the Units can be sold at a price equal to the stated
      value of the capital account.  Furthermore, the ability of an investor
      to liquidate his or her investment is limited subject to certain liquidation
      rights provided by the Partnership, which may include early withdrawal
      penalties.





**Current
      Economic Conditions.**





By
      most
      indicators the United States economy continues to perform well.  Gross
      Domestic Product, which slowed to a 0.7% annual rate in the first quarter of
      2007, rebounded and increased at a 3.4% annual rate during the second quarter
      of
      2007.  The unemployment rate has been hovering around 4.5% for almost
      a full year, which many would consider to be close to full
      employment.  The inflation rate was 0.2% for June of 2007, which was
      2.7% higher than in June of 2006; this is a relatively low rate of inflation
      considering the high energy costs, which have persisted due to the rising cost
      of oil.  Long term interest rates, represented by the 10-year treasury
      bonds, fluctuated during the second quarter of 2007 but stayed within an
      approximate 0.25% range of 4.95% during the second quarter 2007.  At
      August 10, 2007 they were trading at 4.78%; which is near their trading levels
      during the first quarter of 2007.  The Federal Reserve, in
      acknowledging the solid performance of the economy, left its benchmark federal
      funds rate unchanged at 5.25% during its August, 2007 meeting citing its view
      that inflation remains the most significant concern factor.





20


In
      spite
      of the solid performance of the economy, loan delinquencies for many lenders
      have been rising.  Of particular concern are loan delinquencies in the
      "sub prime" residential real estate lending arena.  Loan payment
      delinquencies for this category of borrower, those with low credit scores,
      high
      loan-to-values, and undocumented resources for payments, have risen to levels
      approximating 16%.  Many of these borrowers are dependent upon
      appreciation and loose underwriting standards to assist them with their ability
      to service their indebtedness.  As the majority of these loans were
      written at loan-to-values exceeding 90%, an abatement of residential real estate
      appreciation and a tightening of underwriting standards will cause enough
      financial stress amongst this category of borrowers to cause many of them to
      default on their obligations.  The Partnership believes it is
      different from many sub prime lenders in that it does not make high
      loan-to-value loans, and does document the ability of borrowers to make the
      payments on their loans.  For the Partnership loans outstanding as of
      June 30, 2007, the Partnership had an average loan-to-value ratio of 61.49%,
      computed based on appraised value and senior liens as of the date the loan
      was
      made.  This percentage does not account for any increases or decreases
      in property values since the date the loan was made, nor does it include any
      reductions in principal on senior indebtedness through amortization of payments
      after the loan was made.





The
      Partnership makes loans primarily in Northern California.  As such the
      regional real estate market is of primary concern to the Partnership. As of
      June
      30, 2007 and 2006, approximately 75.93% ($4,688,365) and 78.21% ($4,316,518),
      respectively, of the loans held by the Partnership were in the nine San
      Francisco Bay Area Counties.  The remainder of the loans held was
      secured primarily by Northern California real estate outside of the San
      Francisco Bay Area.





In
      general, California residential real estate sales slowed but prices remained
      similar to those that existed a year ago.  The California Association
      of Realtors reported that sales of single family homes were down 24.7% in June,
      2007, while the median price rose 3.2% to $594,260.  Sales of
      condominiums dropped 19.9%, even as the median price was rising 2.9% to
      $442,670.  Dataquick, which uses different definitions of a home
      versus the California Association of Realtors, reported that the median price
      paid for a home in June, 2007 was $479,000 down 1% from the record high of
      $484,000 for March, April and May, 2007.  That median price was down
      0.2% from the $480,000 median price for June, 2006.  In the San
      Francisco Bay Area, the median price paid for a home increased in June, 2007
      to
      a new high of $665,000.  That was up 0.8% from $660,000 for May, 2007
      and up 2.6% from $648,000 for June, 2006.  Since the majority of the
      Partnership’s residential loans are secured by San Francisco Bay Area real
      estate and all of the residential loans are secured by California real estate,
      the continued stability of residential real estate values in California, and
      particularly the San Francisco Bay Area, is anticipated to minimize the impact
      on the Partnership of higher loan delinquencies in the “sub prime” residential
      real estate market nationally.





Commercial
      properties continued their strong performance in the San Francisco Bay
      Area.  San Francisco’s downtown office vacancy rate dropped slightly
      in the second quarter to 8.5%, down a tenth of a percentage point from the
      first
      quarter, according to CB Richard Ellis.  Average rental rates in
      downtown San Francisco reached $38.31 per square foot annually, a 6.8% increase
      over the previous quarter and 25.8% above the previous year.  All
      other regions of the San Francisco Bay Area exhibited similar improved results
      from 2006.  A strong commercial market indicates strong job and
      economic growth, which is good for commercial property values and for the
      lenders who secure loans on commercial properties.





While
      residential real estate activity and values have certainly moderated from the
      sales and appreciation rates that existed during 2004 and 2005, significant
      price drops have not ensued.  Management believes our loan-to-value
      ratio of 61.49% will assist the Partnership in weathering loan delinquencies
      and
      foreclosures should they occur.





21


**Part
      I – Item 3. Quantitative and Qualitative Disclosures About Market
      Risk**





The
      following table contains information about the cash held in money market
      accounts, loans held in the Partnership’s portfolio and loans to the Partnership
      pursuant to its line of credit as of June 30, 2007.  The presentation,
      for each category of information, aggregates the assets and liabilities by
      their
      maturity dates for maturities occurring in each of the years 2007 through 2011
      and separately aggregates the information for all maturities arising after
      2011.  The carrying values of these assets and liabilities approximate
      their fair market values as of June 30, 2007:





2007
            
            
            2008
            
            
            2009
            
            
            2010
            
            
            2011
            
            
            Thereafter
            
            
            TotalInterest
                earning assets:Money
                market accounts
            
            $
            450,052
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            $
            450,052Average
                interest rate
            
            
            3.96
            %
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            3.96
            %Unsecured
                loans
            
            
            
            
            
            
            
            
            
            
            
            $
            744,324
            
            
            
            
            
            
            
            
            $
            744,324Average
                interest rate
            
            
            
            
            
            
            
            
            
            
            
            
            0
            %
            
            
            
            
            
            
            
            
            0
            %Loans
                secured by deedsof
                trust
            
            $
            1,475,000
            
            
            
            1,377,062
            
            
            
            1,197,118
            
            
            
            512,134
            
            
            
            600,753
            
            
            
            1,012,549
            
            
            $
            6,174,616Average
                interest rate
            
            
            9.54
            %
            
            
            9.52
            %
            
            
            9.16
            %
            
            
            9.38
            %
            
            
            9.11
            %
            
            
            9.42
            %
            
            
            9.39
            %Interest
                bearing liabilitiesLine
                of credit
            
            
            —
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            —Interest
                rate
            
            
            8.50
            %
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            8.50
            %





**Market
      Risk.**





The
      Partnership’s line of credit bears interest at a variable rate, which is tied to
      the prime rate.  As a result, the Partnership’s primary market risk
      exposure with respect to its obligations is to changes in interest rates, which
      will affect the interest cost of outstanding amounts on the line of
      credit.  The Partnership may also suffer market risk tied to general
      trends affecting real estate values that may impact the Partnership’s security
      for its loans.





The
      Partnership’s primary market risk in terms of its profitability is the exposure
      to fluctuations in earnings resulting from fluctuations in general interest
      rates.  The majority of the Partnership’s mortgage loans earn interest
      at fixed rates. Changes in interest rates may also affect the value of the
      Partnership’s investment in mortgage loans and the rates at which the
      Partnership reinvests funds obtained from loan repayments and new capital
      contributions from limited partners.  If interest rates increase, the
      interest rates the Partnership obtains from reinvested funds will generally
      increase, but the value of the Partnership’s existing loans at fixed rates will
      generally tend to decrease.  The risk is mitigated by the fact that
      the Partnership does not intend to sell its loan portfolio, rather such loans
      are expected to be held until they are paid off. If interest rates decrease,
      the
      amounts becoming available to the Partnership for investment due to repayment
      of
      Partnership loans may be reinvested at lower rates than the Partnership had
      been
      able to obtain in prior investments, or than the rates on the repaid
      loans.  In addition, interest rate decreases may encourage borrowers
      to refinance their loans with the Partnership at a time where the Partnership
      is
      unable to reinvest in loans of comparable value.





The
      Partnership does not hedge or otherwise seek to manage interest rate
      risk.  The Partnership does not enter into risk sensitive instruments
      for trading purposes.








**ASSET
      QUALITY**





A
      consequence of lending activities is that occasionally losses will be
      experienced and that the amount of such losses will vary from time to time,
      depending upon the risk characteristics of the loan portfolio as affected by
      economic conditions and the financial experiences of borrowers.  Many
      of these factors are beyond the control of the general
      partners.  There is no precise method of predicting specific losses or
      amounts that ultimately may be charged off on particular segments of the loan
      portfolio, especially in light of the current economic environment.





22


The
      conclusion that a loan may become uncollectible, in whole or in part, is a
      matter of judgment.  Although institutional lenders are subject to
      requirements and regulations that, among other things, require them to perform
      ongoing analyses of their portfolios, loan-to-value ratios, reserves, etc.,
      and
      to obtain and maintain current information regarding their borrowers and the
      securing properties, the Partnership is not subject to these regulations and
      has
      not adopted certain of these practices.  Rather, the general partners,
      in connection with the periodic closing of the accounting records of the
      Partnership and the preparation of the financial statements, determine whether
      the allowance for loan losses is adequate to cover potential loan losses of
      the
      Partnership.  As of June 30, 2007, one loan totaling $487,500 was past
      due 90 days or more in interest payments.  This loan was also in a
      workout agreement.  Management believes that there is sufficient
      collateral to cover the amount outstanding to the Partnership on this
      loan.  As of June 30, 2007, the general partners have determined that
      the allowance for loan and real estate losses of $585,014 (6.29% of net assets)
      is adequate in amount.  Because of the number of variables involved,
      the magnitude of the swings possible and the general partners’ inability to
      control many of these factors, actual results may and do sometimes differ
      significantly from estimates made by the general partners.








**Part
      I – Item 4.   CONTROLS AND PROCEDURES**





As
      of
      June 30, 2007, the Partnership carried out an evaluation, under the supervision
      and with the participation of the general partners of the effectiveness of
      the
      design and operation of the Partnership’s disclosure controls and procedures
      pursuant to Rule 13a-15 of the Securities Exchange Act of 1934, as
      amended.  Based upon that evaluation, the general partners concluded
      that the Partnership’s disclosure controls and procedures are effective in
      timely alerting the general partners to material information relating to the
      Partnership that is required to be included in our periodic filings with the
      Securities and Exchange Commission.  There were no significant changes
      in the Partnership’s internal control over financial reporting during the
      Partnership’s first fiscal quarter that have materially affected, or are
      reasonably likely to materially affect, the Partnership’s internal control over
      financial reporting.





23


**PART
      II – OTHER INFORMATION**








Item
      1.               **Legal
      Proceedings**





The
      Partnership is involved in various legal actions arising in the normal course
      of
      business.  In the opinion of management, such matters will not have a
      material effect upon the financial position of the Partnership.








Item
      1A.                          **Risk
      Factors**





Not
      Applicable








Item
      2.               **Unregistered
      Sales of Equity Securities and Use of Proceeds**





Not
      Applicable.








Item
      3.               **Defaults
      upon Senior Securities**





Not
      Applicable.








Item
      4.               **Submission
      of Matters to a Vote of Security Holders**





Not
      Applicable.








Item
      5.               **Other
      Information**





Not
      Applicable.








Item
      6.               **Exhibits**





31.1
      Certification of General Partner pursuant to Section 302 of the Sarbanes-Oxley
      Act of 2002


31.2
      Certification of General Partner pursuant to Section 302 of the Sarbanes-Oxley
      Act of 2002


32.1
      Certification of General Partner pursuant to Section 906 of the Sarbanes-Oxley
      Act of 2002


32.2
      Certification of General Partner pursuant to Section 906 of the Sarbanes-Oxley
      Act of 2002





24


**SIGNATURES**





Pursuant
      to the requirements of Section 13 or 15 (d) of the Securities Exchange Act
      of
      1934 the registrant has duly caused this report to be signed on its behalf
      by
      the undersigned, thereto duly authorized on the 14th day of August,
      2007.








**REDWOOD
                MORTGAGE INVESTORS VII**





By:
            /S/
                Michael R. BurwellMichael
                R. Burwell, General PartnerBy:
            Gymno
                Corporation, General PartnerBy:
            /S/
                Michael R. BurwellMichael
                R. Burwell, President,Secretary/Treasurer
                & Chief Financial Officer

















25


Exhibit
      31.1





GENERAL
      PARTNER CERTIFICATION





I,
      Michael R. Burwell, General Partner, certify that:





1.
            I
                have reviewed this quarterly report on Form 10-Q of Redwood Mortgage
                Investors VII, a California Limited Partnership (the
                “Registrant”);





2.
            Based
                on my knowledge, this quarterly report does not contain any untrue
                statement of a material fact or omit to state a material fact necessary
                to
                make the statements made, in light of the circumstances under which
                such
                statements were made, not misleading with respect to the period covered
                by
                this quarterly report;





3.
            Based
                on my knowledge, the financial statements, and other financial information
                included in this quarterly report, fairly present in all material
                respects
                the financial condition, results of operations and cash flows of
                the
      Registrant as of, and for, the periods presented in this quarterly
                report;





4.
            The
                Registrant’s other certifying officers and I are responsible for
                establishing and maintaining disclosure controls and procedures (as
                defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Registrant
                and we have:





(a)
            designed
                such disclosure controls and procedures, or caused such disclosure
                controls and procedures to be designed under our supervision, to
                ensure
                that material information relating to the Registrant, including its
                consolidated subsidiaries, is made known to us by others within those
                entities, particularly during the period in which this quarterly
                report is
                being prepared;





(b)
            evaluated
                the effectiveness of the Registrant’s disclosure controls and procedures
                and presented in this report our conclusions about the effectiveness
                of
                the disclosure controls and procedures, as of the end of the period
                covered by this report based on such evaluation;
                and





(c)
            disclosed
                in this report any change in the Registrant’s internal control over
                financial reporting that occurred during the Registrant’s most recent
                fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an
                annual report) that has materially affected, or is reasonably likely
                to
                materially affect, the Registrant’s internal control over financial
                reporting; and





5.
            The
                Registrant’s other certifying officers and I have disclosed, based on our
                most recent evaluation of internal control over financial reporting,
                to
                the Registrant’s auditors and the audit committee of Registrant’s board of
                directors (or persons performing the equivalent
                functions):





(a)
            all
                significant deficiencies and material weaknesses in the design or
                operation of internal control over financial reporting which are
                reasonably likely to adversely affect the Registrant’s ability to record,
                process, summarize and report financial information;
                and





(b)
            any
                fraud, whether or not material, that involves management or other
                employees who have a significant role in the Registrant’s internal control
                over financial reporting.














/s/
      Michael R. Burwell


_____________________________


Michael
      R. Burwell, General Partner


August
      14, 2007


26


Exhibit
      31.2





PRESIDENT
      AND CHIEF FINANCIAL OFFICER CERTIFICATION





I,
      Michael R. Burwell, President and Chief Financial Officer of Gymno Corporation,
      General Partner, certify that:





1.
            I
                have reviewed this quarterly report on Form 10-Q of Redwood Mortgage
                Investors VII, a California Limited Partnership (the
                “Registrant”);





2.
            Based
                on my knowledge, this quarterly report does not contain any untrue
                statement of a material fact or omit to state a material fact necessary
                to
                make the statements made, in light of the circumstances under which
                such
                statements were made, not misleading with respect to the period covered
                by
                this quarterly report;





3.
            Based
                on my knowledge, the financial statements, and other financial information
                included in this quarterly report, fairly present in all material
                respects
                the financial condition, results of operations and cash flows of
                the
                Registrant as of, and for, the periods presented in this quarterly
                report;





4.
            The
                Registrant’s other certifying officers and I are responsible for
                establishing and maintaining disclosure controls and procedures (as
                defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Registrant
                and we have:





(a)
            designed
                such disclosure controls and procedures, or caused such disclosure
                controls and procedures to be designed under our supervision, to
                ensure
                that material information relating to the Registrant, including its
                consolidated subsidiaries, is made known to us by others within those
                entities, particularly during the period in which this quarterly
                report is
                being prepared;





(b)
            evaluated
                the effectiveness of the Registrant’s disclosure controls and procedures
                and presented in this report our conclusions about the effectiveness
                of
                the disclosure controls and procedures, as of the end of the period
                covered by this report based on such evaluation;
                and





(c)
            disclosed
                in this report any change in the Registrant’s internal control over
                financial reporting that occurred during the Registrant’s most recent
                fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an
                annual report) that has materially affected, or is reasonably likely
                to
                materially affect, the Registrant’s internal control over financial
                reporting; and





5.
            The
                Registrant’s other certifying officers and I have disclosed, based on our
                most recent evaluation of internal control over financial reporting,
                to
                the Registrant’s auditors and the audit committee of Registrant’s board of
                directors (or persons performing the equivalent
                functions):





(a)
            all
                significant deficiencies and material weaknesses in the design or
                operation of internal control over financial reporting which are
                reasonably likely to adversely affect the Registrant’s ability to record,
                process, summarize and report financial information;
                and





(b)
            any
                fraud, whether or not material, that involves management or other
                employees who have a significant role in the Registrant’s internal control
                over financial reporting.














/s/
      Michael R. Burwell


____________________________


Michael
      R. Burwell, President and


Chief
      Financial Officer of Gymno


Corporation,
      General Partner


August
      14, 2007


27


Exhibit
      32.1





CERTIFICATION
      PURSUANT TO


18
      U.S.C
      SECTION 1350,


AS
      ADOPTED PURSUANT TO


SECTION
      906 OF THE SARBANES-OXLEY ACT OF 2002








In
      connection with the Quarterly Report of Redwood Mortgage Investors VII (the
      “Partnership”) on Form 10-Q for the period ending June 30, 2007 as filed with
      the Securities and Exchange Commission on the date hereof (the “Report”),
      pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
      Sarbanes-Oxley Act of 2002, I, Michael R. Burwell, General Partner of the
      Partnership, certify, that to the best of my knowledge:





(1)
            The
                Report fully complies with the requirements of section 13(a) or 15(d)
                of
                the Securities Exchange Act of 1934;
                and





(2)
            The
                information contained in the Report fairly presents, in all material
                respects, the financial condition and results of operations of the
                Partnership at the dates and for the periods
                indicated.





This
      certification has not been, and shall not be deemed “filed” with the Securities
      and Exchange Commission.














/s/
                Michael R. Burwell


______________________________


Michael
                R. Burwell, General Partner


August
                14, 2007


28


Exhibit
      32.2








CERTIFICATION
                PURSUANT TO


18
                U.S.C. SECTION 1350


AS
                ADOPTED PURSUANT TO


SECTION
                906 OF THE SARBANES-OXLEY ACT OF
                2002








In
      connection with the Quarterly Report of Redwood Mortgage Investors VII (the
      “Partnership”) on Form 10-Q for the period ending June 30, 2007 as filed with
      the Securities and Exchange Commission on the date hereof (the “Report”),
      pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
      Sarbanes-Oxley Act of 2002, I, Michael R. Burwell, President,
      Secretary/Treasurer & Chief Financial Officer of Gymno Corporation, General
      Partner of the Partnership, certify that to the best of my
      knowledge:





(1)
            The
                Report fully complies with the requirements of section 13(a) or 15(d)
                of
                the Securities Exchange Act of 1934;
                and





(2)
            The
                information contained in the Report fairly presents, in all material
                respects, the financial condition and results of operations of the
                Partnership at the dates and for the periods
                indicated.





This
      certification has not been, and shall not be deemed “filed” with the Securities
      and Exchange Commission.














/s/
                Michael R. Burwell


________________________________


Michael
                R. Burwell, President,


Secretary/Treasurer
                & Chief Financial


Officer
                of Gymno Corporation, General
                Partner


August
                14, 2007


29