VESTIN REALTY MORTGAGE I, INC

INTERCREDITOR AGREEMENT

THIS INTERCREDITOR AGREEMENT, dated as of October 13, 2006 (this “Agreement”), is entered into by and between VESTIN MORTGAGE, INC., a Nevada corporation (“Vestin”), VESTIN ORIGINATIONS, INC., a Nevada corporation (“Originations”), VESTIN REALTY MORTGAGE I, Inc., a Maryland corporation (“VRM I”), VESTIN REALTY MORTGAGE II, Inc., a Maryland corporation (“VRM II”) and VESTIN FUND Ill, LLC, a Nevada limited liability company (“VF III”) whose principal place of business and post office address is 8379 West Sunset Road, Las Vegas, Nevada. 89113, (individually, “Lead Lender, or collectively, “Lead Lenders” and OWENS FINANCIAL GROUP, INC.., a California corporation (“Owens Financial”) and OWENS MORTGAGE INVESTMENT FUND, a California Limited Partnership (“Owens Mortgage Investment Fund”) whose principal place of business and post office address is 2221 Olympic Boulevard, Walnut Creek, California 94595, (individually, a “Lender”, or collectively, “Lenders”)

RECITALS:

NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, and based upon the foregoing Recitals which are an integral part of this Agreement, as well as the mutual covenants and promises contained herein, Originations, Vestin, VRM 1, VRM II, VF III, Owens Financial, and Owens Mortgage Investment Fund hereby agree as follows:

SECTION 1. DEFINITIONS

Section 1.1. Definitions. All capitalized terms used in this Agreement shall have the meanings assigned to them below in this Section 1 or in the provisions of this Agreement referred to below:

“Agreement” shall mean this lntercreditor Agreement as amended, modified or restated in accordance with the terms hereof.

“Assignment” shall mean the actual recorded assignment of a specific percentage interest in a “Loan”.

“Bankruptcy Proceeding” shall mean, with respect to any Person, a general assignment by such Person for the benefit of its creditors, or the institution by or against such Person of any proceeding seeking its relief as debtor, or seeking to adjudicate such Person as bankrupt or insolvent, or seeking reorganization, arrangement, adjustment or composition of such Person or its debts, under any law relating to bankruptcy, insolvency, reorganization or relief of debtors, or seeking appointment of a receiver, trustee, custodian or other similar official for such Person or for any substantial part of its property.

“Borrowers” shall mean any person or entity that obligates itself or its property as security for a “Loan”.

“Collateral” shall mean all the real and personal property collateral under the Loan Documents.

“Default” shall mean any event or condition, the occurrence of which would, with the lapse of time or the giving of notice, or both, pursuant, to the “Loan Documents” constitute an Event of Default.

“Interest Rate” shall mean the rate of interest paid to Owens Financial or Owens Mortgage Investment Fund for their “Participation Interest” in the “Loan”. This rate shall be a fixed rate of Eleven Percent (11.0%) for the duration of the Loan.

“Late Charges” shall mean the late charges and or default rate charged to Borrowers in the event of default or late payments under the “Loan Documents”.

“Lead Lender and Lead Lenders” shall mean Originations, Vestin, VRM I, VRM II, VF Ill or any successor lead lender.

“Lender and Lenders” shall mean Owens Financial or Owens Mortgage Investment Fund or their assignee.

“Loan Documents” shall mean of all the various notes, deeds of trusts, guarantees, title policies, security agreements, loan agreements, assignment of rents and profits, and whatever documents are in existence to protect and secure the repayment of the Borrowers obligations under the note.

“Loan” shall mean the note, and all of the documents and agreements that evidence and secure the debt of the “Borrowers”.

“Priority of Payment” shall mean the order in which payments are made to the

“Lead Lender” and to the “Lender”.

“Participation Interest” shall signify amount in dollars of the “Assignment” owned by Owens Financial and Owens Mortgage Investment Fund in the “Loan”.

1.2 Effectiveness of this Agreement The effectiveness of this Agreement is conditioned upon (a) the execution and delivery of this Agreement by the Lead Lenders and the Lenders, (b) the execution, delivery and effectiveness of the Loan Documents by the Lead Lenders, and the payment of the Participation Interest by Lenders to the Lead Lenders.

SECTION 2. RELATIONSHIP AMONG LENDERS

2.1 Restrictions on Actions. Lead Lenders agree that, so long as any portion of a Loan is outstanding or unpaid they shall, for the benefit of Lenders, except as permitted under this Agreement:

2.2 Representations and Warranties. Lead Lenders and Lenders represent and warrant to each other that:

(a)  It (1) is a legal entity duly organized, existing and in good standing under the laws and governmental authority of the jurisdiction of its domicile, and (ii) has all requisite corporate power to own its property and conduct its business as now conducted and as presently contemplated.

(b)  The execution, delivery and performance by such Lead Lenders or Lenders of this Agreement has been authorized by all necessary proceedings (corporate or otherwise) and does not and will not contravene any provision of law, its charter or by-laws or operating agreement or any amendment thereof, or of any indenture, agreement, instrument or undertaking binding upon such Lead Lenders or Lenders.

(c)  The execution, delivery and performance by such Lead Lenders or Lenders of this Agreement will result in a valid and legally binding obligation of such Lead Lenders or Lenders enforceable in accordance with its terms, subject to bankruptcy, insolvency, fraudulent conveyance and similar laws affecting creditors’ rights generally, and general principles of equity (regardless of whether the application of such principles is considered in a proceeding in equity or at law).

(d)  It has received and approved, as to form and content, sample copies of the Loan Documents and Assignments, however, such approval shall not operate as a warranty or representation of the adequacy, validity or binding effect of any of the Loan Documents or Assignments.

2.3 Cooperation: Accountings. Lead Lenders will, upon the reasonable request of Lenders, from time to time execute and deliver or cause to be executed and delivered in a timely fashion such further instruments, and do and cause to be done such further acts as may be necessary or proper to carry out more effectively the provisions of this Agreement The Lead Lenders agree to provide to Lenders upon reasonable request, but in no event more frequently than once a month, a statement of all payments received in respect of the Loan.

2.4 Reliance on Lead Lenders. The Lead Lenders shall promptly provide to Lenders a copy of all financial statements and reports of operating results and other documents and information received by the Lead Lenders in its capacity as such pursuant to the Loan Documents. The Lead Lenders shall have a duty and responsibility to provide Lenders with any credit or other information concerning the affairs, financial condition or business of the Borrowers which may come into the possession of the Lead Lenders, including financial statements, credit reports and any other documents and information.

2.5 Limitation on Lead Lender’s Liability.

(a)  In addition to the Lead Lender’s failure to comply with the terms of this Agreement, including the Priority of Payment, the Lenders shall have full recourse against Lead Lenders for the amounts payable by the terms of this agreement. Lead Lenders obligation with respect to such payments shall be to remit to the Lenders a monthly payment based on the agreed Interest Rate calculated on the Participation Interest and the principal amount of the Participation interest when a Loan pays off or matures in accordance with this Agreement.

(b)  Although Lead Lenders will exercise the same care in administering the Loan as if the Loan were made entirely for Lead Lenders’ own account, Lead Lenders liability shall be limited to the Lenders Participation Interest and the amount payable on that at the Interest Rate, except for a loss due to Lead Lenders’ own gross negligence, willful acts or misconduct

(c)  Lead Lenders shall be entitled to rely upon any certification, notice or other communication (including any thereof by telephone, telex, telegram, cable or telecopy) believed by it to be genuine and correct and to have been signed or sent by or on behalf of the Lenders. Should approval of any action, any inaction or any proposed course of conduct in administering the Loan (either before or after the occurrence of an Event of Default) be requested in writing by the Lead Lenders from Lenders, such Lenders shall approve or deny such request in writing and shall deliver the writing to the Lead Lenders within ten (10) calendar days after the Lenders’ receipt of the Lead Lender’s request. Any Lenders’ failure to respond within the ten (10) calendar days shall be deemed consent by such Lender to such request

(d)  Lead Lenders do not assume and shall have no responsibility or liability, express or implied, for (i) the collectibility of the Loan made to Borrowers under, or the enforceability of, any of the Loan Documents, or (ii) the financial condition or creditworthiness of the Borrowers, or (iii) any credit or other information furnished by the Borrowers to Lead Lenders, or (iv) the value of any collateral for the Loan.

2.6 Lead Lender Rights as Lender. The Lead Lender in its capacity as a lender hereunder shall have the same rights, powers and obligations hereunder as all ‘other Lenders and may exercise the same as though it were not acting as the Lead Lender.

SECTION 3. ADMINISTRATION OF LOAN

3.1 Administration and Servicing of Loan. In administering and servicing the Loan, Lead Lenders shall act in its own behalf as to its interest in the Loan and shall act as an independent contractor (and not as an agent or trustee) for the Lenders with respect to their respective interests in the Loan. The Lenders hereby appoint and authorize Lead Lenders to act for and on behalf of the Lenders with regard to the Loan, subject to the restrictions set forth in this Agreement Lead Lenders shall utilize its own facilities and equipment and its own employees and other persons authorized under the Loan Documents in the administering and servicing of the Loans, all without cost to the Lenders.

In its administering and servicing of the Loan, Lead Lenders shall

perform the following duties (the enumeration of said duties not being intended to limit the duties to be performed by Lead Lenders in accordance with the foregoing paragraph) and shall be subject to the following restrictions and shall have the following rights:

(a)  Possession of Loan Documents. For the benefit of the Lenders, Lead Lenders shall hold in its possession at its principal office executed originals of all the Loan Documents for each Loan assigned and shall deliver conformed copies of each thereof to the Lenders.

(b)  Expenses/Losses. In the event that any reasonable legal expenses or other expenses for the preservation of the collateral for the Loan or for the enforcement of the Loan are incurred by Lead Lenders in connection with the Loan or on or after or in connection with the occurrence of an Event of Default or the enforcement of any of the Loan Documents (including fees of counsel and other expenses), Lead Lenders shall bear and advance all such costs. Upon receipt of reimbursement for such expenses from Borrowers or any other person, Lead Lenders shall be entitled to retain such reimbursement

(c)  Collections. Lead Lenders shall use reasonable efforts to collect all payments of principal, interest and fees due from the Borrowers under the Loan Documents and shall remit to the Lenders on a monthly basis a payment calculated at the agreed Interest Rate based on the outstanding balance of the Participation Interest. The Lenders shall have the right to an accounting for all monies received by Lead Lenders in connection with each Loan that has a Participation Interest by Lenders.

(d)  Payment Returns. If any payment received by Lead Lenders and distributed or credited to the Lenders is later rescinded or is otherwise required to be returned by Lead Lenders to the Borrowers for whatever reason (including, without limitation, settlement of an alleged claim), the Lenders shall be entitled to retain any payment received. The covenant contained in this paragraph shall survive the termination of this Agreement.

(e)  Records. Lead Lenders shall maintain such books and records relating to the Loan as it would were the Loan made solely by Lead Lenders, which books and records shall be made available to the Lenders at Lead Lender’s main branch in Las Vegas, Nevada at all reasonable times for purposes of inspection, examination and audit upon no less than forty-eight (48) hours prior notice.

(f)  Information. During the term of this Agreement, Lead Lenders shall provide to the Lenders complete and current information as to the accrual status of the Loan and the status of principal and interest payments, and all information supplied by Borrowers in connection with the Loan. The Lenders will treat all such information as confidential, except that disclosure thereof may be made if required by law or the order of a court having jurisdiction.

(g)  Administrative Decisions. Lead Lenders shall not, without written consent of Lenders, (1) release, or agree to the substitution of other security for any portion of the Real Property, Leasehold Rights and/or Collateral securing the Loans, (2) grant any release in favor of the Borrowers under the Loan Documents, or waive the Lenders’ rights to enforce the obligations of the Borrowers, (3) agree to the revision, modification or amendment of any of the Loan Documents, or (4) consent to or accept the cancellation or termination of any of the Loan Documents, except upon payment in full of each Loan. Subject to the foregoing limitations, and until the occurrence and declaration of an Event of Default under the Loan Documents and Borrowers failure to cure within twenty (20) days, Lead Lenders shall have the right to make decisions in connection with the day-to-day administration and servicing of the Loan, relating to inspections, review of financial data, and other matters of an ordinary nature involved in the administration and servicing of the Loan, without the Lenders’ prior review or approval.

(h)  Reasonable Efforts. If any Event of Default shall occur under any of the Loans, Lead Lenders shall use reasonable efforts in accordance with the Loan Documents to cause the Borrowers, Guarantors and/or Limited Guarantors to remedy the default

(i)  Hazard Insurance and Condemnation Awards. If Lead Lenders becomes aware of any damage to or actual or potential condemnation affecting any material portion of the Real Property, Leasehold Rights and/or Collateral securing the Loans, Lead Lenders will promptly notify Lenders thereof. The proceeds of any insurance recovery or condemnation award received by Lead Lenders and not immediately disbursed or applied to the repayment of the Loan or not otherwise distributed by Lead Lenders shall be deposited in an interest-bearing account, in trust for all lenders, and the income, if any, received by Lead Lenders from such account and not payable to others shall be shared with the Lenders in accordance with terms of this Agreement.

3.2 Payment Priorities Between Lead Lenders and Lenders.

(a)  Lead Lenders and Lenders agree that all payment and/or prepayment of principal due on the Loan, received by the Lead Lenders, shall be for held for the account of the Lenders and Lead Lenders as their respective interests may appear, and such payment shall be applied in the following order of priority: (I) first to the payment of that portion of principal of the Loan provided by Owens Financial and Owens Mortgage Investment Fund (ii) next to pay any accrued or outstanding interest due Lenders at the agreed Interest Rate (iii) next to that portion of the principal of the Loan provided by Originations, VRM I, VRM II and VF Ill. In the event of default under the Loan Documents: (I) Originations, VRM I, VRM II and VF Ill agree to purchase the Participation Interest of Owens Financial and Owens Mortgage Investment Fund for the outstanding balance of that Participation Interest plus any accrued interest; and (ii) Originations, VRM I, VRM Il and VF Ill shall not be entitled to receive any payment of their Pro Rata Share of the principal of the Loan in question until Owens Financial and Owens Mortgage Investment Fund has received payment of its Participation Interest of the principal of the Loan and all accrued interest, late charges, default interest, and any other charges payable to Lenders under this Agreement.

(b)  Each payment of interest on the Loan, received by the Lead Lender, shall be for the account of the Lenders and Lead Lenders as their respective interests may appear, and such payment shall be applied first to the payment of agreed Interest Rate due on the Participation Interest of the Loan assigned to Owens Financial or Owens Mortgage Investment Fund for such period that the interest is due.

(c)  As an example, assume Lenders fund a 64.0% Participation Interest in a $31,250,000.00 Loan. The Loan carries an interest rate of 12.0% and pays monthly interest only payments. Lenders and Lead Lenders would receive the following, provided however, that any reduction of the principal balance of the Loan through partial payoffs shall reduce proportionately the amounts shown in the examples below.

Example 1: Borrowers make a monthly payment of $312,500.00. Lenders are paid their full share of interest at 11.0% on $20,000,000.00 or $183,333.33. Lead Lenders receive $129,166.67 or the balance of the interest paid.

Example 2: Borrowers make a monthly payment of $250,000.00. Lenders are paid their full share of interest at 11.0% on $20,000,000.00 or $183,333.33. Lead Lenders receive $66,666.67, or the balance of the interest paid.

Example 3: Borrowers do not make a monthly payment, default, declare bankruptcy or withhold payments for any reason then, Lead Lenders pay to Lenders the full share of interest at 11.0% on $20,000,000.00 or $183,333.33. At this point Lead Lender may buy Lender out of the loan for $20,000,000.00, plus any accrued interest.

Example 4: Borrowers payoff a portion of the Loan. Lenders are paid their Pro Rata Share of the principal balance of the Participation Interest and interest due under the terms of the Loan to the date of the partial payoff.

Example 5: Borrowers pay off the Loan. Lenders are paid their full Pro Rata Share of the Loan equal to their Participation Interest plus unpaid interest due under the terms of the Loan.

3.3 Defaults Under Loan Documents; Enforcement of Remedies. If foreclosure or similar proceedings are commenced under the Loan Documents, Lead Lenders shall buy out the Participation Interest of Owens Financial or Owens Mortgage Investment Fund at the sole an absolute discretion of Lenders.

3.4 Notices under Collateral Documents. Lead Lenders shall deliver to the Lenders, promptly upon receipt thereof, duplicates or copies of all notices, requests and other instruments received by it from any other party under or pursuant to any of the Loan Documents, if not previously furnished to the Lenders.

SECTION 4. RESIGNATION OR REMOVAL OF LEAD LENDER

Lead Lenders will repurchase the Participation Interests of Lenders at Lenders sole and absolute discretion at any time “for cause”. The term “for cause” shall be limited to Lead Lenders’ (i) material breach of the terms of this Agreement, or (ii) fraud committed against Borrowers or Lenders, or (iii) criminal acts committed against Borrowers or Lenders. Upon any such removal, the Lenders shall have the right to appoint a successor Lead Lender.

SECTION 5. TERMINATION OF AGREEMENT

Upon final payment in full of the Loan or all obligations owing to Lenders, such Lenders shall cease to be a party to this Agreement; provided, however, if all or any part of any payments to such Lenders are invalidated or set aside or required to be repaid to any Person in any Bankruptcy Proceeding or otherwise, then this Agreement shall be renewed as of such date and shall thereafter continue in full force and effect to the extent of the Loan so invalidated, set aside or repaid. If any portion of this agreement is declared to be invalid or unenforceable then the remaining portions of the Agreement shall remain in full force and effect.

SECTION 6. INDEMNIFICATION OF LENDER

Originations, Vestin, VRM I, VRM II and VF III indemnifies Owens Financial and Owens Mortgage Investment Fund for all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever which may be imposed on, incurred by or asserted against them in any way relating to or arising out of this Agreement or by their participation in any Loan or by any action brought by any Borrower including all claims relating to the origination of the Loans, except for the gross negligence or willful misconduct of Lenders or the breach by Lenders of the terms of this Agreement.

SECTION 7. NOT A JOINT VENTURE

Neither the execution of this Agreement nor the Lenders’ several ownership of interests in Loans, nor any agreement to share in profits or losses arising as a result of the Loans, is intended to be, nor shall it be construed to be: (a) the formation of a partnership or joint venture between the Lead Lenders and Lenders, or (b) the creation of a loan transaction between the Lead Lenders, as lender, and Lender, as borrower. Vestin Mortgage, in its capacity as Lead Lender, shall not be deemed to be a trustee for the Lenders in connection with the Loans or their interests therein. Vestin Mortgage, in its capacity as Lead Lender, shall owe to the Lenders no duty except as specifically set forth in this Agreement, and no lender shall be liable to any other person for the liability of any other lender arising in connection with the Loans or any transaction related to the Loans, except as may be expressly set forth in this Agreement

SECTION 8. MISCELLANEOUS

8.1 Amendment Neither this Agreement nor any provision hereof may be amended, waived, discharged or terminated orally, but only by an instrument in writing signed by all parties hereto.

8.2 Heading. The headings in this Agreement are for convenience of reference only and shall not define or limit the provisions hereof.

8.3 Applicable Law. This Agreement shall be construed in accordance with and governed by the laws of the State of Nevada.

8.4 Parties in Interest; Decisions by Majority Lenders. All of the terms, covenants and conditions contained in this Agreement shall inure to the benefit of and be binding upon the parties hereto and their permitted successors and assigns. There shall be no third-party beneficiaries of this Agreement.

8.5 Further Sale, Pledge, etc. Lead Lender may not sell, pledge, assign or otherwise transfer all or any part of its interest in any Loan without the prior written consent of Lenders, which consent shall not be unreasonably withheld. In the event all or any part of Lead Lenders interest in any Loan is sold, pledged, assigned or otherwise transferred, Lead Lenders obligations under this Agreement will not be relieved.

8.6 Notices. Notices under this Agreement shall be in writing and personally delivered or sent by certified or registered U.S. mail, or a recognized air courier service, return receipt requested, or by telecopy, acknowledgment of receipt requested, to the parties at their addresses specified in the first paragraph of this Agreement Such addresses may be changed from time to time by the addressee by serving notice as provided above.

8.7 Counterpart Execution. This Agreement may be executed in any number of counterparts with the same effect as if all parties had signed the same document. All counterparts shall be construed together and shall constitute one agreement

8.8 Attorney’s Clause. If legal action is instituted to enforce the terms of this Agreement, the prevailing parties shall be entitled to recover from the losing parties, all costs of collection and enforcement, including reasonable attorney’s fees. For purposes of this section, the award and recovery of attorney’s fees shall survive the entry of any judgment thereon and shall include, without limitation, fees incurred in the following: (1) Post Judgment Motions; (2) Contempt Proceedings; (3) Garnishment, levy, debtor and third party examinations; (4) Discovery; (5) Bankruptcy proceedings or other litigation; and (6) appeals.

8.9 Loan Fees, Extension Fees, Late Charges. Default Interest, Etc. At the close of escrow, Lead Lender and/or Lead Lenders shall pay to Owens Financial, a loan fee of $400,000.00 (2.0% of the face amount of the Note). In addition, if Lender and/or Lenders have not been paid in full by December 31, 2006, then Lead Lender and/or Lead Lenders shall pay to Owens Financial art additional loan fee equal to 1% of the outstanding principal balance of Lender’s/Lenders’ Participation Interest in the Joan. Furthermore, Owens Mortgage Investment Fund and/or Owens Financial Group shall be entitled to their pro rate share of any extension fees, late charges, interest on advances, default interest, etc. collected by Lead Lender and/or Lead Lenders under the terms of the Note.

(END OF TEXT, CONTINUED ON NEXT PAGE]

IN WITNESS WHEREOF, the Lenders have caused this instrument to be duly executed as of the day and year first above written.

VESTIN ORIGINATIONS, INC.,			VESTIN MORTGAGE, INC.,
a Nevada corporation			a Nevada corporation
By:			By:
	Michael V. Shustek			Michael V. Shustek
	President			President
VESTIN FUND I, LLC			VESTIN FUND II, LLC
a Nevada corporation			a Nevada corporation
By:	Vestin Mortgage, Inc.,		By:	Vestin Mortgage, Inc.,
	a Nevada corporation, Manager			a Nevada corporation, Manager
By:			By:
	Michael V. Shustek			Michael V. Shustek
	President			President
OWENS FINANCIAL GROUP, INC.,
a California corporation
By:
	William E. Dutra
	Senior Vice President
OWENS MORTGAGE INVESTMENTS FUND,
a California Limited Partnership
By:	Owens Financial Group, Inc.
	William E. Dutra,
	Senior Vice President
By:
	William E. Dutra,
	Senior Vice President