INTERCREDITOR AGREEMENT

Exhibit 10.8

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”)

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 1.1. 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.

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. ÕA

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 day