LUMINENT MORTGAGE CAPITAL, INC.

                             Shares of Common Stock

UNDERWRITING AGREEMENT

                    , 2003

FRIEDMAN, BILLINGS, RAMSEY & CO., INC.

CREDIT SUISSE FIRST BOSTON LLC

JMP SECURITIES LLC

FLAGSTONE SECURITIES, LLC

as Representatives of the several Underwriters

c/o Friedman, Billings, Ramsey & Co., Inc.

1001 Nineteenth Street North, 18^th Floor

Arlington, Virginia 22209

Dear Sirs:

Luminent Mortgage Capital, Inc., a Maryland corporation (the Company), and each selling stockholder listed on Schedule I hereto (collectively, the Selling Stockholders), confirm their agreement with each of the Underwriters listed on Schedule II hereto (collectively, the Underwriters), for whom you are acting as representatives (in such capacity, the Representatives), with respect to (i) the sale by the Company of                          (                ) shares and the sale by the Selling Stockholders of                          (                ) shares (collectively, the Initial Shares) of Common Stock, par value $0.001 per share, of the Company (Common Stock) (with each Selling Stockholder offering the respective number of shares of Common Stock set forth opposite the name of such Selling Stockholder under the heading Number of Initial Shares to be Sold in Schedule I hereto) and the purchase by the Underwriters, acting severally and not jointly, of the respective number of shares of Common Stock set forth opposite the names of the Underwriters in Schedule II hereto, and (ii) the grant of the option to the Underwriters described in Section 1(b) hereof to purchase from the Company all or any part of                              (                ) additional shares of Common Stock to cover over-allotments (the Option Shares), if any, as set forth in Schedule I hereto. The                      shares of Common Stock to be purchased by the Underwriters from the Company and the Selling Stockholders and all or any part of the                      shares of Common Stock subject to the option described in Section l(b) hereof are hereinafter called, collectively, the Shares.

The Company and the Selling Stockholders understand that the Underwriters propose to offer the Shares for sale to the public as set forth in the Prospectus (as defined below).

The Company has filed with the Securities and Exchange Commission (the Commission) a registration statement on Form S-11 (No. 333-107984) relating to the registration of the Shares under the Securities Act of 1933, as amended (the Securities Act), and the rules and regulations thereunder (the Securities Act Regulations). The Company has prepared and filed such amendments to such registration statement and such preliminary and final prospectuses as may have been required to the date hereof, and will file such additional

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amendments thereto and such amended prospectuses as may hereafter be required. Such registration statement has been declared effective under the Securities Act by the Commission. Such registration statement, as amended at the time it became effective, including all information deemed to be a part of the registration statement (whether by incorporation by reference, pursuant to Rule 430A(b) of the Securities Act Regulations or otherwise), is hereinafter called the Registration Statement, except that, if the Company files a post-effective amendment to such registration statement which becomes effective prior to the Closing Time (as defined below), Registration Statement shall refer to such registration statement as so amended. Any registration statement filed pursuant to Rule 462(b) of the Securities Act Regulations is hereinafter called the Rule 462(b) Registration Statement, and after such filing the term Registration Statement shall include the 462(b) Registration Statement. Each prospectus included in the registration statement, or amendments thereof or supplements thereto, and any prospectus filed with the Commission by the Company with the consent of the Underwriters pursuant to Rule 424(a) of the Securities Act Regulations is hereinafter called the Preliminary Prospectus. The term Prospectus means the prospectus in the form included in the Registration Statement at the time of effectiveness, or if Rule 430A of the Securities Act Regulations is relied upon, the term Prospectus shall mean the final prospectus, as first filed with the Commission pursuant to Rule 424(b) of the Securities Act Regulations, and any amendments thereof or supplements thereto. The Commission has not issued any order preventing or suspending the use of any Preliminary Prospectus.

The Company and the Underwriters agree as follows:

1. Sale and Purchase:

(a) Initial Shares. Upon the basis of the warranties and representations and other terms and conditions herein set forth, at the purchase price per share of $                     for the Common Stock, (i) the Company agrees to sell to each Underwriter an aggregate of                      of the Initial Shares and (ii) the Selling Stockholders agree to sell to the Underwriters an aggregate of                      of the Initial Shares, and each Underwriter agrees, severally and not jointly, to purchase from the Company and the Selling Stockholders the number of Initial Shares set forth in Schedule II opposite such Underwriters name, plus any additional number of Initial Shares which such Underwriter may become obligated to purchase pursuant to the provisions of Section 8 hereof, subject in each case, to such adjustments among the Underwriters as the Representatives in their sole discretion shall make to eliminate any sales or purchases of fractional shares.

(b) Option Shares. In addition, upon the basis of the warranties and representations and other terms and conditions herein set forth, at the purchase price per share set forth in paragraph (a), the Company hereby grants an option to purchase                      (                ) shares of Common Stock to the Underwriters, acting severally and not jointly, in the respective numbers of shares of Common Stock set forth opposite the names of the Underwriters in Schedule I hereto, plus any additional number of Option Shares which such Underwriter may become obligated to purchase pursuant to the provisions of Section 8 hereof. The option hereby granted will expire 30 days after the date hereof and may be exercised in whole or in part from time to time only for the purpose of covering over-allotments which may be made in connection with the offering and distribution of

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the Initial Shares upon notice by the Representatives to the Company setting forth the number of Option Shares as to which the several Underwriters are then exercising the option and the time and date of payment and delivery for such Option Shares. Any such time and date of delivery (a Date of Delivery) shall be determined by the Representatives, but shall not be later than three full business days (or earlier, without the consent of the Company, than two full business days) after the exercise of said option, nor in any event prior to the Closing Time, as hereinafter defined.

2. Payment and Delivery:

(a) Initial Shares. Payment of the purchase price for the Initial Shares shall be made to the Company with respect to the Initial Shares sold by it and to the Selling Stockholders (or to the Custodian, as defined below) with respect to the Initial Shares sold by the Selling Stockholders by wire transfer of immediately available funds at the offices of OMelveny & Myers LLP, located at 275 Battery Street, Suite 2600, San Francisco, California, 94111 (unless another place shall be agreed upon by the Representatives and the Company) against delivery of the certificates for the Initial Shares to the Representatives for the respective accounts of the Underwriters. Such payment and delivery shall be made at 9:30 a.m., New York City time, on the third (fourth, if pricing occurs after 4:30 p.m., New York City time) business day after the date hereof (unless another time, not later than ten business days after such date, shall be agreed to by the Representatives and the Company). The time at which such payment and delivery are actually made is hereinafter sometimes called the Closing Time. Unless the Representatives elect to take delivery of the Initial Shares by credit through full FAST transfer to the accounts at The Depository Trust Company designated by the Representatives, certificates for the Initial Shares shall be delivered to the Representatives in definitive form registered in such names and in such denominations as the Representatives shall specify. For the purpose of expediting the checking of the certificates for the Initial Shares by the Representatives, the Company and the Selling Stockholders agree to make such certificates available to the Representatives for such purpose at least one full business day preceding the Closing Time.

(b) Option Shares. In addition, payment of the purchase price for the Option Shares shall be made to the Company by wire transfer of immediately available funds at the offices of OMelveny & Myers LLP located at the location indicated in Section 2(a) above (unless another place shall be agreed upon by the Representatives and the Company) against delivery of the certificates for the Option Shares to the Representatives for the respective accounts of the Underwriters. Such payment and delivery shall be made at 9:30 a.m., New York City time, on each Date of Delivery determined pursuant to Section 1(b) above. Unless the Representatives elect to take delivery of the Initial Shares by credit through full FAST transfer to the accounts at The Depository Trust Company designated by the Representatives, certificates for the Option Shares shall be delivered to the Representatives in definitive form registered in such names and in such denominations as the Representatives shall specify. For the purpose of expediting the checking of the certificates for the Option Shares by the Representatives, the Company agrees to make such certificates available to the Representatives for such purpose at least one full business day preceding the relevant Date of Delivery.

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3. Representations and Warranties of the Company and the Selling Stockholders:

3.1. The Company represents and warrants to the Underwriters that:

(a) the Company has an authorized capitalization as set forth in the Preliminary Prospectus and Prospectus under the caption Capitalization; all of the outstanding shares of capital stock of the Company have been duly and validly authorized and issued and are fully paid and non-assessable; except as disclosed in the Preliminary Prospectus and Prospectus, there are no outstanding (i) securities or obligations of the Company convertible into or exchangeable for any capital stock of the Company, (ii) warrants, rights or options to subscribe for or purchase from the Company any such capital stock or any such convertible or exchangeable securities or obligations, or (iii) obligations of the Company to issue any shares of capital stock, any such convertible or exchangeable securities or obligation, or any such warrants, rights or options;

(b) the Company has no Subsidiaries (each corporation, partnership, joint venture or limited liability company in which the Company owns at least fifty percent (50%) of the equity interests of such corporation, partnership, joint venture or limited liability company shall be a Subsidiary of the Company);

(c) the Company has been duly incorporated and is validly existing as a corporation in good standing under the laws of the State of Maryland with corporate power and authority to own its properties, to conduct its business as described in the Registration Statement and Prospectus and to execute and deliver this Agreement and to consummate the transactions contemplated hereby;

(d) the Company is duly qualified or licensed by each jurisdiction in which it conducts its business and in which the failure to be so qualified or licensed could reasonably be expected to have a material adverse effect on the assets, business, operations, earnings, properties or condition (financial or otherwise) of the Company (a Material Adverse Effect on the Company), and the Company is duly qualified, and in good standing, in each jurisdiction in which it owns or leases real property or maintains an office and in which such qualification is necessary, except where the failure to be so qualified and in good standing would not reasonably be expected to have a Material Adverse Effect on the Company; the Company does not own, directly or indirectly, any capital stock or other equity securities of any other corporation or any ownership interest in any partnership, joint venture or other association, provided that for purposes of this paragraph, the mortgage-backed securities owned by the Company shall not be deemed capital stock, equity securities or ownership interests;

(e) the Company is in material compliance with all applicable federal, state, local and foreign laws, rules, regulations, orders, decrees and judgments necessary to conduct the business now operated by it and has not received or any notice of changes in existing federal, state, local and foreign laws, rules, regulations, orders, decrees and judgments that, if modified adversely to the Company would have a Material Adverse Effect on the Company;

(f) the Company is not in breach of or in default under (nor has any event occurred that with notice, lapse of time, or both, would constitute a breach of, or default under)

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