FORM 3

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 INITIAL STATEMENT OF BENEFICIAL OWNERSHIP OF SECURITIES Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934, Section 17(a) of the Public Utility Holding Company Act of 1935 or Section 30(h) of the Investment Company Act of 1940

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(Print or Type Responses)

1. Name and Address of Reporting Person *   ARROWGRASS CAPITAL PARTNERS (US) LP 2. Date of Event Requiring Statement (Month/Day/Year) 10/30/2009 3. Issuer Name and Ticker or Trading Symbol Prospect Acquisition Corp [PAX] (Last) (First) (Middle) 245 PARK AVENUE, 39TH FLOOR 4. Relationship of Reporting Person(s) to Issuer (Check all applicable) _____ Director _____ 10% Owner _____ Officer (give title below) __X__ Other (specify below) See Remarks 5. If Amendment, Date Original Filed(Month/Day/Year) (Street) NEW YORK, NY 10167 6. Individual or Joint/Group Filing(Check Applicable Line) ___ Form filed by One Reporting Person _X_ Form filed by More than One Reporting Person (City) (State) (Zip) Table I - Non-Derivative Securities Beneficially Owned

1.Title of Security (Instr. 4) 2. Amount of Securities Beneficially Owned (Instr. 4) 3. Ownership Form: Direct (D) or Indirect (I) (Instr. 5) 4. Nature of Indirect Beneficial Ownership (Instr. 5) Common stock, par value $0.0001 (the "Common Stock") 1,386,338 I (1) See footnote (1)

Reminder: Report on a separate line for each class of securities beneficially owned directly or indirectly.			SEC 1473 (7-02)
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Table II - Derivative Securities Beneficially Owned (e.g., puts, calls, warrants, options, convertible securities)

1. Title of Derivative Security (Instr. 4)	2. Date Exercisable and Expiration Date (Month/Day/Year)		3. Title and Amount of Securities Underlying Derivative Security (Instr. 4)		4. Conversion or Exercise Price of Derivative Security	5. Ownership Form of Derivative Security: Direct (D) or Indirect (I) (Instr. 5)	6. Nature of Indirect Beneficial Ownership (Instr. 5)
	Date Exercisable	Expiration Date	Title	Amount or Number of Shares

Reporting Owners

Reporting Owner Name / Address	Relationships
	Director	10% Owner	Officer	Other
ARROWGRASS CAPITAL PARTNERS (US) LP 245 PARK AVENUE, 39TH FLOOR NEW YORK, NY 10167	Â	Â	Â	See Remarks
Arrowgrass Capital Services (US) Inc. 245 PARK AVENUE, 39TH FLOOR NEW YORK, NY 10167	Â	Â	Â	See Remarks

Signatures

ARROWGRASS CAPITAL PARTNERS (US) LP, By: Arrowgrass Capital Services (US) Inc., its General Partner, By: /s/ Sean Flynn, Director		11/09/2009
**Signature of Reporting Person		Date

Explanation of Responses:

*	If the form is filed by more than one reporting person, see Instruction 5(b)(v).
**	Intentional misstatements or omissions of facts constitute Federal Criminal Violations. See 18 U.S.C. 1001 and 15 U.S.C. 78ff(a).
(1)	Arrowgrass Capital Partners (US) LP, a Delaware limited partnership ("ACP"), acts as the investment manager for Arrowgrass Master Fund Ltd., a Cayman Islands exempted company ("AMF"), which holds the shares of Common Stock. ACP acts as the investment manager of AMF and may be deemed, as of the date hereof, to be the beneficial owner of the Issuer's securities held by AMF. Arrowgrass Capital Services (US) Inc., a Delaware corporation, is the general partner of ACP. ACP and ACS do not hold directly any of the Issuer's securities or derivative securities with respect thereto, and disclaim any beneficial ownership of any of the Issuer's securities reported or excluded herein for purposes of Rule 16a-1(a) under the Securities Exchange Act of 1934, as amended, except for their pecuniary interest therein.
  Remarks: ACP and ACS may be deemed to be members of a 10% group with The Malibu Companies, LLC, a California limited liability company  ("Malibu") and certain of its affiliates (the "Malibu Reporting Persons") by virtue of the fact that AMF entered into an  Option Agreement with Malibu, as more fully described in the Schedule 13D filed by the Reporting Persons on the date hereof.  Although the Reporting Persons and the Malibu Reporting Persons may be deemed to be a "group" with each other within the  meaning of Section 13(d) of the Securities Exchange Act of 1934, as amended, the Reporting Persons do not believe that they  are part of a group with the Malibu Reporting Persons and expressly disclaim membership in any "group" with the Malibu. The  Reporting Persons expressly disclaim beneficial ownership of any shares of Common Stock that may be deemed to be  beneficially owned by the Malibu Reporting Persons.

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