Exhibit 10.2

November 1, 2004

FirstCity Financial Corporation
6400 Imperial Drive
Waco, Texas 76712
Attention: Mr. Jim Sartain, President

Dear Jim:

Closing Statement

     Reference is made to the letter agreement (the “Proceeds Letter”) dated as
of September 21, 2004 among FirstCity Financial Corporation (“FC”), Bank of
Scotland, acting through its New York branch, The Governor & Company of the Bank
of Scotland (“BoS-UK”) and BoS (USA) Inc. relating to the contemplated use of
the $86,800,000 in proceeds from the sale of the Subject Securities by FC and
FirstCity Consumer Lending Corporation (“CLC”) and as contemplated in
Section 2.8 of the Securities Purchase Agreement. All capitalized terms used in
this letter agreement shall have the meaning set forth in the Securities
Purchase Agreement unless such term is defined in this letter agreement in which
case such defined term shall have the meaning set forth herein.

     This letter sets forth the distribution of funds as at November 1, 2004
(the “Payment Date”) as contemplated by the Securities Purchase Agreement and in
addition provides for a Closing Statement of those loans referenced in the
Proceeds Letter.

     FC, CLC, BOS-UK, Bank of Scotland, acting through its New York branch, and
BoS (USA), Inc. acknowledge that the payments and distributions set forth below
were made and received on the Payment Date as contemplated by in Section 2.8 of
the Securities Purchase Agreement and by the Proceeds Letter.

     The Purchase Price payable to CLC by the Buying Entities and CLC’s portion
of the Funding Distributions were applied on Payment Date, as follows:

  (i)   the amount of $16,003,946.67 was paid to BOS-UK in full satisfaction of
the outstanding principal balance of $16,000,000 on the Non-Recourse Loan and
accrued interest in the amount of $3,946.67 payable as of the Payment Date; and
    (ii)   the balance of $70,796,053.33 was distributed to FCFC.

     The balance of the Purchase Price and the Funding Distributions distributed
by CLC to FCFC on the Payment Date ($70,796,053.33) was applied on the Payment
Date, as follows:

 

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  (iii)   the amount of $12,113,993.54 was paid to BoS (USA) Inc. in full
satisfaction of the outstanding principal balance due under the Tranche II Loans
(as defined in the Restated Agreement) under the Restated Agreement in the
amount of $12,000,000, interest in the amount of $8,767.50 accrued and payable
thereon and breakage costs in the amount of $105,226.04 as of the Payment Date);
    (iv)   the amount of $24,621,688.09 was paid to BoS (USA) Inc. in full
satisfaction of the outstanding principal balance due under the Tranche I Loans
(as defined in the Restated Agreement) under the Restated Agreement in the
amount of $24,607,025.00 and interest in the amount of $14,663.09 accrued and
payable thereon as of the Payment Date);     (v)   the amount of $500,000.00 was
paid to the Bank of Scotland, acting through its New York branch, as agent for
the benefit of the lenders under the Restated Agreement in full satisfaction of
the Repayment Fee related to the Tranche II Loans under Section 4.2 of the
Restated Agreement;     (vi)   the amount of $4,007,675.40 was paid to Bank of
Scotland, acting through its New York branch, in full satisfaction of the
outstanding principal balance due under the Revolving Credit Loans (as defined
in the PFAL) in the amount of $4,006,103.00 and interest in the amount of
$1,572.40 accrued and payable thereon as of the Payment Date;     (vii)   the
amount of $29,552,696.30 was paid to Bank of Scotland, acting through its New
York branch, as agent for the “Lenders” pursuant to the Cash Collateral
Agreement dated November 1, 2004, to deposit the balance in the amount of
$29,552,696.30 in a cash collateral account as security for obligations under
the PFAL, held at Bank of Scotland, New York branch to be utilized by FCFC as
set forth in paragraph (viii) of the Proceeds Letter.

[End of Page]

 

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     Executed and acknowledged effective as of November 1, 2004.

            Very truly yours,

BANK OF SCOTLAND, acting through its
New York branch, individually and as
Agent under the PFAL and Restated
Agreement
      By:           Name:   Joseph Fratus        Title:   First Vice President 
   

            THE GOVERNOR & COMPANY OF
THE BANK OF SCOTLAND
      By:           Name:   James Halley        Title:   Executive Vice
President     

            BoS (USA) Inc.
      By:           Name:   Lolita M. Lazaro        Title:   Secretary     

CONFIRMED AND AGREED

FIRSTCITY FINANCIAL CORPORATION

            By:         Name:   James T. Sartain      Title:   President     

FIRSTCITY CONSUMER LENDING CORPORATION

            By:         Name:   James T. Sartain      Title:   Chairman of the
Board