<PAGE>   1

                                                                  EXHIBIT 10.207

                  SIXTH AMENDMENT TO FORBEARANCE AGREEMENT AND
               AMENDMENT NO. 11 TO SECOND AMENDED AND RESTATED AND
                    CONSOLIDATED LOAN AND SECURITY AGREEMENT



               This Sixth Amendment to Forbearance Agreement and Amendment No.
11 to Second Amended and Restated and Consolidated Loan and Security Agreement
("Amendment") is made and entered into this 31 day of March, 2000 (the
"Effective Date"), by and among FINOVA CAPITAL CORPORATION, a Delaware
corporation ("FINOVA" or "Lender"), PREFERRED EQUITIES CORPORATION, a Nevada
corporation ("Borrower") and MEGO FINANCIAL CORP., a New York corporation
("Guarantor") and has reference to the following facts:

               A. Lender and Borrower entered into a Second Amended and Restated
and Consolidated Loan and Security Agreement dated as of May 15, 1997 (the
"Original Loan Agreement") that evidences a loan from Lender to Borrower. The
Original Loan Agreement was amended by the Hartsel Springs Side Letter dated
February 18, 1998 (the "First Amendment"); by the Letter Agreement [Biloxi
Property] dated March 20, 1998 (the "Second Amendment"); by the Letter Agreement
[Headquarters Readvance] dated September 29, 1998 (the "Third Amendment"); by
the Amendment No. 4 to Second Amended and Restated and Consolidated Loan and
Security Agreement dated November 6, 1998 (the "Fourth Amendment"); by that
certain Forbearance Agreement and Amendment No. 5 to Second Amended and Restated
and Consolidated Loan and Security Agreement dated December 23, 1998 ("Amendment
5"), as the same was amended by a Letter Agreement dated February 8, 1999 (the
"Release Fee Letter") (the Amendment 5 and Release Fee Letter are collectively
called the "Fifth Amendment"); by a First Amendment to Forbearance Agreement and
Amendment No. 6 to Second Amended and Restated and Consolidated Loan and
Security Agreement dated May 7, 1999 (the "Sixth Amendment"); by a Second
Amendment to Forebearance Agreement and Amendment No. 7 to Second Amended and
Restated and Consolidated Loan and Security Agreement dated August 6, 1999 (the
"Seventh Amendment"); by a September 7, 1999 letter agreement regarding the
Additional Advance Note (the "Additional Advance Letter"); by a Third Amendment
to Forebearance Agreement and Amendment No. 8 to Loan and Security Agreement
dated November 9, 1999 (the "Eighth Amendment"); by a letter agreement dated
December 3, 1999 between the Borrower and Lender (the "Receivable Loan Lot Cap
Letter"); by a Fourth Amendment to Forebearance Agreement and Amendment No. 9 to
Loan and Security Agreement dated December 17, 1999 (the "Ninth Amendment");
and, by a Fifth Amendment to Forebearance Agreement and Amendment No. 10 to Loan
and Security Agreement dated February 25, 2000 (the "Tenth Amendment"). The
Original Loan Agreement, First Amendment, Second Amendment, Third Amendment,
Fourth Amendment, Fifth Amendment, Sixth Amendment, Seventh Amendment,
Additional Advance Letter, Eighth Amendment, the Receivable Loan Lot Cap Letter,
Ninth Amendment, and Tenth Amendment are collectively called the "Loan
Agreement." Capitalized terms used in this Amendment


<PAGE>   2


which are defined in the Loan Agreement shall have the same meaning and
definition when used herein.

               B. Borrower has requested the Lender to make certain
modifications to the Loan Agreement and the Loan, which the Lender is willing to
do, upon and subject to the terms and conditions set forth in this Amendment.

               Now, therefore, in consideration of the foregoing and for the
good and valuable consideration provided herein, Lender, Borrower and Guarantor
agree as follows:

               1. On the Effective Date, Article 1 of the Loan Agreement is
amended by amending and restating the following terms:

               "ASSOCIATIONS": shall mean the Association (Fountains), the
        Association (Reno), the Association (Suites), the Association
        (Terraces), the Association (Terraces Four), the Association (Towers),
        the Association (Villas), the Association (Winnick), and the Association
        (White Sands), collectively.

               "CUSTODIAL AGREEMENT": shall mean that certain Custodial
        Agreement, dated as of August 5, 1999, among Lender, Borrower, and
        Custodian, and all renewals, extensions, amendments, restatements,
        replacements, supplements or modifications from time to time made
        thereto.

               "CUSTODIAN": shall mean Chicago Title Company, in its sole
        capacity as custodian under the Custodial Agreement, or should such
        entity cease to act as custodian under the Custodial Agreement, its
        successor as custodian under the Custodial Agreement.

               "PROJECT": shall mean each of, or collectively, as the context
        may require, the Winnick Building Addition, the Ida Building Addition,
        Aloha Bay, Ida Building One, Ida Building Two, South Park Ranches,
        Suites Phase I, Suites Phase II, Fountains, Winnick, the Second Winnick
        Building Addition, Project (Reno), Project (Towers), Project (Villas),
        Project (Terraces-Phase I), Project (Terraces-Phase 2), any Additional
        Projects, those certain real estate developments which are owned by the
        Borrower or the Trustee, located in Nye County and Clark County in the
        State of Nevada, and Huerfano County in the State of Colorado, which are
        more particularly described in EXHIBIT "I-J" hereto, and White Sands.

               "RECEIVABLES BORROWING TERM": shall mean the period of time
        during which Lender is committed to make Advances of the Receivables
        Loan under this Agreement which commitment shall terminate on December
        29, 2000.


                                       2
<PAGE>   3


               "TRUST AGREEMENTS": shall mean the Trust Agreement (Reno), the
        Trust Agreement (Towers), the Trust Agreement (Terraces), the Trust
        Agreement (Villas) and the Trust Agreement (Suites) and Trust Agreement
        (White Sands), collectively.

               "TRUSTS": shall mean the Trust (Reno), the Trust (Towers), the
        Trust (Terraces), the Trust (Villas), Trust (Suites), and Trust (White
        Sands), collectively.

               2. On the Effective Date, Article 1 of the Loan Agreement is
amended to add the following definitions:

               "ASSOCIATION (WHITE SANDS)": shall mean the Association of Owners
        of White Sands Waikiki Resort Club, a Hawaiian nonprofit corporation

               "ELEVENTH AMENDMENT": shall mean and collectively refer to the
        Sixth Amendment to Forbearance Agreement and Amendment No. 11 to Second
        Amended and Restated and Consolidated Loan and Security Agreement made
        and entered into on March 31, 2000 among Borrower, Lender and Guarantor.

               "TRUST AGREEMENT (WHITE SANDS)": shall mean that certain Amended
        and Restated White Sands Trust Agreement, dated September 15, 1983 with
        First Hawaiian Bank, as Trustee and The Bank of California, N..A.
        ("BankCal"), as agent, as amended by an Agreement, dated March 31, 1988,
        among VSR, FN Realty Services, Inc, a California corporation ("FN"),
        Association (White Sands) and BankCal, and that certain Agreement, dated
        February 8, 1991, by and among VSR, FN, Association (White Sands) and
        Valley Bank of Nevada, a Nevada corporation (now called Bank of America,
        N.A.).

               "TRUSTEE (WHITE SANDS)": shall mean First Hawaiian Bank, in its
        sole capacity as trustee under the Trust Agreement (White Sands) or
        should such entity cease to act as trustee under the Trust Agreement
        (White Sands), its successor as trustee under the Trust Agreement (White
        Sands).

               3. (a) Under the provisions of Section 2 of the Tenth Amendment,
the Lender agreed during the Forbearance Period (as defined in Section 2(d) of
the Tenth Amendment) to forbear from exercising its rights under the Documents
arising by virtue of the Unsolidified Lot Sales Defaults (as defined in the
Tenth Amendment). In addition to the foregoing, the Lender and Borrower agreed
that, during the Forbearance Period, the Borrowing Base would be determined by
treating the Unsolidified Lot Sales in the same manner as all other forms of
Eligible Receivables. Since the Tenth Amendment, the Lender and Borrower have
reached additional agreements concerning the Unsolidified Lot Sale Defaults.
Notwithstanding anything to the contrary contained in the Loan Agreement, the
Lender and Borrower agree as follows with respect to the Unsolidified Lot Sales:



                                       3
<PAGE>   4


               (i) The Forbearance Period for the Unsolidified Lot Sales
Defaults shall continue until such time as all of the Unsolidified Lot Sales
which were affected by the Y2K Error (as defined in the Tenth Amendment) (such
contracts being called the "Affected Contracts") have (i) converted to a normal
Eligible Receivables as a result of the consumers thereunder electing not to
exercise any recission rights thereunder, or (ii) been replaced with Eligible
Receivables that are not Unsolidified Lot Sales;

               (ii) The Unsolidified Lot Sale Advance Rate for (1) the Affected
Contracts shall remain at 90% of the unpaid principal balance of the same and
(2) any Unsolidified Lot Sales that is not one of the Affected Contracts will be
65% of the unpaid principal balance of the contract;

               (iii) Commencing on March 31, 2000 the various advance rates
applicable to the Eligible Receivables and the Borrowing Base will be tested
monthly, on a weighted average basis for each classification of Eligible
Receivables, and the Borrowing Base as a whole;

               (iv) Commencing on the Effective Date, the Unsolidified Lot Sales
Cap shall be amended to Twelve Million Dollars ($12,000,000.00); and

               (v) The Lender will have the right to (1) periodically audit and
review the Unsolidified Lot Sales and (2) unilaterally exclude the Unsolidified
Lots Sales as being part of the Eligible Receivables in the event that during
any three (3) consecutive month period occurring after February 29, 2000, either
(a) the delinquency rate on the Unsolidified Lot Sales exceeds an average of
three percent (3%), or (b) more than twenty five percent (25%) of aggregate
amount of the Unsolidified Lot Sales during such period are terminated
regardless of whether the termination is due to the consumer exercising its
termination or recission rights thereunder, or the Borrower terminating the
contract because of a default by the consumer thereunder.

                      (b) During the Forbearance Period, in the event that at
any time the Borrowing Base exceeds the outstanding principal balance of the
Receivables Loan (the "Excess Borrowing Base Availability"), then,
notwithstanding contrary provisions that may be contained in the Loan Agreement,
the Borrower will not be entitled to any Advance from the Receivables Loan which
may arise because of the Excess Borrowing Base Availability.

               4. Under the Documents, the Lender advanced to Borrower funds
from the Loan that are evidenced by the Aloha Bay Note and secured by the Aloha
Bay Mortgage. Prior to the Effective Date, the Borrower has repaid to the Lender
all amounts due under the Aloha Bay Note. The provisions of Section 8 of the
Fifth Amendment, provide in part that, except for the periodic release of Units
or Lots or as otherwise provided in the Fifth Amendment, the Lender shall have
no obligation to release its lien on any collateral pledged to Lender pursuant
to the Documents until the latter to occur of (i) the full satisfaction of the
Forebearance Collateral Release Conditions or (ii) the full satisfaction of the
events set forth




                                       4
<PAGE>   5


in the particular Documents that are condition precedent to such collateral
release. As of the Effective Date the Forebearance Collateral Release Conditions
have not been fully satisfied and, as a result thereof, the Lender has no
obligation to release the Aloha Bay Mortgage. Consistent with the Fifth
Amendment, the Borrower hereby agrees that notwithstanding the payment in full
of the Aloha Bay Note, the Lender will retain its lien on all unsold Units at
Aloha Bay (the Units encumbered by the Aloha Bay Mortgage at or
contemporaneously with the final payment of all sums due under the Aloha Bay
Note are called the "Remaining Aloha Bay Units") until such time as the Borrower
has fully Performed and paid all of its Obligations under the Additional Advance
Note. As each of the Remaining Aloha Bay Units are sold, the Lender agrees to
release the Unit from the lien of the Aloha Bay Mortgage upon the payment of the
Aloha Bay Release Fee due for such Unit. Provided there is no Event of Default
or Incipient Default, the payments received pursuant to the previous sentence
will be applied by the Lender first against fees, costs and expenses due to
Lender; then against the unpaid principal balance of the Additional Advance Note
and all accrued interest thereon. However, upon the occurrence of an Event of
Default or Incipient Default, the Aloha Bay Release Fee shall be applied against
the Obligations in such order as the Lender shall deem appropriate. The Borrower
agrees to execute and deliver to the Lender such documents, as the Lender may
deem reasonably appropriate to evidence the agreement of the Borrower under this
subparagraph.

               5. (a) As described in the Loan Agreement, the Borrower is
obligated to pay to the Lender the Hartsel Springs Release Fee (as defined in
the First Amendment) in order to obtain releases of Lots located at Hartsel
Springs from the lien of the Hartsel Springs Deed of Trust. After the Hartsel
Springs Release Fee for a Lot has been paid to the Lender and the Lot released
from the Hartsel Springs Deed of Trust, the ownership of the Lot may revert back
to the Borrower as a result of a Foreclosure (as such term is defined in the
Release Fee Letter), or a Trade (as such term is defined in the Release Fee
Letter) (such lots being called (the "Reacquired Lots"). Provided the conditions
set forth in this Section 5 are satisfied, the Lender will, for each Reacquired
Lot, make available to the Borrower advances from the Mortgage Loan Facility
equal to the Hartsel Springs Release Fee paid to Lender for the Reacquired Lot.
Such Advances may be made in increments of no less than $100,000.00 and no more
frequently than once each calendar quarter.

                      (b) The obligations of the Lender under Sections 5(a) are
conditioned upon the satisfaction of the following conditions:

               (1) The Borrower executing and delivering to the Lender an
        amendment to the Hartsel Springs Deed of Trust, in form and content
        acceptable to the Lender, which encumbers the Reacquired Lots for which
        the advance is being made (the "Hartsel Deed of Trust Amendment");

               (2) The Borrower delivering evidence to the Lender, in form and
        content acceptable to the Lender, that the Borrower (i) owns the entire
        fee simple interest in the Reacquired Lots being encumbered by the
        Hartsel Deed of Trust Amendment free




                                       5
<PAGE>   6


        and clear of any and all claims of the original owner of the same, and
        (ii) may grant unto the Lender a valid first lien, subject only to those
        title exceptions which may be approved by the Lender, in and to all of
        the Borrower's right title and interest in and to the Lots in question;

               (3) The Borrower, at its sole cost and expense, delivering to the
        Lender. an endorsement to the Lender's existing title policy for the
        Hartsel Springs Deed of Trust which (i) adds to the deed of trust
        insured thereby the particular Hartsel Deed of Trust Amendment, (ii)
        amends the land referenced in the policy to include the Reacquired Lots
        that are encumbered by the particular Hartsel Deed of Trust Amendment,
        (iii) insures that the lien of the Hartsel Spring Deed of Trust (as
        amended by the particular Hartsel Deed of Trust Amendment) is subject
        only to the title exceptions previously approved by the Lender, (iv)
        "dates down" or endorses the date of the policy to the recordation of
        the particular Hartsel Deed of Trust Amendment, and (v) contains such
        endorsements as the Lender may reasonably request;

               (4) The Borrower executing and delivering to Lender amendments to
        UCC financing statements, or such additional financing statements as the
        Lender may reasonably request, so as to evidence the Lender's security
        interest in and to the Reacquired Lots being encumbered by the
        particular Hartsel Spring Deed of Trust Amendment;

               (5) The Lender obtaining and approving title, judgment and lien
        searches with respect to the Reacquired Lots in question;

               (6) The Borrower delivering to Lender such additional documents
        and instruments as the Lender may reasonably request; and

               (7) The advance is made prior to December 31, 2000.

        The Borrower acknowledges that the foregoing conditions must be
satisfied each time that it requests an advance pursuant to Section 5(a).

                      (c) Each advance made by the Lender pursuant to this
Section 5 shall be considered a part of the Borrower's indebtedness to the
Lender which is evidenced by the Hartsel Springs Ranch Note and (i) shall bear
interest from the date of its advance by the Lender, at the Interest Rate set
forth in the Hartsel Springs Ranch Note, and (ii) if not sooner repaid, be
entirely due and payable to the Lender on the Maturity Date of the Hartsel
Springs Ranch Note. In no event shall the Lender be obligated to make any
advance under this Section 5 if (i) there exists an Event of Default or
Incipient Default, or (ii) after giving effect to the advance, the outstanding
principal balance of all advances under the Mortgage Loan Facility applicable to
Hartsel Springs Ranch exceed the face amount of the Hartsel Springs Ranch Note.


                                       6
<PAGE>   7


               6. (a) The provisions of the Sixth Amendment revised the Biloxi
Maturity Date to the New Biloxi Maturity Date (defined as being March 20, 2000).
The Lender hereby agrees to extend the Biloxi Maturity Date to provide that the
entire remaining balance of the Biloxi Note, together with all accrued and
unpaid interest and all other sums due and owing thereon, shall be due and
payable in full on December 31, 2000 (the "Amended Biloxi Maturity Date"). From
and after the Effective Date, references in the Documents and the in the Biloxi
Note to the term Maturity Date of the Biloxi Note, or the Biloxi Maturity Date
shall now refer to the Amended Biloxi Maturity Date.

                      (b) In consideration for the agreements of the Lender set
forth in Section 6 hereof, the Borrower agrees to pay to Lender an amendment fee
for the Biloxi Note equal to three quarters of one percent (.75%) of the
outstanding principal balance of the Biloxi Note (the "Biloxi Amendment Fee")
determined as of the Effective Date. The Borrower agrees that the Lender fully
earned the entire amount of the Biloxi Amendment Fee and that such fee, along
with the Deferred Fee (as defined in the Sixth Amendment), are presently due and
payable to the Lender. The Borrower hereby authorizes the Lender to draw upon
the Loan to pay itself the Biloxi Amendment Fee and the Deferred Fee.

               7. (a) As of the Effective Date, White Sands has been added as a
Project. White Sands is also part of the Excess Proceeds Collateral and will
remain a part of the same. Under the Release Fee Letter, the Borrower is
obligated to pay a Release Fee of $484 for each Unit sold at White Sands (the
"White Sands Release Fee"). As of the Effective Date, the White Sands Release
Fee is amended to refer to $800. The Lender and Borrower hereby agree that the
Lender may retain from Advances from the Receivables Loan any White Sands
Release Fee, which is due and owing to Lender to the extent that the same has
not been paid by the Borrower. All payments of the White Sands Release Fee shall
be applied against the outstanding principal balance of the Additional Advance
Note.

                      (b) In connection with the addition of White Sands as a
Project, environmental and other inspections were conducted. The inspectors
discovered floor tiles and mastic which were identified as containing asbestos.
Within one hundred twenty (120) days after the Effective Date, the Borrower
shall retain a licensed asbestos abatement contractor to abate or take
appropriate corrective action with respect to the damaged asbestos containing
floor tiles and mastic identified by the inspectors and deliver a certification
to Lender (Attn: Elizabeth Barringer) that the abatement or corrective actions
have been completed in accordance with local, state and federal laws and
regulations.

                      (c) Notwithstanding the addition of White Sands as a
Project, no advances may be obtained from the Receivables Loan with respect to
White Sands until such time as the Borrower has (i) executed and delivered to
Lender a mutually acceptable environmental indemnity agreement, and (ii)
supplied to Lender a legal opinion or other evidence acceptable to Lender that
it has obtained all governmental and other required approvals needed to sell the
Unit at White Sands.


                                       7
<PAGE>   8


               8. The obligations of the Lender under this Amendment are
conditioned upon the satisfaction of the following conditions:

                      (a) This Amendment has been fully signed by the Borrower
        and Guarantor;

                      (b) An allonge of the Biloxi Note, in form and content
        acceptable to Lender which reflects the amendments to the same made by
        this Amendment and addresses such additional matters as the Lender may
        desire, has been fully signed by the Borrower and delivered to the
        Lender;

                      (c) An Environmental Certificate and Indemnity Agreement
        for White Sands, in a form acceptable to Lender, has been executed by
        Borrower and delivered to Lender;

                      (d) Lender has received, on or before April 17, 2000: (i)
        legal opinions of from the counsels for Borrower and Guarantor, in a
        form and content acceptable to the Lender; and (ii) such resolutions,
        authorizations and other documents as Lender may request relating to the
        existence and good standing of Borrower, and Guarantor, and the
        authority of any person executing this Amendment and other documents on
        behalf of Borrower and Guarantor.

                      (e) The Borrower executing and delivering to the Lender
        such additional documents or instruments as required and approved by the
        Lender so as to fully perfect the liens and security interest of Lender
        granted under the Loan Agreement and this Amendment which security
        interests include but are not limited to a security interest in the
        Eligible Receivables arising from White Sands;

                      (f) Borrower shall have reimbursed Lender for all of
        Lender's out-of-pocket costs and expenses including, without limitation,
        attorney's, engineers' and other consultants' fees and costs, incurred
        in connection with the documentation and closing of this Amendment; and

                      (g) Borrower shall have paid to Lender the Amendment Fee
        (defined below).


                                       8
<PAGE>   9


               9. In consideration of, among other things, the consent of the
Lender to this Amendment, Borrower agrees to pay to Lender, upon Borrower's
execution of this Amendment, the amount of Fifteen Thousand Dollars ($15,000.00)
(the "Amendment Fee"). The Amendment Fee has been fully earned by Lender, is
nonrefundable, and may be deducted from Advances made from the Loan.

               10. Borrower and Guarantor each represents and warrants that:

                      (a) All financial information and other documents it has
        provided to Lender in connection with this Amendment are true, complete
        and correct as of the date provided and the date hereof;

                      (b) There exists no Event of Default or Incipient Default,
        after giving effect to the then applicable provisions of this Amendment
        and other than the Existing Events of Default and the Unsolidified Lot
        Sales Default;

                      (c) After giving effect to this Amendment, there has been
        no material adverse change in any real property or in the business or
        financial condition of Borrower and Guarantor since the date of the last
        financial statements submitted to Lender; and

                      (d) After giving effect to this Amendment (including the
        disclosures contained herein) and the most recent financial and
        litigation reports supplied to Lender, all representations and
        warranties by Borrower and Guarantor remain true, complete, and correct,
        in all material respects as of the date hereof.

               11. Guarantor acknowledges and agrees that (i) the Guarantee
shall remain in full force and effect, (ii) the obligations of the Guarantor
under the Guarantee are joint and several with those of each other Obligor (as
that term is defined in the Guarantee), (iii) Guarantor's liability under the
Guarantee shall continue undiminished by and shall include the obligations of
the Borrower under this Amendment and any other documents and instruments
executed by Borrower in connection with this Amendment and each of the other
Documents, as amended through the date hereof and (iv) all terms, conditions and
provisions set forth in this Amendment and any other documents and instruments
executed by Borrower in connection with this Amendment and each of the other
Documents, as amended through the date hereof, are hereby ratified, approved and
confirmed.

               12. Borrower and Guarantor acknowledge and agree that they have
no defenses, counterclaims, setoffs, recoupments or other adverse claims or
causes of action in tort, contract or of any other kind existing against Lender
or with respect to the Documents, including without limitation, claims regarding
the amount, validity, perfection, priority and enforceability of the Documents.

               13. The Documents shall be deemed amended by the provisions of
this Amendment, as and when applicable and any conflict or inconsistency between
this


                                       9
<PAGE>   10


Amendment and the Documents shall be resolved in favor of this Amendment. Except
as so amended, all other consistent terms and conditions of the Documents will
remain in full force and effect, and are hereby ratified and affirmed.

               14. Except as may be expressly provided herein, Borrower's and
Guarantor's respective obligations under the Documents shall remain in full
force and effect and shall not be waived, modified, superseded or otherwise
affected by this Amendment. This Amendment is not a novation, nor is it be
construed as a release, waiver, extension of forbearance or modification of any
of the terms, conditions, representations, warranties, covenants, rights or
remedies set forth in any of the Documents, except as expressly stated herein.

               15. This Amendment in no way acts as a waiver of any default of
Borrower or as a release or relinquishment of any of the liens, security
interests, rights or remedies securing payment and Performance of the Borrower's
Obligations or the enforcement thereof. Such liens, security interests, rights
and remedies are hereby ratified, confirmed, preserved, renewed and extended by
Borrower in all respects. Further, Lender's execution of this Amendment shall
not constitute a waiver (either express or implied) of the requirement that any
further forbearance under or modification of the Loan Agreement or any other
Document shall require the express written approval of Lender. No such approval
(either express or implied) has been given as of the date hereof.

               16. Borrower and Guarantor acknowledge that Lender has performed,
and is not in default of, its obligations under the Documents; that there are no
offsets, defenses or counterclaims in tort, contract or otherwise, with respect
to any of Borrower's or Guarantor's or other party's obligations under the
Documents; and that Lender has not directed Borrower to pay or not pay any of
Borrower's payables.

               17. Borrower and Guarantor will execute and deliver such further
instruments and do such things as in the judgment of Lender are necessary or
desirable to effect the intent of this Amendment and to secure to Lender the
benefits of all rights and remedies conferred upon Lender by the terms of this
Amendment and any other documents executed in connection herewith.

               18. If any provision of this Amendment is held to be
unenforceable under present or future laws effective while this Amendment is in
effect (all of which invalidating laws are waived to the fullest extent
possible), the enforceability of the remaining provisions of this Amendment
shall not be affected thereby. In lieu of each such unenforceable provision,
there shall be added automatically as part of this Amendment a provision that is
legal, valid and enforceable and is similar in terms to such unenforceable
provisions as may be possible.

               19. Any further discussions by and among Borrower, Guarantor and
Lender, if any, and all such discussions in the past, together with any other
actions or


                                       10
<PAGE>   11


inactions taken by and among Borrower, Guarantor and Lender, shall not cause a
modification of the Documents, establish a custom or waive (unless Lender made
such express waiver in writing), limit or condition the rights and remedies of
Lender under the Documents, all of which rights and remedies are expressly
reserved. All of the provisions of the Documents, including, without limitation,
the time of the essence provision, are hereby reiterated and if ever waived are
hereby reinstated (unless Lender made such express waiver in writing), except as
expressly provided herein. Notwithstanding anything to the contrary contained
herein or in any other instrument executed by the parties and notwithstanding
any other action or conduct undertaken by the parties on or before the date
hereof, the agreements, covenants and provisions contained herein and the Loan
Agreement shall constitute the only evidence of Lender's agreement to forbear or
to modify the Loan Agreement. Accordingly, no express or implied consent to any
further forbearances or modifications shall be inferred or implied by Lender's
execution of this Amendment. The Loan Agreement and this Amendment, together
with the other Documents, constitute the entire agreement and understanding
among the parties relating to the subject matter hereof, and supersedes all
prior proposals, negotiations, agreements and understandings relating to such
subject matter. In entering into this Amendment, Borrower acknowledges that it
is relying on no statement, representation, warranty, covenant or agreement of
any kind made by the Lender or any employee or agent of the Lender, except for
the agreements of Lender set forth herein.

               20. This Amendment shall not be binding upon Lender until
accepted by Borrower and Guarantor as provided for below. This Amendment may be
executed in counterpart, and any number of which have been executed by all
parties shall be deemed to constitute one original. Lender, its attorneys and
agents may also integrate into a single Amendment signature pages from separate
counterpart Amendments. The telecopied signature of a person shall be deemed an
original signature, may be relied upon by others and shall be binding upon the
signer for all purposes provided however that Borrower, Guarantor or any person
otherwise consenting hereto by telecopied signature shall confirm its telecopied
signature by signing and returning to Lender a copy of this Amendment with an
original signature.

               21. Borrower's and Guarantor's representatives are experienced
and knowledgeable business people and have been represented by independent legal
counsel who are experienced in all matters relevant to this Amendment,
including, but not limited to, bankruptcy and insolvency law. The parties hereto
have accepted and agreed to this Amendment after being fully aware and advised
of the effect and significance of all of its terms, conditions, and provisions.

               22. Unless otherwise specifically stipulated elsewhere in the
Documents, if a matter is left in the Documents or this Amendment to the
decision, right, requirement, request, determination, judgment, opinion,
approval, consent, waiver, satisfaction, acceptance, agreement, option or
discretion of Lender, its employees, Lender's counsel or any agent for or
contractor of Lender, such action shall be deemed to be exercisable by Lender or



                                       11
<PAGE>   12


such other person in its sole and absolute discretion and according to standards
established in its sole and absolute discretion. Without limiting the generality
of the foregoing, "option" and "discretion" shall be implied by use of the words
"if" or "may."

               23. The Recitals in this Amendment are incorporated into the body
hereof as fully set forth herein.

               24. THIS AMENDMENT HAS BEEN EXECUTED AND DELIVERED AND SHALL BE
PERFORMED IN THE STATE OF ARIZONA. THE PROVISIONS OF THIS AMENDMENT AND ALL
RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF ARIZONA AND TO
THE EXTENT THEY PREEMPT SUCH LAWS, THE LAWS OF THE UNITED STATES. EACH OF
BORROWER, GUARANTOR AND LENDER: (A) HEREBY IRREVOCABLY SUBMITS ITSELF TO THE
PROCESS, JURISDICTION AND VENUE OF THE COURTS OF THE STATE OF ARIZONA, MARICOPA
COUNTY, AND TO THE PROCESS, JURISDICTION, AND VENUE OF THE UNITED STATES
DISTRICT COURT FOR THE DISTRICT OF ARIZONA, FOR THE PURPOSES OF SUIT, ACTION OR
OTHER PROCEEDINGS ARISING OUT OF OR RELATING TO ANY DOCUMENT OR THE SUBJECT
MATTER THEREOF, OR, IF LENDER SHALL INITIATE SUCH ACTION, IN THE COURT IN WHICH
SUCH ACTION IS INITIATED PROVIDED THAT SUCH COURT HAS JURISDICTION, AND THE
CHOICE OF SUCH VENUE SHALL IN ALL INSTANCES BE AT LENDER'S ELECTION; AND (B)
WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, HEREBY WAIVES AND AGREES NOT
TO ASSERT BY WAY OF MOTION, DEFENSE OR OTHERWISE IN ANY SUCH SUIT, ACTION OR
PROCEEDING ANY CLAIM THAT IT IS NOT PERSONALLY SUBJECT TO THE JURISDICTION OF
THE ABOVE-NAMED COURTS, THAT SUCH SUIT, ACTION OR PROCEEDING IS BROUGHT IN ANY
INCONVENIENT FORUM OR THAT THE VENUE OF SUCH SUIT, ACTION OR PROCEEDING IS
IMPROPER. EACH OF BORROWER, GUARANTOR AND LENDER HEREBY WAIVE THE RIGHT TO
COLLATERALLY ATTACK ANY JUDGMENT OR ACTION IN ANY OTHER FORUM.

                            [SIGNATURE PAGE FOLLOWS]


                                       12
<PAGE>   13
LENDER:

FINOVA CAPITAL CORPORATION,
a Delaware corporation

By:
   ------------------------------------
   Its:
       --------------------------------


BORROWER:

PREFERRED EQUITIES CORPORATION,
a Nevada corporation

/s/ JON A. JOSEPH

By: Jon A. Joseph
   ------------------------------------
   Its: Vice President
       --------------------------------


Signed in the presence of:

[SIGNATURE ILLEGIBLE]
---------------------------------------


GUARANTOR:

MEGO FINANCIAL CORP.,
a New York corporation

/s/ JON A. JOSEPH

By:  Jon A. Joseph
   ------------------------------------
   Its: Vice President
       --------------------------------


Signed in the presence of:

[SIGNATURE ILLEGIBLE]
---------------------------------------



                                       13
<PAGE>   14


STATE OF NEVADA              )
                             ) ss.
County of   Clark            )

               The foregoing instrument was acknowledged before me this 31st day
of March, 2000 by Jon A. Joseph as Vice President of PREFERRED EQUITIES
CORPORATION, a Nevada corporation, on behalf of the corporation.


                                              /s/ DEBBIE L. ALEXANDER
                                                    Notary Public
My Commission Expires:                                 [SEAL]
_____________________


STATE OF NEVADA              )
                             ) ss.
County of   Clark            )

               The foregoing instrument was acknowledged before me this 31st day
of March 2000, by Jon A. Joseph as Vice President of MEGO FINANCIAL CORP., a
New York corporation, on behalf of the corporation.


                                              /s/ DEBBIE L. ALEXANDER
                                                    Notary Public
My Commission Expires:                                 [SEAL]
_____________________


STATE OF ARIZONA          )
                          ) ss.
County of Maricopa        )

               This instrument was acknowledged before me this ___ day of March
2000, by ______________________, as _______________ of FINOVA CAPITAL
CORPORATION, a Delaware corporation, on behalf of the corporation.


                                          ______________________________________
                                          Notary

                                          My Commission expires:



                                       14