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                                                                  EXHIBIT 10.173



                              FORBEARANCE AGREEMENT


        This Forbearance Agreement ("Agreement") is made as of the 6th day of
August, 1999 by and among Preferred Equities Corporation, a Nevada corporation
with its chief executive office and principal place of business at 4310 Paradise
Road, Las Vegas, Nevada 89109, Attention: Herbert Hirsch (hereinafter called the
"Borrower") and with Mego Financial Corp. a New York corporation having an
office at and address of The PEC Building, 4310 Paradise Road, Las Vegas, Nevada
89109, Attention: Jon A. Joseph (hereinafter called the "Guarantor") (Borrower
and Guarantor may hereinafter be referred to collectively as "Obligors") and
Litchfield Financial Corporation, a Massachusetts corporation with an office at
430 Main Street, Williamstown Massachusetts 01267, Attention: Joseph S.
Weingarten, Executive Vice President (hereinafter called the "Lender").

        Reference is hereby made to the following documents by and among
Borrower, Guarantor and Lender:

        1.     Loan and Security Agreement by and between Preferred Equities
               Corporation and Litchfield Financial Corporation dated as of July
               30, 1997 as amended by the First Amendment to Loan and Security
               Agreement by and between by and between Preferred Equities
               Corporation and Litchfield Financial Corporation (the "Loan
               Agreement").

        2.     Secured Promissory Note in the original principal amount of
               $10,000,000.00 executed by Preferred Equities Corporation in
               favor of Litchfield Financial Corporation dated July 30, 1997
               (the "Original Note") as amended by the First Amended and
               Restated Secured Promissory Note/Receivables Loan in the original
               principal amount of $10,000,000.00 executed by Preferred Equities
               Corporation in favor of Litchfield Financial Corporation dated as
               of December 19, 1998 (the "Amended Receivables Note") and as
               amended by the First Amended Secured Promissory Note/Mortgage
               Loan in the original principal amount of $4,500,000.00 executed
               by Preferred Equities Corporation in favor of Litchfield
               Financial Corporation dated as of December 19, 1998 (the "Amended
               Mortgage Note").

        3.     Assignment of Receivables Collateral executed by Preferred
               Equities Corporation in favor of Litchfield Financial Corporation
               dated July 30, 1997.

        4.     Assignment of Deeds of Trust executed by Preferred Equities
               Corporation in favor of Litchfield Financial Corporation dated
               July 30, 1997.

        5.     Short Form Deed of Trust and Assignment of Rents by and between
               Preferred Equities Corporation, United Title and Litchfield
               Financial Corporation dated July 30, 1997.

        6.     Guaranty Agreement by Mego Financial in favor of Litchfield
               Financial Corporation dated July 30, 1997.




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        7.     UCC-1 Financing Statements recorded with the Secretary of the
               State of Nevada and Clark County Recorder.

The documents above referenced are collectively referred to herein as the "Loan
Documents". The Original Note, the Amended Receivables Note and the Amended
Mortgage Note may also hereinafter be referred to as the "Notes". All
capitalized terms used in this Agreement which are not defined herein, but which
are defined in the Loan Documents, shall have the same meanings herein as
therein.

        Obligors acknowledge and agree that certain Events of Default, as set
forth in Lender's correspondence to Borrower dated July 21, 1999 and July 27,
1999, have occurred and are continuing. As a result of these Events of Default,
the Lender has declared the Events of Default to be in existence under the Loan
Documents and has accelerated the date of payment, in full, of all of the
Obligations. Borrower acknowledges and agrees that the Lender has no obligation
to make additional loans or otherwise extend credit to Borrower under the Loan
Documents or otherwise. Borrower has, by correspondence dated July 29, 1999,
requested that the Lender forbear from enforcing its rights to take possession
of the Collateral under the Loan Documents and from enforcing its right to
collect the accelerated Obligations (as hereinafter defined).

        Obligors acknowledge that the outstanding amounts due as of August 6,
1999 are:

       MORTGAGE LOAN #20410007651:
        Principal:                           $2,572,962.72
        Accrued, but unpaid Interest:        $   52,667.80
        Late Charges:                        $   37,067.73
        Costs of Collection:                 $    3,000.00
        Total Amount Due:                    $2,665,698.25
        Per Diem Interest                    $      808.07
        From and After August 6, 1999
        Plus the
        Remaining Balance of                 $   24,915.00
        Minimum Release Fee
        Payment Obligations
        (which will Reduce at $25.00 per Interval, for
        Intervals sold which are not described on
        Schedule 4 attached hereto)







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      RECEIVABLES LOAN #20220000123:
        Principal:                           $1,409,397.84
        Accrued, but unpaid Interest:        $   13,177.19
        Costs of Collection:                 $    4,500.00
        Total Amount Due:                    $1,427,075.03
        Per Diem Interest                    $      376.38
        From and After August 6, 1999


(hereinafter collectively referred to as the "Obligations"). In response to
Borrower's request, the Lender agrees to forbear from enforcing its rights to
take possession of the Collateral and to collect, in full, the Obligations until
the Forbearance Termination Date (as hereinafter defined) upon the following
terms and conditions:

        1. Ratification of Existing Agreements. All of Obligors' obligations,
indebtedness and liabilities to the Lender as evidenced by or otherwise arising
under the Loan Documents, except as may otherwise be expressly modified in this
Agreement upon the terms set forth herein and therein, are, by Obligors'
execution of this Agreement, ratified and confirmed in all respects by Obligors.
Borrower and Guarantor acknowledge that all of Borrower's obligations,
indebtedness and liabilities to the Lender under the Loan Documents are joint
and several. In addition, by Obligors' execution of this Agreement, Obligors
represent and warrant that no counterclaim, right of set-off or defense of any
kind exists or is outstanding with respect to such obligations, indebtedness and
liabilities. Obligors further acknowledge that the security interests given by
Borrower to Lender in the Real Estate Collateral and Receivables Collateral
which secure Obligors' obligations to the Lender constitute a valid lien on such
Real Estate Collateral and Receivables Collateral and that Obligors shall take
no action to impair or invalidate the security interests therein.

        2. Representations and Warranties. All of the representations and
warranties made by Obligors to Lender in the Loan Documents are true and correct
on the date hereof as if made on and as of the date hereof, except to the extent
that any of such representations and warranties relate by their terms to a prior
date.

        3. Forbearance Obligations. Subject to the satisfaction of the
conditions precedent set forth below, the Lender agrees to waive the existing
declaration of default and nullify the acceleration of sums due and forbear from
instituting proceedings to enforce its rights and remedies under the Loan
Documents until the earliest to occur of (a) February 1, 2000, (b) Lender's
declaration of an Event of Default under the Loan Documents arising from an
event or condition in existence and not disclosed to Lender as of this date or
arising subsequent to the date of this Agreement, (c) the failure of Obligors to
comply with the terms of this Agreement, including any of Obligors' undertakings
set forth in Section 7 hereof which such failure shall constitute an Event of
Default under this Agreement and under the Loan Documents, (d) the failure of
Obligors to comply with any of the terms and conditions of any of the Additional
Security Agreements (each as hereinafter






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defined), (e) the initiation of any federal or state Bankruptcy, insolvency or
similar proceeding by (or against and not dismissed or withdrawn within 90 days
after the commencement of the proceeding brought against Obligors) Obligors, (f)
the commencement of litigation or legal proceedings by Obligors against the
Lender or any of its affiliates, or (g) the failure of Obligors to comply with
any term or condition of any other agreement, document or instrument evidencing
any other indebtedness of Borrower to the Lender (the "Forbearance Termination
Date").

               Upon the Forbearance Termination Date, the Lender shall be free,
in its sole and absolute discretion, to proceed to enforce any or all of its
rights and remedies under or in respect of the Loan Documents, the Additional
Security Agreements in connection with Section 4(b) below and applicable law.
All of Obligors' obligations and liabilities to the Lender hereunder (including
without limitation Obligors' payment obligations) shall survive the Forbearance
Termination Date, and all of such obligations are secured under the Loan
Documents and any other documents, instruments or agreements pursuant to which
Obligors may, from time to time, grant to the Lender collateral security for
Obligors' obligations to the Lender.

        4. Conditions. The Lender's forbearance hereunder shall be subject to
the satisfaction on or before September 10, 1999 of the following conditions
precedent:

        (a) Borrower shall have paid in full all principal, accrued interest and
applicable fees due Lender under the Receivables Loan, at the interest rate and
in accordance with the terms set forth in the Loan Agreement.

        (b) Pursuant to security and pledge agreements in form and substance
satisfactory to the Lender, Uniform Commercial Code Financing Statements and
Assignment of Deeds of Trust, as applicable (the "Additional Security
Agreements"), Borrower shall have granted to the Lender valid and perfected
security interests in and liens on all of the assets and properties of Borrower
as set forth on Schedule 4 attached hereto.

        (c) Borrower shall have paid to the Lender on or before August 31, 1999
the balance of $25,000 due as a non-refundable fee in the total amount of
$50,000.00; $25,000 being acknowledged by Lender as received on August 4, 1999.

        5. Representations and Warranties. As of the date of this Agreement, all
of the representations and warranties made by Obligors to Lender, whether
directly or incorporated by reference shall be true and correct on the date
hereof.

        6. Interest. Interest shall continue to be payable monthly in arrears on
the first business day of each calendar month in accordance with the Loan
Documents.

        7. Covenants. Without any prejudice or impairment whatsoever to any of
the Lender's rights and remedies contained in the Loan Documents, Obligors
covenant and agree with the Lender as follows:






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        (a) Obligors agree to pay in full, in cash to Lender, the outstanding
Obligations, outstanding principal amount of Obligors' indebtedness and all
other sums due Lender under the Loan Documents, together with all interest
thereon and all fees and expenses of the Lender incurred in connection therewith
on the Forbearance Termination Date.

        (b) Notwithstanding anything to the contrary contained herein or in the
Loan Documents and in lieu of the principal payments otherwise provided for
under Section 2.5(ii)(C) of the Loan Agreement, Borrower agrees to pay or cause
to be paid to Lender, on the first business day of each calendar month,
commencing on September 1, 1999 and continuing on the 1st business day of each
calendar month thereafter during the Forbearance Period a principal payment, for
application to the Mortgage Loan, in the amount of One Hundred Thousand Dollars
($100,000.00) less the sum of all Release Payments made to Lender during the
preceding calendar month. Commencing October 1, 1999 and continuing through
January 2, 2000, provided that Obligors have have made the payment required
hereunder for all prior months, Obligors may cumulate the aggregate amount of
required payments due under this Section 7(b) against the amount of Release
Payments required to be made upon a sale of an Interval under Section 2.5(ii)(B)
of the Agreement for any given month. Lender acknowledges that the intent of the
cumulative credit of required payments under this Section is to not penalize
Obligor in any month where the amount of Release Payments exceeds the required
amount by requiring Obligor to pay such excess if Obligor has in prior months
not sustained sufficient sales but has made the required payments hereunder.
Nothing contained herein shall relieve Obligor of the requirement to pay Release
Fees in connection with each sale of an Interval as required under Section
2.5(ii)(B) of the Agreement, provided however, that no Release Fee shall be due
upon the sale of an Interval listed on Schedule 4 attached hereto.

        (c) Borrower will provide to the Lender such financial information as it
may request from time to time, and shall permit the Lender to enter (upon
reasonable notice and at reasonable times) upon Borrower's premises and inspect
its books and records, to make extracts therefrom and to discuss Borrower's
affairs with the employees, agents and officers, all at Borrower's expense.

        (d) Obligors shall comply and continue to comply with all of the terms,
covenants and provisions contained in the Loan Documents, except as such terms,
covenants and provisions are expressly modified by this Agreement upon the terms
set forth herein.

        (e) Obligors shall at any time or from time to time execute and deliver
such further instruments, and take such further action as the Lender may
reasonably request, in each case further to effect the purposes of this
Agreement and the Loan Documents.

        8. Releases of Collateral. (a) So long as the Forbearance Termination
Date has not occurred, Borrower or Guarantor may request that the Lender release
its security interest in the Real Estate Collateral and such other collateral
pledged to Lender pursuant to Section 4(b) of this Agreement (a "Release
Request") as is sold in the ordinary course of business provided however that
Lender shall be entitled to the payment of the Release Fees, other than for the
sale of an







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Interval listed on Schedule 4 attached hereto, and Release Payments as provided
for in the Loan Agreement prior to the issuance of such release of security
interest. Obligors specifically acknowledge their obligation to pay any
remaining Release Fees due in accordance with the Loan Agreement upon payment in
full of the Obligations under the Mortgage Loan.

        9. Expenses. Obligors agree to pay to the Lender upon demand (a) an
amount equal to any and all out-of-pocket costs or expenses (including legal
fees (including allocable costs of staff counsel and disbursements) incurred or
sustained by the Lender in connection with the preparation of this Agreement and
all related matters and (b) from time to time after the Forbearance Termination
Date, any and all out-of-pocket costs or expenses (including legal fees
including allocable costs of staff counsel and disbursements and reasonable
consulting, accounting, appraisal and other similar professional fees and
expenses) hereafter incurred or sustained by the Lender in connection with the
administration of credit extended by the Lender or the preservation of or
enforcement of any rights of the Lender under this Agreement or the Loan
Documents or in respect of any of Obligors' other obligations to the Lender.

        10. Partial Payment Not Waiver. Any partial payment amounts made by
Borrower or Guarantor or any other party on Borrower or Guarantor's behalf and
accepted by Lender will not constitute a waiver of any default, waiver of
demand, or waiver of any other right held by Lender under the Loan Documents or
this Agreement. Except as otherwise modified or amended by this Agreement, all
of the terms of the Loan Documents shall remain in full force and effect and are
expressly ratified and confirmed by the Borrower and the Guarantor.

        11. Negative Pledge. Until such time as Lender has received payment in
full of all obligations of Obligors to the Lender, Obligors agree, from and
after the date of execution of this Agreement, that they will not, other than in
the ordinary course of business, without the payment to Lender of any proceeds
to which Lender would be entitled, sell, lease or otherwise dispose of any
assets, now or hereafter existing, or permit or suffer to exist any lien,
encumbrance, pledge, mortgage or security interest in or upon any assets now or
hereafter existing.

        12. Relief from Automatic Stay. In the event any Obligor shall: (i) file
with any Bankruptcy court of competent jurisdiction or be the subject of any
petition under the Bankruptcy Code; (ii) be the subject of any order for relief
issued under the Bankruptcy Code; (iii) file or be the subject of any petition
seeking any reorganization, arrangement, composition, readjustment, liquidation,
dissolution or similar relief under any present or future federal or state act
or law relating to Bankruptcy, insolvency or other relief for debtors; (iv) have
sought or consented to or acquiesced in the appointment of any trustee,
receiver, conservator or liquidator; or (v) be the subject of any order,
judgment or decree entered by any court of competent jurisdiction approving a
petition filed against such party for any reorganization, arrangement,
composition, readjustment, liquidation, dissolution or similar relief under any
present or future federal or state act or law relating to Bankruptcy, insolvency
or other relief for debtors, then, subject to court approval, Lender shall
thereupon be entitled and Obligors irrevocably consent to relief from automatic
stay imposed by Section 362 of the Bankruptcy Code, or otherwise, on or against
the exercise of the







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rights and remedies otherwise available to Lender as provided in the Loan
Documents and this Agreement and as otherwise provided by law, and Obligors
hereby irrevocably waive their rights to object to such relief.

        13. No Waiver. Except as otherwise expressly provided for in this
Agreement, nothing in this Agreement shall extend to or affect in any way any of
Obligors' obligations or any of the rights of the Lender and remedies of the
Lender arising under the Loan Documents executed in connection therewith, and
the Lender shall not be deemed to have waived any or all of such rights or
remedies with respect to any Event of Default or event or condition which, with
notice or the lapse of time, or both would become an Event of Default under the
Loan Documents and which upon Obligors' execution and delivery of this Agreement
might otherwise exist or which might hereafter occur.

        14. Release of Lender. By execution of this Agreement, Borrower and
Guarantor jointly and severally acknowledge and confirm that they do not have
any offsets, defenses or claims against the Lender, or any of its officers,
agents, directors, attorneys or employees whether asserted or unasserted. To the
extent that they may have such offsets, defenses or claims, the Borrower and the
Guarantor and each of their respective successors, assigns, parents,
subsidiaries, affiliates, predecessors, employees, agents, heirs, executors, as
applicable, jointly and severally, release and forever discharge the Lender, its
subsidiaries, affiliates, officers, directors, employees, agents, attorneys,
successors and assigns, both present and former (collectively the "Lender
Affiliates") of and from any and all manner of action and actions, cause and
causes of action, suits, debts, controversies, damages, judgments, executions,
claims and demands whatsoever, asserted or unasserted, in law or in equity which
against the Lender and/or Lender Affiliates they ever had, now have or which any
of the Borrower's or Guarantor's successors, assigns, parents, subsidiaries,
affiliates, predecessors, employees, agents, heirs, executors, as applicable,
both present and former ever had or now has, upon or by reason of any manner,
cause, causes or thing whatsoever, including, without limitation, any presently
existing claim or defense whether or not presently suspected, contemplated or
anticipated.

        15. Voluntary Agreement. Obligors represent and warrant that they are
represented by legal counsel of their choice, are fully aware of the terms
contained in this Agreement and have voluntarily and without coercion or duress
of any kind, entered into this Agreement and the documents executed in
connection with this Agreement.









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        16. Notices. Any notice, payment, demand or communication required or
permitted to be given by any provision of this Agreement will be deemed to have
been given when delivered personally to the party designated to receive such
notice or, on the third business day after the same is sent by certified mail,
postage and charges prepaid, directed to the following addresses or to such
other or additional addresses as any party might designate by written notice to
the other parties:


        To Lender:
        Litchfield Financial Corporation
        430 Main Street
        Williamstown, Massachusetts 01267
        Attention: Joseph S. Weingarten
                   Executive Vice President

        To Borrower:
        Preferred Equities Corporation
        4310 Paradise Road
        Las Vegas, Nevada 89109
        Attention: Herbert Hirsch

        with a copy to:

        Mego Financial Corp.
        The PEC Building
        4310 Paradise Road
        Las Vegas, Nevada 89109
        Attention: Jon A. Joseph

        To Guarantor:
        Mego Financial Corp.
        The PEC Building
        4310 Paradise Road
        Las Vegas, Nevada 89109
        Attention: Jon A. Joseph

        17. Entire Agreement; Binding Affect. This Agreement constitutes the
entire and final agreement among the parties and there are no agreements,
understandings, warranties or representations among the parties except as set
forth herein. This Agreement will inure to the benefit and bind the respective
heirs, administrators, executors, representatives, successors and permitted
assigns of the parties hereto.







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        18. Negation of Partnership. The relationship between the Borrower,
Guarantor and Lender is that of debtor and creditor. Nothing contained in this
Agreement will be deemed to create a partnership or joint venture between
Borrower, Guarantor and Lender, or to cause Lender to be liable or responsible
in any way for the actions, liabilities, debts, or obligations of Borrower
and/or Guarantor.

        19. Severability. If any clause or provision of this Agreement is
determined to be illegal, invalid or unenforceable under any present or future
law by the final judgment of a court of competent jurisdiction, the remainder of
this Agreement will not be affected thereby. It is the intention of the parties
that if any such provision is held to be invalid, illegal or unenforceable,
there will be added in lieu thereof a provision as similar in terms to such
provision as is possible, and that such added provision will be legal, valid and
enforceable.

        20. Headings. All headings contained in this Agreement are for reference
purposes only and are not intended to affect in any way the meaning or
interpretation of this Agreement.

        21. Governing Law. This Agreement is executed and delivered in the
Commonwealth of Massachusetts and it is the desire and intention of the parties
that it be in all respects interpreted according to the laws of the Commonwealth
of Massachusetts. Obligors specifically and irrevocably consent to the
jurisdiction and venue of the federal and state courts of the Commonwealth of
Massachusetts with respect to all matters concerning this Agreement or the Loan
Documents or the enforcement of any of the foregoing. Obligors agree that the
execution and performance of this Agreement shall have a Massachusetts situs and
accordingly, Obligors consent to personal jurisdiction in the Commonwealth of
Massachusetts.

        22. Counterparts. This Agreement may be executed in counterparts, each
of which will be deemed an original document, but all of which will constitute a
single document. This document will not be binding on or constitute evidence of
a contract between the parties until such time as a counterpart of this document
has been executed by each of the parties and a copy thereof delivered to each
party under this Agreement.

        23. Amendment. Neither this Agreement nor any of the provisions hereof
can be changed, waived, discharged or terminated, except by an instrument in
writing signed by the parties against whom enforcement of the change, waiver,
discharge or termination is sought.

        24. WAIVER OF JURY TRIAL. OBLIGORS KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVE ANY RIGHT THEY MAY HAVE OR HEREAFTER HAVE TO A TRIAL BY JURY
IN RESPECT OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR THE UNDERLYING TRANSACTIONS. OBLIGORS CERTIFY THAT NEITHER THE
LENDER NOR ANY OF ITS REPRESENTATIVES, AGENTS OR COUNSEL HAS REPRESENTED,
EXPRESSLY OR







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OTHERWISE, THAT THE LENDER WOULD NOT IN THE EVENT OF ANY SUCH SUIT, SEEK TO
ENFORCE THIS WAIVER OF RIGHT TO TRIAL BY JURY.

        25. Restriction on Assignment. Neither the Borrower or any Guarantor may
assign any of its obligations hereunder or under any related agreement to any
person without the prior written consent of the Lender. The Lender may without
notice to or consent of any person, sell, assign, grant a participation in or
otherwise dispose of all or any portion of the Notes, the Agreement and the
related agreements. In connection therewith, the Lender may disclose to a
prospective purchaser, assignee, participant or transferee any information
possessed by the Lender relating to the loan and the collateral securing the
loan.

        26. Nullification of Agreement. This Forebearance Agreement shall be
null and void and the provisions contained herein shall be of no effect unless
this Forebearance Agreement is fully executed by Borrower and Guarantor and
returned to Lender on or before the close of business on August 27, 1999.


                                     LENDER
                                     Litchfield Financial Corporation


___________________________          By:____________________________________
                                     Joseph S. Weingarten
                                     Its Executive Vice President
___________________________          Duly Authorized


                                     BORROWER
                                     Preferred Equities Corporation
___________________________
                                     By:____________________________________

___________________________          Its ___________________________________
                                     Duly Authorized


                                     GUARANTOR
                                     Mego Financial Corp.
___________________________
                                     By: ___________________________________

___________________________          Its ___________________________________
                                     Duly Authorized











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STATE OF NEVADA              )
                             )  ss.
COUNTY OF                    )

        On this ___ day of August, 1999, before me, the undersigned officer,
personally appeared ________________, who acknowledged himself to be the
________ of Preferred Equities Corporation, a Nevada corporation, and that he,
as such ___________, being authorized so to do, executed the foregoing
instrument as his and its free act and deed for the purposes therein contained,
by signing the name of the corporation by himself as such __________.

        In Witness Whereof, I hereunto set my hand.



                                        ____________________________________

                                        Notary Public
                                        My Commission Expires:


STATE OF NEVADA              )
                             )  ss.
COUNTY OF                    )

        On this ___ day of August, 1999, before me, the undersigned officer,
personally appeared ________________, who acknowledged himself to be the
________ of Mego Financial Corp., a New York corporation, and that he, as such
___________, being authorized so to do, executed the foregoing instrument as his
and its free act and deed for the purposes therein contained, by signing the
name of the corporation by himself as such __________.

        In Witness Whereof, I hereunto set my hand.



                                        ____________________________________

                                        Notary Public
                                        My Commission Expires:









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                                   SCHEDULE 4

               Assets and Property of Borrower in Which Liens and
                      Security Interests Are To Be Granted













Borrower acknowledges its obligation to grant a lien and security interest to
Lender, on a continuing basis, in and to all Intervals which at any time were
Encumbered Intervals and were released by Lender in connection with a sale where
the Interval and/or Note Receivable previously released subsequently becomes
available to be re-pledged to Lender as a result of a cancellation or default by
the Purchaser thereof or for any other reason.












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