<PAGE>   1
                                                                  EXHIBIT 10.178

                                February 8, 1999

Mr. Jon Joseph
Preferred Equities Corporation
4310 Paradise Road
Las Vegas, Nevada 89109-6597

        Re:  Forbearance Agreement and Amendment No. 5 to Second Amended and
             Restated Consolidated Loan and Security Agreement (the "Agreement")
             dated as of December 23, 1998, by and between Preferred Equities
             Corporation (PEC") and FINOVA Capital Corporation ("FINOVA")

Dear Mr. Joseph:

        The purpose of this letter is to confirm certain understandings and
additional agreements that PEC and FINOVA have reached concerning the Agreement.
Terms used in this letter which are defined in the Agreement shall have the same
meaning and definition when used in this Letter.

        Notwithstanding contrary provisions that may be contained in the
Agreement, FINOVA and PEC have agreed to the following:

        1. The deadline to satisfy the Conditions Subsequent associated with
only the Brigantine Inn, Brigantine Villas and CNUC projects shall be extended
to February 12, 1999.

        2. Provided there is no Event of Default or Incipient Default, the
Advance of the Tranche B Loan may occur at any time prior to March 31, 1999.
Notwithstanding the fact that all Conditions Subsequent have not been satisfied
as of the date of this letter, FINOVA will allow a partial advance upon the
Tranche B Loan in the amount of $500,000, provided that, except as set forth in
paragraph 1 of this letter, all of the other General Conditions and Conditions
Subsequent have been satisfied prior to the partial advance. The Borrower
acknowledges that the foregoing partial advance by FINOVA shall not be deemed to
be waiver by FINOVA of its rights under the Agreement and/or its right to insist
on strict performance by the Borrower of its obligations under the Agreement.
Further, the Borrower acknowledges that FINOVA's obligation to make any further
Advance of the Tranche B Loan remains subject to the continued satisfaction of
the General Conditions and to the satisfaction of the Conditions Subsequent.
<PAGE>   2

Mr. Jon Joseph
February 8, 1999
Page 2

        3. The Excess Proceeds Collateral or, where applicable, the Project
Release Fee (collectively, the "Release Fee") for the following described
properties shall be in the amount set forth opposite the name of the properties:

<TABLE>
              <S>                              <C>
              Fountains                        $1,574 per Unit
              Project (Terraces 1)              1,078 per Unit
              Project (Terraces 2)              1,078 per Unit
              Project (Towers)                  1,039 per Unit
              Project (Villas)                  1,251 per Unit
              Winnick                             963 per Unit
              White Sands                         484 per Unit
              Project (Reno)                      851 per Unit
              Brigantine Inn                      955 per Unit
              Brigantine Villas                   893 per Unit
              Calvada RV Park                     300 per Unit
              Calvada Land                       2,815 per Lot
</TABLE>

        With respect to only the aforementioned properties, FINOVA consents to
the Borrower's sale of these properties for an amount less than eighty percent
(80%) of the "Asking Price" as set forth in the Business Plan. Further, with
respect to the Calvada Land, references to "Unit" shall be deemed to include the
"Lots" located in this Project. With respect to any deed of trust or mortgage
encumbering the above properties on behalf of FINOVA, each time share interval
therein shall be deemed a "Unit" even if not a "Unit" as defined in the
Documents.

        4. It is recognized that after the Release Fee for a particular Unit has
been paid and the Unit released from the lien of the Documents, ownership of the
Unit may revert back to the Borrower (which for purposes of this Paragraph shall
be deemed to include any of its Affiliates that own a particular project) as a
result of either (i) a default by the Purchaser under the Purchaser Notes which
result in a termination of such Purchaser's rights with respect to such Unit (a
"Foreclosure"), or (ii) the Borrower and the Purchaser in effect trading Units,
whereby the Purchaser will reconvey the previously released Unit to the Borrower
in return for a simultaneous conveyance by the Borrower of a similar or
additional Unit (a "Trade"). In the event of the Foreclosure, the Unit will not
once again be subject to the lien of the Documents and the Borrower will not be
required to pay to FINOVA a Release Fee for the Unit when it is resold. However,
it will be the responsibility of the Borrower, if requested by FINOVA, to
provide evidence, acceptable to FINOVA, showing that it has previously paid the
Release Fee for the Unit.

<PAGE>   3

Mr. Jon Joseph
February 8, 1999
Page 3

        As to a Trade, two possible situations exist. The first is a Trade of
the same number of Units (the "Even Trade"). The second is Trade whereby the
Purchaser will convey to the Borrower a number of Units which is less than the
number of Units being conveyed by the Borrower to the Purchaser (the number of
Units conveyed to a Purchaser in excess of the number of Units being reconveyed
to the Borrower are called the "Additional Units").

        In the Even Trade transactions occurring within the same project, no
payment of a Release Fee to FINOVA shall be required for the Even Trade.
However, for an Even Trade of Units located in two different projects, a payment
will be due to FINOVA in an amount (the "Adjusted Release Fee") equal to the
positive difference, if any, between the Release Fee due for Units traded to a
Purchaser in the other project, and the Release Fee for the Units that are being
reconveyed to the Borrower. As an illustration of the foregoing, assume that the
Even Trade has the Purchaser reconveying to the Borrower one Unit in the Winnick
Project and the Borrower has, in return for the Winnick Unit, conveyed to the
Purchaser a Unit in the Fountains project. The Adjusted Release Fee due for the
Fountains Unit that has been conveyed to the Purchaser shall be an amount equal
to $611.00, which represents the result obtained by subtracting from the Release
Fee for Fountains, the Release Fee for Winnick. This same method will be used if
the Even Trade involves a multiple number of Units, however, for any Additional
Units, the full Release Fee will be due and payable for each Additional Unit.

        Subject to compliance with the foregoing, in the event of a Trade,
FINOVA will release from the lien of the Documents all Units conveyed to the
Purchaser.

        All Units reacquired by a Borrower as a result of a Trade will
automatically become subject to the lien of the Documents without the need to
execute any further documents or to take any further action. On or before the
tenth (10th) day of each calendar month, Borrower will submit to FINOVA a report
(in a form reasonably acceptable to FINOVA) setting for the Units which, during
the preceding calendar month, were reacquired by Borrower as a result of either
a Trade or a Foreclosure. Concurrently with the report, Burrower will execute
and deliver to FINOVA such recordable documents as are reasonably necessary to
confirm that all Units acquired by Trade during the period covered by the Report
are once again subject to the lien of the Documents.

        5. The Borrower has provided to FINOVA a February 2, 1999 memo (a copy
of which is attached) outlining a proposed agreement with The Preferred RV
Resorts Owners Association (the "Association") concerning the Calvada RV Park.
In the event that the Borrower is able to enter into an agreement with the
Association consistent with the terms outlined in the memo, FINOVA will not
require the payment of a Release Fee for any of the Units in the Calvada RV Park
that are conveyed to the Association in accordance with the agreement. FINOVA
reserves the right to approve the agreement with the Association which approval
shall not be unreasonably withheld provided that the same is consistent with the
terms outlined in the memo.

<PAGE>   4

Mr. Jon Joseph
February 8, 1999
Page 4

        6. The terms of the Documents, as specifically supplemented by this
letter, remain in full force and effect. All provisions of the Documents,
including without limitation, the time is of the essence provisions re hereby
reiterated, and if ever waived, reinstated.

        Should the foregoing accurately reflect our agreements on the matters
set forth herein, please acknowledge your agreement to the same by signing the
enclosed copy of this letter and returning the same to the undersigned. It is
agreed that in the event of a conflict or inconsistency between the provisions
of this letter and the Agreement, this letter shall, as to the matters
specifically addressed herein, govern and control. It is acknowledged and agreed
that a default by the Borrower under this letter shall be an Event of Default.

                                            FINOVA Capital Corporation,
                                            a Delaware corporation

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

The foregoing has been seen and agreed to this 10th day of February, 1999.

Preferred Equities Corporation

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

The undersigned, the Guarantor of the Borrower, hereby acknowledges receipt of
the foregoing and consents to the same, this 10th day of February, 1999.

MEGO Financial Corp.

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