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                                                                  EXHIBIT 10.129



                                THIRD AMENDMENT
                    TO ASSIGNMENT AND ASSUMPTION AGREEMENT

     This Third Amendment (the "Amendment") to Assignment and Assumption
Agreement, by and between RER CORP., COMAY CORP., GROWTH REALTY INC. and H&H
FINANCIAL, INC. (the "Assignors"), and MEGO FINANCIAL CORP., formerly named
MEGO CORP., (the "Assignee").


                                  WITNESSETH:

     WHEREAS, the Assignors are parties to the Assignment Agreement dated
October 25, 1987, with the Assignee, and the Assignment and Assumption
Agreement, dated February 1, 1988, between the Assignors and the Assignee,
which two agreements were amended by the Amendment to Assignment and Assumption
Agreement dated July 29, 1988, and by the Second Amendment to Assignment and
Assumption Agreement dated as of March 2, 1995 between the Assignors and the
Assignee (collectively, the described agreements as so amended are hereinafter
referred to as the "Assignment"); and

     WHEREAS, the Assignment fixed the date of January 31, 1995 as the date on
which the accrual of amounts due to the Assignors under the Assignment would
terminate, except for interest on any of such amounts which remained unpaid; and

     WHEREAS, the amount due the Assignors, as of January 31, 1995 was
$13,328,742.25, plus interest from January 28, 1995 in the amount of $9,322.57,
(collectively, and with interest from January 31, 1995 to March 2, 1995 (the
Amount Due"); and

     WHEREAS, $10,000,000 of the Amount Due was agreed to be considered
subordinated debt (the "Subordinated Debt"), of which $1,428,571.43 plus accrued
interest was paid on March 1, 1997 as scheduled, and the Remaining Balance of
$3,328,742.25 which was not subordinated and all accrued interest thereon has
been paid prior to the date hereof; and

     WHEREAS, the balance of the Subordinated Debt in the amount of
$8,571,428.57 continues to be secured by a pledge of the stock of Preferred
Equities Corporation (and any distributions in respect thereto) pursuant to a
Pledge and Security Agreement dated as of February 1, 1988 (the "Pledge
Agreement") between the Assignee and the Assignors; and

     WHEREAS, interest on the balance of the Subordinated Debt has been paid
through March 1, 1997; and





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     WHEREAS, one of the Assignors, RER Corp. and affiliates of the other
Assignors, namely Jerome J. Cohen, Don A. Mayerson, Herbert B. Hirsch, and
Growth Realty Holdings LLC (RER Corp. and the above named affiliates of
Assignors are collectively referred to herein as the "Warrant Holders"),
presently hold warrants (the "Warrants") for the purchase of an aggregate of
1,000,000 shares of common stock of the Assignee for an exercise price of $4.25
per share for an aggregate exercise price of $4,250,000.00; and

     WHEREAS, the Warrant Holders and the Assignee are desirous that the
Warrants be exercised at this time; and

     WHEREAS, the Assignors other than RER Corp. are prepared to assign a
portion of their share of the future principal payments on the Subordinated
Debt to the Warrant Holders other than RER Corp. so that the Warrant Holders
can exercise their Warrants by applying such portion in payment of the Exercise
Price of the Warrants, to which the Assignee has agreed herein;

     NOW THEREFORE, in consideration of the mutual covenants herein contained
it is hereby agreed as follows:

1.   The statements in the foregoing preamble are true and correct.

2.   That the present balance of the Subordinated Debt in the amount of
     $8,571,428.57 is hereby agreed to be reduced by $4,250,000 (the "Reduction
     Amount") which Reduction Amount shall be credited towards the Exercise
     price of the Warrants on behalf of the Warrant Holders.

3.   That the balance of the Subordinated Debt, in the amount of $4,321,428.57,
     plus interest at the Agreed Rate of 10% per annum, shall be paid by the
     Assignee to the Assignors as follows:

     (a)  A payment of interest only on September 1, 1997 and March 1, 1998 on
          the unpaid balance.

     (b)  A payment of principal in the amount of $35,714.28 plus interest on
          the unpaid balance on September 1, 1998.

     (c)  A payment of principal in the amount of $1,428,571.43 plus interest at
          the Agreed Rate on the unpaid balance on each of the following dates:
          March 1, 1999, September 1, 1999 and March 1, 2000, a which time any
          unpaid principal or interest shall be due and payable.

     (d)  If any of the above amounts are not paid within 15 days of the due
          date thereof, then until such delinquent amounts are paid, interest
          on the unpaid balance of the Deferred Amount shall thereafter bear
          interest at the rate of twelve percent (12%) per annum instead of the
          Agreed Rate, or if lower, the highest rate permitted by law.

     (e)  If any of the above amounts are not paid within 30 days of the due
          date thereof, then the entire unpaid balance of the Deferred Amount,
          and any accrued but unpaid interest thereon, shall be immediately due
          and payable, unless such payment is



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          deferred pursuant to the written agreement of Assignors holding the 
          right to receive at lease 51% of such payments.

     (f)  In the event of (i) the Assignee generally not paying its debts when
          due, or (ii) the dissolution, termination of existence or insolvency
          of the Assignee, or (iii) the appointment of a trustee, receiver,
          custodian, liquidator or other similar official for the Assignee or
          any substantial part of its property, or (iv) the makings of an
          assignment for the benefit of creditors by the Assignee, or (v) the
          commencement of any proceedings under any bankruptcy or insolvency
          laws by or against the Assignee that, in the case of any such
          involuntary proceeding, shall continue undismissed or unstayed and in
          effect for a period of 60 days, then the entire unpaid balance of the
          Deferred Amount, together than any accrued but unpaid interest
          thereon, shall be immediately due and payable, unless such payment is
          deferred pursuant to the written agreement of Assignors holding the
          right to receive at least 51% of the above payments.

4.   The Assignee and Assignors agree that all amounts due to Assignors pursuant
     to the Assignment as amended by this Amendment shall continue to be secured
     as set forth in the Pledge Agreement, and that the Pledge Agreement remains
     in full force and effect.

5.   The Assignors agree that the unpaid balance of the Subordinate Debt, and an
     accrued but unpaid interest due thereon, shall continue to be subordinate
     in right of payment to any debt of Assignee for money borrowed, and to any
     obligation of the Assignee under any guaranty of obligations of a
     subsidiary of Assignee (the "Superior Obligations"), provided however, that
     unless and until a holder of a Superior Obligation has declared such
     Superior Obligation to be in default, which default has not been cured and
     is continuing, Assignee shall pay, and Assignors may accept, scheduled
     payments on the Subordinated Debt and accrued interest thereon as set forth
     in paragraph 3 above. Assignors agree to execute such documentation
     evidencing such subordination as the holder of any Superior Obligation may
     reasonable request.

6.   The Assignee and Assignors agree that this Amendment is an amended to the
     Assignment and not a novation, and that, except as modified hereby, all
     terms and conditions of the Assignment remain in full force and effect.




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     7.  It is agreed that this Amendment may be signed in counterparts, and all
         such counterparts in the aggregate shall constitute one agreement.

          IN WITNESS WHEREOF, the parties hereto have duly executed this
Amendment as of August 20, 1997.

                                        MEGO FINANCIAL CORP.


                                        By: /s/ JEROME J. COHEN
                                           -------------------------------------
                                            Jerome J. Cohen, President


                                        RER CORP.

                                        By:              [SIG]
                                            ------------------------------------
                                            Title: President


                                        COMAY CORP.

                                        By:              [SIG]
                                            ------------------------------------
                                            Title: President


                                        GROWTH REALTY INC.

                                        By:              [SIG]
                                            -----------------------------------
                                            Title: President

                                        H&H FINANCIAL, INC.

                                        By:              [SIG]          
                                            -----------------------------------
                                            Title: President


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     The undersigned Warrant Holders hereby ratify and consent to the
statements included above with respect to the Warrant Holders this 20th day of
August, 1997.


                                   RER CORP.

                                   
                                   By: /s/        [SIG]
                                      --------------------------------
                                   Title: President


                                   By: /s/ JEROME J. COHEN
                                      --------------------------------
                                      Jerome J. Cohen


                                   By: /s/ DON A. MAYERSON
                                      --------------------------------
                                      Don A. Mayerson


                                   By: /s/ HERBERT B. HIRSCH
                                      --------------------------------
                                      Herbert B. Hirsch


                                   GROWTH REALTY HOLDINGS LLC


                                   By: /s/        [SIG]
                                      --------------------------------
                                   Title:




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