##### Table of Contents



United States
    Securities and Exchange Commission
 Washington, D.C. 20549
 Form 10-Q
  (Mark
    One)
 þQuarterly
    Report Under Section 13 or 15(d) of the Securities
    Exchange Act of 1934
  OR
 oTransition
    Report Pursuant to Section 13 or 15(d) of the Securities
    Exchange Act of 1934
 
 001-08007
 Fremont General
    Corporation
 (Exact Name of Registrant as Specified in its Charter)
  Nevada

95-2815260(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)2425 Olympic Boulevard
    Santa Monica, California 90404(Address of principal executive offices) (Zip Code)

(310)
    315-5500(Registrants
    Telephone Number, Including Area Code)   Not
    Applicable
   o þ
  Rule 12b-2
  þ o o
  Rule 12b-2 o þ
    Shares
    OutstandingClass

September 28,
    2007Common Stock, $1.00 par value


79,630,085




---



##### 



Fremont General
    Corporation and Subsidiaries
  INDEX
  
  Page
    No.PART I 
    FINANCIAL INFORMATIONItem 1.

Financial StatementsConsolidated Balance Sheets March 31, 2007
    (Unaudited) and December 31, 2006


3Consolidated Statements of Operations Three
    Months Ended March 31, 2007 and 2006 (Unaudited)


4Consolidated Statements of Changes in
    Stockholders Equity March 31, 2007 and 2006
    (Unaudited)


5Consolidated Statements of Cash Flows Three
    Months Ended March 31, 2007 and 2006 (Unaudited)


6Consolidated Statements of Comprehensive Income
    (Loss) Three Months Ended March 31, 2007 and 2006
    (Unaudited)


7Notes to Consolidated Financial Statements
    (Unaudited)


8Item 2.

Managements Discussion and Analysis of
    Financial Condition and Results of Operations


28Item 3.

Quantitative and Qualitative Disclosures About
    Market Risk


37Item 4.

Controls and Procedures


38PART II 
    OTHER INFORMATIONItem 1.

Legal Proceedings


40Item 1A.

Risk Factors


43Item 2.

Unregistered Sales of Equity Securities and Use
    of Proceeds


43Item 3 - 5.

Not applicableItem 6.

Exhibits


44Signatures


S-1EXHIBIT 31.1EXHIBIT 31.2EXHIBIT 32.1     2     FREMONT
    GENERAL CORPORATION AND SUBSIDIARIES




---



##### Table of Contents



Item 1.Financial Statements
   Consolidated Balance Sheets
  March 31,



December 31,(Thousands of
    dollars, except share data)


2007



2006(Unaudited)ASSETSCash and cash equivalents


$
1,628,441



$
761,642Investment securities classified as available-for-sale at fair
    value



596




633Federal Home Loan Bank stock at cost



172,960




111,860Loans held for investment  net



2,265




6,257,306Commercial real estate loans held for sale  net



6,223,233




Accrued interest receivable



48,370




53,497Real estate owned  net



299




299Premises and equipment  net



31,220




67,859Deferred income taxes  net








52,576Other assets



342,026




268,932Assets of discontinued operations held for sale



4,836,385




5,315,920TOTAL ASSETS


$
13,285,795



$
12,890,524LIABILITIESDeposits:Savings accounts


$
1,254,360



$
1,101,137Money market deposit accounts



461,771




586,158Certificates of deposit



8,945,143




8,302,49310,661,274




9,989,788Senior Notes due 2009



165,967




165,895Junior Subordinated Debentures



103,093




103,093Other liabilities



159,330




210,586Liabilities of discontinued operations held for sale



1,653,753




1,307,205TOTAL LIABILITIES



12,743,417




11,776,567Commitments and contingencies








STOCKHOLDERS EQUITYPreferred stock, par value $.01 per share 
    Authorized: 2,000,000 shares; none issued








Common stock, par value $1 per share  Authorized:
    150,000,000 shares; issued and outstanding:
    (2007  80,255,000 and 2006  79,074,000)



77,315




75,983Additional paid-in capital



344,384




324,064Retained earnings



134,773




728,766Deferred compensation



(18,990
)



(20,694
)Accumulated other comprehensive income



4,896




5,838TOTAL STOCKHOLDERS EQUITY



542,378




1,113,957TOTAL LIABILITIES AND STOCKHOLDERS EQUITY


$
13,285,795



$
12,890,524   The accompanying notes are an
    integral part of these statements.
   2007 QUARTERLY
    REPORT     3




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##### Table of Contents



Consolidated Statements of Operations
    (Unaudited)
  Three Months Ended
    March 31,(Thousands of
    dollars, except per share data)


2007



2006INTEREST INCOME:Interest and fee income on loans:Commercial


$
149,574



$
109,534Other



39




87149,613




109,621Interest income  other



12,833




6,769162,446




116,390INTEREST EXPENSE:Deposits



82,005




36,000Senior Notes



3,350




3,546Junior Subordinated Debentures



2,320




2,32087,675




41,866Net interest income



74,771




74,524Provision for loan losses



221




3,895Net interest income after provision for loan losses



74,550




70,629Other non-interest income



(767
)



2,22173,783




72,850NON-INTEREST EXPENSE:Compensation and related



21,702




26,640Occupancy



5,806




3,423Other



23,867




18,82451,375




48,887INCOME BEFORE INCOME TAXES



22,408




23,963Income tax expense



10,179




9,611Income from continuing operations



12,229




14,352Income (loss) from discontinued operations, net of income taxes
    of $(79,695) and $11,850



(602,840
)



17,335Net income (loss)


$
(590,611
)


$
31,687EARNINGS PER SHARE:Basic:Income from continuing operations


$
0.16



$
0.19Income (loss) from discontinued operations, net of income taxes



(8.02
)



0.24Net income (loss)


$
(7.86
)


$
0.43Diluted:Income from continuing operations


$
0.16



$
0.19Income (loss) from discontinued operations, net of income taxes



(7.90
)



0.23Net income (loss)


$
(7.74
)


$
0.42Cash Dividends Declared per Common Share


$




$
0.11   The accompanying notes are an
    integral part of these statements.
   4     FREMONT
    GENERAL CORPORATION AND SUBSIDIARIES




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##### Table of Contents



Consolidated Statements of Changes in
    Stockholders Equity (Unaudited)
  Common Stock















AccumulatedNumber of







Additional











OtherOutstanding







Paid-in



Retained



Deferred



Comprehensive(in
    thousands, except per share amounts)


Shares



Amount



Capital



Earnings



Compensation



Income



TotalBalance at December 31, 2005



77,497



$
77,497



$
341,800



$
966,112



$
(43,357
)


$
14,754



$
1,356,806Net income


















31,687














31,687Cash dividends declared  $0.11 per share


















(8,534
)













(8,534
)Reclassification of deferred compensation for restricted stock








(1,485
)



(19,417
)








20,902









Shares issued, acquired or allocated for employee benefit plans



389









(250
)








(25,679
)








(25,929
)Amortization of restricted stock













3,747



















3,747Shares allocated to ESOP













(1,370
)








24,315









22,945Change in cost of common stock

































held in trust























(2,759
)








(2,759
)Net change in unrealized gain on

































investments and residual interests,

































net of deferred taxes




























(2,028
)



(2,028
)Excess tax benefits relating to share-based

































payments













2,050



















2,050Other adjustments













(437
)








437









Balance at March 31, 2006



77,886



$
76,012



$
326,123



$
989,265



$
(26,141
)


$
12,726



$
1,377,985Balance at December 31, 2006



79,074



$
75,983



$
324,064



$
728,766



$
(20,694
)


$
5,838



$
1,113,957Net loss


















(590,611
)













(590,611
)Cash dividends adjustment


















5














5Adoption of FIN No. 48


















(3,387
)













(3,387
)Retirement of common stock



(124
)



(83
)



83



















Restricted stock vested








130




14,656



















14,786Shares issued, acquired or allocated for employee benefit plans



20









(2,366
)








(4,798
)








(7,164
)Amortization of restricted stock













1,916



















1,916Shares allocated to ESOP



1,285




1,285




8,249









3,334









12,868Change in cost of common stock held in trust























950









950Net change in unrealized gain on investments and residual
    interests, net of deferred taxes




























(942
)



(942
)GSOP fair value adjustment













(2,218
)








2,218









Balance at March 31, 2007



80,255



$
77,315



$
344,384



$
134,773



$
(18,990
)


$
4,896



$
542,378   The accompanying notes are an
    integral part of these statements.
   2007 QUARTERLY
    REPORT     5




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##### Table of Contents



Consolidated Statements of Cash Flows
    (Unaudited)
  Three Months Ended
    March 31,(Thousands of
    dollars)


2007



2006CASH FLOWS FROM OPERATING ACTIVITIESNet income (loss)


$
(590,611
)


$
31,687Less: income (loss) from discontinued operations



(602,840
)



17,335Income from continuing operations



12,229




14,352Adjustments to reconcile income from continuing operations to
    net cash used in operating activities:Provision for loan losses



221




3,895Provision for deferred income taxes



1,145




13,801Depreciation and amortization



8,400




(997
)Compensation expense related to deferred compensation plans



(4,791
)



5,419Change in accrued interest



(5,607
)



(12,056
)Change in other assets



(141,701
)



7,531Change in accounts payable and other liabilities



(66,191
)



(30,282
)Originations and advances of commercial real estate loans held
    for sale



(968,289
)



Payments received from and sale of commercial real estate loans
    held for sale



1,003,412




NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES 
    CONTINUING OPERATIONS



(161,172
)



1,663NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES 
    DISCONTINUED OPERATIONS



56,157




(1,202,370
)NET CASH USED IN OPERATING ACTIVITIES



(105,015
)



(1,200,707
)CASH FLOWS FROM INVESTING ACTIVITIESOriginations of loans held for investment








(1,025,339
)Payments received from and sales of loans held for investment








425,438Investment securities available for sale:Purchases








Maturities or repayments



107




68Net purchases of FHLB stock



(61,100
)



(38,493
)Purchases of premises and equipment



(3,852
)



(6,595
)NET CASH USED IN INVESTING ACTIVITIES  CONTINUING
    OPERATIONS



(64,845
)



(644,921
)NET CASH PROVIDED BY INVESTING ACTIVITIES 
    DISCONTINUED OPERATIONS



29,360




91,931NET CASH USED IN INVESTING ACTIVITIES



(35,485
)



(552,990
)CASH FLOWS FROM FINANCING ACTIVITIESDeposits accepted, net of repayments



671,486




654,987Extinguishment of Senior Notes and LYONs








(2,963
)Dividends paid



(9,489
)



(7,717
)Excess tax benefits related to share-based payments








2,050Purchase of company common stock for deferred compensation plans



(12,796
)



(33,271
)NET CASH PROVIDED BY FINANCING ACTIVITIES  CONTINUING
    OPERATIONS



649,201




613,086NET CASH PROVIDED BY FINANCING ACTIVITIES 
    DISCONTINUED OPERATIONS



358,098




962,521NET CASH PROVIDED BY FINANCING ACTIVITIES



1,007,299




1,575,607Increase (decrease) in cash and cash equivalents



866,799




(178,090
)Cash and cash equivalents at beginning of period



761,642




768,643Cash and cash equivalents at end of period


$
1,628,441



$
590,553   The accompanying notes are an
    integral part of these statements.
   6     FREMONT
    GENERAL CORPORATION AND SUBSIDIARIES




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##### Table of Contents



Consolidated Statements of Comprehensive
    Income (Loss) (Unaudited)
  Three Months Ended
    March 31,(Thousands of
    dollars)


2007



2006Net income (loss)


$
(590,611
)


$
31,687Other comprehensive income (loss):Net change in unrealized gains (losses) during the period:Residual interests in securitized loans



(1,561
)



(5,366
)Investment securities



(1
)



1,966(1,562
)



(3,400
)Less income tax benefit



(620
)



(1,372
)Other comprehensive loss



(942
)



(2,028
)Total comprehensive income (loss)


$
(591,553
)


$
29,659    2007 QUARTERLY
    REPORT     7




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##### Table of Contents



Notes to Consolidated Financial
    Statements (Unaudited)
  NOTE 1 
    BASIS OF PRESENTATION
 Overview
   Form 10-K Form 10-Q www.fremontgeneral.com www.sec.gov 310/315-5500 invrel@fmt.com
  Exit from Sub-prime Mortgage
    Business; Cease and Desist Order. sub-prime
    sub-prime
    Form 8-K
  Residential Real Estate
    Transactions.
   8     FREMONT
    GENERAL CORPORATION AND SUBSIDIARIES




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##### Table of Contents



Subsequent
    Events
 Commercial Real Estate
    Transaction. i i i i i i i i
  Transaction with Gerald J.
    Ford.
  Discontinued
    Operations
      2007 QUARTERLY
    REPORT     9




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##### Table of Contents



General
     Form 10-K
  NOTE
    2  RECENT ACCOUNTING STANDARDS
        10     FREMONT
    GENERAL CORPORATION AND SUBSIDIARIES




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##### Table of Contents



NOTE 3 
    CASH AND CASH EQUIVALENTS
     March 31,

December 31,(Thousands of
    dollars)

2007

2006Cash on hand

$
291

$
248Deposits in other financial institutions


553,315


118,228Short-term money market funds


535,131


46,971FHLB shareholder transaction account


489,718


397,548Federal Reserve account


20,046


2,078U.S. Government Agency money market fund





169,545Short-term commercial paper


29,940


27,024Total cash and cash equivalents

$
1,628,441

$
761,642      2007 QUARTERLY
    REPORT     11




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##### Table of Contents



NOTE 4 
    DISCONTINUED OPERATIONS
 EITF 03-13, (EITF 03-13), EITF 03-13.
  Assets and Liabilities of
    Discontinued Operations
    March 31,

December 31,(Thousands of
    dollars)

2007

2006Residential real estate loans held for sale  net

$
4,418,421

$
4,949,747Servicing advances


172,519


92,175Mortgage servicing rights  net


92,767


101,172Residual interests in securitized loans at fair value


60,773


85,468Accrued interest receivable


29,306


18,572Investment securities classified as available-for-sale


21,211


21,282REO


20,043


12,790Loans receivable


10,203


8,568Other assets


11,142


26,146Total assets to be sold

$
4,836,385

$
5,315,920Federal Home Loan Bank advances

$
800,000

$
1,060,000Warehouse lines of credit


618,098


Loan repurchase reserve


190,209


140,923Premium repurchase reserve


1,859


6,878Premium recapture reserve


396


1,564Other liabilities


43,191


97,840Total liabilities

$
1,653,753

$
1,307,205   Residential Real Estate Loans
    Held for Sale and Valuation
    Reserve:
   12     FREMONT
    GENERAL CORPORATION AND SUBSIDIARIES




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##### Table of Contents



Residential Real
    Estate Loans Held For Sale

March 31,


December 31,(Thousands of
    dollars)

2007


2006Loan principal balance:First trust deeds

$
4,711,668


$
4,843,547Second trust deeds


356,323



345,8455,067,991



5,189,392Net deferred direct origination costs


33,828



38,9405,101,819



5,228,332Valuation reserve


(683,398
)


(278,585
)Loans held for sale  net

$
4,418,421


$
4,949,747Loans held for sale on non-accrual status

$
172,306


$
64,652   Valuation Reserve

Three Months Ended
    March 31,(Thousands of
    dollars)

2007


2006Beginning balance

$
278,585


$
32,753Provision


393,243



17,334Discounted sales


(54,425
)


(17,378
)Charge-offs


(7,870
)


(1,698
)Transfer from repurchase reserve


73,865



17,708Ending balance

$
683,398


$
48,719   Loan Repurchase
    Reserve:
  Three Months Ended
    March 31,(Thousands of
    dollars)

2007


2006Beginning balance

$
140,923


$
14,556Provision


130,737



30,545Charge-offs for loan repricing


(7,586
)


(4,056
)Transfer to valuation reserve


(73,865
)


(17,708
)Ending balance

$
190,209


$
23,337   Premium Repurchase and Recapture
    Reserve:
  Three Months Ended
    March 31,(Thousands of
    dollars)

2007


2006Beginning balance

$
8,442


$
4,259Provision for premium recapture on repurchased loans


54



2,308Provision for standard premium recapture


(228
)


423Refunds


(6,013
)


(4,053
)Ending balance

$
2,255


$
2,937    2007 QUARTERLY
    REPORT     13




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##### Table of Contents



Mortgage Servicing
    Rights:
  Three Months Ended
    March 31,(Thousands of
    dollars)

2007


2006Beginning balance

$
101,677


$
46,022Additions


10,566



7,359Amortization


(16,497
)


(8,044
)Ending balance before valuation allowance


95,746



45,337Valuation allowance:Beginning balance


(505
)


Provision for temporary impairment


(2,474
)


Ending balance


(2,979
)


Mortgage servicing rights  net

$
92,767


$
45,337Estimated fair value

$
100,644


$
51,122     March 31,


December 31,2007


2006Weighted-average life (years)


1.4



1.4Weighted-average annual prepayment speed


37.3
%


38.8
%Weighted-average annual discount rate


19.7
%


19.6
%   Residual
    Interests in Securitized
    Loans: The
    following table summarizes the activity of the Companys
    retained residual interests within discontinued operations for
    the periods indicated:
  Three Months Ended
    March 31,(Thousands of
    dollars)

2007


2006Beginning balance at fair value

$
85,468


$
170,723Sales of residual interests






(77,220
)Interest accretion


6,226



16,809Cash received


(29,360
)


(14,710
)Change in unrealized losses


(1,561
)


(5,366
)Other-than-temporary impairment






Ending balance at fair value

$
60,773


$
90,236     March 31,

December 31,2007

2006Original principal amount of loans securitized

$
17,536,329

$
17,536,329Current principal amount of loans securitized

$
10,062,965

$
10,938,440Current delinquent principal amount (over 60 days)

$
1,281,452

$
1,142,794Inception to date credit losses (net of recoveries)

$
99,340

$
53,241     March 31,


December 31,2007


2006Weighted-average life (years)


2.28



2.50Weighted-average annual prepayment speed


25.0
%


25.0
%Weighted-average lifetime credit losses


5.5
%


5.5
%Weighted-average annual discount rate


24.0
%


24.0
%    14     FREMONT
    GENERAL CORPORATION AND SUBSIDIARIES




---



##### Table of Contents



Operating Results of
    Discontinued Operations
  Three Months Ended
    March 31,(Thousands of
    dollars)


2007



2006Interest income


$
136,104



$
156,480Non-interest income



(618,860
)



(887
)Revenues from discontinued operations


$
(482,756
)


$
155,593Income (loss) on sale of discontinued operations


$
(630,692
)



(15,176
)Interest income



136,104




156,480Interest expense



(87,509
)



(77,013
)Provision for loan loss



(13
)



14Loan servicing income



32,836




21,349Mortgage servicing rights amortization and impairment provision



(22,111
)



(8,044
)Other non-interest income



1,107




984Compensation and related



(50,821
)



(32,770
)Occupancy



(12,439
)



(4,207
)Other non-interest expense



(48,997
)



(12,432
)Income (loss) from discontinued operations



(682,535
)



29,185Income tax (expense) benefit



79,695




(11,850
)Income (loss) from discontinued operations, net of income taxes


$
(602,840
)


$
17,335               NOTE 5 
    COMMERCIAL REAL ESTATE LOANS HELD FOR SALE
 i
     2007 QUARTERLY
    REPORT     15




---



##### Table of Contents



(Thousands of
    dollars)


March 31,



December 31,2007



2006Loans outstanding


$
7,085,780



$
6,749,316Participations sold



(576,510
)



(202,014
)Loans outstanding, net of participations sold



6,509,270




6,547,302Unamortized deferred origination fees and costs



(53,579
)



(59,804
)Loans outstanding



6,455,691




6,487,498Carrying value adjustment/allowance for loan loss



(232,458
)



(230,398
)Loans held for sale  net


$
6,223,233



$
6,257,100       (Thousands of
    dollars)


March 31,



December 31,2007



2006Non-accrual commercial real estate loans held for sale


$
1,058,894



$
1,110,965Restructured commercial real estate loans on accrual basis


$




$
   NOTE 6 
    REAL
    ESTATE OWNED   (Thousands of
    dollars)


March 31,



December 31,2007



2006Commercial real estate


$
299



$
299Valuation reserve








Real estate owned  net


$
299



$
299   NOTE 7 
    EXIT
    AND DISPOSAL COSTS i No. 03-13.
   16     FREMONT
    GENERAL CORPORATION AND SUBSIDIARIES




---



##### Table of Contents



i i
  NOTE 8 
    INCOME
    TAXES   Three Months Ended
    March 31,(Thousands of
    dollars)


2007



2006Federal:Current


$
7,488



$
(2,632
)Deferred



1,752




11,6949,240




9,062State:Current



1,546




(1,558
)Deferred



(607
)



2,107939




549Total income tax expense


$
10,179



$
9,611       March 31,



December 31,(Thousands of
    dollars)


2007



2006Deferred tax assets:Mark-to-market on loans held for sale


$
280



$
7,398Premium recapture and repurchase reserves



81,181




62,136Allowance for loan losses



38,357




40,262Compensation related items



52,245




29,150Net operating loss carryforward



134,827




21,005Other  net



3,741




164Total deferred tax assets



310,631




160,115Deferred tax liabilities:Loan origination costs and fees



(15,530
)



(16,902
)Mortgage servicing



(35,471
)



(37,718
)State income and franchise taxes



(32,642
)



(17,924
)Total deferred tax liabilities



(83,643
)



(72,544
)Net deferred tax asset before valuation allowance


$
226,988



$
87,571Valuation allowance



(226,988
)



(34,995
)Net deferred tax asset after valuation allowance


$




$
52,576    2007 QUARTERLY
    REPORT     17




---



##### Table of Contents



NOTE 9 
    DEBT 
    FREMONT GENERAL CORPORATION   March 31,


December 31,(Thousands of
    dollars)


2007


2006Senior Notes due 2009, less discount (2007  $563;
    2006  $635)


$
165,967


$
165,895Junior Subordinated Debentures



103,093



103,093$
269,060


$
268,988     NOTE 10 
    DEPOSITS,
    FHLB ADVANCES, FEDERAL RESERVE AND WAREHOUSE LINES OF
    CREDIT  FIL       Maturing by


Weighted(Thousands of
    dollars)


Amount



March 31,


Average
    Rate$
8,832,554




2008



5.25
%66,276




2009



5.40
%28,931




2010



5.67
%3,101




2011



4.99
%14,281




2012



5.21
%$
8,945,143








5.26
%    18     FREMONT
    GENERAL CORPORATION AND SUBSIDIARIES




---



##### Table of Contents



Three
    Months Ended March 31,(Thousands of
    dollars)


2007



2006Savings and money market deposit accounts


$
19,721



$
13,900Certificates of deposit



110,632




76,955Penalties for early withdrawal



(669
)



(170
)$
129,684



$
90,685             NOTE 11 
    OTHER
    ASSETS AND LIABILITIES   March 31,



December 31,(Thousands of
    dollars)


2007



2006OTHER ASSETSFederal and state(s) income taxes receivable


$
290,479



$
220,936Assets held in SERP  mutual funds



32,984




33,536Other assets



18,563




14,460Total other assets


$
342,026



$
268,932     2007 QUARTERLY
    REPORT     19




---



##### Table of Contents



March 31,



December 31,(Thousands of
    dollars)


2007



2006OTHER LIABILITIESDeferred compensation obligation


$
41,000



$
52,926Accrued interest payable



40,299




29,884Accounts payable



38,205




30,256Accrued incentive compensation



5,657




32,368Restricted stock accrual



2,126




14,786Accrued ESOP expense








15,664Other



32,043




34,702Total other liabilities


$
159,330



$
210,586   NOTE 12 
    SHARE-BASED
    PAYMENTS   Stock
    Options
   Restricted
    Stock Awards
     WeightedAverageNumber of



Grant DateShares



Fair ValueNonvested at December 31, 2006



3,091,640



$
16.50Granted



20,000




7.40Vested



(849,010
)



18.23Forfeited



(124,766
)



13.36Nonvested at March 31, 2007



2,137,864



$
15.89     NOTE 13 
    DEFERRED
    COMPENSATION    20     FREMONT
    GENERAL CORPORATION AND SUBSIDIARIES




---



##### Table of Contents



March 31,



December 31,(Thousands of
    dollars)


2007



2006SERP and EBP


$
17,259



$
18,209GSOP



1,731




2,485Total deferred compensation


$
18,990



$
20,694   NOTE 14 
    INDUSTRIAL
    BANK REGULATORY CAPITAL     March 31, 2007Actual



Minimum Required(Thousands of
    dollars, except percents)


Amount



Ratio



Amount



RatioTier-1 Leverage Capital


$
761,220




5.22
%


$
729,163




5.00
%Risk-Based Capital:Tier-1



761,220




5.24
%



2,033,944




14.00
%Total



761,419




5.24
%



1,452,817




10.00
%   December 31,
    2006Actual



Minimum Required(Thousands of
    dollars, except percents)


Amount



Ratio



Amount



RatioTier-1 Leverage Capital


$
1,326,563




10.09
%


$
657,061




5.00
%Risk-Based Capital:Tier-1



1,326,563




8.77
%



907,639
*



6.00
%*Total



1,392,814




9.21
%



1,512,732




10.00
%   *
    Based on the terms of the order, as of December 31, 2006
    the minimum required amount and ratio would have been $2,117,824
    and 14%, respectively.   2007 QUARTERLY
    REPORT     21




---



##### Table of Contents



March 31,



December 31,(Thousands of
    dollars)


2007



2006Common stockholders equity at FIL


$
763,401



$
1,326,557Less: Disallowed portion of deferred tax assets and mortgage
    servicing rights



(2,188
)



Net unrealized losses on available-for-sale securities



7




6Total Tier-1 Capital



761,220




1,326,563Add: Allowable portion of the allowance for loan losses



199




66,251Total Risk-Based Capital (Tier-1 and Tier-2)


$
761,419



$
1,392,814   NOTE 15 
    COMMITMENTS
    AND CONTINGENCIES   Legal
    Actions:
   Enron
    Corp., et al v. J.P. Morgan Securities, et
    al:
 No. 03-92677,
  The
    Bank of New York v. Fremont General Corporation:
 No. 03-9238,
  Fremont
    Indemnity Company (in Liquidation) v. Fremont General
    Corporation, et al:
    22     FREMONT
    GENERAL CORPORATION AND SUBSIDIARIES




---



##### Table of Contents



and/or
        Fremont
    Indemnity Company (in Liquidation as Successor in Interest to
    Comstock Insurance Company) v. Fremont General Corporation,
    et al:
     Gerling
    Global Reinsurance Corporation of America v. Fremont
    General Corporation, et al:
    2007 QUARTERLY
    REPORT     23




---



##### Table of Contents



Insurance
    Commissioner v. Rampino, et al:
   Order
    to Cease & Desist:
     ERISA
    Complaints:
    24     FREMONT
    GENERAL CORPORATION AND SUBSIDIARIES




---



##### Table of Contents



Securities
    Complaints:
   NAACP
    Litigation:
   Massachusetts
    Attorney General Action:
   NOTE 16 
    OPERATIONS
    BY REPORTABLE SEGMENT   i
       2007 QUARTERLY
    REPORT     25




---



##### Table of Contents



Commercial


Corporate and


Intersegment


Total(Thousands of
    dollars)

Real
    Estate


Retail
    Banking


Eliminations


ConsolidatedThree months ended March 31, 2007Total revenues

$
148,630


$
93,394


$
(80,345
)

$
161,679Net interest income

$
69,229


$
5,542


$



$
74,771Provision for loan losses


(221
)










(221
)Other non-interest income


(944
)


177







(767
)Compensation


(6,651
)


(15,051
)






(21,702
)Occupancy


(923
)


(4,883
)






(5,806
)Other non-interest expense


2,598



(26,465
)






(23,867
)Allocations


(1,624
)


1,624







Income (loss) before income taxes


61,464



(39,056
)






22,408Income tax expense














(10,179
)Income (loss) from continuing operations


61,464



(39,056
)






12,229Loss from discontinued operations, net of income taxes














(602,840
)Net income (loss)

$
61,464


$
(39,056
)

$



$
(590,611
)Assets  continuing operations

$
6,273,779


$
2,176,713


$
(1,082
)

$
8,449,410Assets  discontinued operations














4,836,385Total consolidated assets

$
6,273,779


$
2,176,713


$
(1,082
)

$
13,285,795   Commercial


Corporate and


Intersegment


Total(Thousands of
    dollars)

Real
    Estate


Retail
    Banking


Eliminations


ConsolidatedThree months ended March 31, 2006Total revenues

$
111,057


$
58,157


$
(50,603
)

$
118,611Net interest income

$
58,938


$
15,586


$



$
74,524Provision for loan losses


(3,891
)


(4
)






(3,895
)Other non-interest income


1,523



698







2,221Compensation


(6,626
)


(20,014
)






(26,640
)Occupancy


(709
)


(2,714
)






(3,423
)Other non-interest expense


(4,404
)


(14,420
)






(18,824
)Allocations


(1,212
)


1,212







Income (loss) before income taxes


43,619



(19,656
)






23,963Income tax expense














(9,611
)Income (loss) from continuing operations


43,619



(19,656
)






14,352Income from discontinued operations, net of income taxes














17,335Net income (loss)

$
43,619


$
(19,656
)

$



$
31,687Assets  continuing operations

$
5,253,449


$
993,610


$
(5,641
)

$
6,241,418Assets  discontinued operations














6,865,631Total consolidated assets

$
5,253,449


$
993,610


$
(5,641
)

$
13,107,049    26     FREMONT
    GENERAL CORPORATION AND SUBSIDIARIES




---



##### Table of Contents



NOTE 17 
    EARNINGS PER SHARE
   Three Months EndedMarch 31,(Thousands of shares
    and dollars, except per share data)

2007


2006Income from continuing operations(numerator for basic and diluted earnings per share)

$
12,229


$
14,352Weighted-average shares(denominator for basic earnings per share)


75,121



73,513Effect of dilutive securities using the treasury stock method
    for restricted stock and stock options:Employee benefit plans


1,183



1,158Restricted stock






410Stock options






99Dilutive potential common shares


1,183



1,667Adjusted weighted-average shares(denominator for diluted earnings per share)


76,304



75,180Basic earnings per share from continuing operations

$
0.16


$
0.19Diluted earnings per share from continuing operations

$
0.16


$
0.19     NOTE 18 
    SUBSEQUENT EVENTS
 i
   2007 QUARTERLY
    REPORT     27




---



##### Table of Contents



Item 2. Managements Discussion
    and Analysis of
    Financial Condition and Results of Operations
  OVERVIEW
       lease-up
         28     FREMONT
    GENERAL CORPORATION AND SUBSIDIARIES




---



##### Table of Contents



Form 10-K
  CRITICAL
    ACCOUNTING POLICIES AND ESTIMATES
   Form 10-K
         2007 QUARTERLY
    REPORT     29




---



##### Table of Contents



EARNINGS
    PERFORMANCE
       Net
    Interest Income
   Residential
    real estate loans
      Commercial
    real estate loans
     30     FREMONT
    GENERAL CORPORATION AND SUBSIDIARIES




---



##### Table of Contents



Short
    term investments
    Deposits
    Broker
    Deposits
    Net
    Interest Income Table
     2007 QUARTERLY
    REPORT     31




---



##### Table of Contents



Three Months Ended
    March 31,2007



2006Average







Yield/



Average







Yield/(Thousands of
    dollars, except percents)


Balance



Interest



Cost



Balance



Interest



CostInterest-earning
    assets(1):Commercial real estate loans


$
6,710,061



$
149,574




9.04
%


$
5,032,346



$
109,534




8.83
%Cash equivalents and investment securities



959,008




12,872




5.44
%



538,600




6,856




5.16
%Total interest-earning assets


$
7,669,069



$
162,446




8.59
%


$
5,570,946



$
116,390




8.47
%Interest-bearing liabilities:Time deposits


$
8,560,609



$
109,963




5.21
%


$
7,422,836



$
76,809




4.20
%Savings deposits



1,766,058




19,721




4.53
%



1,579,925




13,876




3.56
%Senior Notes due 2009



166,530




3,350




8.05
%



176,180




3,546




8.05
%LYONs




























Junior Subordinated Debentures



103,093




2,320




9.00
%



103,093




2,320




9.00
%Interest-bearing liabilities allocated
    to discontinued operations



(3,289,665
)



(47,679
)



5.88
%



(4,267,319
)



(54,685
)



5.20
%Total interest-bearing liabilities


$
7,306,625



$
87,675




4.87
%


$
5,014,715



$
41,866




3.39
%Net interest income







$
74,771













$
74,524Percent of average interest-earning assets:Interest income













8.59
%













8.47
%Interest expense













4.64
%













3.05
%Net interest margin













3.95
%













5.42
%  (1)
    
    Average loan balances include
    non-accrual loan balances.  Three Months Ended
    March 31, 2007 Compared to 2006Change Due To(Thousands of
    dollars)


Volume(1)



Rate



TotalCash equivalent and investment securities


$
5,643



$
373



$
6,016Commercial real estate loans



37,398




2,642




40,040Total increase in interest income



43,041




3,015




46,056Time deposits



(14,615
)



(18,539
)



(33,154
)Savings deposits



(2,078
)



(3,767
)



(5,845
)Senior Notes due 2009



196









196Junior Subordinated Debentures













Interest-bearing liabilities allocated to discontinued operations



(14,170
)



7,164




(7,006
)Total (increase) in interest expense



(30,667
)



(15,142
)



(45,809
)Increase / (decrease) in net interest income


$
12,374



$
(12,127
)


$
247  (1)
    
    Changes in rate/volume are
    allocated to change in volume.  Non-Interest
    Expense
    2007 QUARTERLY
    REPORT     32




---



##### Table of Contents



i
    Three Months
    EndedMarch 31,(Thousands of
    dollars)


2007


2006Legal, professional and other outside services


$
10,058


$
5,138Information technology



3,731



3,090Printing, supplies and postage



635



1,309Advertising and promotion



2,056



2,379Auto and travel



1,177



1,020Leasing and loan expense



440



242Net real estate owned expenses



83



1,192Telephone



733



654All other



4,954



3,800Total other expenses


$
23,867


$
18,824   Income
    Taxes
   Discontinued
    Operations
              2007 QUARTERLY
    REPORT     33




---



##### Table of Contents



Review of
    Financial Condition
  Commercial
    Real Estate Loans Held for Sale
 i
      March 31,



December 31,(Thousands of
    dollars, except percents)


2007



2006Non-accrual loans held for sale


$
1,058,894



$
1,110,965Real estate owned / foreclosed assets


$
299



$
299Accruing loans receivable past due 90 days or more


$




$
Restructured loans on accrual status


$




$
Delinquent loans 60 days past due or greater


$
288,915



$
98,747Non-accrual loans to loans held for sale



16.40
%



17.12
%     Assets
    and Liabilities of Discontinued Operations
    LIQUIDITY
    AND CAPITAL RESOURCES
    34     FREMONT
    GENERAL CORPORATION AND SUBSIDIARIES




---



##### Table of Contents



Number
    of(Thousands of
    dollars)


Accounts


DepositsSavings and money market deposit accounts



39,414


$
1,716,131Certificates of deposit:Retail



137,806



6,690,724Brokered



N/M



2,254,419Total deposits






$
10,661,274N/M = not meaningful                    2007 QUARTERLY
    REPORT     35




---



##### Table of Contents



OFF-BALANCE
    SHEET ACTIVITIES
     FORWARD
    LOOKING STATEMENTS
 This report may contain forward-looking
    statements within the meaning of Section 27A of the
    Securities Act of 1933 and Section 21E of the Securities
    Exchange Act of 1934, and are made pursuant to the safe harbor
    provisions of the Private Securities Litigation Reform Act of
    1995. Such forward-looking statements and the currently reported
    results are based upon our current expectations and beliefs
    concerning future developments and their potential effects upon
    us. These statements and our results reported herein are not
    guarantees of future performance or results and there can be no
    assurance that actual developments and economic performance will
    be as anticipated by us. Actual developments
    and/or
    results may differ significantly and adversely from our expected
    or currently reported results as a result of significant risks,
    uncertainties and factors, often beyond our control (as well as
    the various assumptions utilized in determining our
    expectations), and which include, but are not limited to, the
    following:
  
    the impact of the Companys withdrawal from the
    sub-prime residential real estate mortgage loan origination
    business;
    the impact of the sale of FILs commercial real estate
    lending business and related loan portfolio;
    the uncertainty of the closing of an investment in FIL or
    Fremont General by an entity controlled by Gerald J. Ford
    and the ability of the Company to enter into any alternative
    transactions;
    the ability of the Company to enter into new lending
    businesses;
    the variability of general and specific economic conditions
    and trends, and changes in, and the level of, interest rates;
    the impact of competition and pricing environments on deposit
    products;
    the ability to access the necessary capital resources in a
    cost-effective manner to fund our operations;
    our ability to sell our existing residential real estate
    loans held for sale and the prices obtained for such loans;
    our ability to realize the full principal amount of the
    participation interest in the commercial real estate loan
    portfolio sold to iStar;
    the impact of changes in the commercial real estate markets,
    in particular the housing market, and changes in the fair values
    of our assets and loans, including the value of the underlying
    real estate collateral;
    the ability to service, collect and realize the amounts
    outstanding, and the timing thereof, of loans and foreclosed
    real estate;   2007 QUARTERLY
    REPORT     36




---



##### Table of Contents




    the ability to appropriately estimate an adequate level for
    the valuation reserve for loans held for sale, the loan
    repurchase reserve and the premium recapture reserve, as well as
    the fair value of the retained mortgage servicing rights and
    residual interests in securitizations;
    changes in various economic and other factors which influence
    the timing and ultimate realization of the cash flows supporting
    our estimate of fair value for our residual interests in
    securitized loans and mortgage servicing rights;
    the effect of certain determinations or actions taken by, or
    the inability to secure regulatory approvals from, the Federal
    Deposit Insurance Corporation, the Department of Financial
    Institutions of the State of California or other regulatory
    bodies on various matters;
    the impact of the Order on the Companys ability to
    conduct its business;
    our ability to maintain cash flow, including at the Fremont
    General level, sufficient for us to meet our debt service and
    other obligations;
    the ability to maintain effective compliance with laws and
    regulations and control expenses;
    the impact and cost of adverse state and federal legislation
    and regulations, litigation, court decisions and changes in the
    judicial or regulatory climate;
    the impact of changes in federal and state tax laws and
    interpretations, including tax rate changes, and the effect of
    any adverse outcomes from the resolution of issues with taxing
    authorities;
    the ability to maintain an effective system of internal and
    financial disclosure controls, and to identify and remediate any
    control deficiencies, under the requirements of Section 404
    of the Sarbanes-Oxley Act of 2002; and
    other events, risks and uncertainties discussed elsewhere in
    this
    Form 10-Q
    and from time to time in our other reports, press releases and
    filings with the Securities and Exchange Commission.  We undertake no obligation to publicly update such
    forward-looking statements.
  Item 3.Quantitative And Qualitative
    Disclosures About Market Risk
  MARKET
    RISK
      37     FREMONT
    GENERAL CORPORATION AND SUBSIDIARIES




---



##### Table of Contents



Form 10-K
  Item 4.Controls And Procedures
  EVALUATION
    OF DISCLOSURE CONTROLS AND PROCEDURES
 Rule 13a-15(e) Rules 13a-15(f) 15d-15(f).
    Form 10-K
  Form 10-Q Form 10-Q).
    
    The grading of some commercial loans were not consistent with
    the Companys loan grading guidelines; and
    the valuation methodology used for collateral dependant loans
    was inappropriate.     38     FREMONT
    GENERAL CORPORATION AND SUBSIDIARIES




---



##### Table of Contents



Form 10-Q
  REMEDIATION
    OF MATERIAL WEAKNESSES
 i
    CHANGES
    IN INTERNAL CONTROL OVER FINANCIAL REPORTING
    2007 QUARTERLY
    REPORT     39




---



##### Table of Contents



Item 1. Legal Proceedings
    Enron
    Corp., Et Al V. J.P. Morgan Securities, Et
    Al:
 No. 03-92677,
  The
    Bank of New York V. Fremont General Corporation:
 No. 03-9238,
  Fremont
    Indemnity Company (In Liquidation) V. Fremont General
    Corporation, Et Al:
   and/or
     40     FREMONT
    GENERAL CORPORATION AND SUBSIDIARIES




---



##### Table of Contents



Fremont
    Indemnity Company (In Liquidation as Successor in Interest to
    Comstock Insurance Company) V. Fremont General Corporation,
    Et Al:
     Gerling
    Global Reinsurance Corporation of America V. Fremont
    General Corporation, Et Al:
          41     FREMONT
    GENERAL CORPORATION AND SUBSIDIARIES




---



##### Table of Contents



Insurance
    Commissioner V. Rampino, Et Al:
   Order
    to Cease & Desist:
     ERISA
    Complaints:
   Securities
    Complaints:
   NAACP
    Litigation:
    42     FREMONT
    GENERAL CORPORATION AND SUBSIDIARIES




---



##### Table of Contents



Massachusetts
    Attorney General Action:
   Item 1A.Risk Factors
  Form 10-K
  Item 2.Unregistered Sales of Equity
    Securities and Use of Proceeds
  ISSUER
    PURCHASES OF EQUITY SECURITIES
 (d) Maximum
    Number(c) Total Number
    of

(or ApproximateShares (or Units)

Dollar Value) of(a) Total Number

(b) Average

Purchased as Part

Shares (or Units)of Shares

Price Paid

of Publicly

that May Yet Be(or Units)

per Share

Announced Plans

Purchased Under
    thePeriod

Purchased(1)

(or
    Unit)(2)

or Programs

Plans or
    Programs(3)JANUARY 1-31, 2007


787,763

$
16.21


787,763FEBRUARY 1-28, 2007


1,260

$
12.88


1,260MARCH 1-31, 2007


1,559

$
9.03


1,559TOTAL


790,582

$
16.19


790,582


1,524,389  (1)
    
    Shares of common stock acquired by
    the Company through purchases of shares under certain employee
    benefit plans at fair value.(2)
    
    The average price per share was
    $16.19 for the three months ended March 31, 2007.(3)
    
    A repurchase program for four
    million shares was announced to the public on February 27,
    2003, and a repurchase program for an additional four million
    shares was announced to the public on May 19, 2005.   43     FREMONT
    GENERAL CORPORATION AND SUBSIDIARIES




---



##### Table of Contents



Item 6.
    Exhibits  Exhibit
    No.


Description2.1


Asset Purchase Agreement, dated as of May 21, 2007, between
    Fremont Investment & Loan and iStar Financial Inc.
    (Incorporated by reference to Exhibit 2.1 to the
    Registrants Current Report on
    Form 8-K
    filed on May 24, 2007, Commission File Number
    001-08007)3.1


Restated Articles of Incorporation of Fremont General
    Corporation. (Incorporated by reference to Exhibit 3.1 to
    the Registrants Quarterly Report on
    Form 10-Q,
    for the period ended June 30, 1998, Commission File Number
    001-08007)3.2


Certificate of Amendment of Articles of Incorporation of Fremont
    General Corporation. (Incorporated by reference to
    Exhibit 3.2 to the Registrants Annual Report on
    Form 10-K,
    for the fiscal year ended December 31, 1998, Commission
    File Number
    001-08007)3.3(a)


Amended and Restated By-Laws of Fremont General Corporation.
    (Incorporated by reference to Exhibit 3.3 to the
    Registrants Annual Report on
    Form 10-K,
    for the fiscal year ended December 31, 1995, Commission
    File Number
    001-08007)3.3(b)


Fremont General Corporation Bylaw Amendment Adopted by the Board
    of Directors on November 20, 2003. (Incorporated by
    reference to Exhibit 3.3(b) to the Registrants Annual
    Report on
    Form 10-K,
    for the fiscal year ended December 31, 2003, Commission
    File Number
    001-08007)3.3(c)


Fremont General Corporation Bylaw Amendment Adopted by the Board
    of Directors on March 16, 2004. (Incorporated by reference
    to Exhibit 3.3(c) to the Registrants Quarterly Report
    on
    Form 10-Q,
    for the period ended June 30, 2004, Commission File Number
    001-08007)4.1


Form of Stock Certificate for Common Stock of the Registrant.
    (Incorporated by reference to Exhibit 4.1 to the
    Registrants Annual Report on
    Form 10-K,
    for the fiscal year ended December 31, 2000, Commission
    File Number
    001-08007)4.2


Indenture with respect to the 9% Junior Subordinated Debentures
    among the Registrant, the Trust and Bank of New York (originated
    with First Interstate Bank of California), a New York Banking
    Corporation, as trustee. (Incorporated by reference to
    Exhibit 4.3 to the Registrants Annual Report on
    Form 10-K,
    for the fiscal year ended December 31, 1995, Commission
    File Number
    001-08007)4.3


Amended and Restated Declaration of Trust with respect to the 9%
    Trust Originated Preferred Securities among the Registrant,
    the Regular Trustees, Bank of New York, a Delaware banking
    corporation, as Delaware trustee, and Bank of New York, N.A., a
    national banking association, as Institutional Trustee.
    (Incorporated by reference to Exhibit 4.5 to the
    Registrants Annual Report on
    Form 10-K,
    for the fiscal year ended December 31, 1995, Commission
    File Number
    001-08007)4.4


Preferred Securities Guarantee Agreement between the Registrant
    and Bank of New York, N.A., a national banking association, as
    Preferred Guarantee Trustee. (Incorporated by reference to
    Exhibit 4.6 to the Registrants Annual Report on
    Form 10-K,
    for the fiscal year ended December 31, 1995, Commission
    File Number
    001-08007)4.5


Common Securities Guarantee Agreement by the Registrant.
    (Incorporated by reference to Exhibit 4.7 to the
    Registrants Annual Report on
    Form 10-K,
    for the fiscal year ended December 31, 1995, Commission
    File Number
    001-08007)4.6


Form of Preferred Securities. (Included in Exhibit 4.5).
    (Incorporated by reference to Exhibit 4.8 to the
    Registrants Annual Report on
    Form 10-K,
    for the fiscal year ended December 31, 1995, Commission
    File Number
    001-08007)4.7


Form of Restricted Stock Agreement. (Incorporated by reference
    to Exhibit 4.2 to the Registrants Registration
    Statement on
    Form S-8
    filed on May 18, 2006, Registration Number
    333-134236)4.8


Form of Nonqualified Stock Option Agreement. (Incorporated by
    reference to Exhibit 4.3 to the Registrants
    Registration Statement on
    Form S-8
    filed on May 18, 2006, Registration Number
    333-134236)4.9


Investment Agreement, dated as of May 21, 2007, by and
    among the Registrant, Fremont Investment & Loan and
    Hunters Glen/Ford, Ltd. (Incorporated by reference to
    Exhibit 4.1 to the Registrants Current Report on
    Form 8-K
    filed on May 24, 2007, Commission File Number
    001-08007)4.10


Form of Exchange and Shareholder Rights Agreement. (Incorporated
    by reference to Exhibit 4.2 to the Registrants
    Current Report on
    Form 8-K
    filed on May 24, 2007, Commission File Number
    001-08007)4.11


Form of Warrant. (Incorporated by reference to Exhibit 4.3
    to the Registrants Current Report on
    Form 8-K
    filed on May 24, 2007, Commission File Number
    001-08007)4.12


Form of Certificate of Determination. (Incorporated by reference
    to Exhibit 4.4 to the Registrants Current Report on
    Form 8-K
    filed on May 24, 2007, Commission File Number
    001-08007)31.1


Certification pursuant to Section 302 of the Sarbanes-Oxley
    Act of 2002.31.2


Certification pursuant to Section 302 of the Sarbanes-Oxley
    Act of 2002.32.1


Certification pursuant to Section 906 of the Sarbanes-Oxley
    Act of 2002.    2007 QUARTERLY
    REPORT     44




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##### Table of Contents



SIGNATURES
      Louis
    J. Rampino
  President and Chief Executive Officer
    Ronald
    J. Nicolas, Jr.
  Senior Vice President, Chief Financial Officer,
    Chief Accounting Officer and Treasurer
    (Principal Accounting Officer)
    2007 QUARTERLY
    REPORT     S-1