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                   US SECURITIES AND EXCHANGE COMMISSION
                          Washington, D.C. 20549

                                FORM 10-KSB
                                     
   [ X ]ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
                         AND EXCHANGE ACT OF 1934
                                     
                 For the fiscal year ended April 30, 1997

                     Commission file number:  0-18108
                                     
                        FINET HOLDINGS CORPORATION
              (Name of small business issuer in its charter)
                                     
                                 DELAWARE
                                94-3115180
  (State or other jurisdiction of incorporation or organization)     (IRS
                       Employer Identification No.)
                                     
                3021 CITRUS CIRCLE, WALNUT CREEK, CA 94598
                  (Address of principal executive offices)
                                     
                Issuer's telephone number:  (510) 988-6550

                         JANUARY 1 TO DECEMBER 31
(Former name, former address and former fiscal year, if changed since last
                                  report)
                                     
Securities registered under Section 12(b) of the Exchange Act:    NONE
Securities registered under Section 12(g) of the Exchange Act:  $.01 PAR
VALUE COMMON STOCK

Check  whether  the issue (1) filed all reports required  to  be  filed  by
Section  13 or 15(d) of the Exchange Act during the past 12 months (or  for
such shorter period that the registrant was required to file such reports),
and  (2) has been subject to such filing requirements for the past 90 days.
Yes........ No....X.....

Check  if there is no disclosure of delinquent filers in response  to  Item
405 of Regulation S-B is not contained in this form, and no disclosure will
be contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of  this  Form
10-KSB or any amendment to this Form 10-KSB. [   ]

The issuer's revenues for the fiscal year ended April 30, 1997 were
$4,366,232

The aggregate market value of voting common stock held by non-affiliates of
the registrant as of August 5, 1997 was $72,965,440.

The number of shares outstanding of the issuer's common stock, as of August
5, 1997 was 28,971,088

Documents incorporated by reference:  None

Transitional Small Business Disclosure Format (check one): Yes........
No....X.....
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                        FINET HOLDINGS CORPORATION
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                                ==========

This report contains 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. Readers are cautioned that actual results could
differ materially from those indicated in such statements as a result of
certain factors, including those set forth under "Certain Business
Considerations" and "Management's Discussion and Analysis of Financial
Condition  and Results of Operations" and elsewhere in, or incorporated by
reference into, this report.


                             TABLE OF CONTENTS
                                     
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Item  Description
Page
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                                  PART I

1     Description of
Business................................................  3
2     Description of
Property................................................ 11
3     Legal
Proceedings...................................................... 11
4     Submission of Matters to a Vote of Security
Holders.................... 12

                                  PART II
                                     
5     Market for Registrant's Common Equity and Related Stockholder
Matters.. 13
6     Management's Discussion and Analysis of Financial Condition
        and Results of
Operations............................................ 15
7     Financial
Statements................................................... 20
8     Changes in and Disagreements with Accountants
        on Accounting and Financial
Disclosure............................... 20

                                  PART III

9     Directors, Executive Officers, Promoters and Control Persons;
        Compliance With Section 16(a) of the Exchange
Act.................... 21
10    Executive
Compensation................................................. 24
11    Security Ownership of Certain Beneficial Owners and
Management......... 28
12    Certain Relationships and Related
Transactions......................... 30
13    Exhibits and Reports on Form 8-
K....................................... 31

Signatures............................................................. 33

                                 APPENDIX
                              Independent                         Auditors'
Report........................................... 34
           Consolidated      Balance      Sheet      at      April      30,
1997........................... 35
      Consolidated Statements of Operations for the years ended
                    April             30,             1997              and
1996............................................... 36
      Consolidated Statements of Stockholders' Equity for the years ended
                April          30,          1997          and          1996
 .............................................. 37
      Consolidated Statements of Cash Flows for the years ended
                April          30,          1997          and          1996
 .............................................. 38
                Notes           to          Consolidated          Financial
Statements............................. 40

</TABLE>
<PAGE> 3
                FINET HOLDINGS CORPORATION AND SUBSIDIARIES
                                     

                                  PART I
                                     
                     ITEM 1.  DESCRIPTION OF BUSINESS

GENERAL

Finet  Holdings  Corporation is a vertically integrated, technology-focused
developer  and  provider  of Internet and computer based  residential  real
estate services that offers all the elements essential to shop for a  home,
shop for a loan, and close the transaction.  Finet Holdings Corporation  is
a  systems and services integrator and marketer with a corporate mission of
providing  faster, easier, lower cost homeownership.  Its prior  activities
and  management, which focused solely on originating loans  as  a  mortgage
broker, were restructured and repositioned in 1996 to encompass the  entire
home  acquisition and financing process and add additional revenue sources.
This  new  integrated business approach is structured to take advantage  of
numerous  opportunities  presented  by a  highly  fragmented  industry  and
current  electronic  communication  and  data  handling  trends  that   are
beginning   to  transform  an  outdated  and  unnecessarily  tedious   home
acquisition and financing process.

All references to the "Company" or "Finet" herein shall mean Finet Holdings
Corporation and its wholly owned subsidiaries unless the context  otherwise
indicates.   The  Company's executive offices are located  at  3021  Citrus
Circle,  Walnut Creek, California 94598, and its telephone number is  (510)
988-6550.

COMPANY HISTORIES

This  annual  report includes detailed information about  both  Finet,  the
Registrant,  and, as a result of a reverse acquisition, Monument  Mortgage,
Inc., the entity deemed to be the reporting entity for accounting purposes.
Accordingly, summary historical information is provided about both firms.

Finet  Holdings  Corporation was founded in 1988 as William  and  Clarissa,
Inc.  ("W&C").  In 1991, W&C was reorganized, its unrelated prior  business
was  discontinued,  and all the outstanding stock of FINEX  ,  a  privately
owned  mortgage  brokerage business, was acquired.  In  l992,  the  Company
changed its name to Finet Holdings Corporation.

Thereafter, the Company has operated as a single service business  offering
mortgage  broker services but was not profitable.  Until 1995, the  Company
pursued the strategy of developing a national loan distribution network  by
converting existing mortgage brokers into mortgage broker franchisees under
the  Finet name.  However, this narrowly focused strategy failed to license
any  franchises or to integrate the emerging technologies that  impact  the
traditional process of buying a home.

In  1994 and 1995, losses were exacerbated by rapidly rising interest rates
and  declining loan originations and the Company's founder/Chairman and the
CEO   resigned.   In  early  1996,  the  Company  undertook   a   voluntary
recapitalization  that  included  negotiated  settlements  with  creditors,
conversion  of certain liabilities to equity and raising additional  equity
capital through private placements of its common shares.  (See Management's
Discussion  and  Analysis of Financial Condition and Results  of  Operation
("MD&A"))   During  that  year the Company was  operationally  dormant  and
repositioned its strategy toward a one-stop shopping enterprise by creating
the  means  to electronically connect prospective home buyers with  a  full
spectrum of homeowner service vendors.  As part of that shift, the  Company
acquired   Monument  Mortgage,  Inc.  ("MMI"),  a  private  seller/servicer
mortgage  banking company, and PreferenceAmerica Mortgage Network ("PAMN"),
a  private mortgage broker.  The Company had completed many of the elements
of  its recapitalization plan and raised $3.5 million in new equity capital
by the end of 1996.
<PAGE> 4

MMI, a California corporation, was founded as an independent mortgage
banker in April 1987 by James W. Noack and two other minority investors
with an initial capitalization of $750,000. Until its acquisition by Finet,
MMI operated as a private S corporation. Using approvals from FHLMC, HUD
and several other investors, operations began in a single retail loan
production office in Walnut Creek, CA.  The company sold all originated
loans with the loan servicing rights either retained or released. In its
first year of operations, one of the highest interest rate environments in
history, $60 million in loans were originated for an operating loss of
$327;000.

Over the next five fiscal years, MMI's business activity and profits
increased.  Between fiscal 1989 to 1993, annual loan fundings grew to $844
million and annual profit increased to $2.8 million. Business development
focus shifted from retail to wholesale lending operations, three full-
service wholesale branches were opened, and retained loan servicing rights
grew to $760 million.  The ability to retain servicing was a key component
in building an annuity and off balance sheet asset that could sustain
operations during down market down cycles. Loan products offered were
limited to a few popular FHLMC programs while very conservative
underwriting ensured a low risk, high quality portfolio of loans.  This
strategy resulted in a loan servicing portfolio with historical delinquency
ratios less than half industry averages.

During fiscal year ended April 30, 1994, rapid increases in interest rates
resulted in a 40% decline in mortgage lending nationally.  MMI maintain an
$842 million funding level, but increased competition and shrinking margins
resulted in operating losses which were offset by the sale of $140 million
in servicing to generate a profit of $210,000.

 As the down market cycle continued into fiscal 1995, all branches were
closed, operations were consolidated at the headquarters location, staffing
was reduced from 150 to 50,  salaries were reduced, and an aggressive
effort was begun to leverage its technology expertise to further reduce
costs and support expansion of the Company's products and market presence.
Recognized as a mortgage industry technology leader, it was invited to
participate in the development of FannieMae (FNMA) and FreddieMac (FHLMC)
automated underwriting systems and is now one of the most active users of
these systems.  These actions, and sale of $156 million of servicing
rights, produced a profit of $237,000.

Concluding that traditional wholesale distribution channels alone would not
sustain prolonged, profitable growth, during fiscal 1996 an affiliate
mortgage broker, Preference America Mortgage Network, was formed to
establish technology based, lower cost methods to deliver loan products to
higher margin retail loan customers and it acquired all rights to the name,
concept and logo of the Property Transaction Network (PTN) ( On February
21, 1997, the PTN was incorporated as a wholly-owned subsidiary of Finet).
PAMN implementation began in the last quarter of fiscal 1996 with little
effect on MMI's operating results. The year ended with a profit of
$339,000.

To raise the additional capital required to create a technology based,
vertically integrated lending operation, fiscal 1997 began with a letter of
intent to merge MMI and PAMN with Finet.  Significant investments were made
in fiscal 1997 to further develop and expand the technology agenda while
completing the acquisition transactions.

In January 1997, the Company emerged as a substantially different
organization with a new charter and strategy, as well as a new management
team and Board of Directors.  In management's opinion, Finet's three new
operating subsidiaries, PTN, PAMN and MMI, form an integrated,
interdependent, synergistic trio.  PTN's  deployment of  advanced
technology real estate services delivery systems, MMI's ability to place
conforming loans quickly and efficiently, and PAMN's ability to broker
remaining loans to other lenders comprise a more comprehensive homeowner
services offering than heretofore available.

In  March,  1997  Cumberland  Partners, holder of  the  Company's  $800,000
convertible debenture, fulfilled their agreement to convert their debenture
and accrued interest to 1,850,000 shares of the Company's common stock.  In
April/May 1997, the Company raised an additional $4.6 million in new equity
capital  and,  on  June  12,  1997, it reached a preliminary  agreement  to
acquire  the assets and certain liabilities of Real Estate Office Software,
Inc.  (REOS), a private software developer and distributor of sophisticated
contact management software for Realtors.
<PAGE> 5

These  acquisitions and technologies enabled the Company to evolve  into  a
consumer  oriented,  one-stop shopping, real estate  services  organization
offering   faster,   easier,  lower  cost  methods   of   home   ownership.
Additionally,   the   Company  has  formed  strategic   partnerships   with
Homeseekers.com, a publicly-held Internet provider of national listings  of
homes  for  sale,  and  with Help-U-Sell, a large,  multi-location  Realtor
network.  The  Company  now  employs the latest advances  in  computer  and
electronic communications technology to address the entire home acquisition
and  financing process, including Internet video-conferencing, Fannie Mae's
and  Freddie Mac's automated artificial intelligence underwriting  systems,
and  a number of internally developed proprietary computer programs.  Thus,
it  is  positioned as both a vendor-neutral technology and Realtor services
firm that is also a mortgage financing vendor.

THE HOMEOWNERSHIP BUSINESS

The  real  estate  business  and home buying process,  taken  as  a  single
industry,  can  be  described as large, fragmented, antiquated,  with  many
nonstandardized  processes  and  on the verge  of  a  major  restructuring.
Technology,  principally data processing and communications technology,  is
beginning to revolutionize the industry.

The  real  estate  industry,  including development,  construction,  sales,
financing,  repair  and  maintenance,  is  one  of  the  country's  largest
industries.   Nevertheless, the real estate industry remains essentially  a
local  business  and  not  a  national  or  regional  business,  with  rare
exceptions.   Both  the  population and the percentage  of  homeowners  are
expected  to gradually rise through the end of the century.  At  any  given
time, two of every three American households are homeowners, but over time,
nine out of ten will own a home.  The average price of the 66.86 million US
housing  units continues to grow, up 4.2% to $166,900 in the twelve  months
ended March 1997, of which 5.64  million homes changed owners in 1996.  The
total  of residential loans outstanding and the annual volume of new  loans
in the US are second in size only to the Federal government's national debt
and annual borrowing.  Since 1990, annual loan demand for home purchase has
been  relatively  flat  at  approximately $340 billion,  while  fluctuating
interest  rates  have caused refinancing demand to vary from  $90  to  $770
billion annually.  This equates to an average of over 10 million new  loans
annually  requiring a flow of funds that can exceed $1.0  trillion  dollars
annually.

Unlike  many industries, change in the real estate market has been  neither
significant nor rapid.  To the contrary, it has been incremental and  slow,
especially  in  the  sales  and financing sectors.   Such  gradual  changes
include:  the  source of funds, the emergence of mortgage  brokers,  and  a
trend toward consolidation.

Over  the  past several decades, the supply of mortgage funds  has  changed
from deposit based local sources to investment based national sources.   As
a  result,  the local and regional sources, such as banks and  savings  and
loan  institutions, have been reduced in both numbers and size.  The  slack
has  been  taken  up  by the secondary market, comprised  of  FNMA,  FHLMC,
pension  plans,  insurance and investment companies  and  the  like,  which
purchase residential loans from local sources.

The   transition  to  an  impersonal  secondary  market  has  had   several
consequences:  (1) loan documentation and procedures have gradually  become
more  standardized  to facilitate acceptance as well as transfer  of  loans
into a market composed of diverse and distant investor groups, and (2) loan
files consisting of various documents and verifications have become thicker
and  much  more  impersonal  compared to the  previous  more  personal  and
character based procedures of local institutions.  At the forefront of this
gradual  evolution is the recent emergence of efforts to collect, integrate
and  analyze data electronically to the end of simplifying and speeding the
home sales and financing processes.

Another  evolution  has been the emergence of mortgage  brokers.   Mortgage
brokers  do  not lend money directly.  They advise and assist borrowers  in
originating a mortgage loan and obtain, process and package all the  credit
and  financial  information necessary for a lender  to  approve  the  loan.
Unlike  the  captive  sales  force  of  retail  lenders,  mortgage  brokers
represent  and  offer the loan products of many lenders.  Starting  with  a
negligible national market share in the 1970's, and spurred by demand for a
greater  selection  of  loan programs than a single  lender  typically  can
offer,  mortgage broker market share rose to exceed 50% in 1991 and  peaked
in  1993.   Since then, their numbers and share have declined  as  interest
rates rose and retail lenders have become more competitive.

<PAGE> 6

Many other industries experienced a pattern of consolidation following  the
introduction  of  modern  technology  (computer  controlled  manufacturing,
airline   reservation  systems,  electronic  banking,  etc.)   The  Company
believes  a  similar effect is beginning to occur in the  residential  real
estate  industry.   Since 1993 many mortgage brokers and  mortgage  bankers
have  merged or ceased operations.  Management believes within a few  years
national  service delivery systems developed and controlled by a few  firms
will dominate the market.  Finet has been repositioned to be one of them.

The  real  estate services industry is highly fragmented.  There  are  well
over   one   million  licensed  Realtors  and  approximately  ten   million
independent  real  estate  service providers (appraisal,  financing,  title
search and verification, escrow, appraisal, inspections of various natures,
warranty,  moving,  repair, maintenance, improvement and insurance,  etc.).
Composed primarily of small, private firms, few firms in this industry have
a  meaningful  market  share.  The vast majority  of  such  businesses  are
resident   in   the   local   community.   The  typical   mortgage   broker
proprietorship, of which at the peak of the 1993 refinance boom there  were
over  40,000  nationally, has an average of 5 loan agents.  In 1996,  there
were  690,000 members of the National Association of Realtors  (NAR),  down
100,000  from the prior year.  Norwest and Countrywide Funding Corporation,
the  two largest independent mortgage firms, each have less than 5% of  the
estimated market.

Until  very recently, this diverse and dispersed group of small independent
service businesses had no easy or inexpensive means by which to communicate
and relied upon traditional means such as mail, courier, and fax, which are
slow, expensive and paper intensive.  Each real estate transaction requires
the  fee-based services of up to ten independent providers, each  of  which
does its own marketing.  This sales and marketing duplication results in an
expensive,  antiquated process whose high cost is born by the  home  buyer.
Purchasing  a  home  remains  a paper intensive,  frustrating,  costly  and
lengthy process.

According  to Rick Amatucci, Director of Technology Initiatives  for  FNMA,
the mortgage industry remains in the technological dark ages, saying "I can
trade  $100,000 worth of stock over the phone with my broker,  conduct  the
trade  immediately,  and get a statement.  But when I refinanced  my  house
recently it took 35 days and a small binder full of forms.  It doesn't make
sense."

Technological advances that more easily and cheaply connect the parties  to
business  transactions  have revolutionized many  business  procedures  and
restructured  many  industries.  Computerized reservation  systems,  faxes,
satellite pagers, ATMs, electronic stock trading, cellular phones and touch-
tone  banking  are  familiar examples.  The acquisition of  automobiles  is
another.   Within  an hour or two it is now possible to  select,  purchase,
finance  and  insure an automobile.  Data interchange standards facilitated
such changes in these industries.

The  first electronic data interchange standards were introduced  into  the
mortgage industry in 1995.  Its adoption is expected to have a major impact
on  the  entire home buying process, and will benefit both home buyers  and
sellers.  All  signs  point  to the industry  being  transformed  from  its
historical  network of local, sole proprietorships offering a  single,  and
typically expensive service, to larger, well financed corporations offering
integrated,  increasingly electronic services.  These may  be  regional  or
national in scope, but will offer multi-services at a cost point well below
the cost of traditional methods.

There   are  several  factors  driving  this  transformation.   Most   sole
proprietorships lack both the expertise and financial resources to make the
transition  into a much larger enterprise required to offer a multitude  of
related products and services.  The emergence of new technology, costly  to
acquire  and  implement, will result in larger competitors with significant
competitive  advantages.   This  will  encourage  consolidation   and   the
typically   under-funded,  technology  starved  firm   will   likely   seek
association  with  a  larger,  full-service enterprise.   Industry  sources
estimate the NAR membership could decline to 350,000 by the year 2000, down
from  690,000 in 1996.  Furthermore, as much as 95% of the dollar value  of
residential real estate transactions is expected to be generated by only 5%
of those Realtors who remain.

<PAGE> 7

With  each  generation  of  technology,  some  companies  adopt  the  newer
technology and become major success stories, while others hesitate or  fail
to   implement  new  technologies  and  eventually  fall  by  the  wayside.
Technological  advances are continuing.  The advent of ever  more  powerful
desktop and server computer systems coupled with advances in communications
technology  are having a major impact on all businesses.  The  majority  of
the  nation's significant increases in worker productivity in other  fields
during  this decade is due directly to technology and automated  processes.
The   emergence  of  the  "information  highway"  is  a  widely  recognized
phenomena.  Local and wide area Intranets and the Internet's world wide web
have  had, and will continue to have, major impacts on the way business  is
conducted.

According  to a recent article in The Economist, "The Internet  is  perhaps
the  single  most  important advance of our day.   Often  compared  to  the
emergence  of  the  PC as a personal productivity tool, the  Internet  will
restructure  entire businesses.  Merchants are just beginning  to  tap  the
resources  and  potential  of the Internet.  As  a  general  rule,  on-line
consumers  are  more  interested in making better-informed  decisions  than
necessarily  getting the lowest price.  The more tiresome and  difficult  a
purchase is in the physical world, the more likely consumers are to try  an
on-line alternative.  For instance, because shopping for a home or mortgage
is   both   difficult  and  tedious,  an  Internet  or  Web  site  offering
straightforward and easy-to-understand comparisons will likely be  a  major
success. When the buying process is relatively simple, for instance a  book
or a CD, the merchant must offer more than the physical product."

THE FINET APPROACH

The  Company  employs  state-of-the-art  technologies,  including  its  own
proprietary programs, to develop and offer integrated systems that  provide
faster,  easier, lower cost homeownership.  Tailored to specific needs  and
capabilities  of  investors, mortgage brokers and Realtors,  these  systems
facilitate increasingly electronic transactions.  These include:

1.    PTN's   newest  system,  the Agent Connector,  is  an  Internet-based
  relationship management tool for Realtors that includes the capability to
  access  all the services involved in acquiring and financing a home.   It
  provides point-to-point direct and Internet multi-media (voice, chat, email
  and   video-conferencing)  connectivity  between  the  Company,  enrolled
  Realtors, customers, and other service providers.

2.    The  Company  is one of the nation's largest users of  the  automated
  underwriting  systems  of FNMA and FHLMC, the two  largest  investors  in
  "conforming loans".  Conforming loans are loans of $214,600 or less  that
  make  up the single biggest market sector.  These systems, FNMA's Desktop
  Originator/Desktop Underwriter (DO/DU) and FHLMC's Loan Prospector  (LP),
  can approve up to 60% or more of loan applications within minutes, as well
  as  indicate  the  potential for approval of many  more.   The  Company's
  proprietary  "IQualify"  system allows individuals  to  complete  a  loan
  application  on  the  Internet and connect to  these  automated  approval
  systems.

3.   MMI's proprietary GreenLight system integrates both FNMA's and FHLMC's
  systems to determine that a loan can be closed as well as adding vital "how
  to  do it" details, enabling mortgage brokers in the field to enter  loan
  data directly for a highly competitive response time edge.

This broader, more balanced approach to the market provides more sources of
revenue,  increased  employee  productivity,  and  increased  margins   and
earnings through a combination of factors: (1) separating the flow of loans
by  type  into  several  processing streams for more efficient  and  faster
throughput, (2) bundling many required separate services to lower marketing
costs, and (3) proactive cross-selling of services by Company units.

The  Company now consists of three inter-related core businesses staged  to
offer  multiple  doorways  for customers to access homeownership  services,
including its proprietary funding engines, so as to be able to contact  and
capture  customers at every stage in the process leading to  homeownership:
(1)  Property  Transaction  Network which incorporates  Mortgage  Marketing
Concepts,  (2)  PreferenceAmerica, and (3) Monument  Mortgage,  Inc.  which
incorporates Monument Acceptance Corporation.

<PAGE> 8

TECHNOLOGY SERVICES

Property  Transaction  Network  ("PTN")  This  new  subsidiary  houses  the
Company's  major  technology  thrust.  A  software  developer  and  systems
integrator, it provides monthly fee-based electronic connectivity  services
to  Realtors  who  acquire  the  Agent  Connector,  a  proprietary,  multi-
dimensional  connectivity  program,  which  operates  in  a  vendor-neutral
environment  on a Realtor's camera equipped laptop computer.   This  multi-
level  service package offers increasingly more capabilities to more active
Realtors, including: connectivity to a virtual electronic office, automated
personal  Web pages, unlimited email, multi-media connectivity to customers
and  the Company, Client Info Centers (private transaction Web site  status
pages  password accessible by customers through the Internet), contact  and
relationship management tools, training and marketing support services, the
ability  to take prospective home buyers on electronic property tours,  and
access   to   various  types  of  prospective  homebuyer  leads  downloaded
electronically from the Internet.

The  PTN  will  derive  its  revenues from both monthly  Realtor  fees  and
advertising/marketing services fees.  Customers are  offered  an  array  of
homeownership  services and vendors to select.  Users can  conduct  TV-like
video   home   tours,   face  to  face  interaction  with   trained   sales
representatives,  and  on-screen  completion  and  printing   of   required
applications  and forms.  Thus a customer can shop for a loan,  home,  etc.
and  close electronically.  Afterwards transaction documentation status  is
routed to a confidential electronic file.

The  PTN  introduces  and  demonstrates these  state-of-the-art  technology
capabilities and services to the real estate industry through  its  ongoing
"Seminars in Excellence"  around the country, at which Realtors can  enroll
as  a PTN member and purchase or lease a system for their personal use.  In
seminars  to  date,  advance reservations for the Agent Connector  software
system,  scheduled  for  initial  distribution  to  PTN  members  in  early
September,   1997   have   exceeded   historical   results.   Additionally,
approximately  80 experienced Bay Area Realtors have agreed to  become  PTN
members.

PTN  has  formed  a  relationship with NDS  Software,  Inc.,  operators  of
Homeseekers.com, an Internet site providing daily updates of home  listings
of  a  growing  number  of boards of realty and multiple  listing  services
around  the  country.  The arrangement is intended to  provide  an  ongoing
source  of introductions of potential homebuyers to the Company's  services
and its PTN Realtors. The Company is now receiving potential borrower leads
from this source on a daily basis.

Mortgage  Marketing  Concepts  ("MMC")  is  a  specialized  fee-for-service
marketing  division  of  PTN responsible for the  generation  and  sale  of
mortgage  leads  to  the  Company's retail centers and  to  other  mortgage
brokers.   MMC  develops  mortgage  leads  through  a  variety  of  methods
including  direct  mail, list purchases, and telemarketing.   This  service
allows  MMC  customers  to  purchase leads to match  their  loan  placement
capabilities.   MMC's telemarketers provide registration services  for  PTN
seminars and furnish personal marketing services to PTN Realtor members.

RETAIL LOAN SERVICES

PreferenceAmerica Mortgage Network ("PAMN") is a mortgage  broker  and  the
Company's primary retail sales operation.  It operates in call centers that
take  telephone, fax, videoconference and Internet calls from  individuals,
PTN  Realtors, and the offices of large Realtor organizations with whom its
Proprietary  Branch  Systems  Division  has  support  agreements  and,   as
appropriate,  directs  the  resulting transactions  to  the  many  mortgage
lenders  with  which  it has brokerage relationships;  other  homeownership
service providers; and its sister companies MMI and MAC, described below.

The  Proprietary  Branch Systems Division is a new division  that  supports
large  Realtor  groups desiring to use this technology  on  a  standardized
basis.   The Company initially is providing home financing services to  the
customers  of  Help-U-Sell,  the  largest  and  oldest  fixed  fee  Realtor
franchise  organization, and is in discussions with others.  Currently  the
Company's primary retail development effort is directed toward training and
equipping  the  approximately  180  Help-U-Sell  offices  to  enable  their
Realtors conduct business with the Company's call centers.

<PAGE> 9

PAMN  also  supports  several  Net Branches, independently  owned  mortgage
brokers  that meet certain operating criteria.  Each Net Branch  agrees  to
place a percentage of its total loan volume through PAMN and to pay certain
fees  per  loan.   In  exchange, each Net Branch is  entitled  to  valuable
support   services  including  payroll  and  benefits  administration   and
disbursement  services,  access to all PAMN lending  relationships,  volume
purchasing arrangements, and use of MMC's marketing services.

LENDING SERVICES

Monument Mortgage, Inc. ("MMI") is an independent mortgage banker and  loan
seller/servicer.   It  develops  loan  programs,  offers  loan   rates   in
competition with other residential real estate lenders.  It also purchases,
sells and manages loan servicing portfolios.  It currently is the Company's
largest business unit and source of revenues, which are primarily from  the
sale  of loans in the secondary mortgage market and from the servicing  and
sale of originated and purchased loan servicing rights.  MMI operates in 17
states and is the largest user of FNMA's DO/DU system in the western United
States.   To date, over 1,000 loans have been originated through  MMI  with
this  system. The Company continues to introduce and train brokers on  this
system, with over 200 brokers now capable of using it. The number of  DO/DU
loan submissions is increasing steadily.

MMI  markets  its capabilities through a network of wholesale relationships
with   hundreds   of  traditional  mortgage  brokers,  plus   correspondent
relationships  with certain more capable brokers who perform more  services
for  higher  fees, as well as serving as a major funding engine  for  loans
originated through PAMN net branches and call centers.

Monument  Acceptance  Corporation ("MAC") is a new sub  prime,  alternative
lending  division of MMI specializing in placing loans for  borrowers  with
impaired  credit.  Where MMI deals only in prime A paper loans to borrowers
who  meet specified minimum financial and credit standards, MAC focuses  on
the  30%  or more of borrowers with sub prime A-, B, C, or D rated  credit.
While  more difficult and time consuming to package and close, these  loans
generate much higher revenues.

By  having  a full spectrum of loan placement capability through  both  its
internal  funding engines as well as by brokering loans to  other  lenders,
the  Company  is positioned to have a competitive solution for  the  widest
range of qualified borrowers.

COMPETITION

The  traditional mortgage banking and broker businesses are mature and thus
highly competitive.  Although Finet provides both services, a major area of
its   anticipated   growth  lies  elsewhere,  more  specifically   in   the
development,  introduction  and use of advanced  technology  to  provide  a
broader  based  of contact with Realtors and borrowers.   The  Company  has
acquired  and  employed computer and communications technology  to  develop
systems  that permit it to offer a proprietary product and service.   Finet
pioneered the PTN's unique bundle of capabilities.

There   are  several  companies  that  use  an  earlier  video-conferencing
technology  that has since been discarded by the Company.  To  date,  these
systems  have been proprietary, single or few lender-based systems and,  in
the  Company's opinion, have had relatively low utilization  as  a  result.
Although  some  mortgage  companies offer  various  Internet  loan  related
services,   Finet   is  unaware  of  any  other  competitor   employing   a
comprehensive strategy or system similar to PTN.   However there can be  no
assurance  that  competitors, some of whom currrently  offer  one  or  more
competitive  capabilities or services, will not seek  to  develop  advanced
integrated Realtor connectivity systems similar to the Company's.

Since Finet provides both mortgage banking and mortgage broker services  it
accordingly  competes  with  traditional firms offering  similar  services,
including   banks,   savings  and  loans,  other  mortgage   bankers,   and
institutional  lenders. This is a highly competitive arena  in  which  many
firms  are larger and have more current loan volume and financial resources
than the Company.

<PAGE> 10

DISTRIBUTION METHODS

Since  entering  the mortgage business in 1991, the Company's  distribution
method  has  gone  through  several evolutions: initially,  as  a  mortgage
broker, Finex's mobile laptop-equipped loan agents serviced Realtor offices
from  a  centralized  processing center.  The  Company's  current  business
strategy is an updated version of that original approach, offering  laptop-
equipped  Realtors  and  their customers mortgage  brokering  and  mortgage
banking  services  using Internet, virtual office, automated  underwriting,
video-conferencing and other connectivity and processing technologies  from
centralized support centers.

CERTAIN BUSINESS CONSIDERATIONS

Borrowers  could  claim  to have suffered adverse  financial  effects  from
utilization of Finet's services.  The most common instance of complaint  in
the  industry occurs when a borrower fails to lock in an interest rate and,
at  the time of closing, the available interest rate has increased from the
rate available at the time of application.  While assessment of such claims
is  highly subjective, in a few instances where it was considered  possible
that  the  borrower had not been made sufficiently aware of the possibility
of  rate  increases and the protection afforded by a rate lock,  Finet  has
resolved the matter to the borrower's satisfaction by discounting its fees.

Some  lenders  may  attempt  to  require that  brokers  repurchase  certain
mortgage loans funded by such lenders when they assert a claim of fraud  by
the  broker  or  misrepresentations  or  inaccuracies  in  borrower's  loan
applications.  To date, the Company has been successful in  modifying  such
agreements  and  avoiding such claims. No lenders have required  that  PAMN
purchase any of the mortgage loans it originated.

As  a  lender,  because such borrower misrepresentation or  inaccuracy  was
later  determined, MMI on occasion has been required to repurchase  a  loan
from  the  institutional investor to whom it sold the loan.  Normally,  MMI
has  been  able  to  resell the loan to another investor  or  to  otherwise
resolve  the  matter without material financial consequences.  As  interest
rates rise and the economy declines, the rate of mortgage loan foreclosures
tends  to  rise.   As  a  result,  MMI occasionally  is  required  to  hold
residential  real  estate in inventory until it can be  resold.   Normally,
such  sales  are for more than the outstanding loan balance, however  there
can be no assurance that such transactions will not have a material adverse
effect  on  the Company's operations.  In the fiscal year ended  April  30,
1997, the Company's foreclosure related expense was $153,000.

The  Company has embarked on a business development strategy that  involves
new  and  advanced  systems, new processes, policies  and  procedures,  and
unproven  activities.   Many  of  these  require  fundamental  changes   in
traditional  attitudes and habits and will require open,  forward  thinking
acceptance  on  the part of those real estate professionals doing  business
with  the  Company.  While  management believes  its  activities  are  well
founded, appropriate, and supportive of the transformations now underway in
this  industry  and of successful development of the real  estate  services
distribution  capability the Company has undertaken, no assurances  can  be
given as to the eventual outcome or results.  Material strategy adjustments
may, and likely will, be required as experience is developed.

GOVERNMENT REGULATION

The  Company's mortgage broker/banker operations are subject  to  extensive
regulation by federal and state authorities.  The US Department of  Housing
and  Urban  Development ("HUD") regulates certain aspects of  the  mortgage
lending  business.   The  Real Estate Settlement  Procedures  Act  of  1974
("RESPA"), a Federal statute, requires that certain disclosures, such as  a
Truth-in-Lending  Statement,  be  made  to  borrowers  and   that   certain
information,  such  as  the HUD Settlement Costs booklet,  be  provided  to
borrowers.    The  Fair  Housing  Act  prohibits  among  other   practices,
discrimination,  unfair  and  deceptive  trade  practices,   and   requires
disclosure  of  certain basic information to mortgagors  concerning  credit
terms.   If  the  Company  fails to comply with such regulations,  possible
consequences   could   include  loss  of  approved  status,   demands   for
indemnification,  class  action law suits, and  administrative  enforcement
actions.

<PAGE> 11

Additionally, RESPA contains certain prohibitions regarding the  giving  or
taking  of  a  fee,  kickback, or anything of value  for  the  referral  of
business  to  any specific person or organization.  However,  there  is  no
prohibition  regarding  the  payment of  reasonable  compensation  for  the
provision of goods, services and facilities.

From  time  to  time in its debate over tax reform, Congress has  discussed
eliminating deductibility of mortgage interest.  Should this occur, it will
reduce  the  number  of those who can afford homeownership.   Additionally,
several  large  law  firms have promoted class action claims  that  certain
industry  fee  practices violate RESPA.  While the industry  has  responded
vigorously  to  these activities, no assurances can be given  as  to  their
outcome and the impact on the industry.

Additionally,  in California, regulation and licensing of mortgage  brokers
falls  under  the California Department of Real Estate (DRE).   Certain  of
MMI's  mortgage  banking  activities fall under  the  jurisdiction  of  the
California  Department of Corporations (DOC).  Other than banking  industry
employees,  who  are  exempt  from DRE licensing requirements,  individuals
engaged  directly  in  the  origination of loans or  the  dissemination  of
certain  information are required to be licensed by the DRE.   The  Company
and  its affiliates will also be required to be licensed in accordance with
the  differing  requirements  of the various states  in  which  offices  or
operations are established.

EMPLOYEES

As  of April 30, 1997, including employees in net branches for whom various
benefits  are provided at net branch cost, the Company employed 131  people
in   various   capacities:  25  executive,  management  and  administrative
personnel,  26  technology  services personnel, and  80  mortgage  services
personnel.  To minimize the effects of possible adverse determinations from
IRS and the state regulatory audits related to their ongoing objections  to
the  status  of loan personnel as independent contractors, the Company  has
taken  the  position  that  all net branch personnel  are  required  to  be
employees.

None  of  the Company's employees is represented by a union.   The  Company
believes its relations with its employees and affiliates are good.

                     ITEM 2.  DESCRIPTION OF PROPERTY

The  Company's leases its 17,042 square foot headquarters in Walnut  Creek,
CA.   Mortgage  Marketing Concepts leases an 1,100 square  foot  office  in
Incline  Village,  NV  and  a 1,200 square foot telemarketing  facility  in
Modesto, CA.  The Company had also rented on a month-to-month basis a  two-
person executive office in San Francisco and a 2,890 square foot MMI branch
in  Rancho  Cucamonga, CA. Subsequent to April 30, 1997, the San  Francisco
office  was vacated and the Rancho Cucamonga branch was moved to a  smaller
office in La Mirada, CA. The Company believes these facilities are adequate
for its current level of operations.

All  net  branch  office  leases  remain the  personal  obligation  of  the
individual net branch manager.

                        ITEM 3.  LEGAL PROCEEDINGS

As  a result of its continuing operating losses and lack of working capital
during  1995,  the  Company  developed  past  due  accounts  payable   from
approximately  150  unsecured trade creditors, with  the  result  that  the
Company  became  involved  in  22  legal proceedings,  primarily  unsecured
creditor actions and/or judgments.  These ranged in individual amount  from
$929.43 to $101,000 and aggregated to approximately $500,000.  As of  April
30,  1997,  the  Company  had settled a majority of these  proceedings  and
subsequently  has settled several more. The Company expects to  settle  the
remainder  in  the near future under similar terms as offered to  creditors
that have not instituted such proceedings.

Including  all  unsecured creditor settlements to  date,  the  Company  has
settled  accounts totaling $465,000 in the form of cash payments of $43,600
and  the  issuance of 225,500 shares of its common stock,  for  an  average
settlement  of  33.6%  of  the  original  amount  owed.,  resulting  in  an
extraordinary gain of $312,000.

<PAGE 12

A  claim by two previous stockholders of MMI had sought recession of  prior
contracts  for  the sale of the plaintiff's stock to MMI's stockholders  to
restore them to their former status as minority stockholders of  MMI.  This
claim  was  settled  during  the fiscal year ended  April  30,  1997.   The
settlement  amount  may not be disclosed as a condition of  the  settlement
agreement,  however said settlement did not have a material adverse  effect
on the Company's financial position.

Additionally, there were claims brought by past employees based on  various
causes of action related to Finet's employment practices.  All such actions
were  dismissed with no liability to the Company subsequent to fiscal  year
end April 30, 1997.

       ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

On  January  27, 1997 the Company's Board of Directors resolved unanimously
to  recommend to shareholders that the number of shares authorized  of  the
Company's  common  stock  be  increased from  30  million  to  40  million.
Subsequently,   In  late   March, 1997 individual  shareholders  of  record
holding  a total of 14,829,751 shares, which represented a majority (57.6%)
of  shares  outstanding,  approved  by written  consent  a  certificate  of
amendment  of  the  Company's restated certificate of incorporation  to  so
increase  the  number  of common shares authorized. Remaining  shareholders
were then promptly notified by mail of the action approved.
<PAGE> 13
                                  PART II
                                     
              ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY
                      AND RELATED STOCKHOLDER MATTERS

MARKET FOR COMMON EQUITY

The Common Stock of the Company is currently quoted on the OTC Bulletin
Board under the symbol FNHC.  For the past several years, there has been no
established trading market for the Company's Common Stock, the Common Stock
was either unpriced or periodically quoted in the pink sheets, and there
was little or no trading volume. From the beginning of 1995 through August,
1996, no trading activity was reported.

Effective with the Company's 1-for-2 reverse stock split on October 21,
1996, its trading symbol was changed from FTHC to FNHC.  Between October
21, 1996, and April 30, 1997, limited trading activity resumed with an
average monthly trading volume of 101,000 shares.  The following table sets
forth the range of high and low closing bid prices per share of the Common
Stock.

<TABLE>
<CAPTION>
YEAR ENDED APRIL 30, 1997:                  HIGH BID      LOW BID
-----------------------------------------   --------      -------
<S>                                         <C>           <C>
First Quarter (F1)                          $ 1.25        $ 0.25
Second Quarter thru October 24, 1996 (F1)     2.625         0.25
October 25, 1996 - October 31, 1996 (F2)      1.75          0.75
Third Quarter (F2)                            2.875         0.75
Fourth Quarter (F2)                           2.625         0.875
<FN>
<F1>
Prices reflect activity while trading under the symbol FTHC
<F2>
Prices reflect activity while trading under the symbol FNHC
</FN>
</TABLE>

On August 5, 1997, the last sales price for the Common Stock was $3.18  per
share. The foregoing prices represent inter-dealer quotations without
retail mark-up, mark-down or commission, and may not necessarily represent
actual transactions.  Common Stock issued and outstanding as of April 30,
1997 was 24,763,030  shares which were held by approximately 475
stockholders, not including 3,991,250 shares subscribed but not yet issued,
6,507,947 warrants and 599,507 options.

UNREGISTERED SHARES

Pursuant to the revised requirements of Item 701 of Regulation S-B, the
following is information regarding all equity securities sold during the
period covered by the report that were not registered under the Securities
Act.

On December 16, 1996, a non-US citizen purchased 1 million common shares
under Regulation D as a sale to a foreign person, and was granted 5 year
warrants to purchase 1 million shares at an exercise price of $1.00. The
aggregate purchase price of $500,000 included conversion of $270,000 of
debt into common stock.

On March 21, 1997, a non-US citizen purchased 1 million common shares under
Regulation D as a sale to a foreign person for a purchase price of $600,000
and was granted 5 year warrants to purchase 200,000 shares at an exercise
price of $1.50 per share, 200,000 shares at an exercise price of $2.00 per
share and 200,000 shares at an exercise price of $2.50 per share.
<PAGE> 14

In April, 1997, a group of 28 individuals purchased 3,991,250 common shares
under Regulation D for a purchase price of $3,991,250. 13 of these
individuals were granted warrants to purchase 743,125 shares at an exercise
price of $1.50 to $3.50 per share until the year 2001.

In addition to the above sales of securities, on December 31, 1996, the
Company sold 6 million common shares under Regulation S to a group of non-
US investors for an aggregate purchase price of $3,000,000.

Commonwealth Associates acted as placement agent for each of the above
sales and received 859,125 warrants to purchase common shares at an
exercise price of $1.50 per share until the year 2006. Fees, commissions
and expenses of these offerings totaled $738,277.

DIVIDENDS

The Company has not paid, and the Company does not currently intend to pay,
cash dividends on its Common Stock. The current policy of the Company's
Board of Directors is to retain earnings, if any, to provide funds for
operation and expansion of the Company's business.  The payment of cash
dividends in the future will be at the discretion of the Board of Directors
and will depend upon, among other things, the Company's earnings, capital
requirements and financial position.  In addition, the Company's ability to
pay dividends may be limited under future loan agreements of the Company
which restrict or prohibit the payment of dividends.
<PAGE> 15
                                     
   ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                         AND RESULTS OF OPERATIONS

GENERAL

Finet acquired its two of its active subsidiaries, Monument Mortgage,  Inc.
("MMI")  and  PreferenceAmerica Mortgage Network ("PAMN") on  December  31,
1996.   The  acquisition  of PAMN was accounted  for  as  a  purchase;  the
acquisition  of MMI was accounted for as a recapitalization  of  MMI  as  a
result of the reverse acquisition.

Due  to  the  requirements of such accounting, MMI  is  deemed  to  be  the
reporting  entity  although  Finet  is the  Registrant.   Accordingly,  the
financial  statements  presented for the 1997 fiscal  year  include  twelve
months  of  operations for MMI, and four months of operations for  FHC  and
PAMN  (from  acquisition  date through April 30, 1997).  The  prior  year's
financial  statements are those of MMI alone.  Further, the  operations  of
the  Company  after  January 1, 1997 have been  and  will  continue  to  be
materially  different  than  prior periods.  Thus,  the  meaningfulness  of
comparisons  below between the fiscal years ended April 30, 1997  and  1996
may be limited and therefore may not be representative of future events.

The  consolidated  operations of the Company include  various  real  estate
technology  services, mortgage brokerage and mortgage banking.  During  the
fiscal  year  ended April 30, 1996 the reported operations of  the  Company
involved  only  mortgage banking.  During the fiscal year ended  April  30,
1997, the Company's primary operations were mortgage banking, with start-up
costs   incurred   in   technology  services,   mortgage   brokering,   and
telemarketing.

The  Company incurred a net loss of $3.2 million for the fiscal year  ended
April 30, 1997 compared to net income of $326 thousand for the fiscal  year
ended  April  30, 1996.  This decline in operating results is  attributable
primarily  to  a decrease in operating revenues, an increase  in  operating
expenses and start up costs, partially offset by an extraordinary gain from
liabilities subject to compromise.

REVENUES

Total  revenues were affected by a broad decline in mortgage  loan  volume,
both  in  the industry and in MMI.  In 1997, revenues decreased $2  million
(31%) to $4.4 million from $6.4 million in 1996.  The decrease is primarily
attributable  to  reduced  mortgage banking activity, since  the  Company's
start up operations did not earn significant revenues.

The  total  gain  or  (loss)  on the sale of  mortgages  is  determined  by
combining  the  Loss on Sale of Mortgage Loans with the  Gain  on  Sale  of
Servicing  Rights, excluding any gains on sales of servicing rights  earned
from  bulk sales of servicing originated in prior fiscal years.  The  total
gain  on sale of mortgages/servicing rights (excluding bulk sales of  prior
year  loan production) in 1997 was $1.37 million compared to $2.28  million
in 1996, a decrease of 40%.

Over  the  same  time periods, total loan volume decreased  30%  from  $504
million  in  1996 to $354 million in 1997.  The margin earned on  sales  of
mortgage loans/servicing rights also declined from 45 basis points in  1996
to  39 basis points in 1997. The average volume of mortgages outstanding in
inventory declined 41% from $23.4 million in 1996 to $13.8 million in 1997,
a result of the decline in 1997 loan volume.

Interest income declined 44% from $1.98 million in 1996 to $1.11 million in
1997.  Interest income is primarily attributable to mortgages that are held
in   inventory,  pending  their  sale  and  delivery  to  secondary  market
investors. Interest yields on mortgages held in inventory declined slightly
over  the same time periods, from 8.27% to 7.96%.  Interest expense on  the
Company's warehouse lines of credit (which finances the mortgages  held  in
inventory) declined 43% in the same time period.

<PAGE> 16

Loan  servicing  fees  decreased 36% from $921 thousand  in  1996  to  $589
thousand  in 1997. This fee income is derived from servicing mortgages  for
secondary  market  investors. The Company's portfolio of off-balance  sheet
serviced loans declined 30% from an average of $483 million in 1996 to $342
million in 1997, due to the routine sale of all servicing originated during
the  year,  as well as several bulk sales in 1997 of servicing  rights  for
loans originated in prior years.

Revenue  from  startup telemarketing operations was $61 thousand  in  1997,
compared to $0 in 1996.

EXPENSES

Primarily  as  a  result of the costs associated with the acquisitions  and
funding  the  start up operations, total expenses increased 30%  from  $6.0
million  in 1996 to $7.8 million in 1997.  The increases were primarily  in
compensation expenses, marketing, and professional fees.

Salaries  and  employee benefits expense increased 48% to $3.1  million  in
1997  from  $2.1 million in 1996, as the number of employees increased  36%
from 96 as of April 30, 1996 to 131 as of April 30, 1997.

Interest expense decreased 39% from $1.8 million in 1996 to $1.1 million in
1997,  largely  due  to the decline in loan volume and  the  resultant  43%
decrease  in  the Company's borrowing on its warehouse line of credit  from
$1.6  million  in  1996  to $907 thousand in 1997. The  Company's  weighted
average cost to borrow on its warehouse line of credit declined from  6.95%
in 1996 to 6.62% in 1997.

Marketing expense increased from $176 thousand in 1996 to $440 thousand  in
1997, primarily from start up operations and expanded MMI marketing.

Professional fees increased 44% to $640 thousand in 1997 from $402 thousand
in  1996.   The  increase is due primarily due to expenses related  to  the
acquisitions, including legal, accounting, auditing and consulting expense.

Other  expense  increased from $69.7 thousand in 1996 to $681  thousand  in
1997.   This material increase resulted from several factors: $153 thousand
is  attributable  to  various start up operating costs;  $156  thousand  is
related to increases in unrecoverable costs on foreclosed loans and sale of
real  estate owned; $300 thousand is related to miscellaneous expenses  for
settlement  of the pre acquisition litigation against MMI; an  increase  in
per use fees for FNMA's automated underwriting system; and write-off of  an
account receivable related to a prior year bulk sale of servicing assets.

As previously discussed, in 1996 the Company negotiated settlements with  a
number  of  past due unsecured trade creditor accounts payable.   Creditors
owed  $500 or less, or willing to reduce the amount owed to $500, were paid
in cash, while larger accounts were paid a discounted amount in the form of
shares  of  the Company's common stock.  As of April 30, 1997, the  Company
has  settled  accounts totaling $465,000 in the form of  cash  payments  of
$43,600  and  the issuance of 225,500 shares of its common  stock,  for  an
average  settlement of 33.6% of the original amount owed, resulting  in  an
extraordinary gain of $312 thousand.

CAPITAL EXPENDITURES, LIQUIDITY, AND CAPITAL RESOURCES

The following summary table presents comparative cash flows of the Company.
The  activities for the fiscal year ended April 30, 1996 represent only the
mortgage  banking activities of MMI, while the activities  for  the  fiscal
year  ended April 30, 1997 additionally represents PAMN's start up mortgage
brokerage  activities and, subsequent to the acquisitions of  December  31,
1996,   the   consolidated  activities  of  Finet  and  its   subsidiaries.
Accordingly,  readers are cautioned that the meaningfulness of  comparisons
between the fiscal years is limited and therefore may not be representative
of future events.

<PAGE> 17
<TABLE>
                                                   Fiscal Year Ended  April
30
                                                      1997          1996
                                                  ------------  -----------
--
<S>                                               <C>           <C>
Net   cash   provided   (used)  by  operating   activities    $   7,837,210
$(8,985,038)
Net   cash   provided   (used)   by  investing   activities       (239,400)
(90,409)
Net cash provided (used) by financing activities   (7,417,201)    9,355,924
</TABLE>

Operating Activities

The  Company's  operating activity cash requirements are  to  fund  ongoing
expenses,  including sales and marketing and geographic  and  product  line
expansion,  and to satisfy accrued liabilities and payables as they  become
due. Historically, these cash requirements have been satisfied through cash
receipts  from lending activities, including loan origination  fees,  gains
from  sale of loans to secondary market investors, loan servicing fees  and
proceeds from the sale of servicing rights.

As a result of the organizational and business development strategy changes
during fiscal year 1997, additional revenue sources began to be developed.
However, the cash consumed from the commencement of these activities
exceeded total cash generated. Accordingly, cash from financing activities
was used to offset the operating cash shortfall. The Company experienced
negative monthly cash flows of $250,000 to $300,000 during the fourth
quarter of fiscal 1997.  These negative amounts have declined and the
Company believes positive cash flow on a monthly basis will be achieved
during fiscal 1998 as business growth continues to generate increased
revenues.

Management believes its near term cash resources are adequate. In addition
to unused borrowing capacity, if required the Company's loan servicing
portfolio can be sold with an expectation of generating net cash in excess
of $1,000,000.  Additionally, certain of the Company's warrants which are
now in the money have exercise prices that increase $1.00 each April until
expiration, which the Company expects will motivate some holders to
exercise their warrants and provide additional capital for operating
activities.

Investing Activities

The  Company's investing activities included the purchase of loan servicing
rights,  business acquisitions, purchase of capital assets to  support  the
expanded  business  development strategy, and expenses related  to  capital
raising.  Investing activities were funded primarily from the  proceeds  of
the sale of common stock.

During fiscal year 1997, four private placements resulted in stock
subscriptions totaling $8.1 million to acquire 11,991,250 shares of the
Company's common stock.  Of these subscriptions, $4.4 million were received
by April 30, 1997, with the remainder received shortly thereafter, for net
cash receipts of $7.35 million, as summarized below.

<TABLE>
<CAPTION>
Offering         Shares      $/share  Subscription   %
---------------  ----------  -------  ------------  ----
<S>              <C>         <C>      <C>           <C>
December, 1996    7,000,000  $  0.50  $  3,500,000   43%
March, 1997       1,000,000     0.60       600,000    7%
April/May, 1997   3,991,250     1.00     3,991,250   50%
                 ---------            ------------  ----
Totals           11,991,250           $  8,091,250  100%
Less Fees, Commissions & Expenses         (738,092)   9%
                                      ------------  ----
Net cash receipts                     $  7,352,058   91%
</TABLE

<PAGE> 18

In addition to the capital raised from this sale of the Company's common
stock, warrants to purchase additional shares were issued to purchasers of
the above described shares.  These warrants were issued at exercise prices
ranging from $0.50 per share to $6.00 per share for a total of 5,490,916
shares.

Financing Activities

The Company's primary financing activities involve the use of cash to fund
its residential mortgage lending activities.  The Company must advance cash
on a daily basis to fund newly originated loans to its borrower customers.
The majority of these funds are provided through a conventional mortgage
warehouse line of credit from Residential Funding Corporation (RFC).  The
Company maintains a $10 million committed warehouse facility and a $25
million uncommitted gestation facility with RFC.  The warehouse and
gestation borrowing facilities function as short term (less than 45 days)
borrowing sources.  RFC will advance up to 98% of the face amount of the
loans being funded by the Company with the remaining 2% "haircut" funded by
the Company.  The warehouse and gestation lines bear an interest rate of
Fed Funds plus a variable margin.  When loans are funded, the borrowings
are drawn from the warehouse line. When the loans are sold and shipped to a
secondary market investor, the borrowings are transferred to the gestation
line awaiting for receipt of the sale proceeds from the investor.  The
borrowing is secured by the underlying mortgage loans and is repaid with
the proceeds from the sale of loans to secondary market investors.  The
current warehouse and gestation borrowing arrangements are adequate to
support monthly loan originations up to $100 million.  Should fundings
increase to that level, the Company does not anticipate difficulty in
arranging additional borrowing capacity.

RFC also provides the Company with a $1 million working capital facility.
The working capital facility is a revolving line of credit that the Company
can draw upon for intermediate term (3 months) cash needs.  RFC requires
that the Company pay this line off entirely for at least 5 calendar days
each quarter.  The working capital facility bears interest at Prime plus
0.625% and is secured by the Company's loan servicing rights and certain
other assets of the Company.  RFC will advance up to 70% of the value of
the Company's loan servicing portfolio to the maximum amount of the working
capital line.

Additionally, the Company has a $1 million long term (5 years) term loan
agreement with RFC.  This loan also carries an interest rate of Prime plus
0.625% and is repaid on a fully amortizing basis over the remaining term.
As with the working capital facility, the term loan is secured by the
Company's loan servicing portfolio and certain other assets.  Typically,
this term loan is used to fund longer term investments such as Purchased
Mortgage Servicing Rights.

The change of ownership resulting from the acquisition of MMI on December
31, 1996 constituted a breach of the certain terms of these arrangements.
At that time, as a result of MMI's funding of startup costs prior to
Finet's completion of its December, 1996 equity offerings and acquisitions,
MMI also was in technical violation of several financial covenants. RFC
continued to allow the Company to operate without disruption and,
subsequent to April 30, 1997, RFC issued a formal waiver of all then
existing breaches and covenant violations on the condition that Finet issue
a parent company guarantee of MMI's borrowings and that the borrowing
arrangements expiration date be accelerated from December 31, 1997 to
August 31, 1997, at which time these agreements are expected to be
renegotiated and renewed.  However, there can be no assurances that the
facilities will be renewed.

In the past the Company had maintained borrowing relationships with
multiple lenders.  Multiple relationships provide the Company with
contingency options should one lender curtail, cancel or fail to renew its
borrowing agreement with the Company.  Should RFC suddenly terminate or
suspend its borrowing agreements with the Company, lending operations would
experience a major disruption and the Company's business relationships with
its brokers, investors and borrowers would be seriously damaged.  However,
multiple relationships are expensive in terms of commitment fees and
administrative overhead.

<PAGE> 19

The Company has had a borrowing relationship with RFC for nearly eight
years, and has never experienced a disruption in borrowing capability.
Accordingly, management determined that the additional costs of maintaining
multiple lender relationships was not warranted.  Management believes that
replacement borrowing facilities could be obtained within 30 days, and it
is unlikely that RFC would terminate the existing borrowing agreements with
less than a 30 day notice unless the Company was to experience a sudden and
severe degradation in its financial position.  In such an unlikely
scenario, multiple lending relationships would be of little value in that
they all would likely suspend borrowing agreements.

As  previously discussed, an extraordinary gain of $312,000 was realized as
a  result of settlement of certain unsecured creditor liabilities for  less
than the amount owed.

                        MATERIAL SUBSEQUENT EVENTS

RECEIPT OF ADDITIONAL CAPITAL

At April 30, 1997 the Company had received subscriptions of $3,991,250 for
the purchase of 3,991,250 shares of the Company's common stock at $1.00 per
share pursuant to its April 1, 1997 private placement  Proceeds totaling
$2,693,038 from these subscriptions were received shortly after April 30,
1997.  Accordingly, this subscribed but uncollected amount is shown as a
Stock Subscription Receivable offset to Total Stockholders' Equity in the
Company's Consolidated Balance Sheet of April 30, 1997. On a pro forma
basis, had these subscriptions been received by April 30, 1997, Total
Stockholders' Equity would have increased from $1,041,070 to $3,734,013.

BORROWING ARRANGEMENTS

As previously discussed, RFC provides MMI several borrowing arrangements to
support MMI's mortgage banking activities.  The change of ownership
resulting from the acquisition of MMI on December 31, 1996 constituted a
breach of the certain terms of these arrangements.  At that time MMI also
was in technical violation of several financial covenants. RFC continued to
allow the Company to operate without disruption and subsequent to April 30,
1997 issued a formal waiver of all then existing breaches and covenant
violations on the condition that Finet issue a parent company guarantee of
MMI's borrowings and that the borrowing arrangements expiration date be
accelerated from December 31, 1997 to August 31, 1997, at which time these
agreements are expected to be renegotiated and renewed.

NDS SOFTWARE AGREEMENT

NDS Software, Inc. (NDS), a Nevada corporation, is a generic software
development company, the creator of a Realtor contact manager with an
installed customer base of several thousand, and the operator of
Homeseekers.com, a popular Internet site that gives daily updated
informational details on homes listed for sale by Multiple Listing Services
and Boards of Realtors in a growing number of areas around the country. On
May 29, 1997, the Company and NDS entered into an agreement whereby the
Company purchased for $1,010,000 in the form of $202,000 in cash and
202,000 shares of its common stock valued at $4.00 per share, a combination
of Internet mortgage leads, software development services and rights to
access and market to certain of NDS' installed customer base. The agreement
terms require an adjustment to the share consideration if the market price
of the Company's shares is not at or above $4.00 per share upon the earlier
of the Company's registration of NDS's shares or June 3, 1998, to maintain
a share value equal to $808,000 at that time, to a maximum additional
shares issuable of 1,414,000 shares.

REOS ACQUISITION

On June 12, 1997, the Company entered into a preliminary agreement with the
shareholders of Real Estate Office Software , Inc. (REOS), a Nevada
corporation, to acquire substantially all of the assets and certain of the
liabilities of REOS. The terms and consideration for this transaction are
being negotiated.  REOS is a software development and marketing company
whose primary product is a proprietary Realtor productivity tool called
Real Estate Office.  Pursuant to this agreement, all former REOS employees
are now employees of PTN engaged in final development of an enhanced
Relator relationship management tool called the Agent Connector scheduled
for initial introduction in August, 1997.
<PAGE> 20
                       ITEM 7.  FINANCIAL STATEMENTS
                                     
The following are  filed in an Appendix as part of this report:


</TABLE>
<TABLE>
<CAPTION>

Page
-----------------------------------------------------------------------  --
--
<S>
<C>
(a)  Financial Statements

 Independent Auditors' Report..........................................  34

 Consolidated Balance Sheet at April 30, 1997..........................  35

 Consolidated Statements of Operations for the years ended
  April 30, 1997 and 1996..... ........................................  36

Consolidated Statements of Stockholders' Equity for the years ended
 April 30, 1997 and 1996 ..............................................  37

Consolidated Statements of Cash Flows for the years ended
 April 30, 1997 and 1996 ..............................................  38

Notes to Consolidated Financial Statements.............................  40

</TABLE>

         ITEM 8.  CHANGES IN OR DISAGREEMENTS WITH ACCOUNTANTS ON
                    ACCOUNTING AND FINANCIAL DISCLOSURE

Pursuant  to  Finet's  previously reported reverse acquisition  of  MMI  on
December  31,  1996,  it  has been determined by the  Registrant's  current
independent accountant that, for accounting purposes, MMI was the acquiring
entity.

The  Registrant previously reported that Deloitte Touche L.L.P. ("DT"), the
independent certifying accountant of MMI, a wholly-owned subsidiary of  the
Registrant  acquired effective December 31, 1996, automatically became  the
independent  certifying  accountant of the  Registrant  as  the  result  of
accounting for the acquisition of MMI as a reverse acquisition transaction.

Upon  further  consideration, the Registrant has concluded that  since  the
Registrant was the legal acquirer of MMI, there has been no change  in  the
Registrant's  independent certifying auditor.  At no time did  an  auditor-
client  relationship exist between DT and the Registrant.  Reuben E. Price,
the  independent certifying accountant of the Registrant prior to  the  MMI
acquisition,  remained  the  independent  certifying  accountant   of   the
Registrant after the acquisition.

DT  advised MMI on March 17, 1997, that the client-auditor relationship had
ceased between DT and MMI.

During  the  two fiscal years ended April 30, 1995 and 1996,  respectively,
and  the  period  through March 17, 1997, there have been no  disagreements
between  DT  and MMI on any matter of accounting principles  or  practices,
financial  statement  disclosure, or auditing  scope  or  procedures  which
disagreement, if not resolved to DT's satisfaction would have  caused  them
to  make reference in connection with its reports to the subject matter  of
disagreement.   In  addition,  DT's  reports  on  the  Company's  financial
statements  for  such  fiscal  periods  contained  no  adverse  opinion  or
disclaimers of opinion, nor were such reports qualified or modified  as  to
uncertainty, audit scope or accounting principles.
<PAGE> 21

  ITEM 9.  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
             COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
                                     
The  Company's  bylaws  provide for a maximum of nine  directors  that  are
elected on an annual basis at the Company's annual meeting of stockholders.
The  present term for each director will expire at the next annual  meeting
of  stockholders  or  at such time as his successor  is  duly  elected  and
qualified.   Executive officers are elected annually  and,  except  to  the
extent  governed  by employment contracts, serve at the discretion  of  the
Board of Directors.


<TABLE>
                     DIRECTORS AND EXECUTIVE OFFICERS
<CAPTION>
NAME                      AGE POSITION     PERIOD SERVED
------------------------  --- --------     --------------------------------
<S>                       <C> <C>          <C>

Stephen J. Sogin, Ph.D..  53  Director     March, 1990 to Present
L. Daniel Rawitch.......  38  Director     September, 1994 to Present
                              Vice Chmn    September, 1994 to May, 1995
                              CEO          May, 1995 to Present
Jan C. Hoeffel..........  61  Director     November, 1995 to Present
                              COO          July, 1995 to November, 1995
                              President    November, 1995 to Present
James W. Noack..........  45  Pres, MMI    1987 to Present
                              Director     January, 1997 to Present
Jose Philipe Guedes.....  50  Director     January, 1997 to Present
S. Lewis Meyer..........  52  Director     January, 1997 to Present
David Purvis............  51  Director     July, 1997 to Present
Paul R. Garrigues         41  MMI SVP/CFO  March 1992 to Present
Lee Decker                33  Pres, PAMN   March 1991 to Present
</TABLE>

L.  Daniel  Rawitch, 38, has served as Chief Executive Officer  since  May,
1995  and  as a Director since September, 1994.  He acquired the  operating
rights  to  Residential Pacific Mortgage, Inc. (RPM) in 1989 and served  as
its Chief Executive Officer until it was acquired by the Company in August,
1994,  at which time he became Vice Chairman of the Company and focused  on
marketing capabilities development.  In 1988-1989 he was Vice President and
San  Jose  Branch  Manager  of Pacific Coast  Savings  and  Loan  where  he
developed wholesale loan originations through mortgage brokers.  From  1986
until  it was sold to Chicago-based UCB Services, Inc. in 1989, he was  co-
founder  and President of Data Fax Information Services, Inc.,  a  mortgage
credit  reporting  company.  In 1985-1986 as Vice President,  Bear  Stearns
Mortgage  Capital  Corporation, he led various mortgage related  activities
throughout the Northwestern US.  In 1984-1985 as a Vice President of Eureka
Federal  Savings  and Loan, he managed all secondary marketing  operations.
From  1982  to 1985 he was President of West Coast Lending Group,  Inc.,  a
loan production and secondary marketing organization.

Jan  Hoeffel,  61,  was  a founder and President of  Finex  Corporation,  a
technology-oriented  mortgage broker acquired by the Company  in  December,
1991, after which he served as Executive Vice President until resigning  in
mid-1992.  He rejoined the Company in mid-1995 and became President  and  a
Director  in  November,  1995.   In  1992  he  incorporated  a  merchandise
advertising  and  marketing  company  providing  custom  multimedia   kiosk
platforms,  and served as its President until July, 1993.  Since  1988,  he
has been a director and major shareholder of Typography Express, a computer-
based  national service bureau for graphic arts professionals.   He  was  a
founder   in  1989  and  first  President  of  Sweet  Factory,  a  licensed
confectionery retailer later sold privately and now a national  chain.   He
was a founder and Director of Healthworks, Ltd., an international specialty
retailer  acquired in 1988 by Grand Metropolitan Retailing, Ltd.  In  1973,
he  became Vice President Marketing with Equitec Financial Group,  Inc.,  a
start-up               financial               planning                firm
<PAGE> 22

which  became  a  $4 billion NYSE firm providing securities management  and
syndication services to individual and institutional investors,  and  later
led  its  business development activities, both domestic and international,
until 1989.  After earning a BA from Ohio State University, he became Naval
Aviator and completed the US Navy Test Pilot School.  Following 4 years  as
a Navy test pilot, in 1967 he joined Pan American World Airways, Inc. where
he  became an Assistant to the Chief Pilot - Technical and Manager,  Flight
Operations Publications.

James  W. Noack, 45, the founder and President of Monument Mortgage,  Inc.,
became  a  Director in January, 1997 after it was acquired by the  Company.
MMI  has  originated  over  $5  billion in  new  loans  under  Mr.  Noack's
leadership.   In  1983  he  joined  Wells Fargo  Mortgage  as  Senior  Vice
President,  Wholesale  Mortgage Banking and  developed  eight  high  volume
wholesale  production offices throughout California.  When it was  sold  in
1985  and became IMCO Realty Services, he served on its Executive Committee
and  was a senior member of its Loan Committee.  In 1981 as a member of the
founding  staff  of Guarantee National Mortgage Corporation  and,  as  Vice
President  of  Production, he led a department which  amassed  a  servicing
portfolio  of  $260  million in 18 months.  From 1977  to  1981,   he  held
positions of increasing responsibility in senior loan origination, business
development and loan approval positions for Oregon, Washington  and  Alaska
for  the Federal National Mortgage Association (Fannie Mae).  From 1973  to
1977, he was Loan Servicing Manager with Countrywide Funding Corporation of
Los  Angeles,  CA, the nation's largest mortgage banking firm.   Mr.  Noack
received  a  BA  from  UC Fullerton.  He is a frequent author,  speaker  to
industry  groups and is widely recognized as an innovative  leader  in  the
application of technology to the loan industry.

Stephen  J.  Sogin,  Ph.D., 55,  has been a Director of the  Company  since
March, 1990.  From 1982 until  1995, he was a general partner of the entity
that  is  the  general  partner  of  Montgomery  Medical  Ventures  II,   a
significant  Finet shareholder.  From 1980 to 1982, he was an Associate  at
the  venture capital firm of Adler and Company.  Earlier he was a  Research
Scholar  of  the  American  Cancer Society and  a  Fellow  of  the  Medical
Foundation  of  Boston  while  at  Brandeis  University  and  an  Assistant
Professor of Biology while at the University of Houston.  Dr. Sogin is  the
author of over 30 scientific papers on theoretical and applied microbiology
and  is  a member of the American Society for Microbiology and the American
Association for the Advancement of Science.  Mr. Sogin is also  a  director
of Osteotech, Inc.

Jose Philipe Guedes, 50, became a Director in January, 1997.  Mr. Guedes is
Managing Partner of Ceramic, a ceramic tile manufacturer, and Pinto  Basil,
a  real  estate  investment firm.  From 1982-1995, he was  Chief  Executive
Officer of Cerexport/Vista Alegre, a ceramic manufacturer.  From 1975-1982,
he  was  with  Atlantica-Boavista Insurance Group in  Brazil  as  Technical
Director  and  a Director.  Earlier he was with Companhia Uniao  Fabril,  a
heavy  chemicals and metal refining firm.  He earned a degree  in  chemical
engineering  from the University of Lisbon and has served as a Director  of
R.  Schedel,  a  Lisbon  Stock  Exchange  broker,  and  SOCI,  a  newspaper
publisher,  and is a past President of the Portuguese Ceramic Manufacturers
Association.

S. Lewis Meyer, 52, became a Director in January, 1997.  Mr. Meyer has over
25  years  of  senior level management experience in the field of  Computed
Tomography  (CT)  scanning.  He is President and CEO  of  Imatron  Inc.,  a
public,  technology-based  company engaged  principally  in  Electron  Beam
Computed  Tomography  (EBCT) scanning, both in  Imatron's  Coronary  Artery
Scanning  clinics and in R&D work for other firms.  From 1991-1993  he  was
Vice President Operations with Otsuka Electronics (USA), Inc.  Between 1981-
1991, he was the founding senior executive officer of 4 startups in the  CT
field.   He  held  senior marketing  and CT management positions  with  EMI
Medical,  Inc.  from 1976-1981 and with Varian Associates  from  1971-1976.
Mr. Meyer received a BS in Physics from the University of Pacific and a  MS
and  Ph.D. in Physics from Purdue University. Mr. Meyer is also a  director
of BSD Medical Company.

David  Purvis, 51, became a Director in July 1997.  Mr. Purvis has been  an
independent  investor and consultant and owner of Grey  Fox  Associates,  a
residential  real  estate development company.   He  serves  as  an  expert
witness in oil trading and transportation cases.  From 1974-1990, he was  a
Partner  and  Managing  Director, US Operations of  Vitol,  S.A.,  Inc.,  a
leading international oil trading company.  In 1972-1974, he was an analyst
and  operations  coordinator with Mobil Oil Corp. and  earlier  was  Deputy
Director  of  the  US Navy's largest Fuel Depot at Subic Bay,  Philippines.
Mr.  Purvis  received a BA in Economics from Amherst College,  is  a  guest
lecturer at Oxford's College of Petroleum Studies,
<PAGE> 23

  is a member of the Smithsonian Institution's National Board and Executive
Committee,  and has served as a Director or Trustee of various  for  profit
and non-profit organizations.

Paul  R.  Garrigues, 41, is MMI's Chief Financial Officer and  Senior  Vice
President, Finance and a Certified Public Accountant.  He has been with MMI
since 1992.  From 1988-1992, he was First Vice President/Assistant Director
with  First  Nationwide  Bank's Loan Division in Sacramento,  CA  where  he
managed a $24 billion servicing portfolio that included 200,000 loans in 43
states.   From 1986-1988, he was Chief Financial Officer/Vice President  of
Financial Savings and Loan Association of San Diego, CA.  He holds a BS  in
Accounting from the University of Southern California.

Lee  Decker, 33, is President of PAMN and the Senior Vice President of  MMI
responsible  for investor/lender relationships, loan pricing and  secondary
marketing  operations.  He is a member of FHLMC, AUS and AQUARIUS  software
development   teams   and  developed  Loanware,   MMI's   PC   program   to
electronically evaluate mortgages and submit loan applications.  From 1989-
1991,  as  Vice President of Hamilton Savings Bank, he supervised all  loan
servicing  operations.  He earned a BA in Economics from the University  of
Colorado and has a Certificate in Mortgage Banking from Cal State Hayward.

COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT

Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and executive officers, and persons who own more than ten percent
of  a registered class of the Company's equity securities, to file with the
Commission initial reports of ownership and reports of changes in ownership
of  common  stock  and other equity securities of the  Company.   Officers,
directors,  and  greater  than  ten percent shareholders  are  required  by
regulation  to furnish the Company with copies of all Section  16(a)  forms
they file.

To  the  Company's knowledge, based solely on review of the copies of  such
reports furnished to the Company and written representations that no  other
reports  were  required, during the fiscal year ended April 30,  1997,  all
Section 16(a) filing requirements applicable to its officers, directors and
greater than ten percent beneficial owners were complied with.
<PAGE> 24
                      ITEM 10. EXECUTIVE COMPENSATION

EXECUTIVE COMPENSATION

The following table sets forth information regarding compensation received
by the Company's Chief Executive Officers and each of the Company's other
executive officers whose total annual compensation exceeded $100,000 with
respect to the fiscal years ended April 30, 1997, 1996, and 1995,
respectively.  Effective January 1, 1997, Messrs. Hoeffel and Noack, each
of whom manages a different segment of the Company's business, voluntarily
elected to defer a portion of their annual salaries.

<TABLE>
                        SUMMARY COMPENSATION TABLE
<CAPTION>
                   Annual Compensation       Awards            Other
                   ------------------- ----------------------  --------
Name and                     Other     Restricted  Securities  All
Principal  Fiscal            Annual    Stock       Underlying  Other
Position   Year    Salary    Comp      Awards      Options     Comp <F1>
---------  ------  --------  --------  ----------  ----------  --------
<S>        <C>     <C>       <C>       <C>         <C>         <C>
L. Daniel  1997    $ 90,664  $ 58,341      -           -       $ 35,000
Rawitch    1996      60,840    38,789      -       100,000         -
CEO        1995     100,000    20,000      -        48,000         -

Harry R.   1997        -         -         -          -            -
Kraatz     1996        -         -         -          -            -
CEO/Pres   1995 <F2> 60,000      -         -       184,320         -

Jan        1997      55,169    53,762      -           -         18,000
Hoeffel,   1996      47,000     1,500      -       100,000         -
President  1995        0         -         -       125,000         -

James W.   1997     116,990     8,735      -           -           -
Noack, MMI
President,
Director

Paul W.    1997     119,386    10,033      -           -           -
Garrigues,
MMI CFO
<FN>
<F1>
During fiscal year 1997 prior to the acquisition of PAMN by Finet, Mr.
Rawitch was employed by PAMN on a part time basis and received compensation
of $35,000, and Mr. Hoeffel received from PAMN consulting fees of $18,000.
<F2>
Mr. Kraatz , who resigned as Chief Executive Officer and voluntarily
surrendered 96,000 options on May 15, 1995, was engaged through November,
1995 to market brokerage franchises, for which no compensation was earned
or paid, and his remaining 88,320 options expired unexercised in December
1995.
</FN>
</TABLE>
<PAGE> 25

DIRECTOR COMPENSATION

Heretofore,  the  members of the Board of Directors have not  received  any
cash  compensation for services on the Board of Directors or any  committee
thereof  but  are  reimbursed for expenses actually incurred  in  attending
meetings  of the Board and its committees.  However,  in January, 1997  the
Board's  Compensation  Committee recommended and the  Board  resolved  that
outside   Directors  receive  $15,000  annually  for  their  services   and
attendance  at  all regular quarterly Board meetings and  $1,000  for  each
additional Board or committee meeting.  Additionally, members of the  Board
of  Directors are eligible to participate under the Company's Stock  Option
Plan.

EMPLOYMENT AGREEMENTS

All  members  of  the  Company's  executive management,  including  certain
executives  of  subsidiaries, have entered into employment agreements  with
the  Company.   Except for certain base salary and performance compensation
differences,   the   agreements   are   standard   and   contain   specific
confidentiality and non-competitive language.

<TABLE>
                     OPTION GRANTS IN LAST FISCAL YEAR
<CAPTION>
                            Individual Grants
-----------------------------------------------------------------
                              % Total    Exercise
                    Options   Options    Price         Expiration
Name                Granted   Granted    Price($/sh)     Date
-----------------   -------   --------   -----------   ----------
<S>                 <C>       <C>        <C>           <C>
Stephen Sogin        40,000    33.3%       .50          1/2002
Jose Philipe Guedes  40,000    33.3%       .50          1/2002
S. Lewis Meyer       40,000    33.3%       .50          1/2002
                    -------   --------
                     120,000   100.0%
<FN>
<F1>
In  February,  1997, options for 3,167 shares were exercised  at  $.06  per
share by a former employee.
</FN>
</TABLE>

The  period  covered in the above table is from May 1, 1996  to  April  30,
1997.  The most recent prior annual report covered the period from  January
1, 1995 to December 31, 1995. During the intervening period from January 1,
1996 to April 30, 1996, the following options were granted.

<TABLE>
<CAPTION>
-----------------------------------------------------------------
                              % Total    Exercise
                    Options   Options    Price<F1>     Expiration
Name                Granted   Granted    Price($/sh)     Date
-----------------   -------   --------   -----------   ----------
<S>                 <C>       <C>        <C>           <C>
Stephen J. Sogin     50,317    20.2%     $ .06          1/2001
L. Daniel Rawitch   100,000    39.9%       .06          1/2006
Jan C. Hoeffel      100,000    39.9%       .06          1/2006
                    -------   --------
                     250,317   100.0%

<PAGE> 26

<FN>
<F1>
Pursuant to the Company's plan of recapitalization approved by shareholders
in the first quarter of 1996, which included the agreement to repurchase  6
million  shares from Cumberland for $.03 per share, in the  absence  of  an
active  trading  market for the Company's shares, the  Company's  Board  of
Directors established $.03 as the share value for that period. As a  result
of  the  reverse split of October, 1996, that value became $.06 per  share.
The  options  granted and the exercise prices above have been adjusted  for
the reverse stock split of October, 1996.
 </FN>
</TABLE>

1989 STOCK OPTION PLAN

The Company's 1989 Stock Option Plan (the "Option Plan") was adopted by the
Company's  Board of Directors in June 1989.  As a result of  reverse  stock
splits,  the  number of shares reserved for issuance has  been  reduced  to
500,000. In January, 1997, the Compensation Committee recommended  and  the
Board  of  Directors  amended the Option Plan  to  incorporate  a  2.5%  of
authorized  shares  non-qualified stock bonus plan in lieu  of  cash  bonus
payments  for performance and an increase in the number of shares  reserved
for  the Option Plan to 5% of authorized shares.  These amendments will  be
submitted  for  shareholder  approval at  the  next  shareholders'  meeting
planned for later in 1997.

The  Option  Plan provides for grants to employees, which are  intended  to
qualify  as  "incentive stock options" under Section 422A of  the  Internal
Revenue  Code  of 1986, as amended (the "Code"), as well as  non-qualifying
options  for  employees, consultants and directors  of  the  Company.   The
purpose  of  the  Plan is to encourage stock ownership by certain  officer,
directors,  consultants and full-time employees of the  Company  by  giving
them a greater personal interest in the success of the Company's business.

The  Option  Plan is administered by the Board of Directors or by  a  Stock
Option  Committee  appointed  by the Board.  The  exercise  price  for  all
options  must be at least equal to the fair market value of the  shares  on
the  date  of  grant.   Payment may be made in cash or with  the  Company's
approval,  in Common Stock or a combination of cash and Common Stock.   The
exercise  of  incentive stock options granted to any participant  who  owns
stock  possessing  more  than 10% of the voting  rights  of  the  Company's
outstanding  capital stock must be at least equal to 110%  of  fair  market
value on the date of grant.  The Option Plan limits the amount of incentive
stock options that any one employee may be granted in any calendar year  in
accordance  with the Code's limitations.  The maximum option  term  is  ten
years.   The  Plan also authorizes stock appreciation rights in  connection
with the exercise of an option.

The  Option  Plan  as modified by the Board of Directors in  January,  1997
subject  to  shareholder approval, provides for automatic  grants  of  non-
qualified  options  to outside directors (directors who are  not  full-time
employees).  Upon becoming a director, each outside director is  granted  a
five-year  option  exercisable for 40,000 shares at the then  current  fair
market value and, for each of the next three years on each anniversary date
of   becoming  a  director,  is  granted  an  additional  five-year  option
exercisable  for an additional 25,000 shares vesting at the rate  of  6,250
shares per quarter, subject to continuing service as a director.  Directors
may also be granted additional options at the discretion of the Board.

As of April 30, 1997 and including the 120,000 options granted to directors
in  January, 1997, there were 559,032 options outstanding under the  Option
Plan, of which 559,032 were vested.
<PAGE 27

LIMITATIONS ON LIABILITY

The  Company's Restated Certificate of Incorporation and By-laws include  a
provision that eliminates or limits the personal financial liability of the
Company's  directors,  except for any breach  of  the  director's  duty  of
loyalty  to the Company or its stockholders; acts or omissions not in  good
faith  or which involve intentional misconduct or knowing violation of  the
law; dividend payments or stock repurchases illegal under Delaware law;  or
for  any  transaction from which the directors derive an improper  personal
benefit.   In  addition,  the  Company's  By-laws  include  provisions   to
indemnify  its  officers and directors and other persons against  expenses,
judgments,  fines  and  amounts  paid  in  settlement  in  connection  with
threatened, pending or completed suits or proceedings against such  persons
by  reason of serving or having served as officers, directors or  in  other
capacities,  except  in  relation  to matters with respect  to  which  such
persons  shall be indemnified only to the extent of expenses  actually  and
reasonably  incurred  by him in connection with the defense  or  settlement
thereof and no indemnification shall be made in respect of any claim, issue
or matter as to which such person shall have been adjudged to be liable for
negligence  or misconduct in the performance of such person's duty  to  the
Company  unless  and  only  to the extent that  the  court  in  which  such
corporate  suit or proceeding was pending shall determine upon  application
that,  despite  the  adjudication of liability  but  in  view  of  all  the
circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such expenses which the court shall deem proper.

Under  Delaware law, to the extent that an Indemnity is successful  on  the
merits  in  defense of a suit or proceeding brought against him or  her  by
reason of the fact that he or she is or was a director, officer of agent of
the Registrant, or serves or served any other enterprise or organization at
the  request of the Registrant, the Registrant shall indemnify him  or  her
against  expenses  (including  attorneys'  fees)  actually  and  reasonably
incurred in connection with such action.

If  unsuccessful in defense of a third-party civil suit or a criminal suit,
or  if  such  a  suit  is  settled, an Indemnity may be  indemnified  under
Delaware law against both (1) expenses, including attorney's fees; and  (2)
judgments, fines and amounts paid in settlement if he or she acted in  good
faith  and  in  a manner he or she reasonably believed to  be  in,  or  not
opposed  to,  the best interests of the Company, and, with respect  to  any
criminal action, had no reasonable cause to believe his or her conduct  was
unlawful.  If unsuccessful in defense of a suit brought by or in the  right
of  the  Registrant,  where  the  suit is  settled,  an  Indemnity  may  be
indemnified under Delaware law only against expenses (including  attorney's
fees) actually and reasonably incurred in the defense or settlement or  the
suit  if he or she acted in good faith and in a manner he or she reasonably
believed  to be in, or not opposed to , the best interest of the Registrant
except  that  if the Indemnity is adjudged to be liable for  negligence  or
misconduct in the performance of his or her duty to the Registrant,  he  or
she  cannot be made whole even for expenses unless a court determines  that
he  or  she  is fully and reasonably entitled to indemnification  for  such
expenses.

Also  under  Delaware law, expenses incurred by an officer or  director  in
defending a civil or criminal action, suit or proceeding may be paid by the
Registrant  in  advance of the final disposition of  the  suit,  action  or
proceeding upon receipt of an undertaking by or on behalf of the officer or
director to repay such amount if it is ultimately determined that he or she
is  not  entitled to be indemnified by the Registrant.  The Registrant  may
also advance expenses incurred by other

employees  and agents of the Registrant upon such terms and conditions,  if
any, that the Board of Directors of the Registrant deems appropriate.

Insofar as indemnification for liabilities arising under the Securities Act
may  be permitted to directors and officers of the Company pursuant to  the
foregoing  provisions, or otherwise, the Company has been advised  that  in
the opinion of the Commission such indemnification is against public policy
as expressed in the Securities Act and is, therefore, unenforceable.
<PAGE> 28
       ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
                                 MANAGEMENT

The  following  table sets forth certain information with  respect  to  the
beneficial ownership of the Company's Common Stock at April 30,  1997:  (i)
by  each  person  known by the Company to own beneficially more  than  five
percent  of the Company's outstanding shares of Common Stock; (ii) by  each
director, director nominee and executive officer of the Company; and  (iii)
by  all  officers, directors and director nominees as a group.   Except  as
otherwise  indicated in the notes to this table, the holders  listed  below
have  sole  voting and investment power with respect to such  shares.   For
purposes  of this table, a person is deemed to have "beneficial  ownership"
of any shares as of a given date which such person has the right to acquire
within  60  days after such date.  For purposes of computing the percentage
of  outstanding shares held by each person named below on a given date, any
security  which such person has the right to acquire within 60  days  after
such  date is deemed to be outstanding, but is not deemed to be outstanding
for the purpose of computing the percentage ownership of any other person.

<TABLE>
                  Beneficial Ownership
-----------------------------------------------------------
<CAPTION>
               Name and Address of      ----Common Stock----
               Beneficial Owner           # owned    % owned
------------   ----------------------   ----------   -------
<S>            <C>                      <C>         <C>
Beneficial     Jose Salema Garcao       8,700,000 <F1>   28.9%
Owners of      Quinta de Marinha
more than 5%   Lote CT-14
of shares      2750 Cascais, Portugal
outstanding

               James A. Umphryes        3,260,000 <F2>   12.7%
               3741 Waterford Lane
               Walnut Creek, CA 94598

               Cumberland Partners      2,564,781 <F3>    9.9%
               1114 Ave of Americas
               New York, NY 10036

Directors      James W. Noack            4,315,000 <F4>  16.7%
and Officers   Jan Hoeffel               1,263,975 <F5>   4.9%
               L. Daniel Rawitch         1,074,934 <F6>   4.1%
               Jose Philipe Guedes         360,000 <F7>   1.4%
               Stephen J. Sogin            156,266 <F8>   0.6%
               Paul Garrigues              107,813 <F9>   0.4%
               David Purvis                107,500 <F10>  0.4%
               S. Lewis Meyer               40,000 <F11>  0.2%

9 Directors                              7,425,488       28.6%
and Officers
as a group
<FN>
<F1>
Reflects 4,400,000 shares beneficially owned by him and currently
exercisable warrants to acquire 4,300,000 shares
<F2>
Reflects 3,220,000 shares beneficially owned by him, 20,000 beneficially
owned by his spouse and 20,000 shares beneficially owned by his minor
child.
<F3>
Reflects 2,350,000 shares beneficially owned and currently exercisable
warrants to acquire 214,781 shares.
<PAGE> 29

<F4>
Reflects 4,295,000 shares beneficially owned by him and 20,000 shares
beneficially owned by his minor child.
<F5>
Reflects 1,037,817 shares beneficially owned by him, 917 shares
beneficially owned by his spouse and currently exercisable options to
acquire 225,241 shares.
<F6>
Reflects 926,934 shares beneficially owned by him and currently exercisable
options to acquire 148,000 shares.
<F7>
Reflects 320,000 shares beneficially owned by him and currently exercisable
options to purchase 40,000 shares granted for his services as a director.
<F8>
Reflects 50,000 shares beneficially owned by him and currently exercisable
options to purchase 106,266 shares granted for his services as a director.
<F9>
Reflects 107,813 shares beneficially owned by him.
<F10>
Reflects 45,000 shares beneficially owned by him , currently exercisable
warrants to purchase 22,500 shares and currently exercisable options to
purchase 40,000 shares granted for his services as a director.
<F11>
Reflects currently exercisable options to purchase 40,000 shares granted
for his services as a director.
 </FN
</TABLE>
                                     
<PAGE> 30
         ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

It  is  the Company's policy not to enter into transactions with affiliates
of  the  Company,  unless  such transactions are  for  bona  fide  business
purposes  and  are on terms at least as favorable to the Company  as  those
which could be obtained from unaffiliated parties.  At present, the Company
has  no material related party relationships other than a 3 year consulting
agreement with James Umphryes, a shareholder and former 50% owner  of  MMI.
The  agreement  calls for payments of $15,000 per month  through  December,
2000.

Pending completion of the Offering and an increase in the Company's working
capital,  James Noack lent the Company a total of $625,326 at  an  interest
rate  of  8.5%.   These  loans  were secured by  3  foreclosed  residential
properties  in  inventory.  The loans were retired as the  properties  were
sold.  As of April 30, 1997, all borrowings had been fully repaid.

Effective  December  31, 1996 the Company issued 8,400,000  shares  of  its
common  stock and $1,000,000 in cash to James Noack and James  Umphryes  as
consideration for the acquisition of Monument Mortgage, Inc.  At  the  same
time, the Company acquired PreferenceAmerica from its shareholders, two  of
whom were Messrs. Noack and Umphryes, for $250,000.

The  Company  rents on a month-to-month basis a 3,500 square  foot  storage
facility  from James Noack for $600 per month for the storage of  furniture
and equipment.

During  fiscal  year 1997 and earlier, the Company made  loans  to  several
officers  and  employees.  As  of April 30, 1997  total  loan  balances  of
$144,350 to 4 individuals remained outstanding.

On  December 16, 1996, Jose Maria Salema Garcao purchased 1,000,000  shares
of  the  Company's   for  $500,000 and was granted five  year  warrants  to
purchase  1,000,000  shares of the Company's common stock  at  an  exercise
price  of  $1.00  per share.  On December 28, 1996, he purchased  1,000,000
shares of the Company's  for $500,000 and was instrumental in assisting the
Company to sell an additional 5,000,000 shares of its  for $2,500,000,  for
which  he  was granted 2,500,000 warrants at an average exercise  price  of
$.85  per share.  On March 21, 1997, he purchased 1,000,000 shares  of  the
Company's  common stock for $600,000 for which he was granted  warrants  to
purchase  600,000 shares of the Company's at an average exercise  price  of
$2.00  per  share.  In  April  1997,  he  purchased  1,400,000  share   for
$1,400,000, for which he was granted warrants to purchase 200,000 shares of
the Company's common stock at an average exercise price of $2.50 per share.
<PAGE> 31
                ITEM 13.  EXHIBITS AND REPORTS ON FORM 8-K

The  exhibits listed in the accompanying index to exhibits on page  56  are
filed as part of this annual report.

<TABLE>
                                 EXHIBITS
<CAPTION>
Exhibit   Description
--------  ---------------------------------------
<S>       <C>
EX-3(i)   Articles of Incorporation <F1>
               1.   Amendments of October, 1997
               2.   Amentment of January, 1997

EX-3(ii)  By-laws <F1>
               1.   Amendments effecting a 1-for-2 reverse stock split and increasing
                 authorized shares to 30 million
               2.   Amendment increasing authorized shares to 40 million

EX-10     Material contracts:
               1.   Term Sheet Agreement between Finet, MMI and PAMN of May 22, 1996
               2.   Revised Term Sheet Agreement between Finet, MMI and PAMN of August 19,
                 1996
3.   Merger Agreement and Plan of Reorganization between Finet and MMI of
December 20, 1996
               4.   Umphryes Consulting Agreement

EX-16     Letter on changes in certifying accountant are incorporated by
           reference to Exhibit 16 of Form 8-K/A filed on 4/24/97.

EX-21     Description of the subsidiaries of the registrant

EX-23     Consent of independent accountant

EX-27     Financial data schedule

<FN>
<F1>
Restated Bylaws of Finet Holdings Corporation, July 14, 1993 are
incorporated by reference pursuant to the provisions of Exchange Act
Regulations 240.12b-1, 240.12b-32 and 201.24, as filed with the Commission
as part of Finet Holdings Corporation's Form SB-2 Registration Statement
under the Securities Act of 1933 on March 18, 1994.

</FN>
</TABLE>

<PAGE> 32

<TABLE>
<CAPTION>
                            REPORTS ON FORM 8-K

Date      Item  Description
--------  ----  -----------------------------------------------------------
-----
<S>       <C>   <C>
5/22/96    2    Announce agreement to acquire MMI and PAMN

10/10/96   5    Announce reverse stock split and increase of authorized
shares

1/16/97    5    Summarize recapitalization plan items completed in 1996

4/10/97    4    Change in independent accountant

4/22/97    4    Amendment to 4/10/97 Form 8-K clarifying continuity of
                  independent accountant

5/9/97     4    Concurrence of MMI's former independent accountant with
4/10/97
                  Form 8-K and 4/22/97 Form 8-K/A

5/15/97    2,7  Clarify accounting basis of MMI acquisition and present
                  interim and prior audited MMI financial statements

<PAGE> 33

                                 SIGNATURE
                                     
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, THE
REGISTRANT HAS DULY CAUSED THIS REPORT TO BE SIGNED ON ITS BEHALF BY THE
UNDERSIGNED, THEREUNTO DULY AUTHORIZED.

FINET HOLDINGS CORPORATION


</TABLE>
<TABLE>
<S>                           <C>
Date: August 13, 1997            /S/     L. DANIEL RAWITCH
                               ------------------------------------
                               L. DANIEL RAWITCH
                               (CEO AND PRINCIPAL EXECUTIVE OFFICER)

Date: August 13, 1997            /S/     JAN C. HOEFFEL
                               ------------------------------------
                               JAN C. HOEFFEL
                               (PRESIDENT AND PRINCIPAL FINANCIAL OFFICER)


Date: August 13, 1997            /S/     JAMES W. NOACK
                               ------------------------------------
                               JAMES W. NOACK
                               (DIRECTOR)


Date: August 13, 1997            /S/     S. LEWIS MEYER
                               ------------------------------------
                               S. LEWIS MEYER
                               (DIRECTOR)
</TABLE>
<PAGE> 34
                                 APPENDIX
                                     
                           REUBEN E. PRICE & CO.
                      PUBLIC ACCOUNTANCY CORPORATION
                             703 MARKET STREET
                          SAN FRANCISCO, CA 94103
                                     

     INDEPENDENT AUDITORS REPORT
     
     To the Board of Directors and Stockholders
     Finet Holdings Corporation
     San Francisco, CA
     
     We  have audited the accompanying consolidated balance sheet of
     Finet  Holdings Corporation and subsidiaries as  of  April  30,
     1997  ,  and the related consolidated statements of operations,
     stockholders' equity  and cash flows for the years ended  April
     30,   1997  and  1996.   These  financial  statements  are  the
     responsibility of the Company's management.  Our responsibility
     is to express an opinion on these financial statements based on
     our audit.
     
     We  conducted  our audit in accordance with generally  accepted
     auditing  standards.  Those standards require that we plan  and
     perform  the audit to obtain reasonable assurance about whether
     the financial statements are free of material misstatement.  An
     audit  includes examining, on a test basis, evidence supporting
     the  amounts  and disclosures in the financial statements.   An
     audit  also  includes assessing the accounting principles  used
     and  significant  estimates  made by  management,  as  well  as
     evaluating  the  overall financial statement presentation.   We
     believe  that  our audit provides a reasonable  basis  for  our
     opinion.
     
     In  our opinion, the consolidated statements referred to  above
     present   fairly,  in  all  material  respects,  the  financial
     position of Finet Holdings Corporation and subsidiaries  as  of
     April 30, 1997, the results of their operations and their  cash
     flows for the years ended April 30, 1997 and 1996 in conformity
     with generally accepted accounting principles.
     
     Finet holdings Corporation acquired Monument Mortgage, Inc. on
     December 16, 1996. As more fully discussed in Note 3 to the
     financial statements, the transaction is accounted for as a
     reverse acquisition whereby Monument Mortgage, Inc. is
     considered the acquiring corporation for accounting and
     financial statement presentation purposes and Monument
     Mortgage, Inc.'s historical financial statements are deemed to
     be the historical financial statements of the reporting entity.
     
     
     /s/ REUBEN E. PRICE & CO.
     
     REUBEN E. PRICE & CO.
     San Francisco, CA
     
     August 13, 1997
<PAGE> 35
                FINET HOLDINGS CORPORATION AND SUBSIDIARIES
                 AUDITED CONSOLIDATED FINANCIAL STATEMENTS
                           AS OF APRIL 30, 1997
<TABLE>
                   CONDENSED CONSOLIDATED BALANCE SHEET

<CAPTION>
                                                                 April 30,
                                                                   1997
                                                               ------------
<S>                                                            <C>
                                  ASSETS
Cash.........................................................  $   603,296
Accounts receivable from sales of mortgage
  loans and servicing rights................................     3,453,199
Mortgage loan servicing advances and
  other receivables.(Note 3).................................      643,072
Notes receivable from officers.(Note 15).....................      144,350
Notes receivable.............................................      247,000
Mortgages held for sale, net.................................    7,268,877
Owned servicing rights (Note 5)..............................      579,018
Furniture, fixtures and equipment, net of
  accumulated depreciation of $1,712,848 (Note 6)............    1,096,666
Other assets.................................................      213,414
                                                               ------------
    Total assets.............................................  $14,249,892
                                                               ============
                   LIABILITIES AND STOCKHOLDERS' EQUITY

Liabilities:
Warehouse line of credit (Note 8)............................  $10,209,197
Accounts payable.............................................      720,916
Revolving line of credit (Note 8)............................      100,000
Note payable and capitalized leases (Note 8).................    1,017,912
Accrued expenses and other liabilities.......................      686,318
Liabilities subject to compromise.(Note 9)...................      474,479
                                                               ------------
    Total liabilities........................................   13,208,822
                                                               ------------
Commitments and contingencies (Note 10)

Stockholders' equity (Notes 12 and 17)
Preferred stock: $.01 par value (100,000 shares authorized,
  0 shares outstanding)......................................  $      -
Common stock: $.01 par value, (30,000,000 shares authorized,
  24,763,030 shares issued and outstanding)..................      312,414
Common stock subscribed (3,991,250 shares)...................       39,913
Paid in capital..............................................    5,814,203
Less: Stock subscription receivable (2,991,250 shares).......   (2,693,038)
Accumulated deficit..........................................   (2,432,422)
                                                               ------------
    Total stockholders' equity...............................    1,041,070
                                                               ------------
    Total liabilities and stockholders' equity..............   $14,249,892
                                                               ============
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
<PAGE> 36
<TABLE>
                   CONSOLIDATED STATEMENTS OF OPERATIONS
                FOR THE YEARS ENDED APRIL 30, 1997 AND 1996
<CAPTION>
                                                                1997
1996
                                                            ------------  -
-----------
<S>                                                         <C>
<C>
REVENUES
Gain on sale of servicing rights..........................  $ 4,251,574   $
4,824,899
Loss on sale of mortgage loans (Note 7)...................   (1,885,057)
(1,548,659)
Interest income...........................................    1,110,420
1,975,388
Loan servicing fees.......................................      588,698
921,220
Retail broker fees........................................       93,997
86,409
Marketing leads...........................................       60,596
-
Other.....................................................      146,004
115,479
                                                            ------------  -
-----------
    Total revenues........................................    4,366,232
6,374,736

EXPENSES
Compensation and employee benefits........................    3,245,818
2,053,987
Interest expense..........................................    1,134,581
1,829,357
Office....................................................      854,270
758,325
Marketing.................................................      439,953
176,131
Professional fees.........................................      639,034
401,965
Depreciation and amortization.............................      436,958
398,630
Occupancy.................................................      286,550
228,836
Insurance.................................................       33,294
38,214
Data processing services..................................       94,581
80,221
Other.....................................................      681,548
69,686
                                                            ------------  -
-----------
    Total expenses........................................    7,846,587
6,035,352
                                                            ------------  -
----------
(LOSS) INCOME BEFORE INCOME TAXES AND EXTRAORDINARY GAIN
 ON LIABILITIES SUBJECT TO COMPROMISE.....................   (3,480,355)
339,384
INCOME TAX (Note 13)......................................         -
13,220
                                                            ------------  -
-----------
NET (LOSS) INCOME BEFORE EXTRAORDINARY GAIN
 ON LIABILITIES SUBJECT TO COMPROMISE.....................   (3,480,355)
326,164
EXTRAORDINARY GAIN ON LIABILITIES SUBJECT TO COMPROMISE...      312,090
-
NET (LOSS) INCOME AFTER EXTRAORDINARY GAIN ON LIABILITIES
 SUBJECT TO COMPROMISE....................................  $(3,168,265)  $
326,164
                                                            ============
============
Pro forma information: (Note 13)
  Historical (loss) income before provision for
    income taxes as shown above...........................  $(3,480,355)  $
339,384
  Pro forma provision for income taxes....................         -
(112,648)
  Pro forma net (loss) income before extraordinary gain...   (3,480,355
226,736
  Extraordinary gain from settlement of
    liabilities subject to compromise.....................      312,090
-
  Pro forma net (loss) income.............................  $(3,168,265)
226,736
  Pro forma net (loss) income per share before              ============
===========
    extraordinary gain....................................        (0.26)
0.03
  Extraordinary gain on liabilities subject to compromise.         0.02
-
  Pro forma net (loss) income per common share............        (0.24)
0.03
                                                            ============
============
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING.............   13,187,876
8,400,000
                                                            ============
===========
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
<PAGE> 37

<TABLE>
                        FINET HOLDINGS CORPORATION
              CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                FOR THE YEARS ENDED APRIL 30, 1997 AND 1996
                                     
<CAPTION>
                                                                 Capital in
Common    Retained
                                -----------Common Stock-------  Excess of
Stock      Earnings
                                  Shares    Amount      Sub-    Par Value
Sub-       (Accum        Total
                                                       scribed
scription    Deficit)     Capital
                                ---------- ----------- ------- ------------
----------- ------------ -----------
<S>                             <C>         <C>        <C>     <C>
<C>         <C>          <C>
Balance April 30, 1995             100,000  $ 760,000          $   350,000
$1,797,600   $2,907,600
Recapitalization to reflect shares
 issued in reverse acquisition   8,300,000   (611,216)             611,216

Net income
326,164     326,164
Distribution to shareholders
(647,225)   (647,225)
                                ----------- ---------  ------- ---------- -
----------- ------------ ----------

Balance April 30, 1996           8,400,000    148,784              961,216
1,476,539  2,586,539

Issue of common shares:
 Common stock offerings         11,991,250     80,000   39,913   7,233,045
(2,693,038)              4,659,920
 Reverse acquisition (Note 13)   6,411,823     64,118           (3,455,338)
(3,391,220)
 Debt & note payable conversion  2,314,114     23,141            1,136,416
1,159,557
 Liabilities subject to compromise 230,089      2,301              112,744
115,045
 Common stock rights             2,403,837     24,038              (24,038)
 Stock option exercise               3,167         32                  158
190
Repurchase of common shares     (3,000,000)   (30,000)            (150,000)
(180,000)

Distributions to shareholders
(740,695)  (740,696)

Net loss
(3,168,265)(3,168,265)
                                ----------- ---------- ------- ------------
------------ ----------- -----------
Balance at April 30, 1997       28,754,280  $ 312,414  $39,913 $ 5,814,203
$(2,693,038) $(2,432,422)$1,041,070
                                =========== ========== ======= ============
============ =======================

</TABLE
      The accompanying notes are an integral part of the consolidated
                           financial statements.
<PAGE> 38

</TABLE>
<TABLE>
                        FINET HOLDINGS CORPORATION
                   CONSOLIDATED STATEMENTS OF CASH FLOWS
<CAPTION>

                                                                   1997
1996
                                                               ------------
- -------------
<S>                                                            <C>
<C>
CASH FLOWS FROM OPERATING ACTIVITIES:
 Net (loss) income............................................ $
(3,168,265) $    326,164
 Adjustments to reconcile net (loss) income to net
  cash used in operating activities:
  Depreciation and amortization...............................      436,956
398,630
  Extraordinary gain on liabilities subject to compromise.....
(312,090)         -
  Provision for losses on loans serviced & real estate owned..       62,046
(126,326)
  Loss on disposition of property, plant & equipment..........       19,829
9,364
 Changes in operating assets and liabilities:
  Decrease (increase) in receivables from sales
   of mortgage loans and loan servicing rights................    7,972,231
(1,636,478)
  Mortgage loans originated...................................
(354,096,235) (503,743,765)
  Mortgage loans sold.........................................  357,502,094
497,200,685
  Decrease (increase) in originated mortgage servicing
    rights, net...............................................
(876,414)   (1,054,538)
  Decrease (increase) mortgage loan servicing advances
    and other receivables.....................................      439,806
(740,973)
  Increase in notes receivable and notes receivable from
    officers..................................................
(391,350)         -
  Increase in prepaids and other assets.......................       25,767
(67,976)
  Increase (decrease) in accounts payable,
   accrued expenses and other liabilities.....................
(27,165)      450,175
                                                               ------------
- -------------
  Net cash provided (used) by operating activities............    7,587,210
(8,985,038)
                                                               ------------
- -------------
CASH FLOWS USED IN INVESTING ACTIVITIES:
 Purchase of mortgage servicing rights........................
(286,263)         -
 Purchase of furniture and equipment..........................
(101,807)      (90,409)
 Proceeds of sale of life insurance to officer................      165,630
-
 Settlement of liabilities subject to compromise..............
(67,122)         -
 Cash acquired with MMI and PAMN..............................       50,162
-
                                                               ------------
- -------------
  Net cash used by investing activities.......................
(239,400)      (90,409)
                                                               ------------
- -------------
<PAGE> 39

CASH FLOWS PROVIDED BY FINANCING ACTIVITIES:
 Proceeds from issuance of common stock.......................    4,390,110
-
 Repurchase of common stock...................................
(180,000)         -
 Net increase (decrease) in warehouse borrowings..............
(9,522,510)    8,622,465
 Proceeds from advances on note payable and line of credit....    1,950,000
1,200,000
 Principal payments on note payable and line of credit........
(2,297,620)      (20,831)
 Proceeds of life insurance cash surrender value loan.........      154,507
-
 Repayment of life insurance cash surrender value loan........
(154,507)         -
 Cash distributions to former MMI shareholders................
(1,040,008)     (445,710)
 Proceeds from notes payable to officers......................      625,326
-
 Repayment of notes payable to officers.......................
(625,326)         -
 Proceeds of pre-acquisition advances to affiliates...........
(1,377,309)         -
 Repayment of pre-acquisition advances to affiliates..........      660,136
-
                                                               ------------
- -------------
  Net cash (used) provided by financing activities.............
(7,417,201)    9,355,924
                                                               ------------
- -------------
Net increase (decrease)in cash................................
(69,391)      280,477
Cash at beginning of period...................................      672,687
392,210
                                                               ------------
- -------------
Cash at end of period......................................... $    603,296
672,687

============= =============
</TABLE>

 The accompanying notes are an integral part of the consolidated financial
                                statements.
<PAGE> 40
                                     
                                     
                        FINET HOLDINGS CORPORATION
                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                     
                                     
                                     
1. GENERAL
                                     
REPORTING ENTITY

Finet Holdings Corporation (FHC) acquired Monument Mortgage, Inc. (MMI) on
December 31, 1996. As more fully discussed in Note 3, the transaction is
accounted for as a reverse acquisition whereby Monument Mortgage, Inc. is
considered the acquiring corporation for accounting and financial statement
reporting purposes and Monument Mortgage, Inc.'s historical financial
statements are deemed to be the historical financial statements of the
reporting entity.  At April 30, 1997, the consolidated financial statements
also include the financial statements of PreferenceAmerica Mortgage Network
(PAMN), a wholly owned FHC subsidiary. (See Note 3)  All material
intercompany transactions and amounts have been eliminated in
consolidation.

ORGANIZATION.

Finet  Holdings  Corporation  (the "Company")  was  founded  as  William  &
Clarissa, Inc. (W&C) in February, 1988. W&C went public in 1989.  In  1991,
after  incurring  substantial  losses  and  experiencing  severe  liquidity
problems,  W&C  discontinued its prior unrelated  business  operations  and
substantially completed an amended plan of reorganization.  On December  5,
1991,  W&C acquired Finex Corporation, a privately-held California mortgage
loan  brokerage corporation that was organized in 1990 and began operations
in  1991,  and  began  continuing operations  in  mortgage  loan  brokerage
business.  On  March  31,  1992, W&C changed its  name  to  Finet  Holdings
Corporation and changed Finex's name to Finet Corporation (Finet).

On  August 31, 1994, the Company completed the acquisition of RPM Partners,
Inc.  (RPM), a California mortgage loan corporation that was organized  and
began  operations in 1991, and, in a simultaneous transaction,  merged  RPM
into  the  Company's wholly-owned corporation, FWC Shell Corporation,  Inc.
(FWC Shell).

On  April  10,  1995,  the Company organized Finet Correspondent,  Inc.,  a
wholly-owned  California  corporation Ficor), to  engage  in  correspondent
lending  activities.  Ficor became inactive in July,  1995  and  through  a
reverse  acquisition became Monument Mortgage, Inc. on December  31,  1996.
(See Note 3)


SEGMENT AND GEOGRAPHICAL INFORMATION

The Company operates in one business segment, residential real estate
services, and is primarily engaged in mortgage lending, as both a retail
mortgage broker and as a wholesale mortgage banker.  The majority of the
Company's business activity is carried out in California with lesser
activity in the western United States and Florida.

<PAGE> 41

2. SIGNIFICANT ACCOUNTING POLICIES
                                     
USE OF ESTIMATES IN PREPARATION OF FINANCIAL STATEMENTS

The  preparation  of  financial  statements in  conformity  with  generally
accepted  accounting principles requires management to make  estimates  and
assumptions that affect the reported amounts of assets and liabilities  and
disclosure  of  contingent  assets and  liabilities  at  the  date  of  the
financial  statements  and the reported amounts of  revenues  and  expenses
during  the  reporting  period.  Actual results  could  differ  from  those
estimates.

MORTGAGE LOANS HELD FOR SALE

Mortgage loans held for sale are carried at the lower of aggregate cost  or
market  value  as determined by outstanding commitments from  investors  or
current investor yield requirements calculated on the aggregate loan basis.
Mortgage  loans sold to investors generally settle within fifteen  days  of
funding.   Gains or losses on sales of mortgage loans are computed  as  the
difference between the selling price and the carrying value of the  related
mortgage loans sold, net of applicable discounts.

OWNED MORTGAGE SERVICING RIGHTS

Statement of Financial Standards ("SFAS") No. 122, Accounting for  Mortgage
Servicing  Rights,  requires the allocation of the cost  of  originated  or
purchased  mortgage loans to the mortgage servicing rights  and  the  loans
based on their relative fair values at the date of purchase or origination.
The  fair  values  of the mortgage servicing rights are based  upon  prices
available  in  the secondary market for servicing rights of mortgage  loans
with   similar   characteristics.   When  material,  capitalized   mortgage
servicing  rights are amortized in proportion to, and, over the period  of,
estimated  net  servicing income.  In evaluating and measuring  impairment,
capitalized  servicing  rights  are tested  for  impairment  based  on  the
expected future net servicing revenue stream.

LOAN SERVICING

The  Company  sells  mortgages on both a servicing retained  and  servicing
released  basis.   Loan  servicing fee income represents  fees  earned  for
servicing real estate mortgages owned by institutional investors.  The fees
are generally calculated on the outstanding principal balances of the loans
serviced  and  are  recorded  as income when  earned.   Servicing  released
premiums are based on a contractual percentage of the outstanding principal
balance and credited to income when the loan servicing rights are sold.

LOAN ORIGINATION FEES

Loan  origination  fees on mortgage loans held for  sale,  net  of  certain
direct loan origination costs, are deferred until the time of sale and  are
included  in  the computation of the gain or loss on sale  of  the  related
loans.  The sale of mortgage loan inventory is recorded when the loans  are
shipped to the investor.

HEDGE ACCOUNTING

The  Company  does  not project interest rates but rather  uses  a  hedging
strategy  to determine the portion of the pipeline loans that are  at  risk
given  the current interest rates.  The Company's hedging activity consists
of  mandatory forward commitments on mortgage-backed securities  which  are
usually  paired-off  to hedge the gain (loss) experience  from  whole  loan
sales.   Additionally, the Company enters into either optional or mandatory
forward  commitments  to  sell mortgage loans  when  funded.   The  Company
assesses  the pipeline interest rate risk based upon a number  of  factors,
including the remaining term of the rate locks, the interest rate at  which
the   locks  are  provided,  current  interest  rates  and  interest   rate
volatility.   The Company controls the credit risk of the pipeline  through
credit  evaluations, limits, and monitoring procedures.  Unrealized hedging
losses  are  recorded through a valuation allowance  that  is  shown  as  a
reduction  in  the carrying value of the related loan sale.  Fees  paid  to
investors are deferred and recognized as expense as loans are delivered  to
the  investor  in  proportion  to  the  percentage  relationship  of  loans
delivered  to the total commitment amount.  Any remaining fee is recognized
as  a  period expense at the expiration of the commitment period or earlier
if exercise of the commitment is deemed remote.

<PAGE> 42

NEW ACCOUNTING STANDARDS

In  October  1995,  the Financial Accounting Standards  Board  issued  SFAS
No.123,  "Accounting for Stock-Based Compensation."  SFAS 123 is  effective
for  fiscal  years beginning after December 15, 1995.  SFAS 123 allows  the
companies  to choose whether to account for stock-based compensation  under
the  current method described in Accounting Principles board Opinion Number
25  (APB25)  or  to use the fair value method described in SFAS  123.   The
Company plans to follow the accounting measurement provisions of APB 25 and
believes  the impact of implementing the disclosure provisions of SFAS  123
would not be material to the Company's consolidated financial statements.

In  June 1996, the Financial Accounting Standard Board issued Statement  of
Financial  Accounting  Standards No. 125,  "Accounting  for  Transfers  and
Servicing of Financial Assets and Extinguishments of Liabilities" (SFAS No.
125).   As  amended, SFAS No. 125 applies to securities lending, repurchase
agreements, dollar rolls, other similar secured financial transactions, and
to  all  other transfers and servicing of financial assets occurring  after
December  31,  1996.  SFAS 125 will result in the recording  of  Originated
Mortgage Servicing rights (OMSR) on the date of the sale of a mortgage loan
as  opposed  to  the current practice of recording OMSRs on the  date  that
loans are originated.  Additionally, under SFAS 125, excess servicing  fees
will  be combined with OMSR for balance sheet presentation as well  as  for
transactions  beginning  in the first quarter of 1997.   Based  on  current
circumstances, the Company believes that the application of the  new  rules
will not have a material impact on the financial statements.

DEPRECIATION METHOD.

Depreciation is computed over the estimated useful lives of the  furniture,
fixtures  and  equipment  of two to twelve years  using  the  straight-line
method.

INCOME TAXES.

The Company and its consolidated subsidiaries file consolidated federal and
combined  state income tax returns. Income taxes are accounted for  by  the
asset/liability approach in accordance with the provisions of SFAS No. 109,
Accounting  for  Income  Taxes. Under this pronouncement,  deferred  income
taxes,  if any, reflect the estimated future tax consequences when reported
amounts  of  assets and liabilities are recovered or paid. They arise  from
differences  between the financial reporting and tax bases  of  assets  and
liabilities  and are adjusted for changes in tax laws and  tax  rates  when
those  changes  are enacted. The provision for income taxes represents  the
total income taxes paid or payable for the current year, plus the change in
deferred taxes during the year.  The tax benefits related to operating loss
carryforwards  are  recognized if management believes, based  on  available
evidence, that it is more likely than not that they will be realized.

MMI  elected  S  Corporation status effective March 1, 1987.  The  election
ceased effective with the acquisition at December 31, 1996 (Note 3).  Prior
to  December  31,  1996,  MMI's items of taxable income,  credit,  and  tax
preferences  of  the Corporation were primarily the responsibility  of  MMI
stockholders on their individual income tax returns.

NET INCOME (LOSS) PER COMMON SHARE.

Net  income (loss) per common share is based on the weighted average number
of  shares  of  common  stock  and the dilutive  effects  of  common  stock
equivalents outstanding during the period.  Since the computation of  fully
diluted loss per share for fiscal 1997 was antidilutive, primary and  fully
diluted earnings per share are the same.

RECLASSIFICATIONS

Certain  reclassifications have been made to the April 30,  1996  financial
statements to conform to the current year presentation.


<PAGE> 43

3. ACQUISITIONS

On  December  31,  1996, the Company acuired all of the outstanding  common
stock  of  Monument Mortgage, Inc. (MMI), a non-public mortgage banker,  in
exchange  for  8.4 million common shares of FHC and a cash  payment  of  $1
million.   For accounting purposes, the cash payment is deemed  a  dividend
payment  to  MMI  shareholders and the acquisition has been  treated  as  a
recapitalization of MMI, with MMI as the reverse acquisition acquiror.  The
historical financial statements prior to December 31, 1996 are those of MMI
and  are  deemed to be those of the reporting entity. Since  the  Company's
operations were minimal or dormant during the years ended December 31, 1996
and  1995,  the  reverse  acquisition is considered a  capital  transaction
rather  than a business combination and, accordingly, pro forma information
is not presented.

Also  on  December  31, 1996, the Company acquired all of  the  outstanding
stock  of  PreferenceAmerica Mortgage Network  (PAMN)  in  exchange  for  a
$250,000  cash  payment.   PAMN  is  a  California  mortgage  broker  which
commenced  operations on February 1, 1996. Prior to its  acquisition,  PAMN
acquired all rights to the name, marketing concepts, logo, and capabilities
of Property Transaction Network. The acquisition of PAMN is being accounted
for  as  a purchase and the results of its operations are included  in  the
consolidated  operations  of the Company for the  period  January  1,  1997
through  April 30, 1997. Unaudited pro forma information giving  effect  to
the acquisition of PAMN as if the acquisition took place May 1, 1996 is  as
follows:

<TABLE>
                                               Year ended April 30, 1997
                                               -------------------------
<S>                                            <C>
Total revenues                                     $  4,552,315
Net loss                                             (3,830,940)
Net loss per weighted average common share         $      (0.29)
</TABLE>

Following the reverse acquisition, the Company changed its fiscal year  end
from  December 31 to April 30 to conform to the fiscal year end of MMI  and
PAMN.

4. MORTGAGE LOAN SERVICING

The  Company's origination and servicing activity is concentrated primarily
within   California.   The  Company's  servicing  portfolio  is   primarily
comprised  of  conventional mortgage loans which are not  included  in  the
accompanying balance sheets and which had outstanding principal balances of
$168 million, representing 1,182 loans, at April 30, 1997.  The majority of
loans   are  securitized  through  Federal  National  Mortgage  Association
("FNMA") and Federal Home Loan Mortgage Corporation ("FHLMC") programs on a
nonrecourse   basis   whereby  foreclosure   losses   are   generally   the
responsibility  of  the investor and not the Company.  In  connection  with
mortgage  loan  servicing  activities, the Company  segregates  escrow  and
custodial  funds in separate trust accounts and excludes these balances  ($
1,053,826  at  April  30, 1997) from the accompanying balance  sheet.   The
company is required to maintain separate accounting records for its  escrow
and custodial cash accounts and the related liabilities.

The Company sold servicing rights for mortgages originated and retained  in
the  servicing  portfolio in prior fiscal years with outstanding  principal
balances of $103 million and $179 million during the years ended April  30,
1997 and 1996, respectively.  These sales of prior fiscal year originations
resulted  in net gains of $1.04  million and $1.00 million  for  the  years
ended April 30, 1997 and 1996, respectively.

Servicing  rights  to  mortgage loans with an unpaid principal  balance  of
approximately  $168 million were pledged as collateral  to  lenders  as  of
April 30, 1997.

As a routine part of servicing operations, the servicing portfolio contains
a number of loans that are in the process of foreclosure, or that have been
foreclosed  upon by the Company (real estate owned). The dollar  amount  of
loans  in  foreclosure  and  real  estate owned  represented  3.2%  of  the
outstanding servicing portfolio balance as of April 30, 1997.   The  losses
(recoveries)  to  the Company arising from the foreclosed  loans  and  real
estate owned were as follows:

<TABLE>
                                 Years ended April 30,
                                  1997        1996
<S>                             <C>        <C>
Losses (recoveries)..........   $111,386   $ (44,802)
</TABLE>
<PAGE> 44

The  Company  has issued various representations and warranties  associated
with  whole  loan  and  bulk  servicing sales which  are  standard  in  the
industry.  These representations and warranties may require the Company  to
repurchase  defective  loans as defined per the  applicable  servicing  and
sales agreements.  The Company experienced no significant losses during the
years  ended  April 30, 1997 and 1996 with respect to these representations
and warranties.

The  Company  carried  fidelity bond coverage of $ 950,000  and  errors  or
omission coverage of $950,000 as of April 30, 1997.

5. OWNED MORTGAGE SERVICING RIGHTS

ORIGINATED MORTGAGE SERVICING RIGHTS

The  Company's policy during the fiscal years ended April 30, 1997 and 1996
has  been  to  sell  all servicing originated in those  years.   Generally,
servicing  rights  that  have  been  capitalized  as  originated   mortgage
servicing  rights  (OMSR)  are  sold  within  thirty  to  ninety  days   of
origination  and capitalization.  Since each servicing right  is  generally
retained  in  inventory for less than one fiscal quarter, the Company  does
not calculate or record amortization on these assets.  For the same reason,
a  distinct market valuation allowance account has not been established for
the assets.  However, the assets are reported at each balance sheet date at
management's  estimate  of the current prevailing market  value,  based  on
information  available  from  independent  brokers  and  recent  sales   of
servicing rights.  The outstanding balance in the OMSR account was $332,336
at April 30, 1997.

PURCHASED MORTGAGE SERVICING RIGHTS

During  the  year  ended  April 30, 1997, the Company  purchased  servicing
rights  for  mortgages  with a principal balance  of  $49.7  million.   The
activity in this account for the years ended April 30, 1997 was as follows:

<TABLE>
                                            1997
                                           -------
<S>                                        <C>
Beginning Balance, May 1
    Purchases............................  $286,263
    Sales................................      -
    Amortization.........................   (39,581)
                                           ---------
Ending Balance, April 30                   $246,682
                                           =========
</TABLE>

The  Company  amortizes PMSR's over four years, using a  declining  balance
method  at  a  rate  approximates  the rate  of  its  working  capital/PMSR
borrowing facilities.

6. FURNITURE, FIXTURES AND EQUIPMENT

The  total net book value of furniture, fixtures and equipment at April 30,
1997 was comprised of the following:

<TABLE>
<S>                                            <C>
Cost:
    Furniture and fixtures...................  $   493,317
    Computer equipment.......................    1,211,872
    Office equipment.........................      215,480
    Video conferencing equipment.............      374,954
    Leasehold improvements...................      183,953
    Capitalized software costs...............      329,938
                                              -------------
        Total cost...........................    2,809,514
Less: Accumulated Depreciation...............   (1,712,848)
                                              -------------
Furniture, Fixture and equipment, Net........ $  1,096,666
                                              ============
</TABLE>
<PAGE> 45

7. LOSS ON SALES OF MORTGAGE LOANS

Loss on sale of mortgage loans for the years ended April 30, 1997 and 1996
consisted of the following:

<TABLE>
<CAPTION>
                                                   1997        1996
                                              -----------   ------------
<S>                                           <C>           <C>
Loan origination fees, net..................  $   999,143   $ 1,492,612
Direct loan origination costs...............   (1,231,224)   (1,557,187)
Investor discounts..........................   (1,773,133)   (2,364,484)
Servicing rights capitalized, net...........      176,414     1,054,538
Commitment fees and hedging activities, net.      (42,356)      (42,356)
Other.......................................      (13,901)     (131,782)
                                              ------------   -----------
    Total...................................  $(1,885,057)  $ (1,548,659)
                                              ============  =============
</TABLE>

8. DEBT

The  Company's warehouse borrowings as of April 30, 1997 were approximately
$9.5  million  less  than  at April 30, 1996.  The  reduction  is  directly
attributable  to  the  approximate  $11.3  million  decrease  in   Accounts
Receivable from Sales of Mortgage Loans and Servicing Rights, and  Mortgage
Loans  Held  for  Sale, as the warehouse line of credit  is  the  financing
source  for  these investments.  The outstanding balance on  the  revolving
line  of credit was reduced from $800,000 at April 30, 1996 to $100,000  at
April  30, 1997.  During the year ended April 30, 1997, all 1997 borrowings
on  the  line  were  repaid, and an additional $700,000  payment  was  made
pursuant  to  the  sale  of  servicing assets which  had  been  pledged  as
collateral for the line of credit.

On December 31, 1996, in conjunction with the reverse acquisition of MMI by
FHC,  and the acquisition of PAMN, the Company acquired capitalized  leases
related  to  PAMN operations in the amount of $169,247.  The  Company  also
acquired  convertible  debt  and notes payable related  to  pre-acquisition
operations   of   FHC  for  approximately  $1,240,000.  Of   this   amount,
approximately  $1,170,000  was retired through the  issuance  of  2,373,000
shares of FHC common stock, and a cash payment of $50,000.

The  following table and comments present summary information regarding the
Company's debt as of April 30, 1997:
<TABLE>
<CAPTION>
                                    Balance at      Interest
Facility                              April     30,     1997           Rate
Terms
--------------------------------  --------------  --------------   --------
-----------
<S>                                <C>            <C>              <C>
REVOLVING/CURRENT
Warehouse line of credit           $ 10,209,197   Fed Funds Rate   Expires
   ($10  million comitted, $25                      plus variable    August
31, 1997
  million uncommitted gestation)                  spread
Revolving line of credit                100,000   Prime plus       Expires
   ($1  million committed)                          0.0625%          August
31, 1997
                                   ------------
Total revolving/current debt       $ 10,309,197
                                   ------------
LONG TERM
Note payable                       $    729,167   Prime plus       Due
($1  million  original note)                        0.0625%           April
30, 2000
Capitalized leases                      288,745                    All  are
36 months,
                                   ------------                    expiring
between Mar
                                                                   1999 and
Feb 2000
Total long term debt               $  1,017,912
                                   ------------
Total debt                         $ 11,327,109
                                   ============
</TABLE>
<PAGE> 46

Principal payments on long-term debt outstanding at April 30, 1997 for  the
five years ending April 30, 1997 are as follows:

<TABLE>
<CAPTION>
                                                   Capitalized   Total
Year                                 Note Payable     Leases    Payments
                                      -----------  -----------  ---------
<S>                                    <C>           <C>        <C>
1998                                   $250,000      $145,264   $  395,264
1999                                    250,000       133,434      383,434
2000                                    229,167        36,027      265,194
2001                                       -             -            -
2002                                       -             -            -
                                      -----------  -----------  ----------
Total Payments                         $729,167      $314,725   $1,043,892
Less interest on capitalized leases        -          (25,980)     (25,980)
                                      -----------  -----------  ----------
Total principal payments               $729,167      $288,745   $1,017,912
                                      ===========  ===========  ===========
</TABLE>

COLLATERAL

The  warehouse line of credit, the revolving line of credit  and  the  note
payable are with the same lender. The collateral for these obligations is a
combination of mortgages held for sale, receivables from sales of  mortgage
loans,  servicing  assets, other assets of the Company,  and  the  personal
guarantees  of the former MMI shareholders.  These facilities were  granted
to MMI prior to the December 31, 1996 acquisition.

The  collateral  for  the  capitalized  leases  is  the  equipment  thereby
financed.

DEBT COVENANTS

The Borrowing Agreements (Agreements) for the warehouse line of credit, the
revolving  line  of  credit and the note payable contain various  financial
covenants  including  net  worth  computed  in  accordance  with  generally
accepted  accounting  principals, current  ratio  and  tangible  net  worth
leverage ration requirements. Should an event of default occur, as  defined
in  the  Agreement, outstanding principal and interest on all three of  the
Company's credit facilities technically would be due on demand.

As  of  April  30, 1997, the Company was in default of three  of  its  debt
covenants.   The  violations  were related to the  Company's  tangible  net
worth, adjusted tangible net worth and required minimum servicing portfolio
balance.  The legal acquisition of MMI by FHC on December 31, 1996  created
an additional breach of the terms of the Agreement.

The  lender has been formally notified of all debt covenant violations and,
to  date, has continued to provide necessary funding to the Company without
disruption.   Subsequent  to April 30, 1997, the  lender  issued  a  formal
waiver  of  all  then  existing breaches and  covenant  violations  on  the
condition that FC issue a parent company guarantee of MMI's borrowings, and
that  the  expiration date of the Agreements be accelerated to  August  31,
1997 from December 31, 1997.

The  Company is in the process of negotiating new Borrowing Agreements with
the  lender,  and has no reason to believe that negotiations  will  not  be
successful. However, no assurances can be given that the Agreements will be
renewed.

9. LIABILITIES SUBJECT TO COMPROMISE

Prior  to  the December 31, 1996 acquisition, FHC had incurred $968,736  of
unsecured  trade creditor payables.  The Company had settled a majority  of
these  claims  by  April  30, 1997.  The creditors  agreed  to  accept,  on
average, 33.8% of what they were owed.  The payments were made in the  form
of cash and shares of FHC common stock.  The balance of liabilities subject
to  compromise  was  $474,479 at April 30, 1997.   The  reduction  of  this
liability  gave rise to extraordinary gain of $312,090 for the  year  April
30, 1997.

<PAGE> 47

10. COMMITMENTS AND CONTINGENCIES

DEBT COVENANTS

As discussed in Note 8, at April 30, 1997, the  Company was in violation of
three  of  its debt covenants related to its warehouse line of credit,  its
note  payable and its revolving line of credit.  The violations are related
to  the  Company's  tangible net worth, adjusted  tangible  net  worth  and
required   minimum   servicing   portfolio  balance.    Additionally,   the
acquisition  of  MMI  by  Finet created a breach  of  the  terms  of  these
borrowing activities as of December 31, 1996.  The lender was notified and,
to date, has not restricted the Company's borrowing ability.  The warehouse
line of credit and the revolving line of credit agreements expire on August
31, 1997.  The Company is in the process of negotiating new agreements with
the  lender,  and  has no reason to believe the negotiations  will  not  be
successful.  However, no assurances can be given that the credit facilities
will be renewed.

LOAN SALE COMMITMENTS

The Company has entered into optional and mandatory forward commitments  to
deliver mortgage loans of $12.5 million as of April 30, 1997.

MORTGAGE LOAN APPLICATIONS IN PROCESS

The   Company  has  open  short-term  commitments  to  fund  mortgage  loan
applications  in  process  subject to credit approval.   Such  commitments,
which had interest rates which were committed to the borrower, amounted  to
$17.5  million  as  of  April  30, 1997.  Commitments  to  fund  loans  are
agreements  to lend to a customer as long as there is no violation  of  any
condition established in the contract.  Interest rate risk is mitigated  by
the use of forward contracts to sell loans to investors.

LEASES

The Company leases its facilities and certain equipment under noncancelable
operating  leases.   As  of April 30, 1997, future  minimum  annual  rental
payments and related sublease receipts under these leases are as follows:

<TABLE>
<CAPTION>
                                 Lease      Sublease    Net Lease
Year ending April 30:            Expense     Income      Expense
---------------------          ----------   ---------   ----------
<S>                            <C>          <C>         <C>
  1998.......................  $  395,485   $  25,482   $  370,003
  1999.......................     316,653           0      316,653
  2000.......................     313,173           0      313,173
  2001.......................     234,335           0      234,335
                               ----------    --------   ----------
    Total....................  $1,259,646   $  25,482   $1,234,164
                               ==========   =========   ==========
</TABLE>

Rental  expense  amounted to $372,671 in fiscal year  1997.   There  is  no
sublease rental income expected beyond 1998.

<PAGE> 48

GUARANTEES

Subsequent  to  fiscal year end April 30, 1997,  Finet issued  a  corporate
guarantee   to   Residential  Funding  Corporation   on   behalf   of   its
subsidiary,MMI.   This guarantee is for a $10 million  committed  warehouse
line  of credit, a $25 million uncommitted gestation line of credit,  a  $1
million term loan of with a remaining unpaid balance of $729,167, and a  $1
million  revolving line of credit with a remaining balance of  $100,000  at
April 30, 1997.

CONTINGENCIES

Certain  claims arising in the ordinary course of business had  been  filed
against  the Company.  One claim by two previous stockholders  of  MMI  had
sought  recession of prior contracts for the sale of the plaintiff's  stock
to  MMI's  stockholders to restore them to their former status as  minority
stockholders of  MMI.  This claim was settled during the fiscal year  ended
April  30, 1997.  The settlement amount may not be disclosed as a condition
of  the  settlement  agreement, however said  settlement  did  not  have  a
material adverse effect on the Company's financial position.

Additionally, there were claims brought by past employees based on  various
causes of action related to Finet's employment practices.  All such actions
were  dismissed with no liability to the Company subsequent to fiscal  year
end April 30, 1997.

11. FAIR VALUE OF FINANCIAL INSTRUMENTS

The  following  disclosures  of  the estimated  fair  values  of  financial
instruments are made in accordance with the requirements of SFAS  No.  107,
Disclosures about Fair value of Financial Instruments.  The estimated  fair
value  amounts  have been determined by the Company using available  market
information and appropriate methodologies.  However, considerable  judgment
is  necessarily required to interpret market data to develop the  estimates
of  fair  value.  Accordingly, the estimates presented herein  may  not  be
indicative  of  the amounts the Company could realize in a  current  market
exchange.   The  use  of  different market  assumptions  and/or  estimation
methodologies  may  have  a  material effect on the  estimated  fair  value
amounts disclosed in the following paragraph.

The  estimated fair values of the Company's financial instruments at  April
30, 1997 are as follows:

<TABLE>
<CAPTION>
                                                 Carrying        Estimated
                                                     Amount            Fair
Value)
--------------------------------------------  ---------------   -----------
<S>                                           <C>               <C>
Assets:
     Cash                                           $      603,296        $
603,296
  Receivables from sales of mortgage loans
        and    loan    servicing    rights                        3,453,199
3,453,199
     Mortgages    loans   held   for    sale                      7,268,877
7,268,877
  Mortgage loan servicing advances and
          other      receivables                                    644,072
644,072
      Owned     servicing     rights                                579,018
579,018

Liabilities:
        Warehouse      borrowings                                10,209,197
10,209,197
      Revolving    line    of    credit                             100,000
100,000
     Note    payable    and   capitalized   leases                1,017,912
1,017,912

                                                        Contract         or
Unrealized
                                                 Notional            Gain
                                                  Amount            (Loss)
Off-balance-sheet financial instruments:
      Loan    commitments    to    fund                          17,474,851
77,092
      Loan    commitments    to    sell                          12,500,000
(97,261)
</TABLE>

<PAGE> 49

The  following methods and assumptions were used to estimate the fair value
of  each  class  of  financial instruments for which it is  practicable  to
estimate such value:

CASH,  RECEIVABLES FROM SALES OF MORTGAGE LOANS AND LOAN SERVICING  RIGHTS,
MORTGAGE  LOANS  HELD FOR SALE, MORTGAGE LOAN SERVICING ADVANES  AND  OTHER
RECEIVABLES, WAREHOUSE BORROWINGS AND NOTE PAYABLE AND LINE OF CREDIT

The carrying value is considered to be a reasonable estimate of fair value,
based   on  interest  rates  of  similar  financial  instruments   in   the
marketplace.

MORTGAGE SERVICING RIGHTS

The  fair  value is determined based on projected net cash flows (including
flows  from  servicing offset by estimated costs of servicing),  using  the
consensus projected prepayment levels published by several large securities
dealers  that approximate the characteristics of the underlying  portfolios
and  discounted  using rates of return required for financial  assets  with
similar risk characteristics.

OWNED SERVICING RIGHTS

The  fair  value is determined based on projected net cash flows (including
inflows  from servicing offset by estimated costs of servicing), using  the
consensus projected prepayment levels published by several large securities
dealers  that approximate the characteristics of the underlying  portfolios
and  discounted  using rates of return required for financial  assets  with
similar risk characteristics.

LOAN COMMITMENTS

The  fair  value  of  mortgage loan commitments is estimated  using  quoted
prices  at April 30, 1997.   The fair value of commitments to sell  can  be
estimated  by the amount the Company would receive or pay to terminate  the
forward  delivery contract at the reporting date based upon  market  prices
for  similar financial instruments.  The fair value of commitments to  fund
can  be  estimated by comparing the Company's cost to acquire mortgages  to
the current prices for similar mortgages, taking into account the terms  of
the commitment and the creditworthiness of the counterparts.

The Company does not acquire or issue derivative financial instruments.

12. STOCKHOLDERS' EQUITY

The  Company is authorized to issue 30,000,000 shares of Common Stock,  par
value $.01 per share, and 100,000 shares of Preferred Stock, par value $.01
per  share.  An increase in the number of shares authorized from 20,000,000
to  30,000,000 was approved by shareholders in January, 1995 as part of the
plan  of  recapitalization.    As  of  April  30,  1997,  the  Company  had
outstanding 28,754,280 shares of Common Stock.  In January, 1997, the Board
of  Directors  resolved  to increase the number  of  shares  authorized  to
40,000,000,  to  which a required majority of shareholders  have  indicated
their  assent.  The  Company has filed this amendment  with  the  State  of
Delaware.

COMMON STOCK

On March 15, 1995, Cumberland Partners, a New York partnership and then the
Company's  second  largest  shareholder, provided  $800,000  of  additional
capital in the form of a convertible debenture secured by all the Company's
assets.  The  debenture  was convertible at $1.25 per  share  into  640,000
shares of the Company's common stock at the option of  Cumberland.   If not
converted,  all  outstanding principal and accrued  interest  was  due  and
payable  on  June  30, 1996, with interest at ten percent (10%)  per  annum
payable semiannually on the last day of August, 1995 and February, 1996.
<PAGE> 50

As part of that transaction, the Company granted to Cumberland the Series B
warrants  to acquire 6 million shares for $0.03 per share.  These  warrants
vested in inverse proportion to the Company's financial performance through
June 30, 1996.  After July 1995, the Company's operations did not enable it
to  meet  or cure defaults on the convertible debenture, resulting  in  the
full  vesting  of  the Series B warrants.  On November 2, 1995,  Cumberland
exercised  all  6  million  Series B warrants  for  an  exercise  price  of
$180,000, increasing Cumberland's total holdings of the Company's stock  to
7,000,000 shares, 53.6% of shares then outstanding.

As  part of the Company's recapitalization plan approved by shareholders in
January,  1996 and subject to its completion, Cumberland agreed  to  resell
the 6 million shares acquired with the Series B warrants to the Company for
$180,000  and to convert its debenture and all accrued interest to  shares.
In  early  1997,  the Company repurchased the shares and  issued  1,850,000
shares of its common stock to Cumberland as consideration for the principal
and interest then due on the convertible debenture.

During fiscal year 1997, four private placements resulted in stock
subscriptions totalling $8.1 million to acquire 11,991,250 shares of the
Company's common stock.  Of these subscriptions, $4.2 million were received
by April 30, 1997, with the remainder received shortly thereafter, for net
cash receipts of $7.35 million, as summarized below.  As part of these
offerings, a total of 4,843,125 investor warrants and 859,125 placement
agent warrants were granted, as indicated in the warrant table below.
<TABLE>
<CAPTION>
Offering         Shares      $/share            Subscription
---------------  ----------  -------            ------------
<S>              <C>         <C>                <C>
December, 1996    7,000,000  $  0.50            $  3,500,000
March, 1997       1,000,000     0.60                 600,000
April/May, 1997   3,991,250     1.00               3,991,250
                 ---------                       ------------
Totals           11,991,250                        8,091,250
Less Fees, Commissions & Expenses                   (738,242)
Total offerings                                    7,352,958
Less subscriptions receivable at April 30, 1997   (2,693,038)
                                                -------------
Total to April 30, 1997                         $  4,659,920
                                                =============
</TABLE
On  April  30, 1997, the Company had 28,754,280 shares of its common  stock
issued  and outstanding.  As of April 30, 1997, the Company had outstanding
subscriptions receivable  for an additional 2,991,250 shares of its  common
stock.

PREFERRED STOCK

At  April  30, 1997, 100,000 shares of preferred stock with a par value  of
$.01 were authorized and none were issued and outstanding.

STOCK OPTIONS

The  Company  adopted a Stock Option Plan (the Option Plan) in  June,  1989
which  is intended to qualify for certain grants to employees as "incentive
stock options" under Section 422A of the 1986 Internal Revenue Code as well
as  provide non-qualifying options to employees, consultants and  directors
of the Company.  Under the terms of the Option Plan, the exercise price for
all options must equal or exceed the fair value of common shares on date of
grant  and,  for  any participant possessing more than 10%  of  the  voting
rights  in  the Company's outstanding capital stock, must equal  or  exceed
110%  of the fair value of the common shares on date of grant.  The maximum
term is ten years. Following is a summary of transactions:

</TABLE>
<TABLE>
<CAPTION>
                                     Shares under Option
                                       1997        1996
                                    ----------    --------
<S>                                 <C>           <C>
Outstanding, beginning of year      884,242       806,724
Granted during the year             120,000       542,158
Canceled during the year            442,043<F1>   464,640
Exercised during the year             3,167          -
                                    -------       -------
Outstanding, end of 4/30/96         559,032       884,242

Eligible for exercise, end of year  559,032       884,242
<PAGE> 51

<FN>
<F1>
All  of  the  cancelled shares are the result of the 1-for-2 reverse  stock
split on October 21,1996.
</FN>
</TABLE>

WARRANTS

Current warrants outstanding are summarized below:

<TABLE>

Holder                 # shares    Exercise $/sh    Expiration
---------------------  ---------   -------------    --------------
<S>                    <C>         <C>              <C>
Jose Salema Garcao     3,500,000   $0.50-3.00       December, 2001
                         600,000    1.50-2.50       March, 2002
April, 1997 investors    743,125    1.50-3.50       April, 2000
Placement Agent          859,125    1.50            December, 2006
Cumberland Partners      214,781    1.50            December, 2006
Bridge lenders            17,776    1.50-3.50       April, 2000
July, 1993 investors     437,223    1.50-3.50       April, 2000
Placement Agent          131,167    4.50            November, 2003
Former employee            4,750    2.68            October, 2001
                       ---------
Total                  6,507,947
</TABLE>

At  April  30,  1997  the Company had outstanding exercisable  warrants  to
purchase  5,490,916  shares of the Company's common stock  at  prices  that
ranged from $.50 to $4.50 per share.

ARRANGEMENTS FOR FUTURE ISSUANCE OF STOCK, OPTIONS AND WARRANTS

As  of  April  30,  1997, the number of shares outstanding including  stock
subscriptions  receivable  approximate  28,754,280  shares.   Consequently,
there would have been insufficient authorized but unissued shares remaining
in  the  event  of  the  exercise of all of  the  warrants  and/or  options
outstanding.   In  order  to  reserve and  assure  an  adequate  number  of
authorized but unissued shares to accommodate warrant and option exercises,
the Company recommended, its Board of Directors resolved, and a majority of
shareholders have indicated their written assent to increase the number  of
shares  authorized from 30,000,000 shares to 40,000,000 shares  to  provide
for  these  requirements.  The Company expects to record this amendment  in
the near future.

As  of  April  30, 1997, 5,904,791 shares of Common Stock were  subject  to
currently  exercisable options and warrants issued  by  the  Company.   The
Company  contemplates  the  future issuance of  other  options  to  certain
members of management pursuant to its stock option plan.

The  Company  applies Accounting Principles Board Opinion. 25  and  related
interpretations in accounting for the Company's stock plans.  Under APB 25,
because  the  exercise price of the Company's employee  stock  options  are
equal  to  the  underlying  stock on the date of  grant.   Accordingly,  no
compensation  cost  has been recognized for the activity  under  the  stock
plans.   The Company intends to follow the provisions of APB 25 for  future
years.

STOCK OPTIONS

SFAS  No.  123,  "Accounting  for Stock-Based Compensation,"  requires  the
Company's to provide pro forma information, and has been determined if  the
Company  hadaccounted for its employee stock options under the  fair  value
method of that Statement.  The fair value of stock options at date of grant
was  estimated using the Black-Shoals Option-Pricing model.  The  following
weighted-average assumptions were used for grants in fiscal 1997 and  1996,
respectively:   0 dividend yield since the Company does not intend  to  pay
dividends  on  it  common stock; volatility factors of the expected  market
price  of  the  Company's common stock of .50 and .50 ; risk-free  interest
rates  of 6.509% to 6.675% based on US Government Treasury securities  with
maturities  comparable to the related option expiration dates and  expected
lives  equal  to remaining option terms for options granted in both  years.
The Company's pro forma net income and earnings per share determined as  if
the  Company  had accounted for its employee stock options under  Statement
123 as follows:
<PAGE> 52

<TABLE>
                                             1997        1996
                                         ----------    ---------
<S>                                      <C>           <C>
Estimated stock-based compensation cost..$   125,146   $    490
Net (loss) income as reported            $(3,186,265)  $226,736
Pro forma net (loss) income              $(4,179,272)  $221,837
(Loss)earnings per share as reported     $      (.24)  $    .03
Pro forma (loss) earnings per share      $      (.32)  $    .03
</TABLE>

The  effect of stock-based compensation on net income for 1997 and 1996 may
not be representative of the effect on pro forma net income in future years
because  compensation expense related to grants made prior to 1996  is  not
considered.

The  Black-Scholes  option  valuation  model  was  developed  for  use   in
estimating  the  fair  value  of  traded  options  which  have  no  vesting
restrictions  and  are fully transferable.  In addition,  option  valuation
models  require  the input of highly subjective assumptions  including  the
expected  stock  price  volatility.  Because the Company's  employee  stock
options  have characteristics significantly different from those of  traded
options,  and  because  changes  in the subjective  input  assumptions  can
materially  affect the fair value estimate, in management's  opinion,  such
estimates  may  not  be a measure of the fair value of its  employee  stock
options.

13. INCOME TAXES

Prior  to  December 31, 1997 the Company had elected S Corporation  status.
Accordingly,  prior to that date items of taxable income, credit,  and  tax
preferences  of the Corporation were primarily that responsibility  of  the
stockholders  and,  as  such, the Corporation was not  subject  to  federal
income  taxes.  The Corporation was subject to state financial  corporation
tax  of approximately 3.9% which comprised the Company's tax provision  for
the fiscal year ended April 30, 1996.  No provision or benefit was recorded
for the fiscal year ended April 30, 1997.

Statement  on Financial Accounting Standards No. 109 requires an asset  and
liability approach for financial accounting and reporting for income taxes.
A  valuation  allowance  for all or a portion of  deferred  tax  assets  is
established  if it is more likely than not that all or some of  a  deferred
tax asset will not be realized.

Deferred  income  taxes  reflect the tax effect  of  temporary  differences
between  the  carrying  amount  of assets  and  liabilities  for  financial
reporting purposes and the amounts used for income tax purposes.   Deferred
tax  assets  and  liabilities  at  April 30,  1997  are  comprised  of  the
following:

<TABLE>
<S>                                          <C>
Deferred tax assets:
  Net operating loss carryforwards(NOL's)    $ 8,732,038
  Goodwill                                     1,232,310
  Deferred compensation                           40,901
                                             ------------
  Total deferred tax assets                   10,005,249
  Valuation allowance, net                    (9,683,557)
                                             ------------
Total deferred tax assets                        321,693
                                             ------------
Deferred tax liabilities:
  Originated mortgage servicing rights           231,607
  Property plant and equipment, net of
     accumulated depreciation                     90,086
                                              -----------
   Total deferred tax liabilities                321,693
                                              -----------
Total net deferred tax assets and liabilities $     -
                                              ===========
</TABLE>

<PAGE> 53

At  April  30,  1997,  the  Company has U.S. federal  and  state  NOL's  of
approximately  $22 million which will expire beginning in the  fiscal  year
2004.   Due  to ownership changes, approximately $21 million  of  the  U.S.
federal  and  state  NOL's are subject to restrictions.  Such  restrictions
generally limit the Company to using a portion of the NOL's existing at the
date  of  the  ownership changes, based on the fair market  values  of  the
Company's  stock immediately before the ownership changes.   A  significant
portion  of  the NOL's subject to restriction, approximately  $19  million,
will be limited to approximately $20,000 per year until they expire in  the
year  2011.  Accordingly, the Company has established a valuation allowance
against  deferred  tax  assets, except to the  extent  that  future  years'
deductible items will offset future years' taxable items.

A summary of the Federal and State NOL's and years of expiration follows:

<TABLE>
    <S>                 <C>
    2004                $2,210,062
    2005                 7,051,825
    2006                      -
    2007                 2,308,598
    2008                 1,600,301
    2009-2012            8,659,309
                        ----------
        Total          $21,830,095
</TABLE>

14. ADDITIONAL STATEMENT OF CASH FLOW INFORMATION

The  following table presents additional cash flow information for the  two
years ended April 30, 1997 and 1996:

<TABLE>
<CAPTION>
                                                                       1997
1996
                                                                 ----------
--- -----------
<S>                                                                     <C>
<C>
Cash paid during the year for:
      Interest     on    line    of    credit    and    other    borrowings
1,165,472  $1,742,679
   Income taxes                                                           -
27,500
Distributions to prior shareholders:
(Reversal   of)distributions)  declared  to  prior   shareholders         $
(259,305)    647,225
Distributions               paid              to               shareholders
(40,008)   (445,710)
                                                                 ----------
---  ----------
Change       in       distributions      payable      to       shareholders
(299,313)    201,515

Assets          and          lease         obligations          capitalized
165,221        -

Common    stock    issued   for   liabilities   subject    to    compromise
115,045        -
Common     stock     issued     for    interest     and     lender     fees
259,557        -
Common          stock         in         exchange         for          debt
1,170,000        -

Assets acquired in acquisition:
Cash
50,162         -
Furniture,                fixtures               &                equipment
246,307         -
Other                                                                assets
279,702         -
Accounts        payable       and       other       accrued        expenses
(1,609,408)        -
Debt
(1,389,247)        -
Liabilities               subject               to               compromise
(968,736)        -
Accumulated                                                         deficit
3,391,220         -
</TABLE>
<PAGE> 54

15. RELATED PARTY TRANSACTIONS

LOANS TO OFFICERS

The Company has outstanding at April 30, 1997 loans to various officers  as
follows:

<TABLE>
<CAPTION>
                                   Loan    Interest
Officer                 Title     Amount    Rate     Term   Collateral
-----------------     ---------  --------  -------   ----   ---------------
--
<S>                   <C>        <C>       <C>       <C>    <C>
L. Daniel Rawitch     CEO        $ 73,000  8.0%      1 yr   Securities
Jan C. Hoeffel        President    12,000  Prime     1 yr   Unsecured
T.  Lee  Decker         MMI SVP      53,350  5.27%     5 yrs  2nd  Deed  of
Trust
William Dullagham     MMI SVP       6,000  8.0%      2 yrs  Securities
                                 --------
  Total Loans to Officers        $144,350
</TABLE

CONSULTING AGREEMENTS

The  Company  entered into a consulting agreement with  James  Umphryes,  a
greater  than  5%  shareholder.  The contract term  is  3  years  beginning
January  1, 1997 at a monthly fee of $15,000 for a total contract  cost  of
$540,000.

BORROWINGS

During  the  year  ended April 30, 1997 the Company  borrowed  a  total  of
$625,326  from  James Noack, President of Monument Mortgage and  a  greater
than  5%  shareholder.  These borrowings were all at 8.5% with terms of  10
to 91 days.  All such borrowings were fully repaid as of April 30, 1997.

FACILITY LEASE

The  Company  leases a 3,500 suare foot storage facility from James  Noack,
President  of  Monument Mortgage and a greater than  5%  shareholder.   The
facility is utilized by the Company to store excess office furniture.   The
monthly  lease payment is $600 and the term of the lease is on a  month  to
month basis.

16. EMPLOYEE BENEFIT PLAN

The  Company  adopted  a  contributory  pension  plan  (the  "Plan")  which
qualifies  under Section 401(k) of the Internal Revenue Code in 1993.   The
Plan  covers  all  employees meeting certain eligibility  requirements  and
provides  for  matching employer contributions.  There was no  contribution
expense for the years ended April 30, 1997 and 1996.

17. MATERIAL SUBSEQUENT EVENTS

RECEIPT OF ADDITIONAL CAPITAL

At  April 30, 1997 the Company had received subscriptions of $3,991,250 for
the purchase of 3,991,250 shares of the Company's common stock at $1.00 per
share  pursuant  to  its  April 1, 1997 private  placement.  Of  the  total
proceeds  to be received, $1,000,000 in cash was received before April  30,
1997 and proceeds totaling $2,693,038 were received shortly after April 30,
1997.   Accordingly, the subscribed but uncollected amount is  shown  as  a
Stock  Subscription Receivable offset to Total Stockholders' Equity in  the
Company's  Consolidated Balance Sheet of April 30, 1997.  On  a  pro  forma
basis,  had theremaining cash subscribed been received by April  30,  1997,
Total  Stockholders'  Equity  would  have  increased  from  $1,041,070   to
$3,734,108.
<PAGE>55

BORROWING ARRANGEMENTS

As  discussed  in  Note  8  and 10, Residential Funding  Corporation  (RFC)
provides  MMI  several  borrowing arrangements to  support  MMI's  mortgage
banking activities.  The change of ownership resulting from the acquisition
of  MMI  on December 31, 1996 constituted a breach of the certain terms  of
these  arrangements.  At that time MMI also was in technical  violation  of
several  financial covenants. RFC continued to allow the Company to operate
without disruption and subsequent to April 30, 1997 issued a formal  waiver
of all then existing breaches and covenant violations on the condition that
Finet  issue  a parent company guarantee of MMI's borrowings and  that  the
borrowing  arrangements expiration date be accelerated  from  December  31,
1997 to August 31, 1997, at which time these agreements are expected to  be
renegotiated  and  renewed.  However no assurancws can be  given  that  the
credit facilities will be renewed.

NDS SOFTWARE AGREEMENT

NDS  Software,  Inc.  (NDS), a Nevada corporation, is  a  generic  software
development  company,  the creator of a Realtor  contact  manager  with  an
installed   customer  base  of  several  thousand,  and  the  operator   of
Homeseekers.com,  a  popular  Internet  site  that  gives   daily   updated
informational details on homes listed for sale by Multiple Listing Services
and Boards of Realtors in a growing number of areas around the country.  On
May  29,  1997, the Company and NDS entered into an agreement  whereby  the
Company  purchased  for  $1,010,000 in the form of  $202,000  in  cash  and
202,000 shares of its common stock valued at $4.00 per share, a combination
of  Internet  mortgage leads, software development services and  rights  to
access and market to certain of NDS' installed customer base. The agreement
terms  require an adjustment to the share consideration if the market price
of the Company's shares is not at or above $4.00 per share upon the earlier
of  the Company's registration of NDS's shares or June 3, 1998, to maintain
a  value  equal  to  $808,000 at that time, to a maximum additional  shares
issuable of 1,414,000 shares.

REOS ACQUISITION

On June 12, 1997, the Company entered into a preliminary agreement with the
shareholders  of  Real  Estate Office Software  ,  Inc.  (REOS),  a  Nevada
corporation, to acquire substantially all of the assets and certain of  the
liabilities  of  REOS.  The consideration for this transaction  is  in  the
process  of being negotiated.  REOS is a software development and marketing
company  whose  primary product is a proprietary Realtor productivity  tool
called  Real  Estate Office.  Pursuant to this agreement, all  former  REOS
employees  are  now  employees of PTN engaged in final  development  of  an
enhanced  Realtor relationship management tool called the  Agent  Connector
which is scheduled for initial introduction in early September, 1997.
                                     
<PAGE> 56

</TABLE>
<TABLE>
                               EXHIBIT INDEX
<CAPTION>
Exhibit     Description
Page
--------    --------------------------------------------------------------
----
<S>         <C>
<C>
EX-3.(i)    Articles of Incorporation <F1>

EX-3.(i).1  Amendment of October, 1997
57

EX-3.(i).2  Amendment of January, 1997
59

EX-3.(ii)   By-laws <F1>

EX-10.1     Term Sheet Agreement
61

EX-10.2     Revised Term Sheet Agreement
67

EX-10.3     Merger Agreement and Plan of Reorganization
73

EX-10.4     Consulting Agreement
78

EX-16      Letter on changes in certifying accountant are incorporated by
            reference to Exhibit 16 of Form 8-K/A filed on 4/24/97.

EX-21      Description of the subsidiaries of the registrant
81

EX-23      Consent of independent accountant
82

EX-27      Financial data schedule
83

<FN>
<F1>
Restated Bylaws of Finet Holdings Corporation, July 14, 1993 are
incorporated by reference pursuant to the provisions of Exchange Act
Regulations 240.12b-1, 240.12b-32 and 201.24, as filed with the Commission
as part of Finet Holdings Corporation's Form SB-2 Registration Statement
under the Securities Act of 1933 on March 18, 1994.

</FN>
</TABLE>