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                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   -----------

                                    FORM 10-K

(Mark One)

[X]       Annual report pursuant to Section 13 or 15(d) of the Securities
          Exchange Act of 1934

          For the fiscal year ended: December 31, 2000 or

[ ]       Transition report pursuant to Section 13 or 15(d) of the Securities
          Exchange Act of 1934

          For the transition period from     to


                         Commission file number: 0-18108

                                 FiNet.com, Inc.
             (Exact name of registrant as specified in its charter)


                        Delaware                          94-3115180
            (State or other jurisdiction of              (IRS Employer
             incorporation or organization)            Identification No.)


                2527 Camino Ramon Suite 200, San Ramon, CA 94583
                    (Address of Principal Executive Offices)
                                 (925) 242-5800
              (Registrant's Telephone Number, Including Area Code)

          Securities registered under Section 12(b) of the Exchange Act: NONE

          Securities registered under Section 12(g) of the Exchange Act:

                     COMMON STOCK, $.01 PAR VALUE-PER SHARE
                                (Title of Class)

     Indicate by check mark  whether the  registrant:  (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  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 [X] No. [ ]

     Indicate by check mark if disclosure of delinquent  filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not 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-K or any amendment to this
Form 10-K. [X]

     As of March 15, 2001,  9,500,803  shares of the  registrant's  common stock
were issued and outstanding.

     At that date,  the  aggregate  market value of voting  common stock held by
non-affiliates  of the registrant  was  approximately  $9,055,215,  based on the
closing  price of the  registrant's  common  stock  as  reported  on the  Nasdaq
SmallCap Market on that date.

     Documents  incorporated by reference:  Items 10 (as to directors),  11, 12,
and 13 of Part III incorporate by reference  information  from the  registrant's
proxy  statement  to be filed with the  Securities  and Exchange  Commission  in
connection  with the  solicitation of proxies for the  registrant's  2001 annual
meeting of stockholders, which is expected to be held on May 21, 2001.

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                                TABLE OF CONTENTS


                                     PART I

Item 1    Business........................................................... 3

Item 2    Properties......................................................... 17

Item 3    Legal Proceedings.................................................. 18

Item 4    Submission of Matters to a Vote of Security Holders................ 18


                                     PART II

Item 5    Market for Registrant's Common Equity and Related Stockholder
          Matters............................................................ 19

Item 6    Selected Financial Data............................................ 20

Item 7    Management's Discussion and Analysis of Financial Condition
          and Results of Operations.......................................... 20

Item 7A   Quantitative and Qualitative Disclosures About Market Risk......... 34

Item 8    Financial Statements and Supplementary Data........................ 35

Item 9    Changes in and Disagreements With Accountants on Accounting
          and Financial Disclosure........................................... 66


                                    PART III

Item 10   Directors and Executive Officers of the Registrant................. 67

Item 11   Executive Compensation............................................. 67

Item 12   Security Ownership of Certain Beneficial Owners and Management..... 67

Item 13   Certain Relationships and Related Transactions..................... 67


                                     PART IV

Item 14   Exhibits, Financial Statement Schedules, and Reports on Form 8-K... 68


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                                     PART I

ITEM 1. BUSINESS

FiNet.com, Inc.

     This  report  contains  forward-looking  statements  within the  meaning of
Section  27A of the  Securities  Act of 1933,  as amended and Section 21E of the
Securities Exchange Act of 1934, as amended.  Forward-looking statements include
statements of our plans, objectives,  expectations and intentions. Also, when we
use  words  such  as  "may,"  "will,"  "should,"  "could,"  "would,"  "expects,"
"anticipates,"  "believes,"  "plans,"  "intends,"  "estimates,"  "is  being"  or
"goal," or other  variations  of these terms or comparable  terminology,  we are
making  forward-looking  statements.  You should  note that many  factors  could
affect our future  financial  results and could  cause  these  results to differ
materially  from  those  expressed  in  our  forward-looking  statements.  These
forward-looking  statements  speak  only  as of the  date  of  this  report.  We
expressly disclaim any obligation or undertaking to release publicly any updates
or  revisions  to any  forward-looking  statement  contained  in this  report to
reflect any change in our  expectations  or any change in events,  conditions or
circumstances on which any of our forward-looking  statements are based. Readers
are  cautioned  that our  actual  results  could  differ  materially  from those
indicated in such statements as a result of certain factors, including those set
forth under  "Management's  Discussion  and Analysis of Financial  Condition and
Results of  Operations-Risk  Factors  That May Affect  Our Future  Results"  and
elsewhere in, or incorporated by reference into, this report.

     "FiNet.com,"  "FiNet,"  "Funding the American  Dream," and "America's  Home
Finance Network" are trademarks of FiNet. This report also contains  trademarks,
trade names and service marks of other companies.

CORPORATE HISTORY AND NEW MANAGEMENT

Corporate History

     FiNet.com,  Inc. was  incorporated  in Delaware in 1989 to pursue a line of
business  unrelated  to its current  business.  In 1990,  FiNet  acquired  FiNet
Corporation, a private technology-oriented  mortgage broker and discontinued its
unrelated lines of business. In December 1996, FiNet acquired Monument Mortgage,
Inc., a  technology-oriented  private mortgage banking company,  and since then,
FiNet has made several  additional  acquisitions  to expand its  technology  and
broaden its services.  In April 1998,  FiNet acquired  Coastal Federal  Mortgage
Company,  a  sub-prime  mortgage  banker  with  lending  offices in New  Jersey,
Pennsylvania and Florida, and, in May 1998, FiNet acquired Mical Mortgage, Inc.,
a mortgage  banker with offices in San Diego and Las Vegas that  specialized  in
the  origination of loans backed by the Federal  Housing  Administration  or the
Veterans  Administration.  As a result  of  operational  and  loan  underwriting
problems discovered after these acquisitions, FiNet closed the Coastal and Mical
business  units in April 1999.  See  "Management's  Discussion  and  Analysis of
Financial  Condition and Results of Operations" and "Factors That May Affect Our
Future  Performance".  FiNet may incur  additional  losses from the discontinued
businesses of Coastal and Mical.

     On August  20,  1999,  FiNet  acquired  certain  operations  and  assets of
Lowestrate.com,  Inc. The assets included the trademark "Lowestrate.com" and the
related  website and certain  equipment  and software.  The acquired  assets and
operations  are  currently  used  in the  consumer-direct  segment  of  Monument
Mortgage.  All mortgage business  operations are performed by Monument Mortgage.
The   operations   of  FiNet's  other  wholly  owned   subsidiaries   have  been
discontinued.

New Management

     On February 1, 2000,  Rick Cossano became the President and Chief Executive
Officer of FiNet.  In addition,  personnel  in other  executive  and  management
positions  have been replaced with people  experienced  in  business-to-business
mortgage sales and secondary  marketing.  FiNet's new management team is focused
on  the  goal  of  improving  profits  by  significantly  growing  revenues  and
streamlining  costs.  FiNet intends to grow revenues by increasing  the Monument
Mortgage sales force  nationwide,  by offering  Monument  Mortgage products with
higher  margins than  traditional  products and by leveraging  its technology to
provide  FiNet's  strategic   partners  with  an  alternative  source  for  loan
origination and production.

DESCRIPTION OF BUSINESS

     FiNet, through its wholly owned subsidiary Monument Mortgage, provides both
traditional   and  on-line   mortgage   services   to  brokers  and   consumers.
Business-to-business  services are provided to brokers and marketed through both
traditional means and through strategic  partners.  Consumer direct services are
marketed through both the internet and various traditional  advertising mediums.
Monument Mortgage is licensed to originate and fund mortgage loans in fifty (50)
states and the District of Columbia.

     Monument Mortgage is a full service, on-line mortgage banker that offers an
easy-to-use,  one-stop  mortgage  source for  consumers  and  brokers.  Monument
Mortgage  operates  one of the first sites on the Internet  enabling  brokers to
electronically search,


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analyze and select  from a wide  variety of mortgage  loan  products  and rates.
Through Monument Mortgage's on-line and e-commerce technologies and loan process
management tools,  brokers are able to compete more effectively with on-line and
other  national  lenders and brokers,  allowing  their  customers to make better
informed borrowing decisions.

     Monument Mortgage  generates  revenues by providing services to two primary
customer groups: brokers and consumers.

     Monument  Mortgage  continually  increases its brand awareness with brokers
by:

     o    leveraging a strong sales force that markets the  business-to-business
          services through personal contact with brokers,  with an  emphasis  on
          their adoption of on-line technologies;

     o    introducing  new web-based  services that empower brokers to work more
          efficiently;

     o    teaming up with  industry-leading  partners  that have an  established
          reputation throughout the broker community; and

     o    employing traditional marketing strategies, including participation in
          trade shows and conferences,  advertising in industry publications and
          flyers, and participation in broker loyalty programs.

     The business-to-business  channel offers brokers the opportunity to use our
on-line  technology  and  automated  underwriting  systems to expand and improve
service to consumers.  These services  empower brokers to  successfully  compete
with on-line mortgage originators,  while maintaining the flexibility to control
their own businesses. As a full service mortgage banker, Monument Mortgage funds
broker-originated  loans, which are then sold to institutional  investors in the
secondary mortgage market.

     The  business-to-consumer  channel offers  consumers a choice between using
web-based automated services and/or personalized assistance,  at any time during
the loan process.

     During the year ended  December  31,  2000,  Monument  Mortgage  originated
and/or funded $765.1  million in loans.  Revenues are primarily  earned from the
sale of loans and related  servicing  rights in the secondary  market,  and from
interest on loans held pending sale.

     Monument Mortgage offers a full range of loan products, including fixed and
adjustable  rate,  first and second mortgage loans with a variety of maturities,
conforming  loans  (mortgages  that meet the  purchase  standards of the Federal
National  Mortgage  Association,  commonly known as "Fannie Mae", or the Federal
Home Loan Mortgage  Corporation,  commonly known as "Freddie Mac"),  jumbo loans
(mortgages that meet those standards  except they exceed the maximum  conforming
loan  amount),  home equity lines of credit,  and loans to borrowers  who do not
meet  one  or  more  of the  other  credit  or  documentation  standards  of the
government-sponsored mortgage programs.

The United States Mortgage Market

     The United States  residential  mortgage market  decreased  slightly in the
year 2000, but is forecast to increase  substantially in 2001.  According to the
Mortgage Bankers  Association of America,  loan  origination  volume declined to
$1.0  trillion in 2000,  down from $1.3  trillion  in 1999.  The  February  2001
Mortgage Finance Forecast from the Mortgage Bankers Association of America shows
loan origination volume projections of $1.4 trillion for the year 2001. Although
existing and new home sales are expected to remain  steady and  consistent  with
previous  years,  home  prices are  expected to increase an average of 4.6% over
last year's  actual  prices.  FiNet is positioned to capitalize on the potential
for increased revenues based upon this opportunity.

     Typically,  the  traditional  mortgage loan process  involves the following
steps:

     o    meeting  with  lender  or  broker  to  complete   the  lengthy   paper
          application;

     o    gathering extensive supporting documentation for the application;

     o    entering  the  application   information/data  into  the  broker's  or
          lender's processing system;

     o    ordering  appraisals,  title and credit reports and verifying  deposit
          and other factual matters;

     o    submitting  the paper loan file to an  underwriter  to determine  loan
          eligibility;

     o    receiving conditions to approval of the loan by the underwriter;


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     o    collecting additional information and complying with the conditions;

     o    resubmitting the revised paper file for approval;

     o    preparing loan documents and closing instructions;

     o    reviewing and approving the loan for funding; and

     o    closing the transaction.

     This  paper-intensive  process generally takes at least three to four weeks
to complete.

Consumers

     The traditional  mortgage loan  origination  and closing process  described
above is complex,  time-consuming,  paper-intensive and costly. This process may
cause many consumers to feel:

     o    uncertain that lenders and brokers are providing  unbiased  advice and
          recommending the most suitable mortgage products;

     o    skeptical that rates initially quoted will ultimately be available;

     o    intimidated by the number and variety of mortgage products available;

     o    pressured to commit to a particular  mortgage product before they have
          researched and compared alternative products to their satisfaction;

     o    aggravated  by the amount and types of loan fees they are  required to
          pay; and

     o    frustrated  by the  substantial  time  and  effort  that it  takes  to
          complete a mortgage loan.

Mortgage Broker Industry

     The mortgage  broker  industry is highly  fragmented.  Typically,  mortgage
brokers are small,  local  enterprises  that lack the  financial  resources  and
technological   capabilities   to  compete   with   financially   stronger   and
better organized  lenders.  In  particular,  brokers  generally  lack  access to
technology   necessary  to  quickly  determine   borrower   eligibility  and  to
automatically   search  and  analyze  available   mortgage  products  for  their
customers.  FiNet believes that nationwide  lenders are unable to meet the needs
of consumers,  thus brokers  continue as an integral and  important  part of the
lending  process in the  immediate  future.  As  technological  advances make it
easier for  lenders to  effectively  interact  with  consumers,  we expect  that
brokers will be required to find new ways to compete more effectively.

On-line Mortgage Origination

     On-line and e-commerce technologies facilitate the automated origination of
loans  electronically,  helping to eliminate  inefficiencies  in the process and
providing easy access to information  for brokers and consumers.  FiNet believes
that the on-going  development of technology for the on-line mortgage  industry,
resulting in the savings of both money and time to consumers, will encourage the
continued growth of our industry.

Seasonality

     The mortgage industry typically experiences seasonal fluctuations primarily
due to a reduced level of home buying  activity  during the winter months.  Loan
originations  generally increase during the warmer months beginning in March and
continuing through October.

     Economic and interest  rate cycles also affect the  mortgage  industry,  as
loan originations  typically fall in rising interest rate  environments.  During
such periods, refinancing originations decrease as higher interest rates provide
reduced economic incentives for borrowers to refinance their existing mortgages.


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<PAGE>

THE FINET SOLUTION

     FiNet is a front-runner in offering on-line mortgage  services to consumers
and brokers. FiNet believes that by using e-commerce  technologies to streamline
and automate the  residential  mortgage  loan process we can help  consumers and
brokers save time and money, and improve access to mortgage  credit.  FiNet also
believes  that we can help brokers  expand  their  business  and  withstand  the
competitive threat posed by on-line lenders.

     The  FiNet   solution   provides  the  following  key   advantages  in  the
business-to-business channel:

     o    Empowering   brokers  with  technology.   By  supplying  brokers  with
          e-commerce technologies and loan processing management tools, Monument
          Mortgage reduces the cost of the broker's mortgage originations. FiNet
          believes that internet-based  tools can empower traditional brokers to
          compete  more  effectively  in their  local  markets  against  on-line
          mortgage  originators  and large  retail  lenders.  Monument  Mortgage
          enables brokers to provide the benefits of automated, on-line mortgage
          services to consumers while  maintaining  personal contact and thereby
          controlling the relationship.

     o    Offering  brokers choice and  assistance.  As a full-service  mortgage
          banker, Monument Mortgage provides its brokers the ability to submit a
          loan either electronically or in the traditional paper format. Through
          Monument  Mortgage,  brokers have access to numerous  e-commerce tools
          used  for  product  selection,  pricing  and  loan  processing.  FiNet
          believes that automated underwriting services significantly reduce the
          time and cost associated with a consumer's  credit  approval,  thereby
          providing value to brokers.

     o    Variety of mortgage products.  Monument Mortgage  continuously reviews
          and updates its portfolio of mortgage  products,  and available  rates
          and terms, to offer a wide variety of loan programs,  thereby ensuring
          a broker's competitive advantage in the industry.

     The  FiNet   solution   provides  the  following  key   advantages  in  the
business-to-consumer channel:

     o    Convenience and service. Monument Mortgage's borrower direct web-based
          services allow consumers to easily and efficiently search, analyze and
          compare mortgage  products and rates, and make loan decisions based on
          their personal  financial  situation and needs. An easy to use on-line
          loan  application  leads  the  consumer  through  a series  of  simple
          questions in order to gather the information  necessary to qualify for
          a  mortgage.  In  addition,  consumers  are able to  choose  either an
          automated  process to complete their mortgage  transaction  or, at any
          point,  choose to receive the  personalized  assistance  of a mortgage
          professional.

     o    Wide choice of mortgage loans.  Monument Mortgage continuously reviews
          and updates its portfolio of mortgage  products,  and available  rates
          and terms, to offer a wide variety of loan programs,  thereby ensuring
          a competitive loan to the consumer.

PRODUCTS AND SERVICES

     FiNet's  business  strategy  encompasses the delivery of automated  on-line
services to both consumers and brokers.  Monument  Mortgage's  on-line  services
offer  distinct   advantages  over  the  traditional  loan  process,   which  is
paper-intensive, slow and cumbersome.

The FiNet.com Website: Services to Consumers

     Through  the  FiNet.com  website,  consumers  can fill out an on-line  loan
application and request an automated underwriting analysis of their application.
The process  requires the consumer to complete an  application  that consists of
only 32 fields,  in  contrast to the  extensive,  multi-page  traditional  paper
mortgage  application.  Monument Mortgage then  electronically  obtains a credit
report on the  borrower,  combines  and  reformats  the credit  and  application
information and submits the information to an automated  underwriting system for
a comprehensive credit analysis. If the system returns an "approved" status, the
consumer can be confident  that a lender will make the consumer a mortgage  loan
on the terms submitted,  subject to verification of the information  provided by
the consumer.

     Monument  Mortgage  accesses  multiple   automated   underwriting   systems
including Fannie Mae (Desktop Underwriter),  Freddie Mac (Loan Prospector),  and
GMAC/RFC  (AssetWise)  to increase the number of approvals  through a variety of
loan programs -- including  jumbo loans which exceed the Fannie  Mae/Freddie Mac
limit, and Alternative A and sub-prime loans for consumers with credit histories
which are outside the Fannie Mae and/or  Freddie Mac lending  guidelines.  FiNet
believes that  approximately  80% of consumers seeking loans are eligible to get
their applications approved through Monument Mortgage's underwriting process.


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<PAGE>

     From the website,  consumers  always have the option to exit the  automated
process and  continue to complete  the loan  application  flow with the personal
assistance of a mortgage professional,  making the request for contact instantly
through a button on the site.

Monument Mortgage: Services to Brokers

     Although mortgage brokers are familiar with the lending process,  they must
still contend with many time consuming and paper intensive  tasks. To assist the
broker,  Monument  Mortgage  provides access to its automated,  on-line mortgage
approval process via a variety of channels.  A broker can utilize these services
either  electronically  through  Monument  Mortgage's  desktop loan  origination
software,  or through the submission of a traditional loan file. In either case,
automated  technology  is used to  process  the  loan  application  quickly  and
efficiently.  Monument  Mortgage also offers an on-line  system that enables the
broker to monitor in real time the status of loans submitted.

TECHNOLOGY

     FiNet's  technology  infrastructure  is  based  on the  combination  of its
proprietary systems along with commercially licensed applications, such as:

     o    Sollen  Technologies' rate engine for pricing and product  eligibility
          determination;

     o    Calyx  Software's  POINT  Transaction  Server  to  automate  the  loan
          processing system for brokers;

     o    DEL MAR Database's WebTrac module, which allows brokers real-time loan
          pipeline management via the internet;

     o    Mortgage Capital Management,  Inc. and Telerate for interest rate risk
          management; and

     o    GMAC/RFC's RFConnects for warehouse line management.

Software and Systems

     Through FiNet's proprietary  web-based  technology,  consumer and wholesale
customers are empowered to interact with Monument Mortgage's back-end processing
systems.

     Monument Mortgage uses commercially licensed software to:

     o    provide  fully-adjusted  pricing  based  on the  loan  parameters  and
          features selected;

     o    perform a variety of mortgage-related computations;

     o    provide  automated  tracking status of all loans submitted by brokers;
          and

     o    empower a broker to electronically "lock-in" a loan rate and fee;

Server Hosting and Back-Up

     FiNet's  website  systems  are housed at FiNet's  facilities  in San Ramon,
California,  where FiNet has redundant  power back-up and  communication  lines.
FiNet's routers are configured for load balancing and fault tolerance. FiNet has
a  strict  maintenance  schedule  for its  hardware  and can  perform  scheduled
maintenance without disrupting service.

MARKETING

     FiNet intends to selectively  pursue  strategic  business  partnerships  in
order to leverage its current market position,  increase its on-line visibility,
and  accelerate  distribution  of  its  services.   Monument  Mortgage  operates
primarily in the business-to-business channel by providing increased services to
mortgage brokers and other  businesses.  During the past year Monument  Mortgage
successfully  shifted  its  focus  to  the   business-to-business   channel  and
significantly  decreased  advertising costs for brand name promotion,  which was
associated  with  the   consumer-direct-channel.   However,   Monument  Mortgage
continues  to incur  the costs of  expanding  its sales  force  consistent  with
supporting a business-to-business infrastructure.


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Business-to-Business Channel

     Monument Mortgage increases its brand awareness with brokers by:

     o    building a strong  sales force that  markets its  services by personal
          contact and assists mortgage brokers in adopting on-line technologies;

     o    partnering with established loan origination channels used by brokers,
          such as Calyx Software;

     o    introducing new web-based services; and

     o    employing traditional marketing strategies, including participation in
          trade shows and conferences,  advertising in industry publications and
          flyers, and participation in broker loyalty programs.

Consumer-Direct Channel

     Monument  Mortgage has realigned its  consumer-direct  channel  strategy by
focusing on 100%  brokered  loans  generated  through the  Internet  and through
newspaper  advertisements.  Origination  volume has  continued to grow despite a
significant reduction in marketing expenses achieved through the cancellation of
multiple marketing arrangements with websites.

MORTGAGE OPERATIONS

     Monument  Mortgage is licensed to originate and fund mortgages in 50 states
and in the District of Columbia.  During  fiscal year 2000,  the  proportion  of
funded loans outside of California increased 15% as a result of the expansion of
Monument Mortgage's nationwide sales force.

LOAN PRODUCT TYPES

     The following is a  description  of the types of mortgage  loans  currently
offered by Monument Mortgage.

Conforming Mortgage Loans

     Conforming   mortgage  loans  comply  with  the   underwriting   guidelines
established by one of the government sponsored mortgage entities,  Fannie Mae or
Freddie Mac.  Monument  Mortgage  sells these loans on the  secondary  market to
Fannie Mae, Freddie Mac, and/or investors, such as Wells Fargo and Countrywide.

Jumbo Mortgage Loans

     Jumbo  mortgage  loans do not comply with the  underwriting  guidelines  of
conforming  loans  because the loan size  exceeds the maximum  amount  allowable
(currently  $275,000 for  single-family  homes).  Monument  Mortgage sells jumbo
loans to investors such as Washington  Mutual Bank,  Credit Suisse First Boston,
and GMAC/RFC.

Alternative A Mortgage Loans

     Alternative  A loans fail to satisfy  one or more  elements of the jumbo or
conventional  underwriting  guidelines,   such  as  documentation  requirements,
employment history,  income verification,  loan-to-value ratios, credit history,
qualifying ratios and/or borrower net worth. Monument Mortgage sells Alternative
A loans to investors such as Credit Suisse First Boston and GMAC/RFC.

Home Equity Loans

     Home equity loans take the form of a line of credit, are designed primarily
for  high-credit  quality  borrowers,  and  are  underwritten  according  to the
guidelines  of the  investor to which the loans will be sold.  Home equity lines
generally  provide for either a 5-year or 15-year draw period,  during which the
borrower may make cash withdrawals,  and a 10-year repayment period during which
the amount outstanding at the end of the draw period is amortized. Only interest
payments  are made  during the draw  period.  Home equity  lines are  frequently
originated in conjunction  with a first-lien  mortgage loan.  Monument  Mortgage
sells home equity loans to investors such as GMAC/RFC.


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Second Mortgage Loans

     Second  mortgage  loans are  "closed-end"  loans,  designed  primarily  for
high-credit quality borrowers,  and are underwritten according to the guidelines
of the  investor  to which the loans  will be sold.  Second  mortgage  loans are
"closed-end,"  meaning they are fixed in amount at the time of  origination  and
typically  amortize over the term of the loan or have a balloon payment.  Second
mortgage  loans are  frequently  originated  in  conjunction  with a  first-lien
mortgage loan.  Monument  Mortgage sells second mortgage loans to investors such
as GMAC/RFC, Credit Suisse First Boston, and Countrywide

Sub-Prime Mortgage Loans

     Sub-Prime  mortgage  loans are designed for  borrowers who have impaired or
limited credit  profiles or higher  debt-to-income  ratios.  Such loans may also
fail to satisfy the underwriting guidelines of the government sponsored entities
in  other  ways.  Monument  Mortgage's  loans  are  categorized  based  upon the
borrower's credit profile as "A-" or "B," or loans that are generally considered
"non-prime"  in the  secondary  mortgage  market.  Monument  Mortgage  does  not
originate  loans  categorized  as "C"  or "D"  loans.  Monument  Mortgage  sells
Sub-Prime loans to investors such as GMAC/RFC, and Credit Suisse First Boston.

LOAN ORIGINATION

     The following table summarizes originations by category of loan type in the
periods indicated for FiNet's ongoing businesses:

<TABLE>
<CAPTION>
                                              Years Ended December 31                  Years Ended April 30
                                         ---------------------------------        -------------------------------
                                              2000               1999                  1999             1998
                                         --------------     --------------        --------------   --------------
<S>                                           <C>                <C>                   <C>             <C>
Conforming Mortgage Loans
Number of loans                                3,710              3,022                 4,660           2,530
Volume (in millions of dollars)               $518.7             $451.6                $705.6          $359.6
% of category volume we funded                   100 %              100 %                  84 %           100 %
% of total loan volume                            68 %               77 %                  75 %            70 %

Jumbo Mortgage Loans
Number of loans                                  283                281                   415             164
Volume (in millions of dollars)               $109.0              $95.8                $148.7           $52.7
% of category volume we funded                   100 %              100 %                  51 %           100 %
% of total loan volume                            14 %               16 %                  16 %            10 %

Alternative A Mortgage Loans
Number of loans                                  531                144                   279             340
Volume (in millions of dollars)               $114.3              $28.8                 $55.0           $69.2
% of category volume we funded                   100 %              100 %                 100 %           100 %
% of total loan volume                            15 %                5 %                   6 %            13 %

Home Equity Mortgage Loans
Number of loans                                  300                241                   311             412
Volume (in millions of dollars)                $18.2              $10.9                 $11.8           $15.3
% of category volume we funded                   100 %              100 %                 100 %           100 %
% of total loan volume                             2 %                2 %                   1 %             3 %

Sub-Prime Mortgage Loans
Number of loans                                   39                  6                   104             128
Volume (in millions of dollars)                 $4.6               $0.9                 $17.2           $19.3
% of category volume we funded                   100 %              100 %                 100 %           100 %
% of total loan volume                             1 %                * %                   2 %             4 %

FHA/VA
Number of loans                                    3                  6                     4               2
Volume (in millions of dollars)                 $0.3               $0.7                  $0.5            $0.3
% of category volume we funded                   100 %              100 %                 100 %           100 %
% of total loan volume                             *                  *                     *               *
</TABLE>

----------
*    Less than one percent


                                                                               9
<PAGE>

     The following table summarizes originations by category of loan type in the
periods indicated for FiNet's discontinued businesses:

<TABLE>
<CAPTION>
                                                 Years Ended December 31           Years Ended April 30
                                                 -----------------------           ---------------------
                                                    2000         1999                1999         1998
                                                 ---------     ---------           --------     --------
<S>                                                  <C>           <C>             <C>           <C>
Conforming Mortgage Loans
Number of loans                                      --            --                 551          --
Volume (in millions of dollars)                      --            --              $ 63.5          --
% of category volume we funded                       --            --                 100 %        --
% of total loan volume                               --            --                16.0 %        --

Sub-Prime Mortgage Loans
Number of loans                                      --            --                 801         1,335
Volume (in millions of dollars)                      --            --              $ 64.7        $ 93.4
% of category volume we funded                       --            --                 100 %         100 %
% of total loan volume                               --            --                  17 %         100 %

FHA/VA
Number of loans                                      --            --               2,702          --
Volume (in millions of dollars)                      --            --              $260.1          --
% of category volume we funded                       --            --                 100 %        --
% of total loan volume                               --            --                  67 %        --
</TABLE>


     The  following  table  summarizes  originations  by purpose in the  periods
indicated for FiNet's ongoing businesses:

<TABLE>
<CAPTION>
                                                  Years Ended December 31                 Years Ended April 30
                                                 --------------------------             -------------------------
                                                    2000             1999                  1999            1998
                                                 ---------        ---------             ---------       ---------
<S>                                               <C>              <C>                   <C>             <C>
Purchase
Number of loans                                    2,817            1,769                 1,405           1,080
Volume (in millions of dollars)                   $462.2           $293.0                $233.2          $167.7
% of category volume we funded                       100 %            100 %                  90 %           100 %
% of total loan volume                                61 %             50 %                  25 %            32 %

Refinancing
Number of loans                                    1,762            1,686                 4,018           2,010
Volume (in millions of dollars)                   $285.9           $283.3                $691.6          $330.4
% of category volume we funded                       100 %            100 %                  76 %           100 %
% of total loan volume                                37 %             48 %                  74 %            64 %

Home Equity Mortgage Loans
Number of loans                                      287              245                   380             486
Volume (in millions of dollars)                    $17.0            $12.4                 $14.0           $18.3
% of category volume we funded                       100 %            100 %                  99 %           100 %
% of total loan volume                                 2 %              2 %                   1 %             4 %
</TABLE>


                                                                              10
<PAGE>

         The following table summarizes  originations by purpose for the periods
indicated for FiNet's discontinued businesses:

<TABLE>
<CAPTION>
                                                    Years Ended December 31         Years Ended April 30
                                                    -----------------------        -----------------------
                                                       2000          1999            1999           1998
                                                    ---------      --------        --------       --------
<S>                                                   <C>            <C>            <C>            <C>
Purchase
Number of loans                                         --             --            1,725            463
Volume (in millions of dollars)                         --             --           $165.0         $ 27.1
% of total loan volume                                  --             --               42 %           29 %

Refinancing
Number of Loans                                         --             --            2,329            872
Volume (in millions of dollars)                         --             --           $223.3         $ 66.3
% of total loan volume                                  --             --               58 %           71 %
</TABLE>

----------
*    Less than one percent


     The following table  summarizes  originations by business  segments for the
period indicated by FiNet's ongoing businesses:

<TABLE>
<CAPTION>
                                                    Years Ended December 31         Years Ended April 30
                                                    -----------------------        -----------------------
                                                       2000          1999            1999           1998
                                                    ---------      --------        --------       --------
<S>                                                   <C>            <C>            <C>            <C>
Consumer Channel
Volume (in millions of dollars)                       $122.4         $170.7         $265.3         $ 24.7
% of total loan volume                                    16 %           29 %           28 %            5 %

Business Channel
Volume (in millions of dollars)                       $642.7         $418.0         $673.5         $491.7
% of total loan volume                                    84 %           71 %           72 %           95 %
</TABLE>

     The following table  summarizes  originations  by business  segment for the
period indicated by FiNet's discontinued businesses.

<TABLE>
<CAPTION>
                                                    Years Ended December 31         Years Ended April 30
                                                    -----------------------        -----------------------
                                                       2000          1999            1999           1998
                                                    ---------      --------        --------       --------
<S>                                                   <C>            <C>            <C>            <C>
Consumer Channel
Volume (in millions of dollars)                         --             --           $ 49.8         $  9.1
% of total loan volume                                  --             --               13 %           10 %

Business Channel
Volume (in millions of dollars)                         --             --           $338.5         $ 84.3
% of total loan volume                                  --             --               87 %           90 %
</TABLE>


                                                                              11
<PAGE>

GEOGRAPHIC CONCENTRATION

     The  following  table  summarizes  originations  by  state  for the  period
indicated by FiNet's ongoing businesses:

<TABLE>
<CAPTION>
                                                 Years Ended December 31                        Years Ended April 30
                                            --------------------------------              -------------------------------
                                               2000                  1999                    1999                  1998
                                            ----------            ----------              ----------           ----------
<S>                                          <C>                   <C>                     <C>                  <C>
California
Number of loans                                 3,259                 3,197                   4,856                2,826
Volume (in millions of dollars)              $    563              $    525                $  820.7             $  428.1
% of total loan volume                             74 %                  89 %                    87 %                 83 %

Washington
Number of loans                                    58                    83                     211                   46
Volume (in millions of dollars)              $    7.6              $   11.9                $   26.1             $    5.9
% of total loan volume                              1 %                   2 %                     3 %                  1 %

Colorado
Number of loans                                   100                   107                     319                  231
Volume (in millions of dollars)              $   13.8              $   13.3                $   42.5             $   28.0
% of total loan volume                              2 %                   2 %                     5 %                  5 %

Oregon
Number of loans                                    93                    99                     139                  213
Volume (in millions of dollars)              $   12.0              $   12.8                $   18.1             $   23.3
% of total loan volume                              2 %                   2 %                     2 %                  5 %

Nevada
Number of loans                                    60                    16                      22                   83
Volume (in millions of dollars)                 $ 8.3              $    2.3                $    4.1             $   10.1
% of total loan volume                              1 %                   1 %                     *                    2 %

All Other States
Number of loans                                 1,296                   198                     256                  177
Volume (in millions of dollars)              $  160.4              $   23.4                $   27.3             $   21.0
% of total loan volume                             20 %                   4 %                     3 %                  4 %
</TABLE>

----------
*    Less than one percent


                                                                              12
<PAGE>

     The  following  table  summarizes  originations  by  state  for the  period
indicated by FiNet's discontinued businesses:

<TABLE>
<CAPTION>
                                                Years Ended December 31                Years Ended April 30
                                                -----------------------             -------------------------
                                                  2000           1999                 1999             1998
                                                --------       --------             --------         --------
<S>                                                <C>            <C>                <C>              <C>
California
Number of loans                                    --             --                   1261              --
Volume (in millions of dollars)                    --             --                 $142.2              --
% of total loan volume                             --             --                     36 %            --

Georgia
Number of loans                                    --             --                    474              --
Volume (in millions of dollars)                    --             --                  $45.6              --
% of total loan volume                             --             --                     12 %            --

Florida
Number of loans                                    --             --                    388             210
Volume (in millions of dollars)                    --             --                  $33.8           $14.5
% of total loan volume                             --             --                      9 %            16 %

Nevada
Number of loans                                    --             --                    299              --
Volume (in millions of dollars)                    --             --                  $39.0              --
% of total loan volume                             --             --                     10 %            --

Pennsylvania
Number of loans                                    --             --                    228             360
Volume (in millions of dollars)                    --             --                  $14.5           $20.5
% of total loan volume                             --             --                    4.0 %          22.0 %

New Jersey
Number of loans                                    --             --                    145             275
Volume (in millions of dollars)                    --             --                  $13.0           $23.3
% of total loan volume                             --             --                      3 %            25 %

All Other States
Number of loans                                    --             --                  1,259             490
Volume (in millions of dollars)                    --             --                 $100.2           $35.1
% of total loan volume                             --             --                     26 %            37 %
</TABLE>

UNDERWRITING

     Underwriting  is the process of evaluating a loan  application to determine
the  risk   involved   for  the   lender,   an   analysis   of  the   borrower's
creditworthiness,  and the  quality of the  property  itself.  Because  Monument
Mortgage  does not hold  loans  for  investment,  each loan is  underwritten  to
guidelines  provided  by the  investor  expected  to  purchase  the  loan,  thus
increasing the probability that the investor will ultimately purchase the loan.

     Investors'  underwriting  guidelines  generally  include  such items as the
borrower's  installment  loan payments and credit history,  employment  history,
capacity  to  pay,  outstanding  judgments,  charge-offs,  and  any  bankruptcy,
repossession  or  foreclosures.  Since loans are secured by a mortgage  lien, an
appraisal of the property securing the loan is also required.

     To maintain  underwriting  integrity,  Monument  Mortgage's loan production
personnel,  including originators and customer service representatives,  are not
permitted to underwrite  loans. All Monument Mortgage  underwriting  reviews and
decisions are executed by dedicated  underwriters  with no other  involvement in
the loan process.

     Additionally,  Monument Mortgage often contracts underwriting services from
leading mortgage insurance  companies.  The risks associated with a loan that is
underwritten  by a contracted  underwriter  are borne by the insurance  company,
thus reducing the risk to Monument Mortgage.


                                                                              13
<PAGE>

COMPLIANCE/QUALITY CONTROL

Compliance

     A compliance  team  monitors  and manages  Monument  Mortgage's  regulatory
compliance  and  licensing,  which  includes  developing  loan documents for new
products,   ensuring  proper  disclosures   throughout  the  loan  process,  and
maintaining lending and broker licenses.

Quality Assurance

     o    Prior to closing a loan,  Monument  Mortgage performs a complete audit
          to ensure that the loan meets the investor's guidelines.

Quality Control

     Quality  control  personnel  review  a sample  of  closed  loans to  verify
compliance with legal documentation requirements,  accuracy and potential fraud.
Through these  reviews,  Monument  Mortgage can evaluate and improve the overall
quality of loan production.  All potential  problems are immediately  identified
and communicated to the compliance team and management.

     Additionally,  Monument  Mortgage  utilizes the services of an  independent
quality control provider, who reviews a 10% random sampling of closed loans on a
monthly basis. These reviews include:

     o    a credit underwriting review;

     o    a complete loan package re-verification;

     o    a loan program compliance review; and

     o    a federal regulatory compliance review.

Repurchases

     Agreements  to  sell  loans  to  institutional  lenders  generally  require
Monument Mortgage to repurchase a loan if the representations regarding the loan
are  materially  inaccurate.   Such  representations  generally  relate  to  the
qualification of the borrower. See "Item 7. Management's Discussion and Analysis
of Financial Condition and Results of  Operations--Risk  Factors That May Affect
Our Future Performance - If Monument Mortgage has to repurchase loans originated
for or sold to lenders,  FiNet's operating results could be materially adversely
affected."

FINANCING AND SALE OF LOANS AND SERVICING RIGHTS

Warehouse Financing

     As of  December  31,  2000,  Monument  Mortgage  had a secured  $60 million
revolving credit facility as well as two  purchase/repurchase  credit facilities
to fund loan  originations and finance  originated loans until they are sold. In
connection  with the committed  warehouse  line of credit  Monument  Mortgage is
required to comply with various  operating  and  financial  covenants  including
covenants relating to:

     o    minimum tangible net worth;

     o    maximum debt limits;

     o    debt to equity ratio;

     o    restrictions on certain transactions with affiliates, and

     o    permitted cumulative loss.


                                                                              14
<PAGE>

     As of December 31, 2000, certain covenants contained in Monument Mortgage's
primary  warehouse  lending  agreement were violated.  On February 28, 2001, the
lender waived these  defaults,  and reduced the credit  facility to $25 million,
and extended the  expiration  date to May 31,  2001.  At December 31, 2000,  the
outstanding balance under this facility was $35.9 million.

Interest Rate Risk Management

     Between the time that the interest  rate for a loan is locked with Monument
Mortgage and the time that  mortgage is sold on the secondary  market,  Monument
Mortgage  bears the market  risk that rates may change.  If interest  rates rise
while  Monument  Mortgage  holds the loan,  the market price  declines which may
result in a loss on the sale of that loan.  Monument  Mortgage's capital markets
department attempts to mitigate interest rate risk by hedging with a combination
of  forward  sales  of  mortgage-backed  securities  and  whole-loans.  Monument
Mortgage  attempts to hedge its entire  estimated  interest  rate risks of prime
loans,  however it does not forward commit non-prime mortgages due to their lack
of sensitivity to interest rate changes.  Monument Mortgage believes that it has
a  cost-effective  hedging  program  to  provide a level of  protection  against
changes in the  market  value of its loans  held for sale,  and we  utilize  the
services of a nationally  known risk  management  consultant,  Mortgage  Capital
Management, to  assist  with  Monument  Mortgage's  hedging  analysis.  Overall,
although Monument  Mortgage uses a complex hedging strategy,  no forward selling
model can  completely  insulate a company  against  losses due to interest  rate
changes.

Loan Sales

     Monument  Mortgage  customarily  sells  all  loans it funds to a number  of
investors,  including:  government-sponsored  mortgage  entities,  institutional
investors,  and national  privately-sponsored  mortgage conduits,  and a primary
component of the business strategy is to seek the most profitable execution when
selling loans. Conforming loans are sold via the following channels:

     o    Concurrent Transactions involve a sale of the underlying mortgage loan
          directly  to Fannie Mae or Freddie Mac with a  concurrent  sale of the
          servicing rights to an independent servicer.

     o    Assignment  of Trade  Sales are sales of  conforming  loans to a third
          party  along with an  assignment  of the  associated  mortgage  backed
          security  commitment/trade.  The third party then  exchanges the loans
          with Fannie Mae or Freddie Mac for mortgage backed  securities  issued
          by them, which are then delivered against the assigned trade.

     o    Whole-Loan Sale individual  loans are underwritten to the standards of
          and  sold  to  a   specific   buyer  on  a   forward   commitment   or
          over-the-counter  basis.  Jumbo  and  Alternative  Mortgage  loans are
          currently sold in whole-loan sales on a forward commitment basis.

     Non-prime loans, home equity lines and closed-end second mortgages are sold
through whole-loan sales.

Sales of Servicing Rights

     When a loan is  originated,  a  corresponding  right to service the loan is
created.  Monument  Mortgage's  current strategy is to realize the value of this
right by selling  loans  without  retaining  the right to service the loan or by
selling the servicing  rights  separately  from the loan. As a result,  Monument
Mortgage  minimizes the risk associated  with defaults and early  prepayments of
those loans. Monument Mortgage sold its loan servicing portfolio in August 1999,
and has no plans for retaining  servicing rights on loans it underwrites,  funds
and closes in the future.

Recourse

     By selling all the loans it closes,  Monument Mortgage reduces its exposure
to default risk (other than first-payment defaults by customers) and most of the
prepayment risk normally inherent in the mortgage lending business.  However, in
connection with whole-loan sales and exchanges, Monument Mortgage represents and
warrants to the buyers of the loans relating to, among other things,  compliance
with laws, regulations and program standards and accuracy of information. In the
event of a breach of these representations and warranties, Monument Mortgage may
be required to  repurchase  these loans and  indemnify the investors for damages
caused by such breach. If a repurchase request is made, Monument Mortgage either
remedies the  deficiency,  or  refinances  and sells the loan.  In addition,  in
connection with some non-prime loan sales,  Monument Mortgage may be required to
return a portion of the premium  received  upon the sale of the loan if the loan
is prepaid by the borrower  within the first year after sale. By using automated
underwriting  systems and by implementing a stringent quality assurance program,
the risks of loan rejection and repurchase are minimized.  Monument Mortgage may
be obligated to  repurchase  some loans  funded by other  companies  acquired by
FiNet. See "Item 7. Management's  Discussion and Analysis of Financial Condition
and  Results  of   Operations  --  Risk  Factors  That  May  Affect  Our  Future
Performance-If  Monument Mortgage has to repurchase loans originated for or sold
to investors, FiNet's operating results could be materially adversely affected."


                                                                              15
<PAGE>

MORTGAGE BANKING REGULATION

     Mortgage  operations  are subject to  extensive  regulation  by federal and
state  authorities.  For example,  the United  States  Department of Housing and
Urban  Development,  or HUD,  regulates  certain aspects of the mortgage lending
business, as do the Federal Reserve Board and the Federal Trade Commission.  The
Real  Estate  Settlement  Procedures  Act of 1974,  or  RESPA,  and the Truth in
Lending Act, require that certain  disclosures,  such as good faith estimates of
settlement  charges,  a  Truth-in-Lending  Statement  and a  "HUD-1"  settlement
statement be provided to borrowers and that certain information, such as the HUD
Settlement  Costs  booklet,  also be provided  to  borrowers.  The Federal  Fair
Housing Act and the Equal Credit  Opportunity Act prohibit  discrimination,  and
various state statutes prohibit unfair and deceptive trade practices, and impose
disclosure  and  other   requirements  in  connection  with  the  mortgage  loan
origination process. If Monument Mortgage fails to comply with such regulations,
possible  consequences  could  include  loss of  approved  status,  demands  for
indemnification, class action lawsuits and administrative enforcement actions.

     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,  the  payment  of  reasonable
compensation  for the provision of goods,  services and  facilities is generally
not prohibited.

     In  California,  regulation  and licensing of mortgage  brokers and lenders
fall  under  the  California  Department  of  Real  Estate  and  the  California
Department  of  Corporations.  Other than banking  industry  employees and other
persons  who are  exempt  from  the  licensing  requirements  of the  California
Department of Real Estate and California Department of Corporations, individuals
engaged  directly in the  origination of loans or the  dissemination  of certain
information  associated  with the  origination  of  loans,  are  required  to be
licensed  by  the  California  Department  of  Real  Estate  or  the  California
Department of Corporations,  or both.  Monument  Mortgage is also required to be
licensed in other states in which it operates or has offices.  Although Monument
Mortgage has the licenses  required in  California  and other states in which it
operates or has offices, it cannot be sure that it will successfully comply with
the  many  government  regulations  and  licensing  requirements  to which it is
subject.  If Monument  Mortgage  fails to comply with these legal  requirements,
governmental  enforcement  actions  could  have a  material  adverse  effect  on
Monument Mortgage's business, financial condition and results of operations and,
consequently,   on  FiNet's  business,   financial   condition  and  results  of
operations.

COMPETITION

     The  e-commerce  market  is  rapidly  evolving,   and  competition  in  the
electronic  mortgage  industry is  continuing to  intensify.  Monument  Mortgage
differentiates  itself from other  mortgage  lenders by providing an emphasis on
ease of use - especially through electronic tools - while providing  competitive
prices.  However,  both existing and new mortgage  companies can launch websites
relatively inexpensively,  and there are many lenders, in general, competing for
residential  mortgage business.  Monument Mortgage currently competes in both of
its business  segments less with dot-coms  companies,  and more with traditional
mortgage services businesses including:

     o    on-line  mortgage  brokers,  such  as  E-LOAN,  Lendingtree.com,   and
          LoanCity

     o    mortgage banking companies,  commercial banks,  savings  associations,
          credit  unions  and  other  financial   institutions  which  originate
          mortgage loans; and

     o    mortgage brokers.

     Many of Monument Mortgage's competitors, both lenders and brokers, may have
a competitive advantage including:

     o    longer operating histories;

     o    greater name recognition and more extensive customer bases; and

     o    substantially  greater  financial,   marketing,  technical  and  other
          resources.

INTELLECTUAL PROPERTY

     Trademarks and other  proprietary  rights are important to FiNet's  success
and  competitive  position,  and FiNet  currently  holds a number of trademarks,
service  marks,  patents  and  copyrights.  Although  FiNet seeks to protect its
trademarks and other  proprietary  rights through a variety of means, it may not
have taken  adequate  steps to protect  these  rights.  FiNet will  continue  to
license  content from third  parties in the future,  and it is possible  that it
could be subjected to infringement  actions based upon the content licensed from
these third  parties.  Any claims  brought  against  FiNet,  regardless of their
merit,  could  result  in  costly  litigation  and the  diversion  of  financial
resources and technical and management  personnel.  Further,  if such claims are
proved valid,  through litigation or otherwise,


                                                                              16
<PAGE>

FiNet may be required to change its  trademarks or other  proprietary  marks and
pay financial damages, which could adversely affect its business.

     Both FiNet and  Monument  Mortgage  enter into  confidentiality  or license
agreements  with new employees,  consultants  and corporate  partners to control
access to, and the distribution of, their technologies,  documentation and other
proprietary  information.  Despite the efforts of FiNet and Monument Mortgage to
protect their proprietary  rights from  unauthorized use or disclosure,  parties
may attempt to disclose, obtain or use these proprietary rights. The steps taken
may not prevent misappropriation of proprietary rights,  particularly in foreign
countries  where laws or law enforcement  practices may not protect  proprietary
rights as fully as in the United States.

EMPLOYEES

     As of March 15,  2001,  FiNet had 84  full-time  employees  and 4 part-time
employees.  Of  these  employees,  20  employees  comprise  the  consumer-direct
division  and  22  employees  comprise  the  business-to-business  division;  42
employees comprise marketing, technology, administration and support areas. None
of our  employees are  represented  by any union.  Management  believes that its
relations with employees are good.

EXECUTIVE OFFICERS OF THE REGISTRANT

     The  following  table  sets forth  certain  information  regarding  FiNet's
executive officers as of March 15, 2001.

Name                          Age       Position
------------------------   ----------   ---------------------------------------
Rick Cossano                  45        President, Chief Executive Officer,
                                          Member of the Board of Directors
Patrick J. Mackin             52        Executive Vice President,
                                          Chief Financial Officer
Michael Quinn                 31        Senior Vice President, Capital Markets
Robert Katz                   35        Chief Technology Officer

     Rick Cossano has served as President,  Chief Executive Officer and a member
of the Board of Directors of FiNet since February 2000.  Prior to joining FiNet,
Mr.  Cossano was the President and Chief  Operating  Officer of LandSafe  Title,
Inc. from 1996 to 2000 and the Executive Vice President of the Wholesale Lending
Division and Consumer  Markets  Division for Countrywide Home Loans from 1987 to
1996.

     Patrick  J.  Mackin  has  served  as  Executive  Vice  President  and Chief
Financial  Officer  since  November  2000.  In March 2001,  Mr.  Mackin  assumed
responsibilities  for the  management  of  operations  for  business-to-business
channel.  Prior to joining FiNet, Mr. Mackin served as the Senior Vice President
of The Money Store from August 1996 to August 2000.

     Robert Katz was promoted to Chief Technology  Officer in October 2000 after
serving as Director of Web  Development  since  January  2000.  Prior to joining
FiNet,  Mr.  Katz  served as a  regional  manager  for a  technology  consulting
company, The Trattner Network.

     Michael Quinn has served as Senior Vice  President,  Capital  Markets since
April 2000.  Prior to joining  FiNet,  Mr. Quinn was Vice President of Secondary
Markets for Commerce Security from January 1996 to March 2000.

FINANCIAL INFORMATION ABOUT BUSINESS SEGMENTS

     See note 15 in the Notes to FiNet's  Consolidated  Financial Statements for
financial  information  concerning the two business segments operated by FiNet's
wholly-owned subsidiary, Monument Mortgage: the business-to-business channel and
the business-to-consumer channel.

ITEM 2. DESCRIPTION OF PROPERTIES

     FiNet's  corporate  headquarters  and operations are located at 2527 Camino
Ramon,  Suite  200  in  San  Ramon,  California.  In  addition  to  housing  the
administrative    offices   of   FiNet,    this   facility   also   houses   the
business-to-business  segment of Monument Mortgage. FiNet occupies approximately
39,335 square feet of space under its sublease.


                                                                              17
<PAGE>

     The  consumer-direct  segment of  Monument  Mortgage  is housed in its east
coast facility located in East Norriton,  Pennsylvania.  This facility  occupies
approximately  4,065 square feet of space and consists of three separate  suites
within the same office  building.  The leases for these  suites  expire  between
August 2002 and November 2002.

     FiNet  believes  that its  facilities  are adequate to support  anticipated
operations.

ITEM 3. LEGAL PROCEEDINGS

     On January 14, 1998,  prior to FiNet's  acquisition of Mical, a lawsuit was
filed against Mical in the United States  District Court for the Middle District
of Georgia.  The complaint alleges,  among other things, that in connection with
residential  mortgage  loan  closings,  Mical made certain  payments to mortgage
brokers in violation of the Real Estate  Settlement  Procedures  Act and induced
mortgage  brokers to breach their alleged  fiduciary  duties to their customers.
The plaintiffs seek unspecified  compensatory and punitive damages as to certain
claims.  Management believes that its compensation programs for mortgage brokers
comply with  applicable  laws and with long standing  industry  practices.  This
action is stayed  pending the  resolution of the appeals in four similar  cases,
which have been selected for interlocutory  review by the United States Court of
Appeals for the Eleventh  Circuit.  Oral arguments were held in January of 2001,
but the Court has not ruled on the matter.  FiNet  intends to defend  vigorously
against this action and believes  that the ultimate  resolution  will not have a
material  adverse  effect on its business,  results of operations  and financial
condition.

     On December 16, 1999, a lawsuit was filed in the Judicial District Court of
Dallas County,  Texas, by FC Capital Corp. d/b/a First City Capital  Corporation
("First  City").  The complaint  alleges  breach of contract by Coastal  Federal
Mortgage  ("Coastal")  for failure to repurchase  loans in  accordance  with the
terms and conditions of a purchase  agreement  entered into by Coastal and First
City in March 1998.  The plaintiff has named FiNet as a defendant  alleging that
FiNet assumed all of Coastal's debts and obligations when FiNet acquired Coastal
in April 1998.  The plaintiff  seeks to recover  actual damages in the amount of
$1.7  million  and premium  rebates in the  approximate  amount of $26,000.  The
action was removed to the United States  District  Court,  Northern  District of
Texas,  Dallas Division ("Texas District Court") on January 18, 2000. On May 31,
2000 the Texas  District  Court  granted  FiNet's  motion to dismiss for lack of
personal  jurisdiction and dismissed the action without  prejudice.  Thereafter,
FiNet and Coastal  filed a declaratory  relief action  against First City in the
San Francisco  Superior Court with respect to the issues that had been raised by
First City in the dismissed  Texas action.  First City removed the action to the
United States  District  Court,  Northern  District of  California  ("California
District Court"),  and filed a motion to dismiss or in the alternative to change
venue to New York. At a hearing held on August 28, 2000,  the  California  Court
denied First City's  motion to dismiss.  First City  answered the  complaint and
filed a "cross-complaint"  which included allegations against Coastal and FiNet,
as well as  allegations  against  Coastal's  three prior  shareholders  in their
individual capacities ("Individual  Defendants").  Subsequently,  the California
District Court on February 12, 2001 dismissed the Individual Defendants for lack
of personal  jurisdiction  and ordered the  remaining  parties to  mediation.  A
mediation  conference is scheduled  for April 26, 2001.  FiNet intends to defend
vigorously against the action and believes that the ultimate resolution will not
have a  material  adverse  effect on its  business,  results  of  operations  or
financial condition.

     FiNet and  certain  subsidiaries  are  defendants  in various  other  legal
proceedings,  which FiNet considers to be ordinary routine litigation incidental
to FiNet's  business.  Although it is  difficult  to predict the outcome of such
cases,  after reviewing with counsel all such  proceedings,  management does not
expect that the aggregate liability,  if any, resulting  therefrom,  will have a
material  adverse effect on the  consolidated  financial  position or results of
operations of FiNet and its subsidiaries.

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

     None.


                                                                              18
<PAGE>

                                     PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

PRICE RANGE OF COMMON STOCK

     Currently  FiNet's  common stock is trading  under the symbol "FNCM" on the
Nasdaq SmallCap Market.  Prior to June 1999,  FiNet's common stock traded on the
Nasdaq  SmallCap  Market under the symbol "FNHC." The following table sets forth
the high and low bid  prices of  FiNet's  common  stock on the  Nasdaq  SmallCap
Market for the periods indicated, as adjusted to give effect to a one-for-twelve
reverse  stock split of FiNet's  common stock that became  effective on February
20, 2001.

                                                          High           Low
                                                       ----------     ---------
Twelve Months ended December 31, 2000
Fourth quarter ................................        $     9.37     $    0.37
Third quarter .................................             13.13          5.25
Second quarter ................................             17.25          5.63
First quarter .................................             29.25         13.50

Twelve Months ended December 31, 1999
Fourth quarter ................................        $    42.75     $   12.37
Third quarter .................................             67.50         23.63
Second quarter ................................            219.00         43.50
First quarter .................................             61.13          9.75

     As of March 15, 2001, there were approximately 467 holders of record of our
common stock. On March 15, 2000, the last reported bid price of our common stock
on the Nasdaq  Market was $0.9531.  The closing bid price of our common stock on
that date  reflects  the  effects of a one-for  twelve  reverse  stock  split of
FiNet's common stock that became effective on February 20, 2001.

DIVIDENDS

     FiNet has not paid, and does not currently intend to pay, cash dividends on
its common  stock.  The  current  policy of the FiNet Board of  Directors  is to
retain earnings, if any, to provide funds for operation and expansion of FiNet'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,  FiNet's
earnings,  capital  requirements and financial  position.  In addition,  FiNet's
ability to pay dividends may be limited  under future  warehouse  line of credit
agreements, which restrict or prohibit the payment of dividends.

RECENT SALES OF UNREGISTERED SECURITIES

     During fiscal year 2000, the registrant has issued the securities set forth
below,  which were not registered  under the Securities Act of 1933.  Except for
sales pursuant to Regulation S, which were made in compliance with Regulation S,
the sales of the following  securities  were made in reliance upon the exemption
from the registration  provisions of the Securities Act of 1933, amended,  under
Section 4(2) thereof or Regulation D promulgated thereunder,  as transactions by
an issuer not involving a public  offering.  The  purchasers  of the  securities
described  below  acquired them for their own account and not with a view toward
distribution  thereof to the public. The certificates  evidencing the securities
bear  legends  stating  that the shares may not be  offered,  sold or  otherwise
transferred other than pursuant to an effective registration statement under the
Securities Act, or an exemption from such registration requirements.

     In October of 2000,  FiNet  issued  1,541,667  shares of common  stock in a
private  placement to accredited  investors for an aggregate  purchase  price of
$7,400,000,  a  portion  of  which  was  purchased  by Banco  Espirito  Santo de
Investimento,  S.A, which along with its affiliates  beneficially owns more than
five percent of FiNet's Common Stock. In connection with the private  placement,
FiNet  agreed  to issue to  certain  financial  advisors,  as  compensation  for
services  rendered in the transaction  500,000 warrants to purchase common stock
at an  exercise  price of $9.00 per share with a five (5) year term,  subject to
the satisfaction of certain conditions to issuance.


                                                                              19
<PAGE>

ITEM 6. SELECTED FINANCIAL DATA

     The  following  selected  consolidated  financial  data  should  be read in
conjunction  with  our  consolidated  financial  statements  and  notes  to  our
consolidated financial statements and with "Management's Discussion and Analysis
of Financial  Condition and Results of  Operations,"  which appear  elsewhere in
this  Annual  Report  on  Form  10-K.  The  following  table  provides  selected
historical  consolidated financial information of FiNet.  Consolidated financial
statements  of  FiNet  are as of the  dates  indicated  and for the  year  ended
December 31, 2000 and 1999, and the eight months ended December 31, 1999 and for
the fiscal  years  ended  April 30,  1999,  1998,  and 1997.  FiNet  derived the
consolidated  statement of  operations  and balance sheet data as of and for the
years ended 2000 and 1999 and the eight months  ended  December 31, 1999 and for
the fiscal  years ended April 30,  1999,  1998 and 1997 from  FiNet's  financial
statements  audited  by Ernst & Young,  LLP  (2000,  1999),  and Reuben E. Price
(1998, 1997), independent public accountants for FiNet.

<TABLE>
<CAPTION>
                                                                                   Eight Months
                                                                 Years Ended           Ended             Fiscal Years Ended
                                                                 December 31        December 31               April 30
                                                            ---------------------    ---------    ---------------------------------
                                                              2000         1999         1999        1999        1998         1997
                                                            --------    ---------    ---------    --------    ---------    --------
                                                                       (unaudited)
Statement of Operations Data:                                                  (in thousands, except per share data)
<S>                                                         <C>         <C>          <C>          <C>         <C>          <C>
Revenues                                                    $  8,144    $   9,093    $   6,070    $ 22,413    $  15,160    $ 12,344
Cost of revenues                                              11,352       19,480        8,423      35,064       14,718       9,316
                                                            --------    ---------    ---------    --------    ---------    --------
Gross profit (loss)                                           (3,208)     (10,387)      (2,353)    (12,651)         442       3,028
Operating expenses                                            21,589       39,005       22,975      20,906        9,175       5,775
                                                            --------    ---------    ---------    --------    ---------    --------
Income (loss) from operations                                (24,797)     (49,392)     (25,328)    (33,557)      (8,733)     (2,747)
                                                            --------    ---------    ---------    --------    ---------    --------
Net income (loss)                                            (24,797)     (49,392)     (25,328)    (36,538)      (9,379)     (2,778)
In-substance preferred stock dividend                           --            353         --           705         --          --
                                                            --------    ---------    ---------    --------    ---------    --------
Net income (loss) for common stockholders                   $(24,797)   $ (49,745)   $ (25,328)   $(37,243)   $  (9,379)   $ (2,778)
                                                            ========    =========    =========    ========    =========    ========

Per Share Data:
Basic and diluted earnings (loss) per common share          $  (3.05)   $   (7.11)   $   (3.40)   $  (9.48)   $   (3.70)   $  (2.28)
Weighted average number of basic shares outstanding(1)         8,134        6,993        7,460       3,906        2,536       1,193
Cash dividends per common share                             $   --      $    --      $    --      $   --      $    --      $   --

Balance Sheet Data:
Cash and cash equivalents                                   $  9,454    $  18,626    $  18,626    $  4,202    $   1,993    $  1,147
Mortgage loans held for sale, net                             39,975       78,691       78,691      33,438       63,034      24,244
Total assets                                                  54,747      119,808      119,808      45,255      101,468      33,070
Warehouse and other lines of credit                           35,922       80,453       80,453      33,038       86,659      26,902
Total liabilities                                             41,887       89,435       89,435      38,567       98,109      30,596
Stockholders' equity                                          12,860       30,373       30,373       6,688        3,359       2,474
</TABLE>

----------

(1)  See Note 2 to the consolidated  financial  statements for an explanation of
     the determination of the number of shares used in computing per share data.


ITEM 7. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

     We have made forward-looking  statements in this Annual Report on Form 10-K
that are subject to risks and uncertainties.  Forward-looking statements include
statements of our plans, objectives,  expectations and intentions. Also, when we
use  words  such  as  "may,"  "will,"  "should,"  "could,"  "would,"  "expects,"
"anticipates," "believes," "plans," "intends," "estimates," "is being" or "goal"
or other  variations  of these terms or  comparable  terminology,  we are making
forward-looking  statements.  You should note


                                                                              20
<PAGE>

that many  factors  could  affect our future  financial  results and could cause
these results to differ  materially from those expressed in our  forward-looking
statements.  These forward-looking  statements speak only as of the date of this
report. We expressly  disclaim any obligation or undertaking to release publicly
any updates or  revisions  to any  forward-looking  statement  contained in this
report to  reflect  any  change in our  expectations  or any  change in  events,
conditions or circumstances on which any of our  forward-looking  statements are
based.  Readers are cautioned  that our actual  results could differ  materially
from  those  indicated  in such  statements  as a  result  of  certain  factors,
including  those set forth  under  "Risk  Factors  That May  Affect  Our  Future
Results" and elsewhere in, or incorporated by reference into this report.

     The  following  discussion  and  analysis of our  financial  condition  and
results  of  operations  should  be read in  conjunction  with our  consolidated
financial statements.

Overview

     FiNet is a financial services holding company.  FiNet,  through it's wholly
owned  subsidiary  Monument  Mortgage,  provides  both  traditional  and on-line
mortgage  services to brokers and consumers.  Business-to-business  services are
provided to brokers and marketed through both traditional  means and through its
strategic  partners.  Consumer  direct  services are  marketed  through both the
internet  and various  traditional  advertising  mediums.  Monument  Mortgage is
licensed  to  originate  and fund  mortgage  loans in fifty (50)  states and the
District of Columbia.

     FiNet  currently   derives  all  revenues   through   Monument   Mortgage's
activities, which include:

     o    the sale of mortgage loans that Monument Mortgage funds, consisting of
          the net gain on the sale of loans and servicing  rights  recognized as
          the  difference  between the selling  price of the loan and  servicing
          rights, and the carrying value of the loan and servicing rights sold;

     o    fees charged for  underwriting  and  processing  loans,  consisting of
          application, documentation, and processing fees paid by the borrower;

     o    interest  income  generated  from  loans  held  for  sale by  Monument
          Mortgage; and

     o    fees  charged  from  Monument  Mortgage's   consumer-direct  brokerage
          activities,  recognized  at the time the  lender  funds the loan,  and
          consisting of the margin added to the lender's loan price.

     FiNet's costs and expenses consist of both fixed and variable  expenses and
are made up largely of:

     o    interest paid by Monument Mortgage for warehouse credit facilities;

     o    Monument Mortgage's loan-related expenses,  consisting of fees paid to
          third parties for appraisal and credit report  services,  and reserves
          for potential loan repurchase and premium recapture obligations;

     o    salaries, commissions and benefits paid to employees of both FiNet and
          Monument Mortgage;

     o    general and  administrative  expenses such as occupancy costs,  office
          expenses  and  professional  services  for  both  FiNet  and  Monument
          Mortgage; and

     o    depreciation and amortization  expense related  principally to FiNet's
          facilities,  furniture,  fixtures, and equipment,  as well as goodwill
          associated with FiNet's acquisition of Lowestrate.com, Inc.

     The mortgage industry typically experiences seasonal fluctuations primarily
due to a reduced level of home buying  activity  during the winter months.  Loan
originations  generally increase during the warmer months beginning in March and
continue  through  October.  As a result,  FiNet may  report  earnings  in these
calendar  quarters  that are  generally  lower than that of the second and third
calendar  quarters.  In the  future,  FiNet's  expenses  are also likely to vary
quarter-to-quarter based upon these fluctuations in the volume of loans Monument
Mortgage originates.

     Economic and interest  rate cycles also affect the  mortgage  industry,  as
loan originations  typically fall in rising interest rate  environments.  During
such periods, refinancing originations decrease as higher interest rates provide
reduced economic incentives for borrowers to refinance their existing mortgages.

     On April 30, 1998, FiNet acquired Coastal in a transaction accounted for as
a pooling of interests. FiNet's results of operations and financial position for
the fiscal  year ended April 30,  1998 have been  restated to include  Coastal's
results. Coastal's results for years prior to fiscal 1997 have not been included
in our consolidated  results, as they are not meaningful in assessing


                                                                              21
<PAGE>

historical  trends.  On May 19,  1998,  FiNet  acquired  Mical in a  transaction
accounted  for as a purchase.  Mical's  results of  operations  are  included in
FiNet's financial  statements since the date of acquisition.  Due to significant
operating  problems and losses at Coastal and Mical,  FiNet's management elected
during fiscal 1999 to close both units and discontinue further operations.

Impact of our Discontinued Units-Mical, Coastal and our Servicing Business

     In the year 2000 FiNet continued  executing the closure of the discontinued
Mical and Coastal units that management  elected to discontinue in the last half
of fiscal  1999.  FiNet  incurred  significant  losses at both Mical and Coastal
subsidiaries during fiscal 1999. Management also determined that servicing loans
would not be a part of the on-going operations of Monument Mortgage and sold the
servicing portfolios that had been previously held for sale. The following table
summarizes  the  impact  these  discontinued   business  units  had  on  FiNet's
consolidated operating results for the last three years:

<TABLE>
<CAPTION>
                                                                               Eight Months
                                                       Years Ended                 Ended            Fiscal Years Ended
                                                       December 31              December 31              April 30
                                                 ------------------------       -----------       -----------------------
                                                   2000            1999             1999            1999            1998
                                                 -------         --------         -------         --------         ------
                                                               (unaudited)
<S>                                              <C>             <C>              <C>             <C>              <C>
Revenues                                         $   120         $    845         $   122         $ 10,865         $9,344
Cost of revenues                                     340            9,987           1,814           21,165          2,200
                                                 -------         --------         -------         --------         ------
Gross profit (loss)                                 (220)          (9,142)         (1,692)         (10,300)         7,144
Other expenses
   General and administrative                      1,055            3,414           1,211            2,945          5,011
   Marketing and advertising                        --                 52               6              434            288
   Special charges                                  --              4,236             352            4,236           --
   Depreciation and amortization                    --                252            --                180            139
   Other                                              (1)             416              76              434            926
                                                 -------         --------         -------         --------         ------
Total expenses                                     1,054            8,370           1,645            8,229          6,364
                                                 -------         --------         -------         --------         ------
Income (loss) from operations                     (1,274)         (17,512)         (3,337)         (18,529)           780
Other interest expense                              --                 38            --                207              6
                                                 -------         --------         -------         --------         ------
     Income (loss) before income taxes            (1,274)         (17,550)         (3,337)         (18,736)           774
Income tax expense                                  --               --              --                  1            226
                                                 -------         --------         -------         --------         ------
     Net income (loss)                           $(1,274)        $(17,550)        $(3,337)        $(18,737)        $  548
                                                 =======         ========         =======         ========         ======
</TABLE>

RESULTS OF OPERATIONS

YEAR ENDED DECEMBER 31, 2000 COMPARED TO YEAR ENDED DECEMBER 31, 1999

     At the end of fiscal year April 30,  1999,  FiNet's  management  decided to
change from a fiscal reporting year to a calendar reporting year, thus resulting
an  eight   month   reporting   year   ending   December   31,   1999.   Certain
reclassifications  have been made to prior year financial  statements to conform
to the presentation for the year ended December 31, 1999.

Revenues and Originations

     Total loan origination for FiNet's  production  units  (excluding  brokered
loans) is summarized below.

<TABLE>
<CAPTION>
                                              For Twelve Months Ended
                                                    December 31
                                           -----------------------------
                                                2000             1999         Variance ($)   Variance (%)
                                           --------------    --------------------------------------------
                                           (in thousands)    (unaudited)
<S>                                           <C>              <C>              <C>                 <C>
Business-to-Business                          $642,700         $418,000         $ 224,700           54%
Business-to-Consumer                           122,400          170,700           (48,300)         (28%)
                                           --------------    --------------------------------------------
              Total Loan Volume               $765,100         $588,700         $ 176,400           30%
                                           ==============    ============================================
</TABLE>


                                                                              22
<PAGE>

Comparative Results of Operations

     The following  table  summarizes  the results of  operations  for the years
ended  December 31, 2000 and 1999 and these results  expressed as the percentage
variance from fiscal year ended 1999 to fiscal year ended 2000 (in thousands).

<TABLE>
<CAPTION>
                                                                 Twelve Months Ended
                                                                      December 31              Variance ($)   Variance (%)
                                                             -----------------------------     ------------   ------------
                                                                 2000             1999
                                                             ------------     ------------
                                                                               (unaudited)
<S>                                                            <C>              <C>              <C>                <C>
Revenues                                                       $  8,144         $  9,093         $   (949)          (10%)
Cost of revenues                                                 11,352           19,480            8,128            42%
                                                             ------------     ------------     ------------   ------------
Gross margin                                                     (3,208)         (10,387)           7,179            69%
Operating expenses
   General and administrative                                    16,859           22,964            6,105            27%
   Marketing and advertising                                      1,992            7,169            5,177            72%
   Special charges                                                1,464            6,311            4,847            77%
   Depreciation and amortization                                  1,877            1,072             (805)          (75%)
   Other                                                            362            1,594            1,232            77%
                                                             ------------     ------------     ------------   ------------
    Total expenses                                               22,554           39,110           16,556            42%
                                                             ------------     ------------     ------------   ------------
Loss from operations                                            (25,762)         (49,497)          23,735            48%
Other income and expense:
Gain on sale of marketable equity securities                        824              366              458           125%
Other interest income                                               191               76              115           151%
Other interest expense                                             --               (267)             267          (100%)
                                                             ------------     ------------     ------------   ------------
Loss before income taxes                                        (24,747)         (49,322)          24,575            50%
Income tax expense                                                   50               70               20            29%
                                                             ------------     ------------     ------------
Net loss                                                        (24,797)         (49,392)          24,595            50%
In-substance preferred dividend                                                      353             (353)         (100%)
                                                             -----------------------------     ------------   ------------
Net loss available to common stockholders                      $(24,797)        $(49,745)        $ 24,948            50%
                                                             =============================     ============   ============
</TABLE>

     Revenues for the year ended December 31, 2000  decreased  $1.0 million,  or
11%,  from $9.1 million for the years ended  December 31, 1999,  to $8.1 million
for the year ended  December 31,  2000.  This  decrease is primarily  due to the
impact of the  discontinued  units'  revenue in 1999 that did not occur in 2000,
and  secondarily  due to the  effect  of the  sale of the  servicing  portfolio.
Servicing revenue gradually decreased during 1999 until the entire portfolio was
sold;  therefore,  no servicing  income was received during 2000.  Revenues from
brokerage fees were also negatively  effected due to management's  primary focus
on developing the  business-to-business  unit. FiNet believes that revenues will
increase through  Monument  Mortgage's:  (a) planned  expansion of higher margin
products  offered by  Monument  Mortgage  (b) lead  generation  of lower  margin
products through strategic  relationships.  However,  there can be no assurances
that increased revenues will be achieved.

Cost of Revenues and Gross Profit

     Cost of revenues  decreased $8.1 million,  or 42%, to $11.4 million for the
year ended  December 31, 2000 from $19.5 million for the year ended December 31,
1999.  Compensation costs of  production-related  personnel,  one of the primary
components  of cost of revenues and other  origination-related  costs  decreased
18%, or $1.5 million,  from $8.4 million to $6.9 million.  Gross margin improved
$7.2  million,  or 69% to  $3.2  million  from  $10.4  million  mainly  due to a
significant  decrease  in the loan  loss  allowance.  During  1999,  the  entire
servicing portfolio was sold; thus, additional expenses related to the sale were
not incurred  during the year ended December 31, 2000.  These  positive  results
were slightly offset by the increase in warehouse interest expense that resulted
from increased  production  financed mainly through warehouse lending facilities
during the year ended December 31, 2000.

Operating Expenses

     General  and   Administrative.   Personnel  costs  and  other  general  and
administrative  costs  decreased $6.1 million,  or 27%, to $16.9 million for the
twelve  months  ended  December  31, 2000 from $23.0  million for the year ended
December 31, 1999. This


                                                                              23
<PAGE>

decrease  is  attributable  to  the  closure  of  discontinued  business  units,
resulting in a substantially decreased employee headcount within these units.

     Marketing and  Advertising.  Marketing  expenses  decreased $5.2 million or
72%, to $2.0  million for the year ended  December 31, 2000 from $7.2 million in
the year ended  December  31,  1999.  During the year ended  December  31,  1999
FiNet's  primary  focus was  retail  operations.  Therefore,  Monument  Mortgage
initiated a number of marketing  relationships  designed to attract  prospective
customers.  At the beginning of year 2000,  management  realigned its strategies
and  focused  instead  on  wholesale  operations;  as a  result,  marketing  and
advertising  expenses decreased.  FiNet intends to continue to decrease spending
on marketing and advertising.

     Special  Charges.  Special  charges  decreased $4.8 million or 76%, to $1.5
million  for the year ended  December  31,  2000 from $6.3  million for the year
ended December 31, 1999.

     During the first quarter ended March 31, 2000,  FiNet recorded a $1,299,000
expense  related  to the  purchase  of certain  loan  origination  and  tracking
software and systems that were subsequently determined to be unsuitable.  During
the second  quarter of 2000,  FiNet  recovered  $335,000 of this amount from the
vendor, resulting in a net expense of $964,000.

     During the  fourth  quarter  ended  December  31,  2000,  FiNet  recorded a
non-recurring expense of $500,000 representing a "devalued" non-interest bearing
loan receivable.  At the time of the Lowestrate acquisition,  FiNet entered into
certain  ancillary  agreements  with the  seller  of  Lowestrate,  along  with a
non-interest-bearing loan, that was secured by shares of FiNet's common stock. A
reduction  in the market  price of FiNet's  common  stock  resulted in this note
becoming  devalued;  therefore,  this note was written-off as a "special charge"
during the year ended December 31, 2000.

     Special charges of $5.6 million recorded during the year ended December 31,
1999 relate to the  Coastal  and Mical  business  unit  closures  and charges of
$690,000  were to  write-off  the  capitalized  costs of software  that would no
longer be used in FiNet's continuing business strategy.

     Depreciation and Amortization. Depreciation and amortization increased $0.8
million or 73%, to $1.9  million for the year ended  December 31, 2000 from $1.1
million in the twelve  months  ended  December  31,  1999.  The increase was due
primarily to the  amortization  of the goodwill  associated with the purchase of
certain assets and operations of Lowestrate.

Gain on Sale of Marketable Securities

     Gain on sale of marketable  securities  increased  $0.4 million or 100%, to
$0.8 million for the year ended  December  31,  2000,  from $0.4 million for the
year ended  December 31, 1999.  FiNet acquired  these  marketable  securities in
October of 1999, and FiNet sold all of these securities by September 31, 2000.

Income Taxes

     As of December 31, 2000,  FiNet had  approximately  $102 million of federal
and state net operating loss  carryforwards for tax reporting purposes available
to offset future taxable  income.  The federal net operating loss  carryforwards
begin to expire in 2004. As a result of uncertainties  regarding the realization
of the net operating loss carryforward asset due to the lack of FiNet's earnings
history a valuation  allowance  has been  recorded  for the entire  deferred tax
asset at December 31, 2000

FISCAL YEAR ENDED APRIL 30, 1999 COMPARED TO FISCAL YEAR ENDED APRIL 30, 1998

Revenues

     Loan volume  increased by $718 million,  or 118%, to $1.3 billion in fiscal
1999 from $610 million in fiscal 1998 as a result of a  significant  increase in
the number of loans funded through FiNet's mortgage banking subsidiaries, volume
attributable  to  acquired  operations,  and  significant  refinancing  activity
stimulated by relatively low interest  rates.  Refinancing  accounted for 69% of
loan volume in fiscal 1999, compared to 65% in fiscal 1998.

     Revenues  for fiscal  1999  increased  by $7.2  million,  or 47%,  to $22.4
million from $15.2 million in fiscal 1998. This increase resulted primarily from
the  incremental  volume of funded  loans  from Mical and  increased  volumes of
originated  loans  generated by the  Interloan.com  website,  both of which were
purchased in the first  quarter of fiscal  1999.  Loans  originated  by mortgage
brokers and funded by FiNet's mortgage banking  subsidiaries  accounted for $4.4
million in  additional  revenues,  or 61% of the  increase  for the year.


                                                                              24
<PAGE>

Loans  originated,  most of which  were  funded by lenders  other  than  FiNet's
mortgage  banking  subsidiaries,   accounted  for  $2.5  million  in  additional
revenues, or 34% of the increase for the year.

Cost of Revenues

     Cost of revenues for fiscal 1999  increased by $20.4  million,  or 139%, to
$35.1  million  from  $14.7  million  in fiscal  1998.  This  increase  resulted
primarily from an increase in direct costs associated with increased  volumes of
funded loans from the purchase of Mical,  increased indirect production expenses
from the purchases of the  Interloan.com  website and Mical,  and provisions for
losses on mortgages held for sale and receivables.  Increased  volumes of funded
loans accounted for $7.7 million in additional costs, or 38% of the increase for
the year.  Indirect production expenses accounted for $5.9 million in additional
costs, or 29% of the increase for the year.

     Provisions  for losses  increased by $5.8 million to $6.5 million in fiscal
1999 from  $718,000  in fiscal  1998.  FiNet  records  provisions  for losses to
reflect  market  valuation  allowances  on mortgages  held for sale and mortgage
loans  previously  sold  (off-balance  sheet risk) and  provisions  for doubtful
accounts  receivable.   FiNet  evaluates  the  collectibility  of  its  accounts
receivable primarily on a receivable by receivable basis, as accounts receivable
is  composed  of  amounts   that  do  not   necessarily   carry   similar   risk
characteristics,  such as amounts  heldback by  purchasers  on sales of mortgage
loans and amounts  heldback on sales of servicing  rights.  Additionally,  FiNet
maintains  communications  with such purchasers and others from whom receivables
are due and in certain  circumstances,  determines the allowance necessary based
on agreed upon amounts.

     FiNet determines its market valuation  allowance relating to mortgages held
for sale and  mortgages  that have been sold  primarily on a loan by loan basis.
The allowance is based on factors such as market values, bids received, industry
loss  experience  and  FiNet's  prior loss  experience,  if any, as well as risk
characteristics of the loan portfolio.

     $2.2  million,  or  38%,  of the  increase  in  provision  for  losses  was
attributable  to the provision for doubtful  accounts  recorded at FiNet's Mical
Mortgage subsidiary. Mical was acquired by the Company in a business combination
accounted for as a purchase in May 1998. Accordingly, the provision for doubtful
accounts of Mical is included in FiNet's  results of operations  only subsequent
to the  acquisition  date--only  for fiscal  1999,  and  accounts for the entire
increase.  The  remaining  increase  in the  provision  for  losses  relates  to
increased  provisions  for  losses  on  mortgages  held for  sale and  mortgages
previously  sold  (off-balance  sheet  risk).  This  increase  was  attributable
primarily to the Mical Mortgage  subsidiary but  additionally  to provisions for
loan  losses  recorded  by  the  Coastal  Federal  Mortgage  subsidiary.   Loans
originated  at Mical and at Coastal,  acquired  in May and April 1998,  had risk
characteristics  and loss recourse provisions that were dissimilar from the risk
characteristics  and sale recourse provisions of loans originated by other FiNet
subsidiaries prior to the acquisitions of Mical and Coastal.

Gross Profit/Loss

     Gross profit for fiscal 1999  decreased by $13.1 million to a loss of $12.7
million  from a profit of $442,000 in fiscal 1998 as a result of the increase in
our cost of revenues.

Operating Expenses

General and administrative.

     General  and  administrative  expenses  for fiscal 1999  increased  by $5.8
million,  or 98%,  to $11.7  million  from $5.9  million  in fiscal  1998.  This
increase  resulted  primarily  from  the  acquisition  of  Mical  and  increased
expenses.

Marketing and advertising.

     Marketing  and  advertising  expenses  for fiscal  1999  increased  by $1.3
million,  or 141%, to $2.2 million from  $921,000 in fiscal 1998.  This increase
resulted primarily from Internet advertising expenses.

Special charges.

     Special charges of $4.9 million were established in fiscal 1999 and include
$3.8 million of goodwill writeoff and restructuring  charges associated with the
discontinuance  of the  business of Mical,  a $690,000  writedown  of  purchased
software and $405,000 to liquidate  certain assets and liabilities in connection
with the discontinuance of the business of Coastal.

Depreciation and amortization.

     Depreciation  and  amortization  expenses  for  fiscal  1999  increased  by
$164,000, or 34%, to $646,000 from $482,000 in fiscal 1998. The increase was due
primarily to the increase in assets acquired with the purchase of Mical.

Other.

     Other operating  expense for fiscal 1999 increased by $625,000,  or 71%, to
$1.5 million from $875,000 in fiscal 1998. This


                                                                              25
<PAGE>

increase resulted  primarily from charges recorded to value warrants issued when
our 3% Convertible Debentures were converted to common stock.

Other Interest Expense

     Other interest expense for fiscal 1999 increased by $2.6 million,  or 619%,
to $3.0 million from  $420,000 for fiscal 1998.  The increase was  primarily the
result of amortization of the imputed interest and debt issuance costs on our 3%
Convertible  Subordinated  Debentures,  which were issued in March and May 1998.
The debt was redeemed in January 1999 and the discount has been fully amortized.

Income Taxes

     As of April 30, 1999,  FiNet had  approximately  $49 million of federal and
state net operating loss  carryforwards for tax reporting  purposes available to
offset future taxable income.  FiNet's federal net operating loss  carryforwards
begin to expire in 2004. A valuation  allowance has been recorded for the entire
deferred tax asset at April 30, 1999 as a result of uncertainties  regarding the
realization of the asset due to the lack of FiNet's earnings history.

Net Loss

     Net loss for fiscal 1999  increased  by $27.1  million,  or 288%,  to $36.5
million  from $9.4 million for fiscal 1998,  primarily  due to the  purchases of
Mical and Coastal,  increased marketing expenses associated with the purchase of
Interloan.com, and expenses associated with financing transactions.

FISCAL YEAR ENDED APRIL 30, 1998 COMPARED TO FISCAL YEAR ENDED APRIL 30, 1997

Revenues

     Loan volume  increased by $222  million,  or 53%, to $610 million in fiscal
1998 from $388 million in fiscal 1997 as a result of a  significant  increase in
the number of loans funded through FiNet's  mortgage  banking  subsidiaries  and
significant  refinancing  activity  stimulated by relatively low interest rates.
Refinancing  accounted for 65% of the origination volume in fiscal 1998 compared
to 48% in fiscal 1997.

     Revenues  for fiscal  1998  increased  by $2.9  million,  or 24%,  to $15.2
million from $12.3 million in fiscal 1997. This increase resulted primarily from
increased  volumes of funded loans.  Loans  originated  by mortgage  brokers and
funded by FiNet's  mortgage banking  subsidiaries  accounted for $2.0 million in
additional  revenues,  or 69% of the increase for the year.  The volume of loans
originated and funded  accounted for $200,000 in additional  revenues,  or 7% of
the increase for the year.

Cost of Revenues

     Cost of revenues  for fiscal 1998  increased  by $5.4  million,  or 58%, to
$14.7 million from $9.3 million in fiscal 1997. This increase resulted primarily
from an increase in direct and indirect costs due to increased volumes of funded
loans.  Funded loans  accounted for $1.3 million in additional  costs, or 24% of
the increase  for the year.  Indirect  production  expenses  accounted  for $3.6
million in additional costs, or 67% of the increase for the year.

Gross Profit

     Gross profit for fiscal 1998  decreased  by $2.6  million to $442,000  from
$3.0 million in fiscal 1997 as a result of an increase in our cost of revenues.

Operating Expenses

General and administrative.

     General  and  administrative  expenses  for fiscal 1998  increased  by $1.4
million, or 31%, to $5.9 million from $4.5 million in fiscal 1997. This increase
resulted primarily from the addition of new employees in technology and customer
service departments.

Marketing and advertising.

     Marketing and  advertising  expenses for fiscal 1998 increased by $254,000,
or 38%, to  $921,000  from  $667,000  in fiscal  1997.  This  increase  resulted
primarily  from increased  advertising  expenses  associated  with the increased
level of loan fundings and the introduction of new products.


                                                                              26
<PAGE>

Special Charges.

     In fiscal  1998,  we recorded  special  charges of $1.0 million to writeoff
intangible  assets  that we  determined  would no longer be  employed  in future
operations.

Depreciation and amortization.

     Depreciation  and  amortization  expenses  for  fiscal  1998  increased  by
$377,000 to $482,000 from  $105,000,  in fiscal 1997. The increase was primarily
due to  depreciation  of fixed  assets  acquired to support  increased  business
activity and staff expansion.

Other.

     Other operating  expense for fiscal 1998 increased by $323,000,  or 59%, to
$875,000 from $552,000 in fiscal 1997.  This increase  resulted  primarily  from
expenses related to the acquisition of Mical and Coastal.

Other Interest Expense

     Other interest  expense for fiscal 1998 increased by $302,000,  or 256%, to
$420,000  from  $118,000  in  fiscal  1997.  This  increase  was the  result  of
amortization  of the  imputed  interest  and debt  issuance  costs on FiNet's 3%
Convertible Subordinated Debentures, which were issued in March 1998.

Income Taxes

     As of April 30, 1998,  FiNet had  approximately  $31 million of federal and
state net operating loss  carryforwards for tax reporting  purposes available to
offset future taxable income.  FiNet's federal net operating loss  carryforwards
begin to expire in 2004. A valuation  allowance has been recorded for the entire
deferred tax asset at April 30, 1998 as a result of uncertainties  regarding the
realization of the asset due to the lack of FiNet's earnings history.

Net Loss

     Net loss for  fiscal  1998  increased  by $6.6  million,  or 236%,  to $9.4
million from $2.8 million for fiscal 1997,  primarily  due to an increase in the
number of employees  and office space in  anticipation  of growing the business,
consulting  expenses  related to the acquisition of Monument in the prior fiscal
year,  expenses  in  anticipation  of the Mical and  Coastal  acquisitions,  and
intangible asset write-downs.

FINANCIAL CONDITION

     Historically,  FiNet has  experienced  operating  losses  and has relied on
external sources of debt and equity financing to fund operations to service debt
and to make capital  investments.  FiNet's  stockholders' equity decreased $17.5
million,  or 58%, to $12.9  million at December  31, 2000 from $30.4  million at
December 31,  1999.  Stockholders'  equity  decreased  primarily  due to FiNet's
operating  losses  incurred in 2000 and was  partially  offset by a $7.4 million
private  placement  completed  during the fourth  quarter of 2000 and by various
warrant and option exercises.

     Cash  decreased  by $9.1  million,  or 49%, to $9.5 million at December 31,
2000  from  $18.6  million  at  December  31,  1999.  Cash was used for  general
operations,  to fund some mortgage  origination  activities by FiNet's  mortgage
banking  subsidiaries  and to make  capital  investments.  The usage of cash was
partially  offset by cash  received  from the private  placement  offering,  the
collection  of the proceeds on the sale of the  servicing  portfolio,  and, to a
lesser  extent,  from sales of marketable  equity  securities.  Restricted  cash
decreased  by $10.1  million,  or 97%, to $0.3 million at December 31, 2000 from
$10.4  million at  December  31,  1999.  The  reduction  represents  settlements
received on sales of mortgage  loans that had not yet been applied to reduce the
warehouse  line of credit.  Subsequent  to December  31,  1999, a portion of the
warehouse line of credit was paid off with the restricted cash of $10.1 million.

     Mortgages held for sale and warehouse borrowings decreased by $38.7 million
and $44.5 million,  respectively, due to intentionally slowing lower margin loan
origination,  while gearing up to originate a better  selection of higher margin
loan products.

     Accounts  payable and accrued  expenses  decreased as FiNet  completed  its
spending on  professional  services  relating to the  implementation  of systems
infrastructure  required for Year 2000  preparedness  and as marketing  expenses
substantially decreased.

     Future  improvements  in  results of  operations  and  financial  condition
depends on the  ability of  Monument  Mortgage to  significantly  increase  loan
origination  volumes, to increase the percentage of higher margin loan products,
to become a significant lead generator of lower margin loan products, to achieve
highly efficient  operations,  and to manage warehouse and operating expenses in
proportion to loan volume.  FiNet's financial  condition is further dependent on
economic  conditions  such as the  general  health of the


                                                                              27
<PAGE>

economy and demand for mortgage  loans.  There can be no assurances that FiNet's
financial condition or results of operations will improve.

LIQUIDITY AND CAPITAL RESOURCES

     The nature of the mortgage lending business  requires  Monument Mortgage to
advance cash on a daily basis to fund newly  originated  loans.  The majority of
these funds are provided either through conventional mortgage warehouse lines of
credit, through  "purchase/repurchase"  arrangements,  and/or through the use of
available cash balances.  Additional cash resources,  obtained primarily through
the private  placement of FiNet's common stock are used to fund ongoing expenses
such as  administration  and  marketing,  to invest in product  development,  to
satisfy debt and other  obligations  as they come due and to expand the business
geographically.

     Adequate  credit  facilities  and other  sources  of  funding  that  permit
Monument Mortgage to close and fund mortgage loans are essential.  Once the sale
of loans is completed and the  warehouse  line of credit  repaid,  the resulting
increase  of  capital  resources  allows  Monument  Mortgage  to close  and fund
additional  loans.  See "Notes to  Consolidated  Financial  Statements - Note 6.
Borrowing   Arrangements"   for  additional   Liquidity  and  Capital  Resources
disclosure on warehouse and other lines of credit.

     During the year ended December 31, 2000,  operating  activities,  including
general operating  expenditures,  repayment of warehouse  borrowings and funding
new loans, used cash of $18.1 million.

     Investing  activities included investments of $1.2 million in furniture and
fixtures.  FiNet also  received  cash of $1.8  million and $0.4 million from the
sale of its  marketable  securities  and  from the  sale of  mortgage  servicing
rights, respectively.

     Financing  activities,  primarily cash received from the issuance of common
stock  through  private  placements,  and from  option  and  warrant  exercises,
provided $7.4 million during the twelve months ended December 31, 2000.

     If FiNet  continues  to  maintain  at least the  current  level of  working
capital borrowing resources,  FiNet believes that its existing cash balances and
funds available through revolving warehouse  facilities and  purchase/repurchase
agreements  will be sufficient to meet FiNet's  liquidity  requirements  for the
next  twelve  months.  FiNet  does not expect  that it will need to arrange  for
additional sources of capital;  however,  FiNet cannot guarantee that it will be
able to meet its operational expenses without the need for additional financing,
or that it will be able to obtain  additional  financing if so required.  In the
event FiNet requires,  but is unable to obtain,  additional  financing,  FiNet's
growth could slow, and its operations could be adversely affected.

RECENT DEVELOPMENTS

     On February 20, 2001,  FiNet effected a 1-for-12 reverse stock split of its
outstanding shares, which had been previously approved by written consent of the
majority of its  shareholders,  in order to meet minimum bid price  requirements
under the Nasdaq SmallCap  Market's listing  maintenance  criteria.  Despite the
reverse stock split, FiNet cannot be certain that it will be able to continue to
maintain its listing on the Nasdaq  SmallCap  Market.  Delisting from the Nasdaq
SmallCap Market and inclusion of FiNet's common stock on the OTC Bulletin Board,
or other similar  quotation  system,  could  adversely  affect the liquidity and
price of FiNet's common stock.

               RISK FACTORS THAT MAY AFFECT OUR FUTURE PERFORMANCE

     The risks described below could  materially  adversely affect our business,
results of operations and financial  condition,  which, in turn, could cause the
price of FiNet's common stock to decline,  resulting in a loss of all or part of
your investment. FiNet cannot predict which, if any, of these risks may actually
occur,  or the  extent  to which  any  occurrence,  circumstance  or event  will
actually affect our business,  results of operations or financial condition, and
the trading price of FiNet's common stock.

The loss of any of our key  personnel  would  likely  have an adverse  effect on
FiNet's business.

     FiNet believes that its future success will depend to a significant  extent
on the  continued  services  of  senior  management  and  other  key  personnel,
particularly Rick Cossano,  President and Chief Executive  Officer,  and Patrick
Mackin,  Chief Financial  Officer and Executive Vice President.  Competition for
qualified personnel is fierce in the mortgage industry. The loss of the services
of key employees or delay in recruiting  candidates to fill our currently vacant
management  positions  or any other key position  which may become  vacant could
have a  material  adverse  effect on our  business,  results of  operations  and
financial condition.


                                                                              28
<PAGE>

If FiNet is unable to attract qualified personnel, its business could suffer.

     Monument  Mortgage's  future  success  depends on the ability to  identify,
attract,  hire, train,  retain and motivate additional highly skilled technical,
managerial,  sales and marketing,  customer service and professional  personnel.
Competition for such employees is intense,  especially in the e-commerce sector,
and  there is a risk that  Monument  Mortgage  will not be able to  successfully
attract,  assimilate or retain  sufficiently  qualified  personnel.  If Monument
Mortgage fails to retain and attract the necessary technical,  managerial, sales
and marketing, customer service personnel and experienced professionals, FiNet's
business,  results of  operations  and financial  condition  could be materially
adversely affected.

If demand for mortgages decrease, Monument Mortgage's business could suffer.

     Demand for mortgages is typically adversely affected by periods of economic
slowdown,  recession or rising  interest  rates,  declining  demand for consumer
credit, declining home sales, declining real estate values and decreased ability
of borrowers to make loan  payments.  These  factors tend to decrease the demand
for the types of loans originated through Monument Mortgage. These changes would
likely have a material adverse affect on FiNet's business, results of operations
and financial condition.

If  Monument  Mortgage  is  unable to manage  growth in the  mortgage  business,
results of operations may not improve.

     If Monument  Mortgage  is unable to manage the  expansion  of its  business
effectively,  results of operations and financial  condition may not improve and
could deteriorate. To manage the expected growth, Monument Mortgage will need to
improve its mortgage processing,  operational and financial systems, information
processing capacity, procedures and controls. Monument Mortgage may be unable to
hire,  train,  retain or manage  necessary  personnel,  or to identify  and take
advantage  of  existing  and  potential   strategic   relationships  and  market
opportunities.

If Monument  Mortgage is unable to differentiate  itself from competition in the
mortgage banking industry, its business prospects could be harmed.

     The  residential  mortgage loan business is highly  competitive and because
the barriers to entry are minimal,  Monument  Mortgage  expects  competition  to
intensify within both the traditional  mortgage banking and the Internet offered
e-mortgage market.  Monument Mortgage currently competes with a variety of other
companies offering mortgage services, including:

     o    mortgage banking companies,  commercial banks,  savings  associations,
          credit unions and other financial  institutions  which still originate
          the vast majority of mortgage loans, such as Washington  Mutual,  Bank
          of America and Countrywide Home Loans, Inc.;

     o    mortgage brokers;

     o    mortgage companies that offer products through on-line search engines,
          such as Yahoo! and Microsoft Corporation's Home Advisor website; and

     o    various   on-line   mortgage    brokers,    including   E-LOAN   Inc.,
          LendingTree.com and IndyMac Bank.

     Many of Monument Mortgage's mortgage banking and brokerage competitors have
longer  operating  histories  or  significantly  greater  financial,  technical,
marketing and other resources.  Some of Monument  Mortgage's on-line competitors
are spending  substantial  funds on mass  marketing and branding  their mortgage
services.  In addition,  some of Monument  Mortgage's  competitors offer a wider
range of services and  financial  products to customers  and have the ability to
respond more quickly to new or changing  opportunities.  As a result,  many have
greater name  recognition  and more extensive  customer bases and can offer more
attractive terms to customers,  including more aggressive loan pricing policies.
Monument  Mortgage  cannot be sure that it will be able to compete  successfully
against current and future competitors. If Monument Mortgage is unable to do so,
it  will  have a  material  adverse  effect  on  FiNet's  business,  results  of
operations and financial condition.

If interest  rates rise,  Monument  Mortgage's  results of  operations  could be
materially adversely affected.

     Rising  interest  rates  generally  discourage  refinancing  of residential
mortgages and reduce the number of new home sales. An increase in interest rates
or an adverse change in the residential  real estate market or general  economic
conditions,  both of which are outside  FiNet's  control,  could have a material
adverse effect on its business, results of operations and financial condition.

     The effect of interest  rate changes  tends to be greater on the market for
refinance loans than it is on the market for purchase loans, since refinancing a
mortgage loan is voluntary and motivated  primarily by the homeowner's desire to
lower  financing  costs,


                                                                              29
<PAGE>

whereas new home purchasers are motivated by a need or desire for a new home. In
the event interest rates significantly  increase,  borrowers' will not have such
incentive  to  refinance,  therefore,  the  number  of loans  Monument  Mortgage
underwrites could be adversely effected.

     The value of the loans Monument Mortgage makes is based, in part, on market
interest  rates,  and Monument  Mortgage's  business,  results of operations and
financial  condition  may be  materially  adversely  affected if interest  rates
change rapidly or unexpectedly.  If interest rates rise after Monument  Mortgage
fixes a price for a loan but before it sells the loan into the secondary market,
the value of that loan will  decrease.  If the  selling  of  committed  loans is
delayed into the secondary market,  Monument  Mortgage's  interest rate exposure
increases and it could incur a loss on the sale.  While  Monument  Mortgage uses
various  hedging  strategies to provide some  protection  against  interest rate
risks, no hedging strategy can protect Monument Mortgage completely.  The nature
and timing of  hedging  transactions  influences  the  effectiveness  of hedging
strategies and poorly designed  strategies or improperly  executed  transactions
may increase rather than decrease risk. In addition,  hedging strategies involve
transaction and other costs.  There is a risk that Monument  Mortgage's  hedging
strategy  and the hedges that it makes will not  adequately  offset the risks of
interest  rate  volatility  and that Monument  Mortgage's  hedges will result in
losses.

     In  addition,  any  increase in  interest  rates may  increase  the cost of
maintaining Monument Mortgage's warehouse line of credit and purchase/repurchase
lines  on which  Monument  Mortgage  greatly  depends  on to fund  the  loans it
underwrites.

If Monument  Mortgage fails to maintain  credit  facilities to finance  mortgage
lending  activities,  Monument  Mortgage's  growth  prospects  could be severely
limited.

     To the extent that Monument  Mortgage is unable to access adequate  capital
to fund loans,  Monument  Mortgage may have to curtail or cease its loan funding
activities entirely.  This would have a material adverse effect on its business,
results of operations and financial condition.  Since Monument Mortgage is not a
depository bank, Monument Mortgage is dependent upon specialized mortgage credit
facilities from other lenders to finance its mortgage lending activities. In the
warehouse   line  of  credit   agreement   Monument   Mortgage   makes  numerous
representations,  warranties and operating and financial  covenants.  A material
breach by  Monument  Mortgage  of any of these  representations,  warranties  or
covenants  could result in the termination of the agreement and an obligation to
repay the entire amount outstanding under the agreement.  In the past,  Monument
Mortgage  has had to obtain  waivers  from its  lender  for  defaults  under the
agreement.  At December  31, 2000  Monument  Mortgage  was in default  under its
primary warehouse lending agreement, as it was in violation of certain financial
and other  covenants.  Subsequent  to December 31, 2000,  the lender  waived the
defaults, however, Monument Mortgage cannot assure that it will be able obtain a
waiver  from its lender of any  future  defaults,  should  they  occur,  or that
financing will continue to be available on favorable terms or at all.

If FiNet is unable to respond to rapid  technological  changes in e-commerce and
improve  offered  products  and  services;  its  business  could  be  materially
adversely affected.

     The  Internet  and  e-commerce  are  characterized  by rapid  technological
change, changes in user and customer requirements and preferences,  frequent new
product and service introductions embodying new technologies,  and the emergence
of new industry standards and practices that could render existing  technologies
and systems  obsolete.  There can be no assurances that FiNet will  successfully
use new  technologies  effectively  or adapt company  websites,  technology  and
transaction-processing  systems to customer  requirements  or emerging  industry
standards.  If FiNet  is  unable  to  license  and  internally  develop  leading
technologies useful in FiNet's business,  enhance its existing services, develop
new services and  technology  that address the  increasingly  sophisticated  and
varied needs of customers,  and respond to  technological  advances and emerging
industry  standards and practices on a  cost-effective  and timely basis,  FiNet
will not  remain  competitive  and the  mortgage  banking  business,  results of
operations and financial condition could be materially adversely affected.

If consumers and mortgage broker businesses do not embrace e-commerce mortgage
financing and sales, Monument Mortgage's business would be materially adversely
affected.

     Monument  Mortgage's  success partly depends upon the acceptance of on-line
mortgage  financing  by  consumers,   brokers  and  other  real  estate  service
providers.  If the market for electronic mortgage financing fails to develop, or
develops more slowly than expected,  FiNet's business, results of operations and
financial  condition would be materially  adversely  affected.  In addition,  if
there are insufficient communications services to support the internet, it could
result in  slower  response  times  that  would  adversely  affect  usage of the
Internet. Even if use of the internet for e-commerce financing gains acceptance,
Monument Mortgage may be unable, for technical or other reasons,  to develop and
introduce new products and services or enhancements in a timely manner, and such
products  and  services  and  enhancements   may  not  gain  widespread   market
acceptance. Any of these factors could have a material adverse effect on FiNet's
business, results of operations and financial condition.

If  Monument  Mortgage  has  to  repurchase  loans  originated  for or  sold  to
investors, FiNet's operating results could be materially adversely affected.


                                                                              30
<PAGE>

     There is a risk that Monument  Mortgage will not have  sufficient  funds to
repurchase  loans  upon  demand or that such  repurchases  will have a  material
adverse effect on its business,  results of operations and financial  condition.
Under  agreements  with some of Monument  Mortgage's  lenders,  they may require
Monument  Mortgage to repurchase  loans that Monument  Mortgage  originated  for
them,  or they  purchased  from  Monument  Mortgage,  in the  event of  material
misrepresentations  by  Monument  Mortgage  or  any  inaccuracies  found  in the
borrowers'  loan  documents.  As a  result  of  repurchases,  Monument  Mortgage
occasionally is required to hold foreclosed residential real estate in inventory
until it can be resold. Future foreclosures could have a material adverse effect
on Monument Mortgage's business,  results of operations and financial condition.
If interest  rates rise and the  economy  declines,  the rate of  mortgage  loan
foreclosures  may  rise.  Depending  on the  circumstances  of the  transaction,
Monument  Mortgage may or may not be able to sell the property for more than the
outstanding  loan  balance.  As of December 31,  2000,  Monument  Mortgage  held
approximately $90,000 aggregate principal amount of loan in foreclosure.

The loss of Monument Mortgage's relationship with Fannie Mae, Freddie Mac or any
other significant  provider of automated  underwriting  systems could materially
adversely affect FiNet's results of operations.

     Monument  Mortgage  depends on automated  underwriting  and other  services
offered by government  sponsored and other mortgage investors,  including Fannie
Mae's  Desktop  Underwriter,  Freddie  Mac's  Loan  Prospector,  and  GMAC/RFC's
AssetWise. These services help ensure that Monument Mortgage's mortgage services
can be offered  efficiently  and  timely.  Monument  Mortgage  currently  has an
agreement  with Fannie Mae that allows the use of their  automated  underwriting
services and enables  Monument  Mortgage to sell them qualified first mortgages.
Monument  Mortgage  expects to continue to process a significant  portion of its
conforming  loans  using the Fannie Mae  system.  However,  Monument  Mortgage's
agreements  with Fannie Mae and other  mortgage  investors  can be terminated by
either party at any time. There is a risk that Monument Mortgage will not remain
in good  standing  with Fannie Mae and other  significant  provider of automated
underwriting  systems and our  relationship  with them will be  terminated.  The
termination  of  Monument  Mortgage's  agreement  with Fannie Mae and with other
providers of underwriting  systems would  materially  adversely  impact Monument
Mortgage's ability to originate loans.

     Additionally,  if the  mortgage  programs  administered  by Fannie  Mae and
Freddie Mac or Monument  Mortgage's  eligibility to  participate  in them,  were
terminated or significantly curtailed,  FiNet's business,  results of operations
and  financial  condition  would  be  materially  adversely  affected.  Monument
Mortgage pays for its loan  operations in part by selling the mortgages  that it
funds to Fannie Mae and Freddie Mac. Monument  Mortgage's  ability to sell loans
depends upon the  continuation of programs  administered  by these entities,  as
well as its continued eligibility to participate in these programs.

     Monument  Mortgage also depends upon private  mortgage  investors,  such as
GMAC/RFC,  Washington Mutual Bank, Credit Suisse First Boston,  and IndyMac,  to
purchase loans it funds.  If private  investors  reduce their purchases of these
loans, the market and price for such mortgages will be adversely affected, which
would have a material adverse effect on our business,  results of operations and
financial condition.

FiNet may incur additional losses from the discontinued  business of Coastal and
Mical Mortgage.

     In April 1998,  FiNet acquired Coastal Federal  Mortgage,  and in May 1998,
FiNet also acquired Mical Mortgage.  FiNet's  results of operations  include net
losses from the  acquisitions  of both of these  units and from their  operating
activities. Although these business units were discontinued in April 1999, FiNet
may incur  additional  losses,  which would be included in FiNet's  consolidated
results.  FiNet  reported net losses  associated  with Coastal and Mical of $1.3
million and $17.6  million  during the years ended  December  31, 2000 and 1999,
respectively.

If FiNet's quarterly revenues and operating results fluctuate significantly; the
price of FiNet's common stock is likely to be volatile.

     FiNet's quarterly  revenues and operating results are likely to continue to
vary  from  quarter-to-quarter  due  to  a  number  of  factors,  including  the
following:

     o    fluctuations in interest rates;

     o    seasonal or other economic factors affecting demand for mortgages;

     o    changes in Monument  Mortgage's  pricing  policies or its competitors'
          pricing policies for mortgage origination and processing fees;

     o    the  introduction  of new  mortgage  products and services by Monument
          Mortgage or its competitors;

     o    the level of consumer  interest  and  confidence  in the internet as a
          means of accessing financial products and services;


                                                                              31
<PAGE>

     o    any  termination  or  restructuring  of  agreements  with key  service
          providers; and

     o    technical  difficulties or service  interruptions  affecting  Monument
          Mortgage's websites or operational data processing systems.

     Fluctuation  in FiNet's  quarterly  results  may cause the price of FiNet's
common stock to be volatile. Accordingly,  FiNet's results for any period should
not be relied upon as an indication  of future  performance.  FiNet's  operating
results may fail to meet  management's  expectations  or those of  analysts  who
follow  FiNet,  and any such failure  could cause FiNet's stock price to decline
substantially.

If there are interruptions or delays in obtaining  appraisal,  credit reporting,
title  searches and other  underwriting  services from third  parties,  Monument
Mortgage may experience customer dissatisfaction and difficulties closing loans.

     Monument  Mortgage  relies on other companies to perform certain aspects of
the loan  approval  process,  including  appraisals,  credit  reports  and title
searches.  If Monument  Mortgage is unsuccessful in securing the timely delivery
of these  ancillary  services,  it will  likely  experience  increased  customer
dissatisfaction, and its business, results of operations and financial condition
could be  materially  adversely  affected.  The  value of the  service  Monument
Mortgage offers, and thus the ultimate success of Monument Mortgage's  business,
are dependent on the ability to secure the timely  provision of these  ancillary
services from third parties.

     If Monument  Mortgage fails to comply with extensive federal and state laws
regulating the mortgage banking industry,  Monument Mortgage could be subject to
penalties, disqualifications,  lawsuits or enforcement actions that could have a
material adverse effect on Monument Mortgage's business.

     Monument  Mortgage's  operations  are subject to  extensive  regulation  by
federal and state  authorities.  If Monument  Mortgage fails to comply with such
regulations,  possible  consequences  could  include  loss of  approved  status,
demands for indemnification,  class action lawsuits,  administrative enforcement
actions, and other civil and criminal sanctions. These consequences could have a
material adverse effect on Monument Mortgage's  business,  results of operations
and financial  condition.  See "Item 1. Business - Mortgage Banking Regulation,"
of Annual Report on Form 10-K for the year ended December 31, 2000.

If FiNet's computer systems fail, FiNet's business could be materially adversely
affected.

     Any  interruption  in the  availability  of Monument  Mortgage's  websites,
transaction-processing   systems  or  network  infrastructure  could  materially
adversely  affect the business,  results of operations and financial  condition.
Such interruptions could result from events such as fires, floods,  earthquakes,
power  losses,  telecommunications  failures,  computer  viruses and  electronic
breaches.  FiNet's insurance  policies may not adequately  compensate for losses
that may  occur in the  event of a  failure  of the  computer  systems  or other
interruptions in FiNet's or Monument Mortgage's businesses.

     Monument  Mortgage's websites must accommodate a high volume of traffic and
deliver frequently updated information,  the accuracy and timeliness of which is
critical to the mortgage  business.  In the past, these systems have experienced
periodic interruptions. Any substantial increase in the volume of traffic on the
Monument  Mortgage's  websites  will  require  expanding  and  upgrading  of its
technology,  transaction-processing systems and network infrastructure. Monument
Mortgage  cannot be sure that it will be able to accurately  project the rate or
timing of increases,  if any, in the use of the websites,  or expand and upgrade
the systems and infrastructure to accommodate such increases in a timely manner.
In addition,  users depend on third-party  internet service providers for access
to  Monument  Mortgage's  e-commerce  tools,  and  many of these  services  have
experienced  significant  outages in the past, and users could experience outage
delays and other  difficulties  due to system  failures  unrelated  to  Monument
Mortgage's  systems.  Moreover,  the internet  infrastructure may not be able to
support  continued  growth in its use. Any of these  problems  would  materially
adversely  affect  FiNet's   business,   results  of  operations  and  financial
condition.

If  Monument  Mortgage's  electronic  security  devices  are  breached,  FiNet's
business would be materially adversely affected.

     If any compromise in Monument Mortgage's security devices were to occur, it
could have a material adverse effect on FiNet's business,  results of operations
and financial  condition.  The secure  transmission of confidential  information
through e-commerce is critical to Monument Mortgage's  underwriting process, and
Monument  Mortgage relies on certain  encryption and  authentication  technology
licensed  from third  parties to provide  secure  transmission  of  confidential
information, such as consumers' financial statements. There can be no assurances
that  advances  in  computer  capabilities,  new  discoveries  in the  field  of
cryptography, or other events or developments will not result in a compromise or
breach of the algorithms  Monument  Mortgage uses to protect  transaction  data.
Monument  Mortgage  may be  required  to spend  significant  capital  and  other
resources to protect  against such  security  breaches or to alleviate  problems
caused by such breaches. Concerns over the security of transactions conducted on
the internet, and the privacy of users may also inhibit the growth of e-commerce
in  general.  To the extent  that  Monument  Mortgage's  activities  involve the
storage and  transmission of proprietary  information,  security  breaches could
damage  Monument  Mortgage's  reputation  and  expose  it to a risk  of  loss or
litigation  and  possible  liability.  There  can be no  assurances  that all of
Monument Mortgage's security measures will prevent


                                                                              32
<PAGE>

security  breaches or that a failure to prevent such security  breaches will not
have a material  adverse  effect on FiNet's  business,  financial  condition and
results of operations.

If FiNet's shares are delisted,  the liquidity of FiNet's shares of common stock
could be impaired.

     If  FiNet  fails  to meet  the  Nasdaq's  continued  listing  requirements,
including,  among others, net tangible assets or market capitalization,  minimum
bid price and various corporate governance requirements, FiNet's shares could be
delisted from the Nasdaq SmallCap Market.  In such event, any trading in FiNet's
common stock would  thereafter be conducted in the  over-the-counter  markets in
the  so-called  "pink  sheets"  or the  Nasdaq's  "Electronic  Bulletin  Board."
Consequently, the liquidity of FiNet's shares could be impaired, not only in the
number of shares which could be bought and sold,  but also through delays in the
timing of the  transactions,  reductions  in the number and  quality of security
analysts'  and the news  media's  coverage  of FiNet,  and lower  prices for its
shares than might otherwise be attained.

     On August 30, 2000,  FiNet was notified by Nasdaq that FiNet's common stock
had  failed to  maintain  a  minimum  bid price of $1.00  over the  previous  30
consecutive  trading  days as  required  for  continued  listing  on the  Nasdaq
SmallCap Market as set forth in Marketplace Rule 4310 (c)(4). FiNet was provided
90 calendar  days, or until  November 28, 2000, to maintain its stock a price of
at least $1.00 for a minimum of 10  consecutive  trading days or FiNet's  common
stock would be delisted at the opening of business on November 30, 2000.

     On January  16,  2001,  FiNet was granted a  temporary  exception  from the
minimum bid price  requirement  after FiNet failed to meet the minimum bid price
requirement. In anticipation of effecting a reverse stock split an exception was
granted by the Nasdaq SmallCap Market that was suppose to expire on February 16,
2001. On February 20, 2001, FiNet effected a 1-for-12 reverse stock split of its
outstanding  shares,  previously  approved by written consent of the majority of
its shareholders.  Despite the reverse stock split,  there can be no assurances,
that FiNet will be able to maintain  its listing on Nasdaq.  Delisting  from the
Nasdaq and inclusion of FiNet's  common stock on the OTC Bulletin Board or other
similar  quotation  system could adversely affect the liquidity and price of its
stocks

If FiNet's  shares of common  stock are  delisted,  FiNet's  shares could become
subject to the SEC's "Penny Stock Rule".

     If FiNet's  shares were delisted from Nasdaq,  they could become subject to
Rule 15g-9 under the Securities  Exchange Act of 1934, which imposes  additional
sales practice  requirements  on  broker-dealers  which sell such  securities to
persons other than established customers and "accredited  investors" (generally,
individuals  with net worth in excess of $1,000,000 or annual incomes  exceeding
$200,000 or $300,000 together with their spouses).  For transactions  covered by
this rule, a broker-dealer must make a special suitability determination for the
purchase and have received the  purchaser's  written  consent to the transaction
prior to sale.  Consequently,  the rule may  adversely  affect  the  ability  of
broker-dealers  to sell FiNet's  shares and may adversely  affect the ability of
purchasers  in this  offering  to sell  any of the  securities  acquired  in the
secondary  market.  If  FiNet's  shares  become  subject  to this  rule,  market
liquidity for its shares could be severely adversely affected.

If there is a recession,  natural disaster or other disruption in the California
economy, FiNet's business could be materially adversely affected.

     FiNet is particularly vulnerable to recessions and conditions affecting the
California  economy.  Of the loans Monument Mortgage originated and/or funded in
the year ended December 31, 2000, 74% were for properties located in California.
No other state  represented more than 3% of its closed loans during such period.
While  Monument  Mortgage  expects to expand its  business  in other  states,  a
concentration  of loans in California is likely to continue for the  foreseeable
future.

     There have been times in the past, most recently in 1991 and 1992, when the
California  economy  suffered  a  recession  more  severe  than  the rest of the
country. If such a recession were to occur again,  FiNet's business,  results of
operations and financial condition would be materially  adversely  affected.  In
addition, California historically has been vulnerable to natural disasters, such
as earthquakes and mudslides, which are not typically covered by standard hazard
insurance  policies.  These  natural  disasters  often result in increased  loan
delinquencies or defaults that could adversely effect Monument  Mortgage's,  and
therefore FiNet's, business, results of operations and financial condition.


                                                                              33
<PAGE>

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

     See  "Notes  to  Consolidated  Financial  Statements  - Note 1.  Risks  and
Uncertainties" for quantitative and qualitative disclosure about market risk.

QUARTERLY RESULTS OF OPERATIONS (unaudited)

     The following is a summary of the quarterly  results of operations  for the
year ended December 31, 2000.

<TABLE>
<CAPTION>
                                                                                Quarter End
                                                          -------------------------------------------------------
                                                           March 31       June 30      September 30    December 31
                                                          ----------     ----------     ----------     ----------
<S>                                                       <C>            <C>            <C>            <C>
Revenues                                                  $    2,871     $    2,075     $    2,515     $    2,102
Cost of Revenues                                               1,713          2,254          4,210          3,172

Net Income (Loss)                                         $   (6,540)    $   (5,526)    $   (6,930)    $   (5,800)
                                                          ==========     ==========     ==========     ==========

Basic and diluted net loss per common
   share                                                  $    (0.84)    $    (0.70)    $    (0.84)    $    (0.64)
                                                          ==========     ==========     ==========     ==========

Weighted average common shares used
   in computing basic and diluted net loss
   per common share                                            7,814          7,879          7,898          9,013
                                                          ==========     ==========     ==========     ==========
</TABLE>

     The following is a summary of the quarterly  results of operations  for the
year ended December 31, 1999

<TABLE>
<CAPTION>
                                                                             Quarter ending
                                                          -------------------------------------------------------
                                                           March 31       June 30      September 30    December 31
                                                          ----------     ----------     ----------     ----------
<S>                                                       <C>            <C>            <C>            <C>
Revenues                                                  $    2,430     $    2,548     $    1,748     $    2,367
Cost of Revenues                                               8,702          3,432          3,085          4,261

Net Income(Loss)                                          $  (16,986)    $   (9,952)    $   (9,771)    $  (13,036)
                                                          ==========     ==========     ==========     ==========

Basic and diluted net loss per common
   share                                                  $    (2.89)    $    (1.49)    $    (1.27)    $    (1.68)
                                                          ==========     ==========     ==========     ==========

Weighted average common shares used
   in computing basic and diluted net loss
   per common share                                            5,883          6,672          7,705          7,769
                                                          ==========     ==========     ==========     ==========
</TABLE>


                                                                              34
<PAGE>

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA


Index to Consolidated Financial Statements..................................  35
Report of Management........................................................  36
Independent Auditors' Reports...............................................  37
Consolidated Balance Sheets at December 31, 2000 and 1999 ..................  40
Consolidated Statements of Operations for the years ended
   December 31, 2000 and 1999 (unaudited), the eight months
   ended December 31, 1999 and for the fiscal years ended
   April 30, 1999 and 1998..................................................  41
Consolidated Statements of Stockholders' Equity for the year
   ended December 31, 2000, the eight months ended December 31,
   1999 and the fiscal years ended April 30, 1999 and 1998..................  42
Consolidated Statements of Cash Flows for the years ended
   December 31, 2000 and 1999 (unaudited), the eight months ended
   December 31, 1999 and the fiscal years ended April 30, 1999 and 1998.....  43
Notes to Consolidated Financial Statements..................................  44


                                                                              35
<PAGE>

                              REPORT OF MANAGEMENT

To Our Stockholders:

     Management  of FiNet is  responsible  for the  preparation,  integrity  and
objectivity of the consolidated  financial  statements,  and the other financial
information presented in the annual report. To meet these  responsibilities,  we
maintain a system of internal  control  that is  designed to provide  reasonable
assurance as to the integrity and reliability of the financial  statements,  the
protection  of Company  and  customer  assets  from  unauthorized  use,  and the
execution  and  recording  of  transactions  in  accordance  with   management's
authorization.  The system is augmented by careful selection of our managers, by
organizational   arrangements   that   provide  an   appropriate   division   of
responsibility  and by communications  programs aimed at assuming that employees
adhere to the highest standards of personal and professional integrity. Although
no  cost-effective   internal  control  system  will  preclude  all  errors  and
irregularities,  we believe  FiNet's  system of internal  control is adequate to
accomplish the objectives set forth above.

     The consolidated financial statements have been prepared in conformity with
accounting  principles  generally  accepted in the United States and necessarily
include some amounts that are based on  estimates  and our best  judgments.  The
financial  statements  have been audited,  except as noted,  by the  independent
accounting firm of Ernst & Young LLP, who were given unrestricted  access to all
of  FiNet's   financial   records  and  related   data.   We  believe  that  all
representations  made to Ernst & Young LLP  during  their  audit  were valid and
appropriate.

     The Board of  Directors  through its Audit  Committee,  which is  comprised
entirely  of  non-management  directors,  has an  oversight  role in the area of
financial reporting and internal control. The Audit Committee periodically meets
with Ernst & Young LLP, our internal auditors and Company  management to discuss
accounting,  auditing,  internal  controls  over  financial  reporting and other
matters.


                                                                              36
<PAGE>

                REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS

The Board of Directors and Stockholders
FiNet.com, Inc.

     We have audited the accompanying  consolidated balance sheets of FiNet.com,
Inc.  and  subsidiaries  as of  December  31,  2000 and  1999,  and the  related
consolidated statements of operations,  stockholders' equity, and cash flows for
the year ended  December 31, 2000,  the eight months ended December 31, 1999 and
for  the  year  ended  April  30,  1999.  These  financial  statements  are  the
responsibility of FiNet.com, Inc.'s management. Our responsibility is to express
an opinion on these financial statements based on our audits.

     We conducted our audits in accordance  with  auditing  standards  generally
accepted in the United States.  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 audits provide a reasonable  basis
for our opinion.

     In our opinion,  the financial statements referred to above present fairly,
in all material respects, the consolidated financial position of FiNet.com, Inc.
and subsidiaries at December 31, 2000 and 1999, and the consolidated  results of
their  operations and their cash flows for the year ended December 31, 2000, the
eight  months  ended  December  31, 1999 and the year ended April 30,  1999,  in
conformity with accounting principles generally accepted in the United States.

                                               /s/ Ernst & Young LLP

San Francisco, California
February 23, 2001


                                                                              37
<PAGE>

                              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.com, Inc.
Walnut Creek, CA

     We have audited the accompanying  consolidated  balance sheet of FiNet.com,
Inc.  (formerly  FiNet Holdings  Corporation)  and  subsidiaries as of April 30,
1998,  and the related  consolidated  statements  of  operations,  stockholders'
equity and cash flows for the fiscal  years ended  April 30, 1998 and 1997.  The
consolidated  financial  statements  give  retroactive  effect to the  merger of
FiNet.com,  Inc. and Coastal Federal  Mortgage  Company on April 30, 1998, which
has been accounted for using the pooling of interests method as described in the
notes to the consolidated  financial  statements.  These consolidated  financial
statements are the responsibility of FiNet's  management.  Our responsibility is
to express an opinion on these financial  statements based on our audits. We did
not audit the 1998 and 1997  financial  statements of Coastal  Federal  Mortgage
Company,  which statements reflect total assets and revenues of approximately 10
percent and 53 percent,  respectively,  of the related consolidated totals as of
April 30, 1998. Those statements were audited by other auditors whose report has
been  furnished to us, and our opinion,  insofar as it relates to data  included
for Coastal Federal Mortgage Company, is based solely on the report of the other
auditors.

     We conducted  our audits in accordance  with  generally  accepted  auditing
standards. Those standards require that we plan and perform the audits 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 audits provide a reasonable basis for our opinion.

     In our opinion,  based on our audits and the report of other auditors,  the
consolidated  statements  referred  to above  present  fairly,  in all  material
respects, the financial position of FiNet.com, Inc. and subsidiaries as of April
30, 1998, the consolidated  results of their operations and their cash flows for
the fiscal  years  ended April 30, 1998 and 1997 in  conformity  with  generally
accepted accounting principles.

/s/ REUBEN E. PRICE & CO.
San Francisco, CA
August 12, 1998


                                                                              38
<PAGE>

                          INDEPENDENT AUDITORS' REPORT


To the Board of Directors
Coastal Federal Mortgage Company

     We have audited the  statements  of income,  stockholders'  equity and cash
flows of Coastal Federal Mortgage Company for the year ended April 30, 1998 (not
presented separately herein).  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 financial  statements  enumerated above present fairly,
in all material  respects,  the results of operations  and cash flows of Coastal
Federal  Mortgage  Company for the year ended April 30, 1998, in conformity with
generally accepted accounting principles.


Richard A. Eisner & Company, LLP


Florham Park, New Jersey
July 9, 1998
With respect to Note C
July 31, 1998



                                                                              39
<PAGE>

                        FiNet.com, Inc. and Subsidiaries
                           CONSOLIDATED BALANCE SHEETS
                (Amounts in thousands, except per share amounts)

<TABLE>
<CAPTION>
                                                                                         December 31
                                                                                         -----------
                                                                                   2000                 1999
                                                                                ---------            ---------
<S>                                                                             <C>                  <C>
                                     ASSETS

Cash and cash equivalents                                                       $   9,454            $  18,626
Restricted cash                                                                       300               10,403
Marketable equity securities available for sale, at market value                       --                2,674
Accounts and notes receivable, net                                                    416                2,363
Mortgages held for sale, net                                                       39,975               78,691
Furniture, fixtures and equipment, net                                              2,712                4,471
Goodwill, net                                                                       1,309                1,757
Other assets                                                                          581                  823
                                                                                ---------            ---------
     Total assets                                                               $  54,747            $ 119,808
                                                                                =========            =========

                      LIABILITIES AND STOCKHOLDERS' EQUITY

Liabilities:
Warehouse and other lines of credit                                             $  35,922            $  80,453
Accounts payable                                                                      187                2,379
Notes payable and capitalized leases                                                   70                  141
Accrued expenses and other liabilities                                              5,708                6,462
                                                                                ---------            ---------
     Total liabilities                                                             41,887               89,435

Stockholders' equity:
Common stock, par value $.01 per share (150,000 shares authorized,
9,465 and 7,787 shares issued and outstanding at December 31,
2000 and 1999, respectively)                                                        1,024                  934
Additional paid-in capital                                                        109,841              100,943
Accumulated comprehensive income                                                       --                1,704
Accumulated deficit                                                               (98,005)             (73,208)
                                                                                ---------            ---------
     Total stockholders' equity                                                    12,860               30,373
                                                                                ---------            ---------

Total liabilities and stockholders' equity                                      $  54,747            $ 119,808
                                                                                =========            =========
</TABLE>

        See accompanying notes to the consolidated financial statements.


                                                                              40
<PAGE>

                        FiNet.com, Inc. and Subsidiaries
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                  (Amounts in thousands, except per share data)


<TABLE>
<CAPTION>
                                                                                            Eight Months
                                                                         Year Ended             Ended              Year Ended
                                                                         December 31         December 31            April 30
                                                                   ----------------------    ------------    ----------------------
                                                                     2000          1999          1999          1999          1998
                                                                   --------      --------      --------      --------      --------
                                                                               (unaudited)
<S>                                                                <C>           <C>           <C>           <C>           <C>
Revenues                                                           $  8,144      $  9,093      $  6,070      $ 22,413      $ 15,160
Cost of revenues                                                     11,352        19,480         8,423        35,064        14,718
                                                                   --------      --------      --------      --------      --------
Gross profit (loss)                                                  (3,208)      (10,387)       (2,353)      (12,651)          442
Operating expenses
   General and administrative                                        16,859        22,964        13,973        11,661         5,887
   Marketing and advertising                                          1,992         7,169         6,200         2,205           921
   Special charges                                                    1,464         6,311         1,385         4,926         1,010
   Depreciation and amortization                                      1,877         1,072           777           646           482
   Other                                                                362         1,594           575         1,468           875
                                                                   --------      --------      --------      --------      --------
     Total expenses                                                  22,554        39,110        22,910        20,906         9,175
                                                                   --------      --------      --------      --------      --------
Loss from operations                                                (25,762)      (49,497)      (25,263)      (33,557)       (8,733)
Other income and expense:
     Gain on sale of marketable equity securities                       824           366            --            --            --
     Other interest income                                              191            76            --            --            --
     Other interest expense                                              --          (267)           --         2,976           420
                                                                   --------      --------      --------      --------      --------
Loss before income taxes                                            (24,747)      (49,322)      (25,263)      (36,533)       (9,153)
Income tax expense                                                       50            70            65             5           226
                                                                   --------      --------      --------      --------      --------
Net loss                                                            (24,797)      (49,392)      (25,328)      (36,538)       (9,379)
In-substance preferred dividend                                          --           353            --           705            --
                                                                   --------      --------      --------      --------      --------
Net loss available to common stockholders                          $(24,797)     $(49,745)     $(25,328)     $(37,243)     $ (9,379)
                                                                   ========      ========      ========      ========      ========
Loss per share available to common stockholders:
   Basic and diluted net loss per common share                     $  (3.05)     $  (7.11)     $  (3.40)     $  (9.54)     $  (3.70)
                                                                   ========      ========      ========      ========      ========
Weighted average common shares used in computing basic
   and diluted net loss per common share                              8,134         6,993         7,460         3,906         2,536
                                                                   ========      ========      ========      ========      ========
</TABLE>

        See accompanying notes to the consolidated financial statements.


                                                                              41
<PAGE>

                        FiNet.com, Inc. and Subsidiaries
                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                             (Amounts in thousands)

<TABLE>
<CAPTION>
                                                                             Additional   Common   Accumulated
                                                          Common                Paid       Stock     Compre-    Accum-
                                                           Stock    Sub-         In         Sub-     hensive    ulated
                                               Shares     Amount    scribed    Capital   scription   Income     Deficit      Total
<S>                                              <C>    <C>         <C>      <C>         <C>            <C>    <C>         <C>
Balance April 30, 1997                           2,500  $    260    $  40    $   6,331   $(2,693)        --    $ (1,258)   $  2,680
Proceeds of subscription receivable                 --        40      (40)          --     2,693         --          --       2,693
Issue of common shares:
   In connection with acquisitions:
     Real Estate Office Software                    13         2       --          373        --         --          --         375
     iQualify, Inc.                                  4         1       --          180        --         --          --         181
     NDS                                            17         2       --          806        --         --          --         808
   Private placement                               108        13       --        3,887        --         --          --       3,900
   Settlement of liabilities                        19         2       --          355        --         --          --         357
   Employee bonuses                                  1        --       --           35        --         --          --          35
Warrants exercised                                   9         1       --          157        --         --          --         158
Paid in capital related to imputed interest
   on issue of convertible debt                     --        --       --        1,551        --         --          --       1,551
Net loss                                            --        --       --           --        --         --      (9,379)     (9,379)
                                              --------  --------  -------     --------   -------    -------    --------    --------
Balance April 30, 1998                           2,671       321       --       13,675        --         --     (10,637)      3,359
Issue of common shares:
   Private placements of common shares           2,844       341       --       28,196        --         --          --      28,537
   Costs of equity offerings                        --        --       --         (762)       --         --          --        (762)
   In connection with acquisitions:
     Mical Mortgage, Inc.                           39         5       --        1,798        --         --          --       1,803
     Interloan.com                                   8         1       --           74        --         --          --          75
     Real Estate Office Software                     4        --       --          246        --         --          --         246
   Conversion of convertible subordinated
     debentures                                    794        95       --        5,405        --         --          --       5,500
   Warrants exercised                               94        11       --        1,410        --         --          --       1,421
   Stock options exercised                          32         4       --           22        --         --          --          26
   Employee/other compensation                      67         8       --        1,120        --         --          --       1,128
Paid in capital related to imputed interest
    on issue of convertible debentures              --        --       --          423        --         --          --         423
Paid in capital and in-substance dividend on
    preferred stock                                 --        --       --          705        --         --        (705)         --
Warrants issued with subordinated convertible
   debentures                                       --        --       --          269        --         --          --         269
Warrants issued upon conversion of debentures       --        --       --          739        --         --          --         739
Issue of preferred stock                            --        --       --        2,500        --         --          --       2,500
Costs of preferred stock issue                      --        --       --         (214)       --         --          --        (214)
Redemption of preferred stock                       --        --       --       (2,500)       --         --          --      (2,500)
Warrants issued for services                        --        --       --          676        --         --          --         676
Net loss                                            --        --       --           --        --         --     (36,538)    (36,538)
                                              --------  --------  -------     --------   -------    -------    --------    --------
Balance April 30, 1999                           6,553       786       --       53,782        --         --     (47,880)      6,688
Issue of common shares:
   Private placements of common shares             922       111       --       41,890        --         --          --      42,001
   Costs of equity offerings                        --        --     (729)          --        --         --        (729)
   In connection with acquisitions:
     Homeseekers                                    50         6       --        1,457        --         --          --       1,463
     Lowestrate                                     47         6       --        1,815        --         --          --       1,821
   Warrants/stock options exercised                177        21       --        2,152        --         --          --       2,173
   Employee/other compensation                      38         4       --          576        --         --          --         580
   Other comprehensive income                       --        --       --           --        --      1,704          --       1,704
Net loss                                       (25,328)  (25,328)
                                              --------  --------  -------     --------   -------    -------    --------    --------
Balance December 31, 1999                        7,787       934       --      100,943        --      1,704     (73,208)     30,373
Issue of common shares:
   Private placements of common shares           1,542        74       --        7,326        --         --          --       7,400
   Warrants issued for services                     --        --       --          659        --         --          --         659
   Stock options exercised                          96        12       --          797        --         --          --         809
   Employee/other compensation                      40         4       --          116        --         --          --         120
Other comprehensive income                          --        --       --           --        --     (1,704)         --      (1,704)
Net Loss                                                                                                        (24,797)    (24,797)
                                              -------------------------------------------------------------------------------------
Balance December 31, 2000                        9,465  $  1,024    $  --    $ 109,841   $    --    $    --    $(98,005)   $ 12,860
                                              =====================================================================================

</TABLE>

        See accompanying notes to the consolidated financial statements.


                                                                              42
<PAGE>


                        FiNet.com, Inc. and Subsidiaries
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                             (Amounts in thousands)

<TABLE>
<CAPTION>
                                                                                                Eight Months     Fiscal Years
                                                                               Years Ended         Ended             Ended
                                                                               December 31       December 31        April 30
                                                                          --------------------  ------------  --------------------
                                                                            2000        1999        1999        1999        1998
                                                                          --------    --------    --------    --------    --------
CASH FLOWS FROM OPERATING ACTIVITIES:                                                (unaudited)
<S>                                                                       <C>         <C>         <C>         <C>         <C>
    Net loss                                                              ($24,797)   ($49,745)   ($25,328)   ($36,538)   ($ 9,379)
    Adjustments to reconcile net loss to net cash provided by (used in
    operating activities:
      Depreciation and amortization                                          1,877       1,602         826       2,476       1,549
      Imputed interest from convertible debentures                              --         267          --       2,502         287
      Write down of goodwill and other asset valuation adjustments           1,771       5,786         989       4,958       1,728
      Gain on sale of mortgage servicing rights                                 --          --          --        (420)         --
      Gain on sale of marketable securities                                   (824)       (366)       (366)         --          --
      Expenses paid by issuance of common stock or warrants                    671       1,974          --       1,804         392
      Expense from warrants issued upon conversion of debentures                --         739          --         739          --
    Changes in operating assets and liabilities:
      Increase (decrease) in restricted cash                                10,103     (10,403)    (10,003)         --          --
      (Increase) decrease in mortgage loans held for sale                   38,716      (6,691)    (45,253)     71,596     (38,562)
      (Increase) decrease in receivables from sales of mortgage loans,
        servicing rights and other receivables                               1,527       3,565         591      23,911     (20,496)
      (Increase) decrease in originated mortgage servicing rights               --          --          --         382      (1,248)
      (Increase) decrease in other assets                                      296         374        (121)        724         317
      Net increase (decrease) in warehouse borrowings                      (44,531)     10,261      47,415     (91,494)     58,357
      Increase (decrease) in accounts payable and accrued expenses          (2,946)      2,299       3,703      (6,175)      3,006
      Other operating                                                           --          --        (322)        309        (229)
                                                                          --------    --------    --------    --------    --------
            Net cash used in operating activities                          (18,137)    (40,338)    (27,869)    (25,226)     (4,278)
CASH FLOWS FROM INVESTING ACTIVITIES:
    Purchase of mortgage servicing rights                                       --          --          --          --      (4,515)
    Proceeds from sale of mortgage servicing rights                            420       1,919       1,984       1,509         497
    Proceeds on sale of marketable securities                                1,794         872         872
    Purchase of furniture, fixtures and equipment                           (1,165)     (4,760)     (4,338)       (338)       (647)
    Acquisition of purchased technology and intangibles                         --          --          --        (481)     (1,007)
    Cash acquired in acquisition                                                --        (176)         --         185          --
    Pre-acquisition advances to affiliates, net of payments                     --          --          --          --      (1,930)
    Other                                                                       --          --          --          --         110
                                                                          --------    --------    --------    --------    --------
      Net cash provided by (used in) investing activities                    1,049      (2,145)     (1,482)        875      (7,492)
CASH FLOWS FROM FINANCING ACTIVITIES:
    Proceeds from issuance of common stock                                   7,190      56,381      41,852      27,775       6,582
    Proceeds from issuance of convertible preferred stock                       --          --          --       2,286          --
    Proceeds from issuance of convertible debt                                  --          --          --       1,384       5,058
    Proceeds from advances on note payable and line of credit                   --          --          --       1,400       2,550
    Proceeds from the exercise of common stock warrants and options            797       2,630       2,173       1,447         219
    Redemption of convertible debt                                              --      (1,500)         --      (1,500)         --
    Redemption of convertible preferred stock                                   --      (2,500)         --      (2,500)         --
    Repayment of note payable, capitalized leases and line of credit           (71)     (1,093)       (250)     (3,732)     (1,665)
    Repayments of loans and distributions to former stockholders                --          --          --          --        (129)
    Other financing                                                             --        (227)         --          --          --
                                                                          --------    --------    --------    --------    --------
      Net cash provided by financing activities                              7,916      53,691      43,775      26,560      12,615
                                                                          --------    --------    --------    --------    --------
Net increase (decrease) in cash                                             (9,172)     11,208      14,424       2,209         845
Cash at beginning of period                                                 18,626       7,418       4,202       1,993       1,148
                                                                          --------    --------    --------    --------    --------
Cash at end of period                                                     $  9,454    $ 18,626    $ 18,626    $  4,202    $  1,993
                                                                          ========    ========    ========    ========    ========
Supplemental disclosures:
    Interest paid                                                         $  3,852    $    830    $    625    $  6,812    $  1,877
    Taxes paid                                                                  50          70          65           2          57
</TABLE>

        See accompanying notes to the consolidated financial statements.


                                                                              43
<PAGE>

                        FiNet.com, Inc. and Subsidiaries
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2000

NOTE 1. FINET.COM, INC.

ORGANIZATION

     FiNet.com,  Inc. (Finet),  a financial  services holding company,  provides
both traditional and on-line mortgage  services to brokers and consumers through
its  wholly  owned  subsidiary  Monument  Mortgage,  Inc.  (Monument  Mortgage).
Business-to-business  services are provided to brokers and marketed through both
traditional means and through its strategic  partners.  Consumer direct services
are  marketed  through both the  internet  and various  traditional  advertising
mediums.  Monument  Mortgage is licensed to originate and fund mortgage loans in
fifty (50) states and the District of Columbia.

     FiNet has suffered  recurring losses from operations and currently projects
such losses for 2001. In addition, it has requested,  and has been granted, debt
covenant  violation waivers from its primary  warehouse lender.  FiNet's current
business  plan for 2001  reflects  continued  initiatives  to increase  revenue,
reduce  overhead,  and  realize  the  benefit of recent  reductions  in employee
headcount  and  occupancy  costs.  The  plan  projects  that the  amount  of the
quarterly  net loss  will  decline  from  quarter  to  quarter  with net  income
projected  to begin in the third  quarter  of 2001.  As a result,  current  cash
balances are  projected  to be  sufficient  to fund the excess of expenses  over
revenue  for the year.  Based on  FiNet's  belief  that it will  obtain  planned
results prior to the maturity dates of the financing  facilities;  the plan also
assumes  that  warehouse  lines or other such credit  facilities  are  available
through December 31, 2001 in amounts  necessary to operate the business and debt
covenant violations, if any, are waived without business interruption.  Although
FiNet cannot  guarantee  that  planned  results will be obtained in 2001 or that
sufficient  debt or equity  capital will be  available to them under  acceptable
terms,  if at all,  FiNet  believes  that  their  planned  revenue  and  expense
assumptions  will be  realized.  The  ability  of FiNet to  continue  as a going
concern beyond 2001 is dependent on eventually  achieving  profitability  and on
adequate access to capital.

MORTGAGE BANKING ACTIVITIES AND RELATED RISKS AND UNCERTAINTIES

     Monument  Mortgage  is  substantially  dependent  on its  mortgage  finance
partners  and  the  termination  of one or  more of  these  relationships  would
adversely affect FiNet's business.  Monument Mortgage primarily funds and closes
single-family  mortgages. As a non-depository mortgage banker, Monument Mortgage
is dependent on specialized  mortgage credit  facilities to finance its mortgage
lending activities, including, as of February 2001, a $25,000,000 line of credit
with its primary warehouse  lender.  Monument Mortgage expects that this line of
credit  will  remain  available  to finance  its  mortgage  lending  activities;
however,  there is no  certainty  that this lending  relationship,  or any other
current lending  relationships,  will continue. If Monument Mortgage's warehouse
line of credit  becomes  unavailable  or  diminished,  the reduction in Monument
Mortgage's  borrowing  ability could have a material  adverse  affect on FiNet's
results of operations and financial conditions.

     Additionally,  in the normal course of its business,  Monument  Mortgage is
exposed to risks common to other  companies in the  mortgage  banking  industry,
including  certain  economic and regulatory  risks such as:  interest rate risk,
market risk, credit risk and repurchase risk.

     Monument Mortgage's commitments to extend credit (pipeline loans) for which
interest  rates were committed to borrowers,  subject to loan approval,  totaled
approximately  $18,934,000  and $36,458,000 as of December 31, 2000 and December
31, 1999 respectively.  Until a rate commitment is extended to a borrower, there
is no market risk to Monument  Mortgage.  If market  interest rates rise between
the time the  commitment  is made to originate a loan at a specific rate and the
time such  loans are priced for sale,  the  market  price of the loan  declines,
resulting in a loss on the sale of the loan.  Monument  Mortgage is also subject
to risks  associated  with  increased  interest  rates,  to the extent that in a
rising  interest  rate  environment,  a  decrease  in  loan  production  may  be
experienced, which may negatively impact operations

     To protect against such losses,  Monument  Mortgage  attempts to manage its
interest rate risk exposure by selling the majority of loans funded within 20 to
30 days of funding and by utilizing hedging  transactions using a combination of
forward sales of  mortgage-backed  securities  and forward  whole-loan  sales to
stabilize the sales price of loans Monument  Mortgage  expects to fund.  Forward
sales  are  sales of loans  with  settlement  dates  more  than five days in the
future.  Before entering into hedging  transactions,  an analysis is made of the
loans with committed  interest rates. This analysis includes taking into account
such  factors as the  estimated  portion of such loans that will  ultimately  be
funded,  note rate, market interest rates,  inventory of loans and applications,
and other factors to determine the amount of the forward commitment and the type
of hedging transaction. Monument Mortgage also retains the


                                                                              44
<PAGE>

                        FiNet.com, Inc. and Subsidiaries
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2000

NOTE 2. FINET.COM, INC. (Continued)

services of Mortgage Capital  Management,  Inc., ("MCM") an independent  hedging
service  and is able to  utilize  MCM's  reporting  services  including  but not
limited to pipeline,  commitment and mark-to-market reporting. Monument Mortgage
had  mandatory  and  optional  forward  commitments  with  institutions  that it
believes  are sound  credit  risks at  December  31,  2000 and 1999  aggregating
$19,700,000 and $110,233,000,  respectively.  These commitments  covered some of
the market risk associated with the mortgage loans held for sale to investors of
$39,975,000, and $78,691,000 as of December 31, 2000 and 1999, respectively, and
the pipeline loans for which  interest  rates were committed of $18,934,000  and
$36,458,000, respectively.

     Monument  Mortgage  reduces  its  exposure  to  default  risk  (other  than
first-payment  defaults by customers) and most of the  prepayment  risk normally
inherent in the mortgage lending business by selling all funded loans.  However,
in connection with loan sales and bulk servicing sales,  Monument Mortgage makes
representations   and   warranties   relating   to  credit   information,   loan
documentation and collateral.  To the extent that with such  representations and
warranties are determined to be inaccurate, or there are early payment defaults,
Monument  Mortgage  may be required to  repurchase  the loans or  indemnify  the
purchasers  for any losses.  For the year ended  December 31, 2000 and the eight
months ended December 31, 1999, and for the fiscal year ended April 30, 1999 and
1998,  Monument  Mortgage   repurchased  loans  totaling  $90,000,   $6,982,820,
$10,034,000  and  $347,000  respectively,   which  resulted  in  losses  of  $0,
$1,572,000, $759,000, and $347,000, respectively.

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

PRINCIPLES OF CONSOLIDATION AND BASIS OF PRESENTATION

     The consolidated financial statements include the accounts of FiNet and its
wholly owned subsidiaries.  All significant intercompany  transactions have been
eliminated.  Certain  reclassifications  have been made to prior year  financial
statements to conform to the presentation for the current year.

USE OF ESTIMATES IN PREPARATION OF FINANCIAL STATEMENTS

     The  preparation  of financial  statements  in conformity  with  accounting
principles  generally accepted in the United States requires  management to make
estimates  and  assumptions  that  affect  the  reported  amounts  of assets and
liabilities and disclosures 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.

CASH AND CASH EQUIVALENTS

     Cash and cash  equivalents  consist of cash balances and  instruments  with
maturities  of less than three months at the time of  purchase.  At December 31,
2000,   FiNet  had   restricted   cash  of  $300,000   relating  to  a  stand-by
letter-of-credit  required in connection  with its office lease. At December 31,
1999,  FiNet had  restricted  cash of $10,403,000  primarily  related to amounts
received by Monument  Mortgage for  settlements  on sales of mortgage loans that
had not yet been applied to reduce the warehouse line of credit.

MORTGAGE LOANS HELD FOR SALE

     Mortgage loans held for sale,  consisting of loans secured by single-family
residential  properties  are  carried  at the  lower of cost or  market.  Market
valuation  adjustments  of  $1,231,000  and  $2,937,000 at December 31, 2000 and
1999,  respectively,  were  required  and  recorded in a valuation  allowance by
charges to revenues.  Additions to the  allowance  are based on  assessments  of
certain factors,  including, but not limited to, economic conditions,  trends in
the portfolio of mortgages  held for sale and estimated  inherent  losses on the
loans.  Subsequent  recoveries of items  previously  charged off are credited to
loan loss allowance. Premiums paid and discounts obtained on such mortgages held
for sale are deferred as an adjustment to the carrying  value of the loans until
the loans are sold.  Pursuant  to the terms of the  loans,  the  borrowers  have
pledged the underlying real estate as collateral for the loans.

MORTGAGE SERVICING RIGHTS

     Originated loan servicing is recorded based on its relative fair value when
separated from the underlying loan and retained by Monument Mortgage.  Purchased
loan  servicing  is recorded  at cost,  which is not in excess of the future net
cash flows related to the servicing  profile.  Impairment of mortgage  servicing
rights is  determined  using the estimated  fair value of the  servicing  rights
based on third party appraisals or written bids. The appraisals use a discounted
cash flow analysis on a disaggregated portfolio basis stratified by


                                                                              45
<PAGE>

                        FiNet.com, Inc. and Subsidiaries
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2000


NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

loan type,  investor  type,  and  interest  rate to  determine  fair value.  Any
indicated impairment is recorded using a valuation allowance.

DERIVATIVE FINANICAL INSTRUMENTS

     Monument Mortgage utilizes  derivatives  contracts,  to manage the interest
rate risk related  specifically  to its  committed  pipeline  and mortgage  loan
inventory.  The overall  objective  of Monument  Mortgage's  interest  rate risk
management  policies is to offset changes in the values of these items resulting
from changes in interest  rates.  Monument  Mortgage  does not  speculate on the
direction of interest rates in its management of interest rate risk.

     To qualify for hedge accounting,  the derivative contract positions must be
designated  as a hedge and be  effective  in  reducing  the  market  risk of the
existing asset or the committed  pipeline.  The  effectiveness of the derivative
contracts  is  evaluated  on an initial  and ongoing  basis  using  quantitative
measures of  correlation.  If a  derivative  contract no longer  qualifies  as a
hedge,  any  subsequent  changes  in fair  value  are  recognized  currently  in
earnings.

     If a derivative  contract that qualifies as a hedge is sold,  matures or is
terminated,  any  resulting  intrinsic  gain or loss  adjusts  the  basis of the
underlying  item.  Unamortized  premiums  associated with the time value of such
contracts are recognized in income. If a designated underlying item is no longer
held,  any  previously  unrecognized  gain or loss on the related  derivative is
recognized in earnings and the derivative contract is subsequently accounted for
at fair value.

FURNITURE, FIXTURES AND EQUIPMENT

     Furniture,  fixtures and  equipment  are stated at cost.  Depreciation  and
amortization  are computed  straight-line  over their estimated  useful lives of
three to seven years. The cost of repairs and maintenance of furniture, fixtures
and equipment is charged to operating expense.

GOODWILL

     Goodwill is carried at cost less accumulated amortization.  Amortization is
computed using the straight-line method over the economic life of the respective
asset,  generally two to three years.  On a periodic basis,  management  reviews
goodwill  and  evaluates  events or changes in  circumstances  that may indicate
impairment in the carrying amount of such assets. In such instances, impairment,
if any, is measured on a discounted future cash flow basis.

REVENUE RECOGNITION

     Interest income on the portfolio of mortgages  held-for-sale  is accrued as
earned.  When loans become ninety days past due interest  income stops  accruing
and all previously accrued interest is reversed.

     Lending  related  premiums paid and  discounts  obtained are deferred as an
adjustment to the carrying value of such loans until the related loans are sold.
Upon sale of such loans,  deferred  transaction fees are recognized and included
in gain on sale of mortgage loans.

     Loan servicing  fees represent fees earned for servicing  loans for various
investors.  The  fees  are  either  based  on a  contractual  percentage  of the
outstanding  principal  balance  or a fixed  dollar  amount  per loan.  Fees are
credited to income when the related payments are received.

     Loan brokerage fees are earned by Monument Mortgage's  business-to-consumer
segment  for the  processing  of  mortgage  loan  applications  for third  party
lenders.  Monument  Mortgage  never  takes title to the  mortgage.  The fees for
providing  these services are recognized at the time the loans are funded by the
third party lenders.

     Direct loan origination  costs and other  production costs  attributable to
inventory,  as well as other costs  associated  with revenues  earned during the
period are included in "Cost of revenues" in FiNet's Consolidated  Statements of
Operations.


                                                                              46
<PAGE>

                        FiNet.com, Inc. and Subsidiaries
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2000


NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

FiNet's revenue components are as follows (in thousands):

<TABLE>
<CAPTION>
                                                                                      Eight Months       Fiscal Years
                                                                    Year Ended            Ended             Ending
                                                                    December 31        December 31         April 30
                                                                 ------------------   ------------    ------------------
                                                                  2000       1999         1999         1999       1998
                                                                 -------    -------      -------      -------    -------
                                                                          (unaudited)
<S>                                                              <C>        <C>          <C>          <C>        <C>
Revenues:
    Warehouse interest income                                    $ 5,030    $ 2,975      $ 2,016      $ 6,009    $ 3,247
    Gain on sale of servicing rights and mortgage loans            2,579      3,011        1,969       11,847     10,187
    Loan servicing fees                                               18        728          305        1,319        823
    Loan brokerage fees                                              416      1,755          797        2,895        418
    Other                                                            101        624          983          343        485
                                                                 -------    -------      -------      -------    -------
                Total revenues                                   $ 8,144    $ 9,093      $ 6,070      $22,413    $15,160
                                                                 =======    =======      =======      =======    =======
</TABLE>

COST OF REVENUES

     Certain loan origination  costs and other production costs  attributable to
loan  inventory are included in "Cost of revenue" in the Company's  Consolidated
Statements of Operations. FiNet includes costs of personnel attributable to loan
production, expense recorded for loan and receivables losses directly related to
loans and servicing  assets held for sale,  interest  expense and other costs of
production. Direct loan origination costs are deferred until the related loan is
sold.  Certain of these  direct  costs are  included in gain on sale of mortgage
loans and other costs are included in costs of revenues.

MARKETING AND ADVERTISING COSTS

     All marketing and  advertising  costs are charged to operating  expenses as
incurred.

INCOME TAXES

     FiNet and its  subsidiaries  file  consolidated  federal  and  separate  or
combined tax returns for certain states.  State and local income taxes are filed
according to the taxable activities of FiNet.

     In  accordance  with the  provisions  of Statement of Financial  Accounting
Standards  ("SFAS")  No.  109,  "Accounting  for Income  Taxes,"  FiNet uses the
liability  method of accounting  for income taxes.  Under the liability  method,
deferred tax assets and  liabilities  are recognized for the expected future tax
consequences  of  existing  differences  between  financial  reporting  and  tax
reporting bases of assets and  liabilities,  as well as for operating losses and
tax credit carryforwards,  using enacted tax laws and rates. Deferred tax assets
are  recognized  to the extent  that  management  believes,  based on  available
evidence,  that it is more likely than not that they will be realized.  Deferred
tax expense  represents  the net change in the  deferred  tax asset or liability
balance  during the year.  This amount,  together  with income  taxes  currently
payable or  refundable  for the current  year,  represents  the total income tax
expense for the year.


                                                                              47
<PAGE>

                        FiNet.com, Inc. and Subsidiaries
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2000


NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

LOSS PER SHARE

     FiNet  computes basic net loss and diluted net loss per share in accordance
with SFAS No. 128,  "Earnings per Share." Under the  provisions of SFAS No. 128,
basic net loss per share is  computed  by  dividing  the net loss  available  to
common  stockholders  for the period by the  weighted  average  number of common
shares outstanding during the period.  Diluted net loss per share is computed by
dividing  the net loss  available to common  stockholders  for the period by the
weighted  average  number of common and  common  equivalent  shares  outstanding
during the period,  to the extent such common  equivalent  shares are  dilutive.
Since the common equivalent shares for all years were antidilutive  (i.e. reduce
net loss per share), basic and diluted loss per share are the same.

FiNet has excluded all outstanding warrants and options to purchase common stock
and shares  potentially  issuable upon  conversion of  convertible  subordinated
debentures  that  existed  at April 30,  1998 from the  calculation  of loss per
share,  because their inclusion would be antidilutive (i.e., reduce the net loss
per share) for all periods  presented.  The number of options to purchase common
stock that were excluded are 599,205,  989,569,  626,000 and 61,490 for the year
ended  December 31, 2000 and the eight months ended  December 31, 1999,  and the
fiscal years ended April 30, 1999 and 1998,  respectively.  Warrants to purchase
common  stock of  1,270,935,  1,233,417;  1,368,417  and  883,000 for the twelve
months ended December 31, 2000 and 1999 and for the fiscal years ended April 30,
1999 and 1998,  respectively,  and  221,583  shares  potentially  issuable  upon
conversion of subordinated  debentures for the fiscal year ended April 30, 1998,
were also excluded.

COMPREHENSIVE INCOME (LOSS)

     FiNet adopted SFAS No. 130, "Reporting  Comprehensive Income," at April 30,
1999.  FiNet  is  required  to  display  comprehensive  income  (loss)  and  its
components  as part of the  financial  statements.  Other  comprehensive  income
(loss)  includes  certain  changes in equity that are  excluded  from net income
(loss). FiNet recorded other comprehensive income related to unrealized gains on
the appreciation of marketable equity securities.

STOCK-BASED COMPENSATION

     FiNet  accounts  for  stock-based  employee  compensation  arrangements  in
accordance  with the provisions of Accounting  Principals  Board ("APB") Opinion
No. 25, "Accounting for Stock Issued to Employees," and related Interpretations,
as SFAS No. 123, "Accounting for Stock-Based  Compensation"  permits.  Under APB
No. 25, compensation  expense is based on the excess of the estimated fair value
of FiNet's stock over the exercise price,  if any, on the grant date.  FiNet, as
required,  follows the pro forma net income,  pro forma earnings per share,  and
stock-based compensation plan disclosure requirements set forth in SFAS No. 123.

NEW ACCOUNTING STANDARDS

     In June 1998, the Financial Accounting Standards Board issued SFAS No. 133,
Accounting  for  Derivative   Instruments  and  Hedging   Activities,   and  its
amendments, SFAS No. 137 and 138, in June 1999 and June 2000, respectively.  The
Statements require the Company to recognize all derivatives on the balance sheet
at fair  value.  Derivatives  that are not hedges must be adjusted to fair value
through  income.  If the  derivative is a hedge,  depending on the nature of the
hedge,  changes in the fair value of  derivatives  are either offset against the
change  in fair  value  of  assets,  liabilities,  or firm  commitments  through
earnings or recognized in cumulative other comprehensive income until the hedged
item is recognized in earnings. The ineffective portion of a derivative's change
in fair value will be immediately  recognized in earnings.  The Company  adopted
Statement  No. 133, as amended on January 1, 2001.  The fair market value of the
derivatives  held by the Company on January 1, 2001 was not  material,  and as a
result,  the  adoption  did  not  have a  significant  impact  on the  Company's
financial  position or results of operations.  The impact of SFAS No. 133 on the
Company's  financial  position or results of operations in the future,  however,
will depend on a variety of factors,  including  the level of hedging  activity,
the types of hedging instruments used and the effectiveness of such instruments.


                                                                              48
<PAGE>

                        FiNet.com, Inc. and Subsidiaries
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2000


NOTE 3. ACQUISITIONS AND DISPOSITIONS

     On October 28, 1999,  FiNet  acquired the remaining 50% interest in a joint
venture from the joint venture partner. As consideration for the purchase, FiNet
issued 50,000 shares of its common stock valued at $1,462,000. The only asset of
the  joint  venture  was  300,000  common  shares  of   Homeseekers.com   equity
securities,  which  became  marketable  during  1999.  The joint  venture had no
operating activities. The securities were classified as "available for sale" and
were valued using publicly available market quotations.  Of the original 300,000
shares,  FiNet sold 96,000  shares in 1999 and the  remainder of the shares were
sold in 2000.  FiNet  recognized  gains on the sale of these  marketable  equity
securities of $824,000 and $366,000  during the year ended December 31, 2000 and
the eight months ended  December 31, 1999,  respectively.  At December 31, 1999,
$1,704,000 of unrealized gains were included in accumulated comprehensive income
within stockholders' equity related to these securities.

     On August  20,  1999,  FiNet  acquired  certain  operations  and  assets of
Lowestrate.com,   Inc.   ("Lowestrate").   The  assets  included  the  trademark
"Lowestrate.com" and the related website and certain equipment and software. The
acquired   assets  and  operations  are  being  used  in  FiNet's  wholly  owned
subsidiary, Monument Mortgage's business-to-consumer segment. The purchase price
of the acquired  assets was 116,667  shares of FiNet's  common stock,  46,667 of
which were issued at closing and valued at approximately  $1,820,000.  Including
expenses, the purchase price of these assets and operations, was $1,997,000. The
$1,997,000  purchase  price was  recorded as  goodwill,  using  purchase  method
accounting,  with an amortization period of 36 months.  Amortization expense for
the year ended  December  31,  2000,  totaled  $723,000 and for the eight months
ended  December 31, 1999,  totaled  $240,000.  The remaining  70,000 shares were
escrowed  subject  to release to the  seller  upon the  satisfaction  of certain
contingencies.  The value of the  escrowed  shares were  recorded as  additional
purchase price and added to goodwill.  On August 25, 2000,  35,000 shares valued
at $275,000 were released from escrow to the seller upon the  satisfaction  of a
portion of the contingencies.  Additionally,  certain ancillary  agreements were
entered  into in  connection  with the  acquisition,  including  a $500,000  non
interest-bearing  loan to the seller,  secured by 16,667 of the escrowed  shares
and  consulting  and  employment  agreements  with the seller.  As this loan was
solely secured by the seller's interest in 16,667 shares of the Company's common
stock,  the reduction in market value of the underlying  collateral  during 2000
resulted in the  write-down  of this loan balance which was included in "Special
charges" within the consolidated  statements of operations during the year ended
December 31, 2000.

     On May 19, 1998, FiNet acquired all of the issued and outstanding shares of
Mical  Mortgage,  Inc., a non-public  mortgage banker with offices in San Diego,
California  and Las Vegas,  Nevada,  in  exchange  for 46,000  shares of FiNet's
common stock. On the purchase date,  35,994 of these shares were issued and were
valued at  $1,674,000.  The  remaining  shares  are  issuable  by FiNet upon the
resolution of specified  contingencies  related to the  acquisition and would be
recognized  as  additional  purchase  price if and when the  contingencies  were
satisfied.  The acquisition was accounted for using purchase method  accounting.
The excess of purchase  price over the fair value of the net assets  acquired of
$3,332,000  was  recorded  as  goodwill.  Accordingly,  the  results  of Mical's
operations  have been  included  in FiNet's  consolidated  financial  statements
subsequent to the acquisition  date. FiNet  discontinued the operations of Mical
during fiscal 1999 and expensed the remaining  unamortized  goodwill relating to
the acquisition.

     On April 30, 1998,  FiNet  acquired all the issued and  outstanding  common
shares of Coastal Federal Mortgage  Company,  a non-public,  sub-prime  mortgage
banker with offices in New Jersey,  Pennsylvania  and  Florida,  in exchange for
104,167 shares of FiNet common stock.  This  transaction  was accounted for as a
pooling of interest transaction and,  consequently,  the consolidated  financial
statements  of FiNet  have  been  restated  to  include  the  balance  sheet and
statements of operations of Coastal for all periods reported. FiNet discontinued
the  operations  of Coastal  Federal  Mortgage  during  fiscal 1999 and recorded
$405,000 in special charges in the consolidated statements of operations related
to liquidating the assets and satisfying the liabilities of Coastal.

     On February 9, 1998, FiNet acquired all of the issued and outstanding stock
of iQualify,  Inc., a software  developer  whose principal asset is the iQualify
software, for the aggregate  consideration of 4,167 shares of FiNet common stock
valued at $180,000,  plus certain future usage-based  payments.  The acquisition
was accounted for using purchase method accounting.


                                                                              49
<PAGE>

                        FiNet.com, Inc. and Subsidiaries
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2000


NOTE 3. ACQUISITIONS AND DISPOSITIONS (Continued)

     In December 1997, FiNet completed the purchase of substantially  all of the
assets of Real Estate Office Software, Inc. ("REOS"), a Nevada corporation. REOS
is a software  development  and marketing  company  whose primary  product was a
proprietary  realtor  productivity tool called the Real Estate Office. The total
purchase price paid was $1,261,000,  consisting of $641,000 and 16,667 shares of
FiNet's common stock valued at $620,000.  In January 1999, management determined
that REOS no longer fit FiNet's strategic direction; accordingly, FiNet expensed
the  remaining  recorded  value of REOS of $690,000  and  included the amount in
"Special charges" in FiNet's consolidated statement of operations.

NOTE 4. MORTGAGE SERVICING RIGHTS

     Mortgage servicing rights and the related valuation  allowance activity was
as follows (in thousands):

<TABLE>
<CAPTION>
                                                           Eight Months              Year Ended
                                                               Ended                  April 30
                                                            December 31      ---------------------------
                                                               1999             1999             1998
                                                            ----------       ----------       ----------
<S>                                                         <C>              <C>              <C>
Balance at beginning of year                                $    2,693       $    5,478       $      579
Additions                                                           --            1,192            5,763
Sales                                                           (2,539)          (1,825)            (268)
Scheduled amortization                                              --           (1,199)            (596)
Impairment additions charged to operations                        (154)          (1,703)              --
Impairment reductions credited to operations                        --              750               --
                                                            ----------       ----------       ----------
Ending balance                                              $       --       $    2,693       $    5,478
                                                            ==========       ==========       ==========
</TABLE>

     In  connection  with  mortgage  servicing  activities,   Monument  Mortgage
segregates  escrow and custodial  funds in separate  trust accounts and excludes
this   balance  of  $284,000  and  $571,000  at  December  31,  2000  and  1999,
respectively, from FiNet's balance sheet.

NOTE 5. FURNITURE, FIXTURES AND EQUIPMENT

     Furniture, fixtures and equipment consists of the following:

                                                            December 31
                                                  -----------------------------
                                                       2000             1999
                                                  -----------------------------
                                                          (in thousands)
Furniture and fixtures                            $    1,182         $    1,304
Computer equipment                                     2,788              3,313
Leasehold improvements                                   283                260
                                                  -----------------------------
Total cost                                             4,253              4,877
Less accumulated depreciation                         (1,541)              (406)
                                                  -----------------------------
Net furniture, fixtures and equipment             $    2,712         $    4,471
                                                  =============================

     During the eight months ended December 31, 1999, FiNet expensed  $1,385,000
related to the  retirement  of fixed assets as a result of a  relocation  of the
corporate headquarters and primary operations. See Note 11, "Special Charges".


                                                                              50
<PAGE>

                        FiNet.com, Inc. and Subsidiaries
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2000

NOTE 6. BORROWING ARRANGEMENTS

     Borrowing arrangements consist of the following:

<TABLE>
<CAPTION>
                                                                                                    December 31
                                                                                             -------------------------
                                                                                               2000              1999
                                                                                             -------------------------
                                                                                                   (in thousands)
<S>                                                                                          <C>               <C>
Warehouse and other borrowing arrangements
Warehouse lines of credit:
   $60 million committed at December 31, 2000, and $75 million
    committed at December 31, 1999, respectively, bearing interest at
      LIBOR plus variable spread, expires February 28, 2001                                  $35,922           $73,125
Purchase/Repurchase agreements:
   $15 million, bearing interest at Fed Funds + 0.70%, no expiration date                         --             7,316
   $20 million, bearing interest at prime - 1.00%, expires July 31, 2001                          --                --
   $10 million, bearing interest at prime                                                         --                12
                                                                                             -------------------------
                                                                                             $35,922           $80,453
                                                                                             =========================
Notes payable and capitalized leases (various rates)                                         $    70           $   141
                                                                                             =========================
</TABLE>

WAREHOUSE LINES OF CREDIT

     In August 1999, Monument Mortgage entered into a new lending agreement with
its primary warehouse lender,  GMAC/RFC. As of December 31, 2000, this agreement
provided a committed  $60,000,000  warehouse  borrowing  facility that carries a
rate of  interest  ranging  from  LIBOR  plus  1.75% to LIBOR  plus  2.25%.  The
agreement  originally was scheduled to expire on February 28, 2001, however, the
expiration  date of this borrowing  arrangement  has been extended until May 31,
2001,  with a  borrowing  line of credit of  $25,000,000.  FiNet  believes  that
Monument  Mortgage  will  be able to  renew  this  facility  upon  or  prior  to
expiration and/or be able to obtain additional borrowing arrangements.

     For the year ended  December  31, 2000,  the eight  months  ended  December
31,1999,  and  fiscal  year  ended  April 1999 and 1998,  the  Company  recorded
warehouse  interest  expense  of  $4,049,000,   $1,002,000  and  $6,587,000  and
$2,710,000,  respectively.  Borrowings under this warehouse facility are secured
by the mortgages held for sale,  financed  thereunder.  At December 31, 2000 and
1999, LIBOR was 6.64% and 6.49% respectively.

     FiNet's    available    credit   lines   also    include   a    $15,000,000
purchase/repurchase  agreement  with  Fannie  Mae's  "As  Soon  as  Pooled/Early
Purchase Option" (the "ASAP Plus" program).  Under the ASAP Plus program, Fannie
Mae  funds  the  loans  delivered  to Fannie  Mae upon  receipt  of  appropriate
collateral. Fannie Mae subsequently purchases the loans for cash upon receipt of
complete and accurate loan documentation. At December 31, 2000 Monument Mortgage
had no  borrowings  under this  facility and at December  31,1999,  the Monument
Mortgage had $7,300,000 of borrowings outstanding.

     Additionally,  Monument  Mortgage  has  a  $20,000,000  loan  participation
agreement with Gateway Bank,  F.S.B.  ("Gateway  Bank") that expires on July 31,
2001.  Under  this  agreement,  Monument  Mortgage  offers to sell an  undivided
participation  ownership interest in mortgages underwritten by Monument Mortgage
to Gateway  Bank at a  purchase  price of 100% of the  principal  balance or the
take-out  commitment  amount obtained from independent  investors,  whichever is
less. At the time such mortgages are sold to independent investors, Gateway Bank
earns a yield of  prime  less  1.00%  on  participated  balances.  This  program
originated   during  2000  and  at  December  31,  2000,  there  were  no  loans
participated to Gateway Bank.


                                                                              51
<PAGE>

                        FiNet.com, Inc. and Subsidiaries
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2000

NOTE 6. BORROWING ARRANGEMENTS (Continued)

WAREHOUSE FACILITY COVENANTS

     The warehouse  agreement with GMAC/RFC contains various financial covenants
including minimum tangible net worth,  current ratio,  permitted cumulative loss
and leverage ratio requirements. Should an event of default occur, as defined in
the agreement, outstanding principal and interest are due on demand. At December
31,  2000 and 1999,  FiNet  was in  default  of its  primary  warehouse  lending
agreement,  as a result of violations of the permitted  cumulative  net loss and
liability  growth rate  covenants.  On February  22,  2001,  and  subsequent  to
December 31, 1999, GMAC/RFC waived the non-compliance.

3% SUBORDINATED CONVERTIBLE DEBENTURES

     During the fiscal  years  ended April 30,  1999 and 1998,  FiNet  issued an
aggregate of $7,000,000 of 3% Subordinated  Convertible  Debentures in a private
placement,  with interest  payable in FiNet common stock when  converted,  or in
cash at maturity,  redemption or retirement. FiNet also issued 14,583 detachable
warrants  to  purchase  FiNet  common  stock in  connection  with the  debenture
issuances.  These debentures were issued in three separate  tranches.  The first
two tranches  totaling  $5,500,000  issued in fiscal 1998,  and the third tranch
totaling  $1,500,000 issued in fiscal 1999. The debentures were convertible into
FiNet  common  stock  at  the  lesser  of $60  per  common  share  or 78% of the
determined market price prior to conversion.

     FiNet  recorded  $1,974,000 as additional  paid in capital for the discount
deemed related to imputed  interest for the preferential  conversion  feature on
the  debentures,  during the fiscal  years ended  April 30, 1999 and 1998.  This
discount  was  amortized  to interest  expense  over the period from the date of
issue to the date the debentures first became  convertible.  Interest expense of
$267,000, $1,687,000 and $287,000 was recognized in connection with the discount
amortization  and is  included  in other  interest  expense  for the year  ended
December  31,  1999,  and the  fiscal  years  ended  April  30,  1999,  and 1998
respectively.

     In  January  1999,  $1,100,000  of the  total  $7,000,000  debentures  were
converted  into 183,333  common shares at a conversion  price of six dollars per
share,  and an additional  $4,400,000 of debentures  were converted into 611,111
shares  of  FiNet  common  stock at a  conversion  price  of $7 per  share.  The
remaining $1,500,000 of debentures were redeemed for cash at 100 percent of face
value.  In connection  with the  redemption,  FiNet also issued to the debenture
holders  70,000  warrants to purchase FiNet common stock at an exercise price of
$18 per share with a five-year  term.  Expense of $739,000  was recorded for the
deemed  fair value of these  warrants  and is  included  in "Other  expense"  in
FiNet's Consolidated  Statements of Operations.  Additionally,  capitalized debt
issuance  costs of $546,000  were  expensed in fiscal year ended April 30, 1999,
and are included in "Other interest expense" on FiNet's Consolidated  Statements
of Operations.

NOTE 7. COMMITMENTS AND CONTINGENCIES

LEASES

     FiNet leases its  facilities  and certain  equipment  under  non-cancelable
operating  leases.  Future minimum payments consist of the following at December
31, 2000, (in thousands):

          Fiscal Year                                          Operating
          -----------                                          ---------

          2001..........................................        $  1,196
          2002..........................................           1,041
          2003..........................................             932
          2004..........................................             304
          2005..........................................               0
                                                                --------
          Total minimum lease payments..................        $  3,473
                                                                ========

     Rent  expenses  for the year ended  December  31,  2000,  and for the eight
months ended  December  31, 1999,  and for the fiscal years ended April 30, 1999
and 1998, were $1,729,000, $1,012,000, $867,000 and $601,000, respectively.


                                                                              52
<PAGE>

                        FiNet.com, Inc. and Subsidiaries
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2000


NOTE 7. COMMITMENTS AND CONTINGENCIES (Continued)

LITIGATION

     On January 14, 1998, prior to the Company's acquisition of Mical, a lawsuit
was filed  against  Mical in the  United  States  District  Court for the Middle
District  of  Georgia.  The  complaint  alleges,  among  other  things,  that in
connection with residential mortgage loan closings,  Mical made certain payments
to mortgage  brokers in violation of the Real Estate  Settlement  Procedures Act
and induced mortgage  brokers to breach their alleged  fiduciary duties to their
customers.  The plaintiffs seek unspecified compensatory and punitive damages as
to certain  claims.  Management  believes  that its  compensation  programs  for
mortgage  brokers comply with  applicable  laws and with long standing  industry
practices.  This action is stayed  pending the resolution of the appeals in four
similar cases,  which have been selected for interlocutory  review by the United
States Court of Appeals for the Eleventh  Circuit.  Oral  arguments were held in
January of 2001, but the Court has not ruled on the matter.  The Company intends
to  defend  vigorously  against  this  action  and  believes  that the  ultimate
resolution will not have a material  adverse effect on its business,  results of
operations and financial condition.

     On December 16, 1999, a lawsuit was filed in the Judicial District Court of
Dallas County,  Texas, by FC Capital Corp. d/b/a First City Capital  Corporation
("First  City").  The complaint  alleges  breach of contract by Coastal  Federal
Mortgage  ("Coastal")  for failure to repurchase  loans in  accordance  with the
terms and conditions of a purchase  agreement  entered into by Coastal and First
City in March 1998.  The plaintiff has named FiNet as a defendant  alleging that
FiNet assumed all of Coastal's debts and obligations when FiNet acquired Coastal
in April 1998.  The plaintiff  seeks to recover  actual damages in the amount of
$1.7  million  and premium  rebates in the  approximate  amount of $26,000.  The
action was removed to the United States  District  Court,  Northern  District of
Texas,  Dallas Division ("Texas District Court") on January 18, 2000. On May 31,
2000,  the Texas  District  Court granted  FiNet's motion to dismiss for lack of
personal  jurisdiction and dismissed the action without  prejudice.  Thereafter,
FiNet and Coastal  filed a declaratory  relief action  against First City in the
San Francisco  Superior Court with respect to the issues that had been raised by
First City in the dismissed  Texas action.  First City removed the action to the
United States  District  Court,  Northern  District of  California  ("California
District Court"),  and filed a motion to dismiss or in the alternative to change
venue to New York. At a hearing held on August 28, 2000,  the  California  Court
denied First City's  motion to dismiss.  First City  answered the  complaint and
filed a "cross-complaint," which included allegations against Coastal and FiNet,
as well as  allegations  against  Coastal's  three prior  shareholders  in their
individual capacities ("Individual  Defendants").  Subsequently,  the California
District  Court, on February 12, 2001,  dismissed the Individual  Defendants for
lack of personal jurisdiction and ordered the remaining parties to mediation.  A
mediation  conference is scheduled  for April 26, 2001.  FiNet intends to defend
vigorously against the action and believes that the ultimate resolution will not
have a  material  adverse  effect on its  business,  results  of  operations  or
financial condition.

     FiNet and  certain  subsidiaries  are  defendants  in various  other  legal
proceedings,  which FiNet considers to be ordinary routine litigation incidental
to FiNet's  business.  Although it is  difficult  to predict the outcome of such
cases,  after reviewing with counsel all such  proceedings,  management does not
expect  the  aggregate  liability,  if any,  resulting  therefrom,  will  have a
material  adverse effect on the  consolidated  financial  position or results of
operations of FiNet and its subsidiaries.

NOTE 8. 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 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
that could be realized 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 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:

     o    Cash,  accounts  receivable,  and warehouse and other lines of credit.
          The carrying amounts of these assets and liabilities  approximate fair
          value because of the short maturity of these instruments.

     o    Mortgages  held for sale.  Fair values for mortgages held for sale are
          based on management's estimate of the ultimate realizable value.


                                                                              53
<PAGE>

                        FiNet.com, Inc. and Subsidiaries
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2000


NOTE 8. FAIR VALUE OF FINANCIAL INSTRUMENTS (Continued)

     o    Mortgage  servicing rights.  Fair values for mortgage servicing rights
          are based on third  party  appraisals  and  written  bids to  purchase
          Monument Mortgages's mortgage servicing rights.

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

     o    Loan  commitments  to fund  (locked  pipeline)  and loan and  mortgage
          backed  securities  forwards.  The fair value for the locked pipeline,
          allowing for estimated  fallout based on  historical  experience,  and
          loan and  mortgage  backed  securities  forwards,  are based on quoted
          market prices

     The  carrying  values  and  the  estimated  fair  values  of our  financial
instruments at December 31, 2000 and 1999 are as follows:

<TABLE>
<CAPTION>
                                                 December 31, 2000                        December 31, 1999
                                            -----------------------------           -----------------------------
                                            Carrying           Estimated            Carrying           Estimated
                                              Value            Fair Value             Value            Fair Value
                                            --------           ----------           --------           ----------
                                                  (In thousands)                           (In thousands)
<S>                                          <C>                 <C>                 <C>                 <C>
Assets:
  Mortgages held for sale                    $39,975             $39,975             $78,691             $78,691
  Liabilities:
  Notes payable                                   70                  70                  70                  70
Off Balance Sheet:
  Loan commitments to fund                        --                  65                  --                 881
  Loan and mortgaged backed
     securities forwards                          --                  79                  --                 243
</TABLE>

NOTE 9. STOCKHOLDERS' EQUITY

     As of December 31, 2000, the Company had outstanding warrants as follows:

          Number of Warrants     Exercise Price   Year of Expiration
          Issued (Thousands)       Per Share
        ---------------------- ------------------ ------------------
                         1,074    $ 6.00-18.00        2001-2008
                            46    $18.01-36.00        2003-2005
                            63    $36.01-54.00        2001-2003
                            88    $54.01-60.00        2001-2002
        ----------------------
                         1,271
        ======================

     On February 20, 2001, FiNet effected a  one-for-twelve  reverse stock split
of  its  outstanding  shares  of  common  stock,  approved  by  a  majority  its
stockholders.  All share data has been  restated for all periods to reflect this
reverse stock split.


                                                                              54
<PAGE>

                        FiNet.com, Inc. and Subsidiaries
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2000

NOTE 9. STOCKHOLDERS' EQUITY (Continued)

     In October of 2000,  FiNet  issued  1,541,667  shares of common  stock in a
private  placement to accredited  investors for an aggregate  purchase  price of
$7,400,000,  a  portion  of  which  was  purchased  by Banco  Espirito  Santo de
Investimento,  S.A, which along with its affiliates  beneficially owns more than
five percent of FiNet's Common Stock. As compensation  for services  rendered in
connection  with the private  placement,  FiNet will issue to certain  financial
advisors,  upon the  resolution of certain items,  500,000  warrants with a five
year term to purchase common stock at an exercise price of $9.00 per share. Upon
the  resolution of certain items in 2001,  the market value of the warrants will
be recorded as a cost of the  transaction as an offset to the additional paid in
capital  raised  from  the  private  placement  with  an  offsetting  credit  to
additional paid in capital to record the issuance of the warrants

     In  September  1998,  FiNet  issued  21  shares  of  its  $2,500  Series  A
Convertible  Preferred  Stock in a  private  placement  generating  proceeds  of
$2,286,250, net of expenses. In addition, FiNet issued warrants to the preferred
investors to purchase  20,833 shares of FiNet common stock at an exercise  price
of $12.00 per share. The Company recorded a preferred stock discount of $705,000
upon  issuance of the preferred  stock.  This discount was amortized to the date
the preferred stock first became convertible.  The entire discount was amortized
in fiscal 1999 and is reported as "In-substance  preferred dividend" in the 1999
consolidated  statement of operations.  During fiscal year ended April 30, 1999,
the $2,500,000 Series A Convertible Preferred stock was redeemed at face value.

NOTE 10. STOCK OPTIONS

1989 STOCK OPTION PLAN Expired

     The  Company's  1989 Stock Option Plan (the "1989  Plan")  provided for the
grant of options to officers,  directors, other key employees and consultants of
the Company to purchase up to an  aggregate of 145,833  shares of common  stock.
The 1989 Plan is  administered  by the  Compensation  Committee  of the Board of
Directors. The Committee is authorized to determine the terms of options granted
under the 1989  Plan,  including  the number of shares  subject  to the  option,
exercise price, term and exercisability. Options granted under the 1989 Plan may
be incentive stock options or nonqualified stock options.

     The exercise price of incentive  stock options may not be less than 100% of
the fair market  value of the common  stock as of the date of grant (110% of the
fair market value in the case of an optionee who owns more than 10% of the total
combined voting power of all classes of the Company's  capital  stock).  Options
may not be exercised  more than ten years after the date of grant (five years in
the case of 10% stockholders).

     Upon  termination  of employment,  the optionee  generally has the right to
exercise,  for 90 days following the termination date, any outstanding option to
the  extent  it is  exercisable  on the date of  termination,  after  which  all
unexercised  options lapse.  In the event of an optionee's  death or disability,
the  optionee  may  exercise  any  outstanding  option,  to  the  extent  it  is
exercisable,  for one year following the termination date. At December 31, 2000,
41,562 options were outstanding under this plan.

1998 STOCK OPTION PLAN

     The  Company's  1998 Stock Option Plan (the "1998  Plan")  provides for the
grant  of  options  to  officers,   employee  directors,   other  employees  and
consultants  of FiNet.com  to purchase up to an  aggregate of 833,333  shares of
common stock. The 1998 Plan is administered by the Board of Directors. The Board
of  Directors  determines  the terms of  options  granted  under the 1998  Plan,
including the number of shares subject to the option,  exercise price,  term and
exercisability.  Options  granted  under  the 1998 Plan may be  incentive  stock
options or nonqualified  options.  In general,  the 1998 Plan has the same terms
and conditions as the 1989 Plan. As of December 31, 2000, 415,128,  options were
available for grant under the 1998 plan.

NON-EMPLOYEE DIRECTORS' STOCK OPTION PLAN

     The  Company's  1998   Non-Employee   Directors'  Stock  Option  Plan  (the
"Directors'  Plan")  provides  for an  automatic  grant of an option to purchase
3,333 shares of common stock to  non-employee  directors  upon their election or
appointment  to the Board of Directors  and 5,000 shares for  subsequent  annual
grants.  The aggregate number of shares that can be purchased under this plan is
83,333. In February 2001, the Board approved,  subject to stockholder  approval,
an amendment to the Directors'  Plan  increasing the aggregate  number of shares
reserved for issuance thereunder by 200,000, from 83,333 to 283,333, in order to
ensure that there will be a sufficient  reserve of shares to permit the grant of
further options to existing and new directors of the Company. The Board believes
that this amendment is necessary to permit the Company to remain  competitive in
the industry and to continue to attract and retain qualified


                                                                              55
<PAGE>

                        FiNet.com, Inc. and Subsidiaries
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2000


NOTE 10. STOCK OPTIONS (Continued)

directors by providing them with  appropriate  equity  incentives.  The exercise
price of the options is 85% of the fair market  value of the common stock on the
date of grant.  The Directors'  Plan is  administered by the Board of Directors.
The initial option grant vests 100% on grant. Subsequent annual grants under the
Directors' Plan become exercisable in four equal annual installments, commencing
on the first  anniversary of the date of grant.  To the extent that an option is
not  exercisable  on the date that a  director  ceases to be a  director  of the
Company,  the  unexercisable  portion  lapses.  As of December 31, 2000,  54,167
options, were available for grant under this plan.

STOCK BONUS INCENTIVE PLAN

     The Company's  Stock Bonus Incentive Plan (the "Stock Bonus Plan") provides
for the grant of bonus  shares  to any of the  Company's  employees,  directors,
officers and to consultants  or advisers to the Company.  The Board of Directors
has  authorized up to an aggregate of 72,917 shares of common stock for issuance
as bonus  awards  under the Stock Bonus Plan.  The Stock Bonus Plan is currently
administered  by the Board of  Directors.  Each  grant of bonus  shares  becomes
exercisable  according to a schedule to be established by the Board of Directors
at the time of grant.

OTHER AGREEMENTS

     In December 1999, the Company entered into an employment agreement with its
new  executive  officer.  Pursuant to the  agreement,  the  Company  granted the
executive  officer  250,000  options  under  the 1998  Stock  Option  Plan at an
exercise price of $12.37.

1999 Employee Stock Purchase Plan

     The Company has an Employee Stock Purchase Plan (the "Purchase Plan") under
which 41,667 shares of common stock have been reserved for issuance.  Under this
plan, FiNet's employees, subject to certain restrictions, may purchase shares of
common stock at 85% of the fair market value at either the date of enrollment or
the date of  purchase,  whichever is less.  During 2000,  6,104 shares of common
stock were purchased by FiNet's employees.

     The Company has elected to follow Accounting Principles Board (APB) Opinion
No. 25, "Accounting for Stock Issued to Employees," and related interpretations,
which require  compensation expense for options to be recognized when the market
price of the  underlying  stock exceeds the exercise price on the date of grant.
Compensation  expense  recognized  in income  under  APB 25 for the year  ending
December 31, 2000,  the eight months ended  December 31, 1999,  were $47,260 and
$184,174 and $0 for the fiscal years ending April 30, 1999 and 1998.

     Statement of Financial  Account  Standards No. 123 (SFAS 123),  "Accounting
for Stock Based  Compensation,"  permits  companies to recognize as expense over
the  vesting  period  the fair  value of all  stock-based  awards on the date of
grant. In management's  opinion,  the existing stock option  valuation models do
not  necessarily  provide  a  reliable  single  measure  of the  fair  value  of
stock-based awards.  Therefore, as permitted, the Company will continue to apply
the existing account rules under APB No. 25 and provide pro forma net income and
pro forma  earnings  per share (EPS)  disclosures  for  stock-based  awards made
during the year  ending  December  31,  2000 as if the  fair-value-based  method
defined in SFAS No.123 had been applied.

<TABLE>
<CAPTION>
                                                Year Ended    Eight Months Ended        Fiscal Year Ended
                                                           December 31              ------------------------
                                                    ------------------------                April 30
Pro Forma Statement of Operations                      2000            1999            1999            1998
---------------------------------                   --------        --------        --------        --------
                                                            (In thousands, except for per share data)
<S>                                                 <C>             <C>             <C>             <C>
Estimated stock-based compensation                  $  4,313        $  2,310        $  1,715        $    200
Net loss as reported                                 (24,797)        (25,328)        (37,243)         (9,379)
Pro forma net loss                                   (29,110)        (27,638)        (38,958)         (9,579)
Loss per share as reported                          $  (3.05)          (3.40)          (9.54)          (3.70)
Pro forma loss per share                            $  (3.58)       $  (3.72)       $  (9.96)       $  (3.84)
</TABLE>


                                                                              56
<PAGE>

                        FiNet.com, Inc. and Subsidiaries
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2000


NOTE 10. STOCK OPTIONS (Continued)

     The fair  value of  options  at the date of grant was  estimated  using the
Black-Scholes  model with the following  assumptions for the year ended December
31, 2000,  and the eight months ended  December 31, 1999,  and fiscal year ended
April 30, 1999,  and 1998,  respectively:  risk-free  interest rates of 6.39% to
6.84%;  5.38% to 6.52%; 4.78% to 5.53%;  5.5%;  volatility of 179.62%;  132.86%;
141%;  and 50%; a  dividend  growth  rate of zero was used since  FiNet does not
intend to pay  dividends on its common  stock;  the expected life equals to 0.92
years over the vesting period for the year ended  December 31, 2000,  0.53 years
over the vesting  period for the eight months ended  December 31, 1999, one year
over the vesting  period for fiscal year ended April 30, 1999, and the remaining
option terms for fiscal 1998.

     The  weighted-average  grant-date  fair value and exercise price of options
granted during the year ended December 31, 2000, and eight months ended December
31, 1999, fiscal year ended April 30, 1999 and 1998 are summarized below:

<TABLE>
<CAPTION>
                                                                    Weighted-         Weighted-
                                                                     Average          Average
                                                      Shares       Fair Value      Exercise Price
                                                    -----------    -----------     --------------
<S>                                                    <C>             <C>              <C>
Year Ended December 31, 2000
    Granted
         Price = Market Value...................       365,741         $11.32           $12.10
         Price > Market Value...................            --             --               --
         Price < Market Value...................        20,000         $14.82           $13.39
Eight Months Ended December 31, 1999
    Granted
         Price = Market Value...................       437,770         $24.50           $28.51
         Price > Market Value...................            --             --               --
         Price < Market Value...................        17,083         $35.31           $29.16
Fiscal Year Ended April 30, 1999
    Granted
         Price = Market Value...................       627,752         $10.32           $11.88
         Price > Market Value...................           625         $10.20           $13.56
         Price < Market Value...................         6,667         $12.96           $16.20
Fiscal Year End April 30, 1998
    Granted
         Price = Market Value...................        12,333         $34.20           $53.28
         Price > Market Value...................            --             --               --
         Price < Market Value...................         3,333         $33.96            $6.00
</TABLE>


                                                                              57
<PAGE>

                        FiNet.com, Inc. and Subsidiaries
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2000


NOTE 10. STOCK OPTIONS (Continued)

     The  following  table  summarizes  stock option plan  activity for the year
ended  December 31, 2000,  and eight months ended  December 31, 1999, and fiscal
years ended April 30,1999 and 1998:

<TABLE>
<CAPTION>
                                                                                                    Weighted
                                                                                                     Average
Employee Stock Option Summary                           Options           Exercise Price         Exercise Price
-------------------------------------------------   ---------------     ------------------      -----------------
<S>                                                         <C>                <C>                          <C>
Outstanding at May 1, 1997                                   46,573             $0.72-6.00                  $1.80
Granted                                                      15,667             6.00-66.00                  50.16
Exercised                                                        --                     --                     --
Expired / Cancelled                                            (750)                 36.00                  33.72
                                                    ---------------
Outstanding at May 1, 1998                                   61,490             0.72-66.00                  13.80
Granted                                                     635,043             6.00-39.00                  11.88
Exercised                                                   (31,920)             0.72-9.00                   0.84
Expired / Cancelled                                         (38,572)            6.00-39.00                  14.28
                                                    ---------------
Outstanding at April 30, 1999                               626,041             0.72-66.00                  12.36
Granted                                                     454,853           12.36-109.56                  28.56
Exercised                                                   (19,826)            6.00-13.56                   8.52
Expired / Cancelled                                         (71,499)            9.00-80.28                  30.72
                                                    ---------------
Outstanding at December 31, 1999                            989,569            0.72-109.56                  18.60
Granted                                                     385,741             4.13-22.13                  12.17
Exercised                                                   (95,547)            0.72-12.37                   8.41
Expired / Cancelled                                        (680,558)           6.76-109.50                  21.31
                                                    ---------------
Outstanding at December 31, 2000                            599,205             0.72-80.26                  12.95
                                                    ===============
</TABLE>

     The  following  table  summarizes  significant  ranges of  outstanding  and
exercisable options at December 31, 2000:

<TABLE>
<CAPTION>

     Weighted
Average                                                              Weighted                           Weighted
Remaining                                                             Average                            Average
                                     Number      Contractural        Exercise          Number           Exercise
   Range of Exercise Prices       Outstanding        Life              Price        Exercisable           Price
-----------------------------------------------------------------------------------------------------------------
<S>                                   <C>            <C>              <C>               <C>             <C>
      0.07200  -    7.87200           101,780        8.77              6.48670           32,093          5.57610
      8.62800  -   12.00000            56,465        8.88              9.17410           16,212          9.36790
     12.37200  -   12.37200           258,009        8.98             12.37200           68,772         12.37200
     12.75000  -   15.00000            37,777        8.87             13.75110            8,057         14.10880
     15.37200  -   15.37200           106,623        9.16             15.37200           34,920         15.37200
     16.87200  -   36.00000            27,253        8.67             24.44770           16,918         25.48870
     44.25600  -   44.25600             5,779        8.71             44.25600            1,808         44.25600
     51.75600  -   51.75600               833        8.54             51.75600              208         51.75600
     54.00000  -   54.00000             4,166        2.07             54.00000            4,166         54.00000
     80.25600  -   80.25600               520        8.40             80.25600              390         80.25600
                               --------------                                      ------------

      0.07200  -   80.25600           599,205        8.89             12.95160          183,544         14.22220
                               ==============                      ===========
</TABLE>


                                                                              58
<PAGE>

                        FiNet.com, Inc. and Subsidiaries
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2000


NOTE 11. SPECIAL CHARGES

     During the year ended  December 31, 2000,  FiNet  recorded a  non-recurring
expense of $500,000 that represented a write-down of a non-interest bearing loan
receivable solely secured by 17,000 of the Company's  escrowed common shares. As
this loan was solely  secured by the seller's  interest in 17,000  shares of the
Company's  common  stock,  the  reduction  in  market  value  of the  underlying
collateral  during 2000 resulted in the write-down of this loan balance which is
included in "Special  charges" within the consolidated  statements of operations
during the year ended December 31, 2000.

     During  year  ended  December  31,  2000,  FiNet  recorded  an  expense  of
$1,299,000 for the purchase of certain loan  origination  and tracking  software
and systems that were  subsequently  determined  unsuitable  for FiNet's  needs.
During 2000 FiNet recovered  $335,000 of this amount from the vendor,  resulting
in a net expense of $964,000.

     In connection  with the relocation of FiNet's  corporate  headquarters  and
operating  facilities  from Walnut Creek,  California to San Ramon,  California,
during the eight months ended  December 31, 1999, an expense of  $1,385,000  was
recorded to write-off  fixed  furniture,  fixtures and  equipment  that would no
longer be employed in the new location.

     In  addition,  FiNet  recorded  nonrecurring  charges  associated  with its
discontinued  business  units  during  fiscal year ended April 30,  1999.  FiNet
assessed the remaining  goodwill  balance and determined that the amount was not
recoverable  from future  cash flow.  Goodwill  of  $3,189,000,  net of purchase
accounting adjustments and recorded amortization,  was expensed as part of these
special  charges in fiscal 1999.  Approximately  130 employees  were  terminated
during fiscal year ended April 30, 1999 as a result of the Mical closure.  FiNet
also recorded a special charge expense of $642,000  during the fiscal year ended
1999 to recognize exit costs primarily  associated  with severance  payments and
occupancy lease costs. During the eight months ended December 31, 1999, $352,000
was  recorded  as  expense  associated  with  the  write  off of  the  remaining
furniture, fixtures and equipment of Mical.

     Except for the items detailed above totaling  $352,000 for the eight months
ended  December  31, 1999 and $642,000 for the fiscal year ended April 30, 1999,
all other  financial  statement  effects of winding  down Mical are  included in
results from  operations as incurred.  At December 31, 1999,  the balance of the
special charge  accrual was $202,000,  which  represents  lease costs of vacated
space that FiNet expected to incur subsequent to December 31, 1999.

     During the year ended  April 30,  1999,  FiNet also  recorded  nonrecurring
expenses of $405,000 to liquidate certain assets and settle certain  liabilities
in  connection  with  closing  Coastal and  $690,000 to expense the  unamortized
balance of its Real Estate Office Software (REOS) technology.  Management closed
Coastal and expensed the remaining  balance of REOS upon  determining that FiNet
would no longer employ these assets in its future strategic direction.

     In fiscal 1998,  FiNet wrote off $1,010,000  relating to software  services
and loan  leads.  Management  determined  that  these  assets  were  permanently
impaired,  as they did not fit  FiNet's  strategic  plans and would no longer be
employed in future operations.


                                                                              59
<PAGE>

                        FiNet.com, Inc. and Subsidiaries
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2000


NOTE 12. INCOME TAXES

     The provisions for income taxes consist of the following:

<TABLE>
<CAPTION>
                                                              Eight Months
                                               Year Ended         Ended              Fiscal Years Ended
                                                      December 31                         April 30
                                               ---------------------------       ----------------------------
                                                  2000             1999             1999              1998
                                               ----------       ----------       ----------        ----------
                                                                      (In thousands)
<S>                                            <C>              <C>              <C>               <C>
Current Federal                                $       --       $       --       $       --        $      236
Current State                                          50               65                5                80
                                               ----------       ----------       ----------        ----------
                                                       50               65                5               316
Deferred Federal                                       --               --               --               (70)
Deferred State                                         --               --               --               (20)
                                               ----------       ----------       ----------        ----------
                                                       --               --               --               (90)
                                               ----------       ----------       ----------        ----------
Total                                          $       50       $       65       $        5        $      226
                                               ==========       ==========       ==========        ==========
</TABLE>

     The  reconciliation  of the  provision  for income  taxes  computed at U.S.
statutory income tax rates to pretax income is as follows:

<TABLE>
<CAPTION>
                                                                             Eight Months
                                                               Year Ended        Ended            Fiscal Years Ended
                                                                       December 31                    April 30
                                                                -------------------------     -------------------------
                                                                   2000           1999           1999            1998
                                                                ----------     ----------     ----------     ----------
<S>                                                                  <C>            <C>            <C>            <C>
Federal statutory income tax rate                                    (34.0)%        (34.0)%        (34.0)%        (34.0)%
State and local income taxes, net of federal tax effect                0.1%           0.2%            --            0.4%
Non-deductible goodwill                                                 --             --            4.0%            --
Valuation allowance                                                   37.4%          33.5%          20.8%          36.5%
Prior period adjustment                                                 --             --            5.0%            --
Other, net                                                            (3.3)%          0.6%           4.2%          (0.6)%
                                                                ----------     ----------     ----------     ----------
Total                                                                  0.2%           0.3%           0.0%           2.3%
                                                                ==========     ==========     ==========     ==========
</TABLE>


                                                                              60
<PAGE>

                        FiNet.com, Inc. and Subsidiaries
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2000


NOTE 12. INCOME TAXES

     The significant  components of FiNet's  deferred tax liabilities and assets
as of December 31, 2000, and as of December 31, 1999 are as follows:

<TABLE>
<CAPTION>
                                                                        December 31
                                                              --------------------------------
                                                                  2000                1999
                                                              ------------        ------------
                                                                       (in thousands)
<S>                                                           <C>                 <C>
Deferred tax liabilities
   Originated mortgage servicing rights                       $         --        $         --
   Marketable Securities                                                --                 764
   Depreciation                                                        215                  41
                                                              ------------        ------------
   Total deferred tax liabilities                                      215                 805
                                                              ------------        ------------
Deferred tax assets:
   Net operating loss carryforwards                                 39,182              28,848
   Loan loss and other reserves                                      1,886               2,138
   Goodwill and other intangibles                                      346                 396
   Deferred revenue                                                     --                 175
   Accrued expenses & other                                            473                 852
                                                              ------------        ------------
Total deferred tax assets                                           41,887              32,409
Valuation allowance                                                (41,672)            (31,604)
Net deferred tax asset                                                 215                 805
                                                              ------------        ------------
Total net deferred tax liabilities and assets                 $         --        $         --
                                                              ============        ============
</TABLE>

     Deferred tax assets are recognized to the extent that management  believes,
based on available  evidence,  that it is more likely than not that they will be
realized.  Due to the  uncertainty  surrounding  FiNet's  ability to realize the
benefits  associated with its net operating  losses,  a valuation  allowance was
established  against its net deferred tax asset.  During the year ended December
31, 2000 and the year ended  December  31, 1999,  the  valuation  allowance  was
increased  by  $10,068,000  and  $9,842,000,  respectively.  A  portion  of  the
valuation allowance relates to deductions from the exercise of stock options. If
realized,  the  benefit  from the  reduction  of that  portion of the  valuation
allowance will be credited to equity

     At December 31, 2000,  FiNet has federal net operating  loss  carryforwards
(NOL) of approximately  $102 million.  The NOLs expire in the years 2004 through
2020.  FiNet has  smaller  state  carryforwards  that  expire in the years  2001
through  2020.  Due to ownership  changes,  these  carryforwards  are subject to
substantial annual limitations as provided by the Internal Revenue Code of 1986,
as amended and similar state  provisions.  The annual limitation could result in
the expiration of a significant portion of the NOL before full utilization.


                                                                              61
<PAGE>

                        FiNet.com, Inc. and Subsidiaries
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2000


NOTE 13. NON-CASH INVESTING AND FINANCING ACTIVITIES

     The following table presents non-cash  investing and financing  information
for the years ended  December 31, 2000 and 1999 and for fiscal years ended April
30, 1999 and 1998:

<TABLE>
<CAPTION>
                                                                                Eight Months         Fiscal Years Ended
                                                                Year Ended         Ended        ---------------------------
                                                                        December 31                        April 30
                                                                --------------------------       ---------------------------
                                                                   2000            1999             1999             1998
                                                                ----------      ----------       ----------       ----------
                                                                                      (in thousands)
<S>                                                                   <C>           <C>              <C>               <C>
Common stock and warrants issued for services                         $960          $1,804             $580            $392
Common stock issued to purchase certain assets and
  operations of Lowestrate .com                                         --           1,821               --              --
Common stock issued to purchase the remaining 50%
  interest of a joint venture not already owned                         --           1,463               --              --
Common stock issued for purchased technology and
  intangibles                                                           --              --              320           1,364
Warrants issued upon conversion of convertible debt                     --                              739              --
Common stock issued upon debenture conversion                           --                            5,500              --
In-substance dividend on preferred stock discount                       --              --              705              --
3% convertible debenture discount                                       --              --              423              --
Acquired in acquisition:
  Furniture, fixtures and equipment                                     --              --              505              --
  Mortgages held for sale                                               --              --           84,598
  Other assets                                                          --              --            3,995              --
  Accounts payable and other accrued expenses                           --              --            9,829              --
  Debt                                                                  --              --           82,634              --
</TABLE>

NOTE 14. SEGMENT DATA

     FiNet has adopted SFAS No. 131 "Disclosures about Segments of an Enterprise
and Related  Information"  which requires  certain  disclosures  about operating
segments  in a manner  that is  consistent  with how  management  evaluates  the
performance  of the  segment.  FiNet  has  identified  two  reportable  business
segments: business-to-business and business-to-consumer.


                                                                              62
<PAGE>

                        FiNet.com, Inc. and Subsidiaries
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2000


NOTE 14. SEGMENT DATA (Continued)

     Information related to FiNet's reportable operating segments is shown below
(in thousands):

<TABLE>
<CAPTION>
                                                                            Eight Months
                                                      Years Ended               Ended            Fiscal Years Ended
                                                      December 31            December 31             April 30
                                                ------------------------      ---------      ----------------------------
                                                   2000           1999           1999           1999           1998
                                                ---------      ---------      ---------      ---------      ---------
                                                              (unaudited)
<S>                                             <C>            <C>            <C>            <C>            <C>
Revenue
    Business-to-business                        $   6,922      $   7,961      $   4,408      $  19,411      $  14,394
    Business-to-consumer                            1,222            524          1,054          3,002            766
                                                ---------      ---------      ---------      ---------      ---------
Segment Revenue                                 $   8,144      $   8,485      $   5,462      $  22,413      $  15,160
    Corporate                                          --            608            608             --             --
                                                ---------      ---------      ---------      ---------      ---------
                                                $   8,144      $   9,093      $   6,070      $  22,413      $  15,160
                                                =========      =========      =========      =========      =========

Operating loss
    Business-to-business                        $ (13,911)     $ (25,972)     $ (14,716)     $ (17,455)     $    (508)
    Business-to-consumer                           (5,152)       (10,303)        (4,769)        (4,642)        (4,485)
                                                ---------      ---------      ---------      ---------      ---------
Segment operating income                          (19,063)       (36,275)       (19,485)       (22,097)        (4,993)
    Corporate                                      (6,699)       (13,222)        (5,843)       (11,460)        (3,740)
                                                ---------      ---------      ---------      ---------      ---------
                                                $ (25,762)     $ (49,497)     $ (25,328)     $ (33,557)     $  (8,733)
                                                =========      =========      =========      =========      =========

Capital expenditures
    Business-to-business                        $     990      $   4,046      $   3,687      $     116      $   1,486
    Business-to-consumer                               58            238            217             75             55
                                                ---------      ---------      ---------      ---------      ---------
Segment Capital expenditures                        1,048          4,284          3,904            191          1,541
    Corporate                                         117            476            434            703            113
                                                ---------      ---------      ---------      ---------      ---------
                                                $   1,165      $   4,760      $   4,338      $     894      $   1,654
                                                =========      =========      =========      =========      =========

Identifiable assets
    Business-to-business                        $  46,535      $ 101,837      $ 101,837      $  22,147      $  91,174
    Business-to-consumer                            2,737          5,990          5,990         (3,782)         3,362
                                                ---------      ---------      ---------      ---------      ---------
Segment Identifiable assets                        49,272        107,827        107,827         18,365         94,536
    Corporate                                       5,475         11,981         11,981         26,890          6,932
                                                ---------      ---------      ---------      ---------      ---------
                                                $  54,747      $ 119,808      $ 119,808      $  45,255      $ 101,468
                                                =========      =========      =========      =========      =========

Long-lived assets
    Business-to-business                        $   2,305      $   3,800      $   3,800      $     624      $     783
    Business-to-consumer                              136            224            224            311            452
                                                ---------      ---------      ---------      ---------      ---------
Segment long-lived assets                           2,441          4,024          4,024            935          1,235
    Corporate                                         271            447            447            640            206
                                                ---------      ---------      ---------      ---------      ---------
                                                $   2,712      $   4,471      $   4,471      $   1,575      $   1,441
                                                =========      =========      =========      =========      =========
</TABLE>


                                                                              63
<PAGE>

                        FiNet.com, Inc. and Subsidiaries
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2000


NOTE 15. VALUATION ALLOWANCES

     Valuation allowances consist of the following:

<TABLE>
<CAPTION>
                                                 Balance at      Charged to                                   Balance at
                                                  Beginning      Costs and     Acquired                         End of
Description                                       of Period       Expenses     Business       Deductions        Period
-----------                                       ---------       --------     --------       ----------        ------
                                                                            (In thousands)
<S>                                                 <C>            <C>           <C>            <C>             <C>
MARKET VALUATION ALLOWANCE:
   Year ended December 31, 2000                     $2,937         $  465        $ --           (2,171)         $1,231
   Eight Months ended December 31, 1999              3,851          1,518          --           (2,432)          2,937
   Year ended April 30, 1999                           396          4,344          542          (1,431)          3,851
   Year ended April 30, 1998                           311            718          --             (633)            396
ALLOWANCE FOR DOUBTFUL ACCOUNTS:
   Year Ended December 31, 2000                     $1,793         $ --          $ --          $  (780)         $1,013
   Eight Months ended December 31, 1999              2,150             30          --             (387)          1,793
   Year ended April 30, 1999                            36          2,150          --              (36)          2,150
   Year ended April 30, 1998                            56           --            --              (20)             36
</TABLE>

NOTE 16. RELATED PARTY TRANSACTIONS

IQUALIFY

     On  February 9, 1998,  FiNet  purchased  the  outstanding  common  stock of
iQualify, Inc., a software developer, from T. Lee Decker and James Noack, former
employees and officers of FiNet, for aggregate  consideration of 4,000 shares of
FiNet's common stock.

CONSULTING AGREEMENTS

     FiNet entered into a consulting  agreement  with James  Umphryes,  a former
Monument  Mortgage  stockholder.  The  contract  term was three years  beginning
January  1,  1997 at a  monthly  fee of  $15,000  for a total  contract  cost of
$540,000. For the eight months ended December 31, 1999 and for fiscal year ended
April 30, 1999 and 1998, FiNet incurred  consulting fee expense relating to this
agreement of $120,000, $180,000, and $180,000, respectively.

     FiNet and Dr. Lewis Meyer,  a director of FiNet,  entered into a consulting
agreement in June 1998.  Pursuant to the agreement,  Dr. Meyer received $25,000.
In addition, Dr. Meyer paid FiNet $10,000 for warrants to purchase 83,000 shares
of common  stock at an exercise  price of $15 per share.  Twenty  percent of the
shares became  exercisable on the date of grant, and the remaining shares become
exercisable in quarterly  installments  over four years,  so long as Dr. Meyer's
service with FiNet continues.

LOANS TO OFFICERS

     On December 28, 1999,  an  adjustable  rate,  second  mortgage  loan in the
amount of $356,000 was made to Michael  Conway,  a former  executive  officer of
FiNet.  The loan carries an initial  interest  rate of 7.25% and is secured by a
second residence. During year 2000 this loan was sold in the secondary market.

     On October 22, 1999, a fixed rate, fifteen-year second mortgage loan in the
amount of $223,000 was made to Christos  Skeadas,  a former  executive of FiNet.
The loan carries an interest rate of 10.5% and matures on November 14, 2014.

     On November 12, 1999, a fixed rate,  third  mortgage  loan in the amount of
$20,000 was made to Christos  Skeadas,  a former  executive  of FiNet.  The loan
carries an  interest  rate of 7%.  Subsequently,  the  principal  amount and all
accrued interest were due and paid in a single payment.


                                                                              64
<PAGE>

                        FiNet.com, Inc. and Subsidiaries
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2000


NOTE 15. VALUATION ALLOWANCES (Continued)

OTHER

     During the fiscal year ended April 30,  1999,  warrants to purchase  58,333
shares  of  FiNet  common  stock at an  exercise  price  of $15 per  share  were
purchased by two officers for cash consideration of $7,000.

     In April 1999, FiNet entered into a Lender  Subscriber  Agreement with IMX,
Inc. of which Richard Wilkes, a former director of FiNet, is president and chief
executive  officer  and of which  FiNet's  then chief  executive  officer,  Mark
Korell,  was a minority  shareholder.  Pursuant to the  agreement,  IMX provided
certain software and brokerage services.

     On  February  3, 1999,  FiNet and Jan C.  Hoeffel,  a former  director  and
FiNet's  former  president,  entered  into a  letter  agreement  concerning  the
termination of his employment as a corporate officer. Pursuant to the agreement,
Mr.  Hoeffel's  employment  terminated as of February 28, 1999. In consideration
for the  issuance  to him of 25,000  unregistered  shares of common  stock,  Mr.
Hoeffel agreed to forfeit any and all anti-dilution  rights  previously  granted
him by FiNet,  and to  surrender  to FiNet a warrant  entitling  him to purchase
25,000 shares of common stock.

NOTE 17. EMPLOYEE BENEFIT PLAN

     FiNet has a salary  reduction 401(k)  retirement  savings plan (the "Plan")
covering all employees meeting certain eligibility  requirements.  Employees may
contribute up to 15% of their eligible compensation, subject to an annual limit.
The  Plan  provides  that,  at  FiNet's  discretion,  FiNet  may  make  employer
contributions.  There were no employer contributions for the year ended December
31, 2000 and the eight months ended December 31, 1999, or for fiscal years ended
April 30, 1999 and 1998.

NOTE 18. EVENTS SUBSEQUENT TO DATE OF AUDITORS' REPORT (UNAUDITED)

     In March  2001,  the Board of  Directors  adopted,  subject to  stockholder
approval,  an amendment to the 1998 Stock Option Plan  increasing  the aggregate
number of shares reserved for issuance thereunder by 3,000,000,  from 833,333 to
3,833,333,  in order to ensure that there will be a sufficient reserve of shares
to permit  the grant of  further  options  to  existing  and new  employees  and
consultants of the Company.


                                                                              65
<PAGE>

ITEM 9. CHANGES IN OR DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE

CHANGES IN FINET'S INDEPENDENT ACCOUNTANTS

     Prior to the  Company's  appointment  of  Ernst & Young  LLP in 1999 as the
Company's independent public accountants, the Company employed Reuben E. Price &
Co. as its  independent  accountants  to audit the  financial  statements of the
Company.  On February 12, 1999, the Company  dismissed Reuben E. Price & Co. and
appointed Ernst & Young LLP to that position. The change in accountants was made
in light of the recently expanded scope of the Company's  operations at the time
and the attendant  requirement  for the accounting  services of a larger firm of
national scope. The decision to change  independent  accountants was recommended
by  management  and was approved by the Company's  Audit  Committee and Board of
Directors.  Reuben E. Price & Co. has not  issued any  reports on the  Company's
financial  statements  during the past two fiscal  years  containing  an adverse
opinion or a  disclaimer  of opinion,  nor any reports  that were  qualified  or
modified as to uncertainty, audit scope, or accounting principles.

DISAGREEMENTS WITH FINET'S INDEPENDENT ACCOUNTANTS

     During  the  Company's  most  recent two  fiscal  years and the  subsequent
interim  period  there were no  disagreements  with Reuben E. Price & Co. on any
matter of accounting principles or practices, financial statement disclosure, or
auditing scope or procedure.

     There have been no  disagreements  with Ernst & Young LLP,  FiNet's current
independent accountants on accounting and/or financial disclosure.


                                                                              66
<PAGE>

                                    PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

     The  information  required  by  this  Item  10 is  hereby  incorporated  by
reference to the section titled "Executive Officers of the Registrant" in Part I
of this report and to the  Company's  definitive  Proxy  Statement,  to be filed
pursuant to Regulation 14A within 120 days after the end of the fiscal year.

ITEM 11. EXECUTIVE COMPENSATION

     The  information  required  by  this  Item  11 is  hereby  incorporated  by
reference  to  FiNet's  definitive  Proxy  Statement,  to be filed  pursuant  to
Regulation 14A within 120 days after the end of the fiscal year.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     The  information  required  by  this  Item  12 is  hereby  incorporated  by
reference  to  FiNet's  definitive  Proxy  Statement,  to be filed  pursuant  to
Regulation 14A within 120 days after the end of the fiscal year.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     The  information  required  by  this  Item  13 is  hereby  incorporated  by
reference  to  FiNet's  definitive  Proxy  Statement,  to be filed  pursuant  to
Regulation 14A within 120 days after the end of the fiscal year.



                                                                              67
<PAGE>

                                     PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

(a) 1 FINANCIAL STATEMENTS

     The  information  required  by this Item  appears in Item 8 of this  Annual
Report on Form 10-K.

(a) 2 FINANCIAL STATEMENT SCHEDULES

     See Note 18 to FiNet's  Consolidated  Financial Statements for the required
information  about  Valuation and Qualifying  Accounts.  All other schedules are
omitted because they are not applicable.

(a) 3 EXHIBITS


Exhibit Number                        Description

3.1.1(1)      Certificate of Amendment to the registrant's  Restated Certificate
              of Incorporation, dated as of October 29, 1997

3.1.2(2)      Certificate of Amendment to the registrant's  Restated Certificate
              of Incorporation, dated as of May 28, 1999

3.1.3*        Certificate of Amendment to the registrant's  Restated Certificate
              of Incorporation, dated as of February 15, 2001

3.2*          Restated Bylaws

4.1(4)        Form of Common Stock Purchase Agreement between the registrant and
              Jose Maria Salema Garcao, dated December 16, 1996

4.2(4)        Form of Warrant Purchase Agreement between the registrant and Jose
              Maria Salema Garcao dated December 16, 1996

4.3(4)        Form of Warrant  issued to Jose Maria Salema Garcao dated December
              16, 1996

4.4(4)        Common  Stock  Purchase   Agreement  between  the  registrant  and
              investors in the private placement concluded December 31, 1996

4.5(4)        Form of Warrant Purchase Agreement between the registrant and Jose
              Maria Salema Garcao dated December 30, 1996

4.6(4)        Form of Warrant  issued to Jose Maria Salema Garcao dated December
              30, 1996

4.7(4)        Form of Common Stock Purchase Agreement between the registrant and
              Jose Maria Salema Garcao dated March 21, 1997

4.8(4)        Form of Warrant Purchase Agreement between the registrant and Jose
              Maria Salema Garcao dated March 21, 1997

4.9(4)        Form of Warrant issued to Jose Maria Salema Garcao dated March 21,
              1997

4.10(4)       Form of  Stock  Purchase  Agreement  between  the  registrant  and
              investors in the private placement concluded April 30, 1997

4.11(4)       Form of Warrant Purchase Agreement between the registrant and Jose
              Maria Salema Garcao dated April 30, 1997

4.12(4)       Form of  Warrant  Issued to  investors  in the  private  placement
              concluded April 30, 1997

4.13(4)       Form of Common Stock Purchase Agreement between the registrant and
              investors in the private placement concluded October 31, 1997

4.14(4)       Form of Common Stock  Purchase  Warrant issued to investors in the
              private placement concluded October 31, 1997

4.15(5)       Form of Common Stock Purchase Agreement between the registrant and
              investors in the private placement concluded December 23, 1998

4.16(5)       Form of Common Stock  Purchase  Warrant issued to investors in the
              private placement concluded December 23, 1998

4.17(6)       Restructuring  Agreement  and  Amendment,  dated January 15, 1999,
              among the registrant  and the investors in the debenture  offering
              concluded May 26, 1998

4.18(7)       Form of Registration  Rights Agreement  between the registrant and
              investors in the debenture offering concluded May 26, 1998

4.19(8)       Form of Warrant issued to the investors in the debenture  offering
              concluded May 26, 1998

4.20(5)       Form of Stock  Purchase  Agreement  among the  registrant  and the
              investors in the private  placement  concluded on May 10, 1999 and
              May 20, 1999

4.21(5)       Form of Stock  Purchase  Agreement  among the  registrant  and the
              investors  in the  private  placement  concluded  on June 28, 1999

              Merger Agreement and Plan of Reorganization between the registrant
              and Monument Mortgage, Inc., dated December 20, 1996

10.3(5)**     1989 Stock Option Plan

10.4(4)       Asset  Purchase  Agreement  between the registrant and Real Estate
              Office Software, Inc., dated August 30, 1997

10.5(4)       Stock  Purchase  Agreement  between  the  registrant  and  Coastal
              Federal Mortgage Company, dated April 30, 1998


                                                                              68
<PAGE>

10.6(4)       Stock  Purchase   Agreement   between  the  registrant  and  MICAL
              Mortgage, Inc., dated May 19, 1998

10.7(5)**     1998 Stock Option Plan

10.8(5)**     1998 Stock Bonus Incentive Plan

10.9(5)**     1998 Non-Employee Directors' Stock Option Plan

10.10(5)**    1999 Employee Stock Purchase Plan

10.11(9)      Second Amendment to First Amended and Restated  Warehousing Credit
              and  Security  Agreement  between  Monument  Mortgage,   Inc.  and
              Residential Funding Corporation dated as of March 29, 2000.

10.12(10)     Sublease  agreement  between  The  Scotts  Company,  successor  in
              interest  to  Monsanto  Company and the  Registrant  and  Monument
              Mortgage, Inc., dated May 21, 1999.

10.13(11)     Agreement and Release between the Registrant and Mark Korell dated
              December 14, 1999.

10.14(12)     First  Amendment  to  Loan  and  Security  Agreement  between  the
              Registrant and  Lowestrate.com,  Inc. and Robert J. Ross dated May
              24, 2000.

10.15(13)     Assignment  and  Assumption  Agreement  between the Registrant and
              Lowestrate.com, Inc., Robert J. Ross.

10.16(14)     Fourth Amendment to First Amended and Restated  Warehousing Credit
              and  Security  Agreement  dated  July 14,  2000  between  Monument
              Mortgage,  Inc.,  subsidiary of the  registrant,  and  Residential
              Funding Corporation.

10.17(15)     Fifth Amendment to First Amended and Restated  Warehousing  Credit
              and Security  Agreement,  dated  August 22, 2000 between  Monument
              Mortgage,  Inc.,  subsidiary of the  registrant,  and  Residential
              Funding Corporation.

10.18(16)     Sixth Amendment to First Amended and Restated  Warehousing  Credit
              and Security  Agreement,  dated October 12, 2000 between  Monument
              Mortgage,  Inc.,  subsidiary of the  registrant,  and  Residential
              Funding Corporation.

10.19*        Third Amendment to First Amended and Restated  Warehousing  Credit
              and  Security  Agreement,  dated June 27,  2000  between  Monument
              Mortgage,  Inc.,  subsidiary of the  registrant,  and  Residential
              Funding Corporation.

10.20*        Seventh Amendment to First Amended and Restated Warehousing Credit
              and Security  Agreement,  dated December 28, 2000 between Monument
              Mortgage,  Inc.,  subsidiary of the  registrant,  and  Residential
              Funding Corporation.

10.21*        Eighth Amendment to First Amended and Restated  Warehousing Credit
              and Security  Agreement,  dated February 28, 2001 between Monument
              Mortgage,  Inc.,  subsidiary of the  registrant , and  Residential
              Funding Corporation.

10.22(17)     Master Loan Participation and Custodian Agreement,  dated July 10,
              2000  between   Monument   Mortgage,   Inc.,   subsidiary  of  the
              registrant, and Gateway Bank, F.S.B.

10.23(18)     Guaranty of Payment and  Performance  and Contract of  Affirmative
              Covenants,  dated July 10, 2000 between Monument  Mortgage,  Inc.,
              subsidiary of the registrant, and Gateway Bank, F.S.B.

10.24(19)**   Employment Agreement between the registrant and Patrick J. Mackin,
              dated November 1, 2000.

16.1(3)       Letter from Former Certifying Accountant

21.1*         List of Subsidiaries

23.1*         Consent of Ernst & Young LLP

23.2*         Consent of Reuben E. Price & Co.

23.3          Consent of Richard A. Eisner & Company

24.1*         Power of Attorney (Included on signature page of Form 10-K)


-----------

*    Filed herewith.

**   Management compensation plan or arrangement.

(1)  Incorporated by reference to Exhibit 3.2 of the registrant's  Annual Report
     on Form 10-KSB for the fiscal year ended  April 30,  1998,  filed on August
     13, 1998.

(2)  Incorporated by reference to Exhibit 3 of the  registrant's  Current Report
     on Form 8-K filed on June 2, 1999.

(3)  Incorporated by reference to Exhibit 16 of the registrant's  Current Report
     on Form 8-K filed on February 11, 1999.

(4)  Incorporated  by reference to the Exhibit of the same number filed with the
     registrant's  Annual  Report on Form 10-KSB for the fiscal year ended April
     30, 1998, filed on August 13, 1998.

(5)  Incorporated  by reference to the Exhibit of the same number filed with the
     registrant's Registration Statement on Form S-1 filed on July 2, 1999.

(6)  Incorporated by reference to Exhibit 7.1 of the registrant's Current Report
     on Form 8-K filed on January 19, 1999.

(7)  Incorporated by reference to Exhibit 4.2 of the registrant's Current Report
     on Form 8-K filed April 6, 1998

(8)  Incorporated by reference to Exhibit 7.2 of the registrant's Current Report
     on Form 8-K filed on January 19, 1999.


                                                                              69
<PAGE>

(9)  Incorporated  by reference to Exhibit 10.26 of the  registrant's  Report on
     Form 10-Q filed on May 15, 2000.

(10) Incorporated  by reference to Exhibit 10.27 of the  registrant's  Report on
     Form 10-Q filed on May 15, 2000.

(11) Incorporated  by reference to Exhibit 10.28 of the  registrant's  Report on
     Form 10-Q filed on May 15, 2000.

(12) Incorporated  by reference to Exhibit  10.1 of the  registrant's  Report on
     Form 10-Q filed on August 14, 2000.

(13) Incorporated  by reference to Exhibit  10.2 of the  registrant's  Report on
     Form 10-Q filed on August 14, 2000

(14) Incorporated  by reference to Exhibit  10.1 of the  registrant's  Report on
     Form 10-Q filed on November 14, 2000.

(15) Incorporated  by reference to Exhibit  10.2 of the  registrant's  Report on
     Form 10-Q filed on November 14, 2000.

(16) Incorporated  by reference to Exhibit  10.3 of the  registrant's  Report on
     Form 10-Q filed on November 14, 2000.

(17) Incorporated  by reference to Exhibit  10.4 of the  registrant's  Report on
     Form 10-Q filed on November 14, 2000.

(18) Incorporated  by reference to Exhibit  10.5 of the  registrant's  Report on
     Form 10-Q filed on November 14, 2000.

(19) Incorporated  by reference to Exhibit  10.6 of the  registrant's  Report on
     Form 10-Q filed on November 14, 2000.

(b)  Reports on Form 8-K:

     On October 25, 2000 the registrant filed a Current Report on Form 8-K under
Item 5 of Form 8-K.

     On  December  8, 2000 the  registrant  filed a Current  Report on Form 8-KA
under Item 5 of Form 8-K.


                                                                              70
<PAGE>

                                   SIGNATURES

     Pursuant  to the  requirements  of  Section  13 or 15(d) of the  Securities
Exchange  Act of 1934,  the  registrant,  FiNet.com,  Inc.  has duly caused this
report to be signed on its behalf by the undersigned, thereunto duly authorized,
in the City of San Ramon, State of California, on the 2nd day of April 2001.

                                            FINET.COM, INC.


                                            By: /s/ Rick Cossano
                                                ------------------------------
                                                    Rick Cossano
                                            President, Chief Executive Officer,
                                            and Member of the Board of Directors


                                POWER OF ATTORNEY

     KNOW ALL  PERSONS  BY THESE  PRESENTS,  that each  person  whose  signature
appears below constitutes and appoints Rick Cossano and Gary A. Palmer,  jointly
and severally,  his attorney-in-fact,  each with the power of substitution,  for
him in any and all  capacities,  to sign any amendments to this Annual Report on
Form 10-K and to file the same,  with  exhibits  thereto and other  documents in
connection  therewith,  with the  Securities  and  Exchange  Commission,  hereby
ratifying  and  confirming  all  that  each  of said  attorneys-in-fact,  or his
substitute or substitutes, may do or cause to be done by virture hereof.

     Pursuant to the  requirements of the Securities  Exchange Act of 1934, this
Annual  Report on Form 10-K has been signed  below by the  following  persons on
behalf of the Registrant and in the capacities and on the dates indicated.

<TABLE>
<CAPTION>
            Signature                           Office                                       Date
            ---------                           ------                                       ----
<S>     <C>                    <C>                                                       <C>


      /s/ Rick Cossano
      ----------------------
          Rick Cossano          President and Chief Executive Officer (Principal         March 31, 2001
                                Executive Officer)

      /s/ L. Daniel Rawitch
      ----------------------
          L. Daniel Rawitch    Vice Chairman                                             March 31, 2001


      /s/ Patrick J. Mackin
      ----------------------
          Patrick J. Mackin    Executive Vice President-Chief Financial Officer          March 31, 2001
                               (Principal Financial and Accounting Officer)

      /s/ Antonio P. Falcao
      ----------------------
          Antonio P. Falcao    Director                                                  March 31, 2001


      /s/ Stephen J. Sogin
      ----------------------
          Stephen J. Sogin     Director                                                  March 31, 2001

      /s/ S. Lewis Meyer
      ----------------------
          S. Lewis Meyer       Director                                                  March 31, 2001
</TABLE>


                                                                              71
<PAGE>

Exhibit Number                        Description

3.1.1(1)      Certificate of Amendment to the registrant's  Restated Certificate
              of Incorporation, dated as of October 29, 1997

3.1.2(2)      Certificate of Amendment to the registrant's  Restated Certificate
              of Incorporation, dated as of May 28, 1999

3.1.3*        Certificate of Amendment to the registrant's  Restated Certificate
              of Incorporation, dated as of February 15, 2001

3.2*          Restated Bylaws

4.1(4)        Form of Common Stock Purchase Agreement between the registrant and
              Jose Maria Salema Garcao, dated December 16, 1996

4.2(4)        Form of Warrant Purchase Agreement between the registrant and Jose
              Maria Salema Garcao dated December 16, 1996

4.3(4)        Form of Warrant  issued to Jose Maria Salema Garcao dated December
              16, 1996

4.4(4)        Common  Stock  Purchase   Agreement  between  the  registrant  and
              investors in the private placement concluded December 31, 1996

4.5(4)        Form of Warrant Purchase Agreement between the registrant and Jose
              Maria Salema Garcao dated December 30, 1996

4.6(4)        Form of Warrant  issued to Jose Maria Salema Garcao dated December
              30, 1996

4.7(4)        Form of Common Stock Purchase Agreement between the registrant and
              Jose Maria Salema Garcao dated March 21, 1997

4.8(4)        Form of Warrant Purchase Agreement between the registrant and Jose
              Maria Salema Garcao dated March 21, 1997

4.9(4)        Form of Warrant issued to Jose Maria Salema Garcao dated March 21,
              1997

4.10(4)       Form of  Stock  Purchase  Agreement  between  the  registrant  and
              investors in the private placement concluded April 30, 1997

4.11(4)       Form of Warrant Purchase Agreement between the registrant and Jose
              Maria Salema Garcao dated April 30, 1997

4.12(4)       Form of  Warrant  Issued to  investors  in the  private  placement
              concluded April 30, 1997

4.13(4)       Form of Common Stock Purchase Agreement between the registrant and
              investors in the private placement concluded October 31, 1997

4.14(4)       Form of Common Stock  Purchase  Warrant issued to investors in the
              private placement concluded October 31, 1997

4.15(5)       Form of Common Stock Purchase Agreement between the registrant and
              investors in the private placement concluded December 23, 1998

4.16(5)       Form of Common Stock  Purchase  Warrant issued to investors in the
              private placement concluded December 23, 1998

4.17(6)       Restructuring  Agreement  and  Amendment,  dated January 15, 1999,
              among the registrant  and the investors in the debenture  offering
              concluded May 26, 1998

4.18(7)       Form of Registration  Rights Agreement  between the registrant and
              investors in the debenture offering concluded May 26, 1998

4.19(8)       Form of Warrant issued to the investors in the debenture  offering
              concluded May 26, 1998

4.20(5)       Form of Stock  Purchase  Agreement  among the  registrant  and the
              investors in the private  placement  concluded on May 10, 1999 and
              May 20, 1999

4.21(5)       Form of Stock  Purchase  Agreement  among the  registrant  and the
              investors  in the  private  placement  concluded  on June 28, 1999

              Merger Agreement and Plan of Reorganization between the registrant
              and Monument Mortgage, Inc., dated December 20, 1996

10.3(5)**     1989 Stock Option Plan

10.4(4)       Asset  Purchase  Agreement  between the registrant and Real Estate
              Office Software, Inc., dated August 30, 1997

10.5(4)       Stock  Purchase  Agreement  between  the  registrant  and  Coastal
              Federal Mortgage Company, dated April 30, 1998

10.6(4)       Stock  Purchase   Agreement   between  the  registrant  and  MICAL
              Mortgage, Inc., dated May 19, 1998

10.7(5)**     1998 Stock Option Plan

10.8(5)**     1998 Stock Bonus Incentive Plan

10.9(5)**     1998 Non-Employee Directors' Stock Option Plan

10.10(5)**    1999 Employee Stock Purchase Plan

10.11(9)      Second Amendment to First Amended and Restated  Warehousing Credit
              and  Security  Agreement  between  Monument  Mortgage,   Inc.  and
              Residential Funding Corporation dated as of March 29, 2000.

10.12(10)     Sublease  agreement  between  The  Scotts  Company,  successor  in
              interest  to  Monsanto  Company and the  Registrant  and  Monument
              Mortgage, Inc., dated May 21, 1999.

10.13(11)     Agreement and Release between the Registrant and Mark Korell dated
              December 14, 1999.

10.14(12)     First  Amendment  to  Loan  and  Security  Agreement  between  the
              Registrant and  Lowestrate.com,  Inc. and Robert J. Ross dated May
              24, 2000.

10.15(13)     Assignment  and  Assumption  Agreement  between the Registrant and
              Lowestrate.com, Inc., Robert J. Ross.

10.16(14)     Fourth Amendment to First Amended and Restated  Warehousing Credit
              and  Security  Agreement  dated  July 14,  2000  between  Monument
              Mortgage,  Inc.,  subsidiary of the  registrant,  and  Residential
              Funding Corporation.


                                                                              72
<PAGE>

10.17(15)     Fifth Amendment to First Amended and Restated  Warehousing  Credit
              and Security  Agreement,  dated  August 22, 2000 between  Monument
              Mortgage,  Inc.,  subsidiary of the  registrant,  and  Residential
              Funding Corporation.

10.18(16)     Sixth Amendment to First Amended and Restated  Warehousing  Credit
              and Security  Agreement,  dated October 12, 2000 between  Monument
              Mortgage,  Inc.,  subsidiary of the  registrant,  and  Residential
              Funding Corporation.

10.19*        Third Amendment to First Amended and Restated  Warehousing  Credit
              and  Security  Agreement,  dated June 27,  2000  between  Monument
              Mortgage,  Inc.,  subsidiary of the  registrant,  and  Residential
              Funding Corporation.

10.20*        Seventh Amendment to First Amended and Restated Warehousing Credit
              and Security  Agreement,  dated December 28, 2000 between Monument
              Mortgage,  Inc.,  subsidiary of the  registrant,  and  Residential
              Funding Corporation.

10.21*        Eighth Amendment to First Amended and Restated  Warehousing Credit
              and Security  Agreement,  dated February 28, 2001 between Monument
              Mortgage,  Inc.,  subsidiary of the  registrant , and  Residential
              Funding Corporation.

10.22(17)     Master Loan Participation and Custodian Agreement,  dated July 10,
              2000  between   Monument   Mortgage,   Inc.,   subsidiary  of  the
              registrant, and Gateway Bank, F.S.B.

10.23(18)     Guaranty of Payment and  Performance  and Contract of  Affirmative
              Covenants,  dated July 10, 2000 between Monument  Mortgage,  Inc.,
              subsidiary of the registrant, and Gateway Bank, F.S.B.

10.24(19)**   Employment Agreement between the registrant and Patrick J. Mackin,
              dated November 1, 2000.

16.1(3)       Letter from Former Certifying Accountant

21.1*         List of Subsidiaries

23.1*         Consent of Ernst & Young LLP

23.2*         Consent of Reuben E. Price & Co.

24.1*         Power of Attorney (Included on signature page of Form 10-K)


-----------

*    Filed herewith.

**   Management compensation plan or arrangement.

(1)  Incorporated by reference to Exhibit 3.2 of the registrant's  Annual Report
     on Form 10-KSB for the fiscal year ended  April 30,  1998,  filed on August
     13, 1998.

(2)  Incorporated by reference to Exhibit 3 of the  registrant's  Current Report
     on Form 8-K filed on June 2, 1999.

(3)  Incorporated by reference to Exhibit 16 of the registrant's  Current Report
     on Form 8-K filed on February 11, 1999.

(4)  Incorporated  by reference to the Exhibit of the same number filed with the
     registrant's  Annual  Report on Form 10-KSB for the fiscal year ended April
     30, 1998, filed on August 13, 1998.

(5)  Incorporated  by reference to the Exhibit of the same number filed with the
     registrant's Registration Statement on Form S-1 filed on July 2, 1999.

(6)  Incorporated by reference to Exhibit 7.1 of the registrant's Current Report
     on Form 8-K filed on January 19, 1999.

(7)  Incorporated by reference to Exhibit 4.2 of the registrant's Current Report
     on Form 8-K filed April 6, 1998

(8)  Incorporated by reference to Exhibit 7.2 of the registrant's Current Report
     on Form 8-K filed on January 19, 1999.

(9)  Incorporated  by reference to Exhibit 10.26 of the  registrant's  Report on
     Form 10-Q filed on May 15, 2000.

(10) Incorporated  by reference to Exhibit 10.27 of the  registrant's  Report on
     Form 10-Q filed on May 15, 2000.

(11) Incorporated  by reference to Exhibit 10.28 of the  registrant's  Report on
     Form 10-Q filed on May 15, 2000.

(12) Incorporated  by reference to Exhibit  10.1 of the  registrant's  Report on
     Form 10-Q filed on August 14, 2000.

(13) Incorporated  by reference to Exhibit  10.2 of the  registrant's  Report on
     Form 10-Q filed on August 14, 2000

(14) Incorporated  by reference to Exhibit  10.1 of the  registrant's  Report on
     Form 10-Q filed on November 14, 2000.

(15) Incorporated  by reference to Exhibit  10.2 of the  registrant's  Report on
     Form 10-Q filed on November 14, 2000.


                                                                              73
<PAGE>

(16) Incorporated  by reference to Exhibit  10.3 of the  registrant's  Report on
     Form 10-Q filed on November 14, 2000.

(17) Incorporated  by reference to Exhibit  10.4 of the  registrant's  Report on
     Form 10-Q filed on November 14, 2000.

(18) Incorporated  by reference to Exhibit  10.5 of the  registrant's  Report on
     Form 10-Q filed on November 14, 2000.

(19) Incorporated  by reference to Exhibit  10.6 of the  registrant's  Report on
     Form 10-Q filed on November 14, 2000.



                                                                              74