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                  U.S. SECURITIES AND EXCHANGE COMMISSION
                          Washington, D.C. 20549

                               FORM 10-KSB/A
                             (Amendment No. 1)
                                     
   [ X ]ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
                         AND EXCHANGE ACT OF 1934
                                     
                 For the fiscal year ended April 30, 1997

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

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

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

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

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

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

The number of shares outstanding of the issuer's common stock, as of August
5, 1997 was 28,973,618.

Documents incorporated by reference:  None

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

This report contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. Readers are cautioned that actual results could
differ materially from those indicated in such statements as a result of
certain factors, including those set forth under "Certain Business
Considerations" and "Management's Discussion and Analysis of Financial
Condition  and Results of Operations" and elsewhere in, or incorporated by
reference into, this report.

                             TABLE OF CONTENTS
                                     
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Item  Description
Page
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<S>   <C>
<C>
PART I
1     Description of
Business................................................  3
2     Description of
Property................................................ 11
3     Legal
Proceedings...................................................... 11
4     Submission of Matters to a Vote of Security
Holders.................... 12

                                  PART II
                                     
5     Market for Registrant's Common Equity and Related Stockholder
Matters.. 12
6     Management's Discussion and Analysis of Financial Condition
        and Results of
Operations............................................ 14
7     Financial
Statements................................................... 19
8     Changes in and Disagreements with Accountants
        on Accounting and Financial
Disclosure............................... 19

                                  PART III

9     Directors, Executive Officers, Promoters and Control Persons;
        Compliance With Section 16(a) of the Exchange
Act.................... 20
10    Executive
Compensation................................................. 23
11    Security Ownership of Certain Beneficial Owners and
Management......... 27
12    Certain Relationships and Related
Transactions......................... 28
13    Exhibits and Reports on Form 8-
K....................................... 29

Signatures............................................................. 31

                                 APPENDIX
                              Independent                         Auditors'
Report........................................... 32
           Consolidated      Balance      Sheet      at      April      30,
1997........................... 33
      Consolidated Statements of Operations for the years ended
                    April             30,             1997              and
1996............................................... 34
      Consolidated Statements of Stockholders' Equity for the years ended
                April          30,          1997          and          1996
 .............................................. 35
      Consolidated Statements of Cash Flows for the years ended
                April          30,          1997          and          1996
 .............................................. 36
                Notes           to          Consolidated          Financial
Statements............................. 38

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

                                  PART I
                                     
                     ITEM 1.  DESCRIPTION OF BUSINESS

GENERAL

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

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

COMPANY HISTORIES

This report includes detailed information about Finet, the Registrant, and,
Monument  Mortgage  Inc.  ("MMI") since, as a result  of  a  December  1996
reverse  acquisition between the two companies, MMI is  deemed  to  be  the
reporting  entity for accounting purposes.  In December 1996,  the  Company
also  acquired  PreferenceAmerica  Mortgage  Network  ("PAMN"),  a  company
affiliated with MMI.

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

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

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

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

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

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

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

During fiscal 1996, MMI's management concluded that traditional wholesale
distribution channels alone would not sustain prolonged profitable growth
for the company.  Accordingly, management formed PAMN to establish
technology based, lower cost methods for the delivery of loan products to
higher margin retail loan customers.  PAMN commenced operations in February
1996 and, a year later, it acquired the rights to the name, concept and
logo of Property Transaction Network ("PTN"), a software developer and
systems integrator, to expand its technology based delivery systems.

MMI's management also concluded that the creation of a technology based,
vertically integrated lending operation would require additional capital.
This conclusion led to the decision to merge MMI and PAMN with Finet.
Letters of intent for the mergers were signed in May 1996 and the
transactions were completed in December 1996.

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

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

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

THE HOMEOWNERSHIP BUSINESS

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

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

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

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

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

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

<PAGE> 6

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

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

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

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

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

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

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

<PAGE> 7

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

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

THE FINET APPROACH

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

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

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

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

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

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

<PAGE> 8

TECHNOLOGY SERVICES

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

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

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

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

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

RETAIL LOAN SERVICES

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

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

<PAGE> 9

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

LENDING SERVICES

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

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

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

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

COMPETITION

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

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

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

<PAGE> 10

DISTRIBUTION METHODS

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

CERTAIN BUSINESS CONSIDERATIONS

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

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

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

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

GOVERNMENT REGULATION

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

<PAGE> 11

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

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

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

EMPLOYEES

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

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

                     ITEM 2.  DESCRIPTION OF PROPERTY

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

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

                        ITEM 3.  LEGAL PROCEEDINGS

As  a result of its continuing operating losses and lack of working capital
during  1995,  the  Company  developed  past  due  accounts  payable   from
approximately  150  unsecured trade creditors, with  the  result  that  the
Company  became  involved  in  22  legal proceedings,  primarily  unsecured
creditor actions and/or judgments.  These ranged in individual amount  from
$930 to $101,000 and aggregated to approximately $500,000.  As of April 30,
1997,  the  Company  had  settled  a  majority  of  these  proceedings  and
subsequently  has settled several more. The Company expects to  settle  the
remainder  in  the near future under similar terms as offered to  creditors
that have not instituted such proceedings.

The Company has settled $494,000 of $968,000 unsecured creditor obligations
existing  at date of the Finet/MMI merger.  Settlements were made  by  cash
payments  of  $67,000 and the issuance of approximately 230,000  shares  of
common  stock.   These  settlements resulted in an  extraordinary  gain  of
$312,000.

<PAGE> 12

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

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

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

On  January  27, 1997 the Company's Board of Directors resolved unanimously
to  recommend to shareholders that the number of shares authorized  of  the
Company's  common  stock  be  increased from  30  million  to  40  million.
Subsequently,   in  late  March, 1997, individual  shareholders  of  record
holding  a total of 14,829,751 shares, which represented a majority (57.6%)
of  shares  outstanding,  approved  by written  consent  a  certificate  of
amendment  of  the  Company's restated certificate of incorporation  to  so
increase  the  number  of common shares authorized. Remaining  shareholders
were then promptly notified by mail of the action approved.

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

MARKET FOR COMMON EQUITY

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

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

<TABLE>
<CAPTION>
YEAR ENDED APRIL 30, 1997:                  HIGH BID      LOW BID
-----------------------------------------   --------      -------
<S>                                         <C>           <C>
First Quarter (F1)                          $ 1.25        $ 0.25
Second Quarter thru October 24, 1996 (F1)     2.625         0.25
October 25, 1996 - October 31, 1996 (F2)      1.75          0.75
Third Quarter (F2)                            2.875         0.75
Fourth Quarter (F2)                           2.625         0.875
<FN>
<F1>
Prices reflect activity while trading under the symbol FTHC
<F2>
Prices reflect activity while trading under the symbol FNHC
</FN>
</TABLE>
<PAGE> 13

On August 5, 1997, the last sales price for the common stock was $3.18  per
share. The foregoing prices represent inter-dealer quotations without
retail mark-up, mark-down or commission, and may not necessarily represent
actual transactions.  Common stock issued and outstanding as of April 30,
1997 was 24,763,030  shares which were held by approximately 475
stockholders, not including 3,991,250 shares subscribed but not yet issued,
6,907,947 warrants and 599,507 options.

UNREGISTERED SHARES

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

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

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

In April, 1997, a group of 28 individuals purchased 3,991,250 common shares
under Regulation D for a purchase price of $3,991,250. Thirteen of these
individuals were granted warrants to purchase 1,543,125 common shares at an
exercise price of $1.50 to $3.50 per share which expire between 2001 and
2002.

In addition to the above sales of securities, on December 31, 1996, the
Company sold six million common shares under Regulation S to a group of non-
US investors for an aggregate purchase price of $3,000,000.  In connection
with this sale, warrants to purchase 2,500,000 common shares at exercise
prices of $0.50 to $3.00 were granted to an individual who was instrumental
in assisting the Company to sell five million of the shares in the
placement.

Commonwealth Associates acted as placement agent for each of the above
sales and received 859,125 warrants to purchase common shares at an
exercise price of $1.50 per share until the year 2002. Fees, commissions
and expenses of these offerings totaled $738,277.

DIVIDENDS

The Company has not paid, and the Company does not currently intend to pay,
cash dividends on its common stock. The current policy of the Company's
Board of Directors is to retain earnings, if any, to provide funds for
operation and expansion of the Company's business.  The payment of cash
dividends in the future will be at the discretion of the Board of Directors
and will depend upon, among other things, the Company's earnings, capital
requirements and financial position.  In addition, the Company's ability to
pay dividends may be limited under future loan agreements of the Company
which restrict or prohibit the payment of dividends.
<PAGE> 14
                                     
   ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                         AND RESULTS OF OPERATIONS

GENERAL

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

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

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

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

REVENUES

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

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

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

Interest income declined 44% from $1.98 million in 1996 to $1.11 million in
1997.  Interest income is primarily attributable to mortgages that are held
in   inventory,  pending  their  sale  and  delivery  to  secondary  market
investors. Interest yields on mortgages held in inventory declined slightly
over  the same time periods, from 8.27% to 7.96%.  Interest expense on  the
Company's warehouse lines of credit (which finances the mortgages  held  in
inventory) declined 43% in the same time period.
<PAGE> 15

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

Revenue from startup telemarketing operations was $61 thousand in 1997.

EXPENSES

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

Compensation  and  employee benefits expense increased  48%  from  to  $2.1
million  in  1996  to  $3.2  million in 1997, as the  number  of  employees
increased 36% from 96 as of April 30, 1996 to 131 as of April 30, 1997.

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

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

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

Other  expense  increased from $69.7 thousand in 1996 to $681  thousand  in
1997.   This material increase resulted from several factors: $153 thousand
attributable to various startup operating costs; $156 thousand  related  to
increases  in  unrecoverable costs on foreclosed loans  and  sale  of  real
estate owned; and $300 thousand related to miscellaneous expenses including
settlement of the pre-acquisition litigation against MMI.

As previously discussed, in 1996 the Company negotiated settlements with  a
number  of  past due unsecured trade creditor accounts payable.   Creditors
owed  $500 or less, or willing to reduce the amount owed to $500, were paid
in cash, while larger accounts were paid a discounted amount in the form of
shares  of  the Company's common stock.  As of April 30, 1997, the  Company
has settled accounts totaling $494 thousand in the form of cash payments of
$67  thousand and the issuance of 230 thousand shares of its common  stock,
for  an  average settlement of 33.6% of the original amount owed, resulting
in an extraordinary gain of $312 thousand.

CAPITAL EXPENDITURES, LIQUIDITY, AND CAPITAL RESOURCES

The  activities for the fiscal year ended April 30, 1996 represent only the
mortgage  banking activities of MMI, while the activities  for  the  fiscal
year  ended April 30, 1997 additionally represents PAMN's start up mortgage
brokerage  activities and, subsequent to the acquisitions of  December  31,
1996,   the   consolidated  activities  of  Finet  and  its   subsidiaries.
Accordingly,  readers are cautioned that the meaningfulness of  comparisons
between the fiscal years is limited and therefore may not be representative
of future events.
<PAGE> 16

OPERATING ACTIVITIES

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

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

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

INVESTING ACTIVITIES

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

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

<TABLE>
<CAPTION>
                                      Gross                     Net
Offering         Shares      $/Share  Subscription  Expenses
Consideration
---------------  ----------  -------  ------------  ----------  -----------
--
<S>              <C>         <C>      <C>           <C>         <C>
December, 1996    1,000,000  $  0.50  $    500,000  $        0  $
500,000
December, 1996    6,000,000     0.50     3,000,000     348,065
2,651,935
March, 1997       1,000,000     0.60       600,000           0
600,000
April, 1997       3,991,250     1.00     3,991,250     390,227
3,601,023
                 ----------           ------------  ----------  -----------
-
Totals           11,991,250           $  8,091,250  $  738,292
7,352,958
                 ==========           ============  ==========
Less Subscriptions receivable
(2,693,038)
                                                                -----------
-
Total                                                           $
4,659,920

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

In addition to the capital raised from this sale of the Company's common
stock, warrants to purchase additional shares were issued to purchasers of
the above described shares.  These warrants were issued at exercise prices
ranging from $0.50 per share to $3.50 per share for a total of 6,102,250
shares.
<PAGE> 17

FINANCING ACTIVITIES

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

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

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

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

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

The  Company  has  had a borrowing relationship with RFC for  nearly  eight
years,  and  has  never  experienced a disruption in borrowing  capability.
Accordingly, management determined that the additional costs of maintaining
multiple lender relationships was not warranted.  Management believes  that
replacement borrowing facilities could be obtained within 30 days,  and  it
is unlikely that RFC would terminate the existing borrowing agreements with
less than a 30 day notice unless the Company was to experience a sudden and
severe  degradation  in  its  financial  position.   In  such  an  unlikely
scenario, multiple lending relationships would be of little value  in  that
they all would likely suspend borrowing agreements.
<PAGE> 18

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

                        MATERIAL SUBSEQUENT EVENTS

RECEIPT OF ADDITIONAL CAPITAL

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

BORROWING ARRANGEMENTS

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

NDS SOFTWARE AGREEMENT

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

REOS ACQUISITION

On June 12, 1997, the Company entered into a preliminary agreement with the
shareholders of Real Estate Office Software , Inc. (REOS), a Nevada
corporation, to acquire substantially all of the assets and certain of the
liabilities of REOS. The terms and consideration for this transaction are
being negotiated.  REOS is a software development and marketing company
whose primary product is a proprietary Realtor productivity tool called
Real Estate Office.  Pursuant to this agreement, all former REOS employees
are now employees of PTN engaged in final development of an enhanced
Realtor relationship management tool called the Agent Connector scheduled
for initial introduction in August, 1997.
<PAGE> 19

                       ITEM 7.  FINANCIAL STATEMENTS
                                     
The following are  filed in an Appendix as part of this report:

<TABLE>
<CAPTION>

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

 Independent Auditors' Report..........................................  32

 Consolidated Balance Sheet at April 30, 1997..........................  33

 Consolidated Statements of Operations for the years ended
  April 30, 1997 and 1996..... ........................................  34

Consolidated Statements of Stockholders' Equity for the years ended
 April 30, 1997 and 1996 ..............................................  35

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

Notes to Consolidated Financial Statements.............................  38

</TABLE>

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

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

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

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

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

During  the  two fiscal years ended April 30, 1995 and 1996,  respectively,
and  the  period  through March 17, 1997, there have been no  disagreements
between  DT  and MMI on any matter of accounting principles  or  practices,
financial  statement  disclosure, or auditing  scope  or  procedures  which
disagreement, if not resolved to DT's satisfaction would have  caused  them
to  make reference in connection with its reports to the subject matter  of
disagreement.   In  addition,  DT's  reports  on  the  Company's  financial
statements  for  such  fiscal  periods  contained  no  adverse  opinion  or
disclaimers of opinion, nor were such reports qualified or modified  as  to
uncertainty, audit scope or accounting principles.
<PAGE> 20

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

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

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

Jan  C.  Hoeffel, 61, was a founder and President of Finex  Corporation,  a
technology-oriented  mortgage broker acquired by the Company  in  December,
1991, after which he served as Executive Vice President until resigning  in
mid-1992.  He rejoined the Company in mid-1995 and became President  and  a
Director  in  November,  1995.   In  1992  he  incorporated  a  merchandise
advertising  and  marketing  company  providing  custom  multimedia   kiosk
platforms,  and served as its President until July, 1993.  Since  1988,  he
has been a Director and major shareholder of Typography Express, a computer-
based  national service bureau for graphic arts professionals.   He  was  a
founder   in  1989  and  first  President  of  Sweet  Factory,  a  licensed
confectionery retailer later sold privately and now a national  chain.   He
was a founder and Director of Healthworks, Ltd., an international specialty
retailer  acquired in 1988 by Grand Metropolitan Retailing, Ltd.  In  1973,
he  became Vice President Marketing with Equitec Financial Group,  Inc.,  a
start-up               financial               planning                firm
<PAGE> 21

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

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

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

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

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

David  Purvis, 51, became a Director in July 1997.  Mr. Purvis has been  an
independent  investor and consultant and owner of Grey  Fox  Associates,  a
residential  real  estate development company.   He  serves  as  an  expert
witness in oil trading and transportation cases.  From 1974-1990, he was  a
Partner  and  Managing Director, U.S. Operations of Vitol,  S.A.,  Inc.,  a
leading international oil trading company.  In 1972-1974, he was an analyst
and  operations  coordinator with Mobil Oil Corp. and  earlier  was  Deputy
Director  of  the U.S. Navy's largest Fuel Depot at Subic Bay, Philippines.
Mr.  Purvis received a B.A. in Economics from Amherst College, is  a  guest
lecturer at Oxford's College of Petroleum Studies,
<PAGE> 22

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

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

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

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

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

To  the  Company's knowledge, based solely on review of the copies of  such
reports furnished to the Company and written representations that no  other
reports  were  required, during the fiscal year ended April 30,  1997,  all
Section 16(a) filing requirements applicable to its officers, Directors and
greater than ten percent beneficial owners were complied with.
<PAGE> 23
                      ITEM 10. EXECUTIVE COMPENSATION

EXECUTIVE COMPENSATION

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

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

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

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

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

Paul R.    1997     119,386    10,033      -           -           -
Garrigues,
MMI CFO
<FN>
<F1>
During fiscal year 1997 prior to the acquisition of PAMN by Finet, Mr.
Rawitch was employed by PAMN on a part time basis and received annual
compensation of $35,000, and Mr. Hoeffel received from PAMN consulting fees
of $18,000.
<F2>
Mr. Kraatz , who resigned as Chief Executive Officer and voluntarily
surrendered 96,000 options on May 15, 1995, was engaged through November,
1995 to market brokerage franchises, for which no compensation was earned
or paid, and his remaining 88,320 options expired unexercised in December
1995.
</FN>
</TABLE>
<PAGE> 24

DIRECTOR COMPENSATION

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

EMPLOYMENT AGREEMENTS

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

<TABLE>
<CAPTION>
                     OPTION GRANTS IN LAST FISCAL YEAR
Individual Grants
-----------------------------------------------------------------
                              % Total    Exercise
                    Options   Options    Price     Expiration
Name                Granted   Granted    Price($/sh)     Date
-----------------   -------   --------   -----------   ----------
<S>                 <C>       <C>        <C>           <C>
Stephen J. Sogin     40,000    33.3%       .50          1/2002
Jose Philipe Guedes  40,000    33.3%       .50          1/2002
S. Lewis Meyer       40,000    33.3%       .50          1/2002
                    -------   ------
                     120,000   100.0%
                    ========   ======

</TABLE>

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

<TABLE>
<CAPTION>
-----------------------------------------------------------------
                              % Total    Exercise
                    Options   Options    Price<F1>     Expiration
Name                Granted   Granted    Price($/sh)     Date
-----------------   -------   --------   -----------   ----------
<S>                 <C>       <C>        <C>           <C>
Stephen J. Sogin     50,317    20.2%     $ .06          1/2001
L. Daniel Rawitch   100,000    39.9%       .06          1/2006
Jan C. Hoeffel      100,000    39.9%       .06          1/2006
                    -------   --------
                     250,317   100.0%
<PAGE> 25

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

1989 STOCK OPTION PLAN

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

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

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

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

As of April 30, 1997 and including the 120,000 options granted to Directors
in  January, 1997, there were 558,874 options outstanding under the  Option
Plan,  of  which 558,478 were vested. In February, 1997, options for  3,167
shares were exercised at $.06 per share by a former employee
<PAGE> 26

LIMITATIONS ON LIABILITY

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

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

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

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

Insofar  as  indemnification for liabilities arising under  the  Securities
Acts may be permitted to Directors and officers of the Company pursuant  to
the  foregoing provisions, or otherwise, the Company has been advised  that
in  the  opinion  of the Commission such indemnification is against  public
policy as expressed in the Securities Act and is, therefore, unenforceable.
<PAGE> 27

       ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
                                MANAGEMENT

The  following  table sets forth certain information with  respect  to  the
beneficial ownership of the Company's common stock at April 30,  1997:  (1)
by  each  person  known by the Company to own beneficially more  than  five
percent  of the Company's outstanding shares of common stock; (2)  by  each
Director, Director nominee and executive officer of the Company; and (3) by
all  officers,  Directors and Director nominees  as  a  group.   Except  as
otherwise  indicated in the notes to this table, the holders  listed  below
have  sole  voting and investment power with respect to such  shares.   For
purposes  of this table, a person is deemed to have "beneficial  ownership"
of any shares as of a given date which such person has the right to acquire
within  60  days after such date.  For purposes of computing the percentage
of  outstanding shares held by each person named below on a given date, any
security  which such person has the right to acquire within 60  days  after
such  date is deemed to be outstanding, but is not deemed to be outstanding
for the purpose of computing the percentage ownership of any other person.

<TABLE>
                  Beneficial Ownership
-----------------------------------------------------------
<CAPTION>
               Name and Address of      ----Common stock----
               Beneficial Owner           # owned    % owned
------------   ----------------------   ----------   -------
<S>            <C>                      <C>         <C>
Beneficial     Jose Salema Garcao       9,100,000 <F1>   29.9%
Owners of      Quinta de Marinha
more than 5%   Lote CT-14
of shares      2750 Cascais, Portugal
outstanding

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

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

Directors      James W. Noack            4,315,000 <F4>  16.7%
and Officers   Jan C. Hoeffel            1,263,975 <F5>   4.9%
               L. Daniel Rawitch         1,074,934 <F6>   4.1%
               Jose Philipe Guedes         360,000 <F7>   1.4%
               Stephen J. Sogin            155,663 <F8>   0.6%
               Paul R. Garrigues           107,813 <F9>   0.4%
               David Purvis                107,500 <F10>  0.4%
               S. Lewis Meyer               40,000 <F11>  0.2%

9 Directors
and Officers
as a group                               7,424,855       28.1%<PAGE> 29
<PAGE> 28

<FN>
<F1>
Reflects 4,400,000 shares beneficially owned by him and currently
exercisable warrants to acquire 4,700,000 shares.
<F2>
Reflects 3,220,000 shares beneficially owned by him, 20,000 beneficially
owned by his spouse and 20,000 shares beneficially owned by his minor
child.
<F3>
Reflects 2,350,000 shares beneficially owned and currently exercisable
warrants to acquire 214,781 shares.

<F4>
Reflects 4,295,000 shares beneficially owned by him and 20,000 shares
beneficially owned by his minor child.
<F5>
Reflects 1,037,817 shares beneficially owned by him, 917 shares
beneficially owned by his spouse and currently exercisable options to
acquire 225,241 shares.
<F6>
Reflects 926,934 shares beneficially owned by him and currently exercisable
options to acquire 148,000 shares.
<F7>
Reflects 320,000 shares beneficially owned by him and currently exercisable
options to purchase 40,000 shares granted for his services as a Director.
<F8>
Reflects 50,000 shares beneficially owned by him and currently exercisable
options to purchase 105,633 shares granted for his services as a Director.
<F9>
Reflects 107,813 shares beneficially owned by him.
<F10>
Reflects 45,000 shares beneficially owned by him , currently exercisable
warrants to purchase 22,500 shares and currently exercisable options to
purchase 40,000 shares granted for his services as a Director.
<F11>
Reflects currently exercisable options to purchase 40,000 shares granted
for his services as a Director.
 </FN
</TABLE>
                                     
         ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

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

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

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

The  Company  rents on a month-to-month basis a 3,500 square  foot  storage
facility  from James Noack for $600 per month for the storage of  furniture
and equipment.
<PAGE> 29

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

On  December 16, 1996, Jose Maria Salema Garcao purchased 1,000,000  shares
of  the  Company's  common stock for $500,000 and  was  granted  five  year
warrants to purchase 1,000,000 shares of the Company's common stock  at  an
exercise  price  of  $1.00 per share.  On December 28, 1996,  he  purchased
1,000,000  shares  of  the  Company's common stock  for  $500,000  and  was
instrumental  in  assisting  the Company to sell  an  additional  5,000,000
shares  of  its  common  stock for $2,500,000, for  which  he  was  granted
2,500,000  warrants  at an average exercise price of $.85  per  share.   On
March 21, 1997, he purchased 1,000,000 shares of the Company's common stock
for  $600,000 for which he was granted warrants to purchase 600,000  shares
of  the Company's at an average exercise price of $2.00 per share. In April
1997, he purchased 1,400,000 share for $1,400,000, for which he was granted
warrants  to  purchase 600,000 shares of the Company's common stock  at  an
average exercise price of $2.83 per share.

                ITEM 13.  EXHIBITS AND REPORTS ON FORM 8-K

The  exhibits listed in the accompanying index to exhibits on page  57  are
filed as part of this annual report.

<TABLE>
                                 EXHIBITS
<CAPTION>
Exhibit   Description
--------  ---------------------------------------
<S>       <C>
EX-3(i)   Articles of Incorporation <F1>
               1.   Amendments of October, 1996
               2.   Amendments of January, 1997

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

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

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

EX-21     Description of the subsidiaries of the registrant

EX-23     Consent of independent accountant

EX-27     Financial data schedule
<PAGE> 30

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

</FN>
</TABLE>

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

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

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

1/16/97    5    Summarization of recapitalization plan items completed in
1996

4/10/97    4    Change in independent accountant

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

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

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

<PAGE> 31

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

FINET HOLDINGS CORPORATION


Date: September 24, 1997

/S/     GEORGE P. WINKEL
-----------------------------------
GEORGE P. WINKEL
PRINCIPAL FINANCIAL OFFICER

<PAGE> 32

                                 APPENDIX
                                     
                           REUBEN E. PRICE & CO.
                      PUBLIC ACCOUNTANCY CORPORATION
                             703 MARKET STREET
                          SAN FRANCISCO, CA 94103
                                     

     INDEPENDENT AUDITORS' REPORT
     
     To the Board of Directors and Stockholders
     Finet Holdings Corporation
     Walnut Creek, CA
     
     We  have audited the accompanying consolidated balance sheet of
     Finet  Holdings Corporation and subsidiaries as  of  April  30,
     1997  ,  and the related consolidated statements of operations,
     stockholders' equity  and cash flows for the years ended  April
     30,   1997  and  1996.   These  financial  statements  are  the
     responsibility of the Company's management.  Our responsibility
     is to express an opinion on these financial statements based on
     our audit.
     
     We  conducted  our audit in accordance with generally  accepted
     auditing  standards.  Those standards require that we plan  and
     perform  the audit to obtain reasonable assurance about whether
     the financial statements are free of material misstatement.  An
     audit  includes examining, on a test basis, evidence supporting
     the  amounts  and disclosures in the financial statements.   An
     audit  also  includes assessing the accounting principles  used
     and  significant  estimates  made by  management,  as  well  as
     evaluating  the  overall financial statement presentation.   We
     believe  that  our audit provides a reasonable  basis  for  our
     opinion.
     
     In  our opinion, the consolidated statements referred to  above
     present   fairly,  in  all  material  respects,  the  financial
     position of Finet Holdings Corporation and subsidiaries  as  of
     April 30, 1997, the results of their operations and their  cash
     flows for the years ended April 30, 1997 and 1996 in conformity
     with generally accepted accounting principles.
     
     Finet Holdings Corporation acquired Monument Mortgage, Inc. on
     December 31, 1996. As more fully discussed in Note 3 to the
     financial statements, the transaction is accounted for as a
     reverse acquisition whereby Monument Mortgage, Inc. is
     considered the acquiring corporation for accounting and
     financial statement presentation purposes and Monument
     Mortgage, Inc.'s historical financial statements are deemed to
     be the historical financial statements of the reporting entity.
     
     
     /s/ REUBEN E. PRICE & CO.
     
     REUBEN E. PRICE & CO.
     San Francisco, CA
     
     August 13, 1997
<PAGE> 33

</TABLE>
<TABLE>
                FINET HOLDINGS CORPORATION AND SUBSIDIARIES
                        CONSOLIDATED BALANCE SHEET
                              APRIL 30, 1997

<CAPTION>
                                                               ------------
<S>                                                            <C>
                                  ASSETS
Cash.........................................................  $   603,296
Accounts receivable from sales of mortgage
  loans and servicing rights................................     3,453,199
Mortgage loan servicing advances and
  other receivables.(Note 4).................................      644,072
Notes receivable.............................................      247,000
Notes receivable from officers.(Note 16).....................      144,350
Mortgages held for sale, net.................................    7,268,877
Mortgage servicing rights (Note 5)...........................      579,018
Furniture, fixtures and equipment, net of
  accumulated depreciation of $1,712,848 (Note 6)............    1,096,666
Other assets.................................................      213,414
                                                               ------------
    Total assets.............................................  $14,249,892
                                                               ============
                   LIABILITIES AND STOCKHOLDERS' EQUITY

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

Stockholders' equity: (Notes 12 and 18)
Preferred stock: $.01 par value (100,000 shares authorized,
  No shares outstanding)......................................  $      -
Common stock: $.01 par value, (30,000,000 shares authorized,
  24,763,030 shares issued and outstanding)..................      312,414
Common stock subscribed (3,991,250 shares)...................       39,913
Paid in capital..............................................    5,814,203
Less: Stock subscription receivable (2,991,250 shares).......   (2,693,038)
Accumulated deficit..........................................   (2,432,422)
                                                               ------------
    Total stockholders' equity...............................    1,041,070
                                                               ------------
    Total liabilities and stockholders' equity..............   $14,249,892
                                                               ============
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
<PAGE> 34
<TABLE>
                FINET HOLDINGS CORPORATION AND SUBSIDIARIES
                   CONSOLIDATED STATEMENTS OF OPERATIONS
                FOR THE YEARS ENDED APRIL 30, 1997 AND 1996
<CAPTION>
                                                                1997
1996
                                                            ------------  -
-----------
<S>                                                         <C>
<C>
REVENUE
Gain on sale of servicing rights..........................  $ 4,251,574   $
4,824,899
Loss on sale of mortgage loans (Note 7)...................   (1,885,057)
(1,548,659)
Interest income...........................................    1,110,420
1,975,388
Loan servicing fees.......................................      588,698
921,220
Retail broker fees........................................       93,997
86,409
Marketing leads...........................................       60,596
-
Other.....................................................      146,004
115,479
                                                            ------------  -
-----------
    Total revenue........................................    4,366,232
6,374,736

EXPENSES
Compensation and employee benefits........................    3,245,818
2,053,987
Interest expense..........................................    1,134,581
1,829,357
Office....................................................      854,270
758,325
Marketing.................................................      439,953
176,131
Professional fees.........................................      639,034
401,965
Depreciation and amortization.............................      436,958
398,630
Occupancy.................................................      286,550
228,836
Insurance.................................................       33,294
38,214
Data processing services..................................       94,581
80,221
Other.....................................................      681,548
69,686
                                                            ------------  -
-----------
    Total expenses........................................    7,846,587
6,035,352
                                                            ------------  -
----------
(LOSS) INCOME BEFORE INCOME TAXES AND
 EXTRAORDINARY GAIN.......................................   (3,480,355)
339,384
INCOME TAX (Note 14)......................................         -
13,220
                                                            ------------  -
-----------
NET (LOSS) INCOME BEFORE EXTRAORDINARY GAIN...............   (3,480,355)
326,164
EXTRAORDINARY GAIN ON LIABILITIES
 SUBJECT TO COMPROMISE (Note 9)...........................      312,090
-
                                                            ------------  -
-----------
NET (LOSS) INCOME     ....................................  $(3,168,265)  $
326,164
                                                            ============
============

NET (LOSS) INCOME PER SHARE BEFORE
    EXTRAORDINARY GAIN....................................  $     (0.26)  $
0.04
EXTRAORDINARY GAIN ON LIABILITIES
 SUBJECT TO COMPROMISE....................................         0.02
-
                                                            ------------  -
-----------
NET (LOSS) INCOME PER COMMON SHARE........................  $     (0.24)  $
0.04
                                                            ============
============
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING.............   13,063,241
8,400,000
                                                            ============
============
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
<PAGE> 35
<TABLE>
                FINET HOLDINGS CORPORATION AND SUBSIDIARIES
              CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                FOR THE YEARS ENDED APRIL 30, 1997 AND 1996
                                     
<CAPTION>

Common
                                -----------Common Stock------- Capital in
Stock        Retained
                                  Shares    Amount     Sub-    Excess of
Sub-         Earnings     Total
                                                       scribed Par Value
scription    (Deficit)    Capital
                                ---------- ----------- ------- ------------
----------- ------------ -----------
<S>                             <C>         <C>        <C>     <C>
<C>         <C>          <C>
Balance April 30, 1995             100,000  $ 760,000  $   -   $   350,000
$   -        $1,797,600  $2,907,600
Recapitalization to reflect shares
 issued in reverse acquisition   8,300,000   (611,216)             611,216
Distribution to shareholders
(647,225)    647,225)
Net income
326,164     326,164
                                 ----------  ---------  ------  -----------
----------  -----------  ----------
Balance April 30, 1996           8,400,000    148,784              961,216
1,476,539   2,586,539

Issue of common shares:
 Common stock
  offerings (Note 12)           11,991,250     80,000   39,913   7,233,045
(2,693,038)               4,659,920
 Reverse acquisition (Note 3)    6,411,823     64,118           (3,455,338)
(3,391,220)
 Debt & note payable conversion  2,314,114     23,141            1,136,416
1,159,557
 Liabilities subject to
  compromise settlements           230,089      2,301              112,744
115,045
 Common stock rights             2,403,837     24,038              (24,038)
 Stock option exercise               3,167         32                  158
190
Repurchase of common shares     (3,000,000)   (30,000)            (150,000)
(180,000)

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

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

</TABLE
      The accompanying notes are an integral part of the consolidated
                           financial statements.
<PAGE> 36

</TABLE>
<TABLE>
                FINET HOLDINGS CORPORATION AND SUBSIDIARIES
                   CONSOLIDATED STATEMENTS OF CASH FLOWS
                FOR THE YEARS ENDED APRIL 30, 1997 AND 1996
<CAPTION>
                                                                   1997
1996
                                                               ------------
- -------------
<S>                                                            <C>
<C>
CASH FLOWS FROM OPERATING ACTIVITIES:
 Net (loss) income............................................ $
(3,168,265) $    326,164
 Adjustments to reconcile net (loss) income to net
   cash used in operating activities:
 Depreciation and amortization................................      436,958
398,630
 Extraordinary gain on liabilities subject to compromise......
(312,090)         -
 Provision for losses on loans serviced and real estate owned.       62,046
(126,326)
 Loss on disposition of property, plant and equipment.........       19,829
9,364
 Changes in operating assets and liabilities:
   Decrease (increase) in receivables from sales
    of mortgage loans and loan servicing rights...............    7,972,231
(1,636,478)
   Mortgage loans originated..................................
(354,096,235) (503,743,765)
   Mortgage loans sold........................................  357,502,094
497,200,685
   Increase in originated mortgage servicing rights, net......
(876,414)   (1,054,538)
   Decrease (increase) mortgage loan servicing advances and
    other receivables.........................................      439,806
(740,973)
   Increase in notes receivable and notes from officers.......
(391,350)         -
   Decrease (increase) in prepaid expenses and other assets...       25,767
(67,976)
   Increase (decrease) in accounts payable, accrued expenses
    and other liabilities.....................................
(27,167)      450,175
                                                               ------------
- -------------
   Net cash provided (used) by operating activities...........    7,587,210
(8,985,038)
                                                               ------------
- -------------
CASH FLOWS FROM INVESTING ACTIVITIES:
 Purchase of mortgage servicing rights........................
(286,263)         -
 Purchase of furniture and equipment..........................
(101,807)      (90,409)
 Proceeds from sale of life insurance to officer..............      165,630
-
 Settlement of liabilities subject to compromise..............
(67,122)         -
 Pre-acquisition advances to affiliates.......................
(1,377,309)         -
 Repayment of pre-acquisition advances to affiliates..........      660,136
-
 Cash acquired with acquisition...............................       50,162
-
                                                               ------------
- -------------
  Net cash used by investing activities.......................
(956,573)      (90,409)
                                                               ------------
- -------------
<PAGE> 37

CASH FLOWS FROM FINANCING ACTIVITIES:
 Proceeds from issuance of common stock.......................    4,390,110
-
 Repurchase of common stock...................................
(180,000)         -
 Net (decrease) increase in warehouse borrowings..............
(9,522,510)    8,622,465
 Proceeds from advances on note payable and line of credit....    1,950,000
1,200,000
 Principal payments on note payable and line of credit........
(2,297,620)      (20,831)
 Proceeds of life insurance cash surrender value loan.........      154,507
-
 Repayment of life insurance cash surrender value loan........
(154,507)         -
 Cash distributions to former shareholders (Note 3)...........
(1,040,008)     (445,710)
 Proceeds from notes payable to officers......................      625,326
-
 Repayment of notes payable to officers.......................
(625,326)         -
                                                               ------------
- -------------
  Net cash (used) provided by financing activities.............
(6,700,028)    9,355,924
                                                               ------------
- -------------
Net (decrease) increase in cash...............................
(69,391)      280,477
Cash at beginning of period...................................      672,687
392,210
                                                               ------------
- -------------
Cash at end of period......................................... $    603,296
$    672,687

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

 The accompanying notes are an integral part of the consolidated financial
                                statements.
<PAGE> 38
                FINET HOLDINGS CORPORATION AND SUBSIDIARIES
                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                     
1. GENERAL
                                     
REPORTING ENTITY

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

SEGMENT AND GEOGRAPHICAL INFORMATION

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

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

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

MORTGAGES HELD FOR SALE

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

MORTGAGE SERVICING RIGHTS

Mortgage Servicing Rights are carried at values based on the allocation  of
the  cost  of  originated  or  purchased mortgage  loans  to  the  mortgage
servicing rights and the loans based on their relative fair values  at  the
date  of  purchase or, for Originated Mortgage Servicing Rights  ("OMSRs"),
the  date  of  sale of the related mortgage loan.  The fair values  of  the
mortgage  servicing rights are based upon prices available in the secondary
market for servicing rights of mortgage loans with similar characteristics.
When  material,  capitalized mortgage servicing  rights  are  amortized  in
proportion to, and over the period of, estimated net servicing income.   In
evaluating  and  measuring  impairment, capitalized  servicing  rights  are
tested  for  impairment based on the expected future net servicing  revenue
stream.
<PAGE> 39

LOAN SERVICING

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

LOAN ORIGINATION FEES

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

HEDGE ACCOUNTING

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

FURNITURE, FIXTURES AND EQUIPMENT

Depreciation is computed over the estimated useful lives of the  furniture,
fixtures  and  equipment  of two to twelve years  using  the  straight-line
method.   The  cost of repairs and maintenance of furniture,  fixtures  and
equipment is charged to operating expenses.

INCOME TAXES

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

MMI  elected  S  Corporation status effective March 1, 1987.  The  election
ceased effective with the acquisition at December 31, 1996 (Note 3).  Prior
to  December  31,  1996,  MMI's items of taxable income,  credit,  and  tax
preferences  of  the Corporation were primarily the responsibility  of  MMI
stockholders on their individual income tax returns.
<PAGE> 40

NET (LOSS) INCOME PER COMMON SHARE

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

RECLASSIFICATIONS

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


NEW ACCOUNTING STANDARDS

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

In  June 1996, the Financial Accounting Standard Board issued SFAS No. 125,
"Accounting   for   Transfers  and  Servicing  of  Financial   Assets   and
Extinguishments  of  Liabilities".  As amended, SFAS  No.  125  applies  to
securities  lending,  repurchase agreements, dollar  rolls,  other  similar
secured financial transactions, and to all other transfers and servicing of
financial assets occurring after December 31, 1996.  SFAS No. 125  resulted
in  the  recording of OMSRs on the date of the sale of a mortgage  loan  as
opposed  to the current practice of recording OMSRs on the date that  loans
are  originated.  Additionally, under SFAS No. 125, excess  servicing  fees
will   be  combined  with  OMSRs  for  balance  sheet  presentation.    The
application  of  the  new  rules did not have  a  material  impact  on  the
financial statements.

In  February 1997, the Financial Accounting Standards Board issued SFAS No.
128,  "Earnings  Per  Share," which is required to be adopted  for  periods
ended  after December 15, 1997.  At that time, the Company will be required
to  change the method used to compute earnings per share and to restate all
prior periods.  Under the new requirements, primary earnings per share will
be  replaced by the presentation of basic earnings per share in  which  the
dilutive effect of common stock equivalents will be excluded.  The adoption
is  expected to have no material impact on the Company's reported  earnings
per share.

3. ACQUISITIONS

On  December  31, 1996, the Company acquired all of the outstanding  common
stock  of  MMI, a non-public mortgage banker, in exchange for  8.4  million
common  shares  of Finet and a cash payment of $1 million.  For  accounting
purposes, the cash payment is deemed a dividend payment to MMI shareholders
and  the  common shares issued in the acquisition have been  treated  as  a
recapitalization of MMI, with MMI as the reverse acquisition acquirer.  The
historical financial statements prior to December 31, 1996 are those of MMI
and  are  deemed to be those of the reporting entity. Since  the  Company's
operations were minimal or dormant during the years ended December 31, 1996
and  1995,  the  reverse  acquisition is considered a  capital  transaction
rather  than a business combination and, accordingly, pro forma information
is  not  presented.  Following the reverse acquisition, the Company changed
its  fiscal year end from December 31 to April 30 to conform to the  fiscal
year end of MMI.
<PAGE> 41

The  Company also acquired all of the outstanding stock of PAMN in exchange
for  a  $250,000 cash payment on December 31, 1996.  PAMN is  a  California
mortgage  broker  which  commenced operations on  February  1,  1996.   The
acquisition of PAMN is being accounted for as a purchase and the results of
its  operations are included in the consolidated operations of the  Company
for  the period January 1, 1997 through April 30, 1997. Unaudited pro forma
information  giving effect to the acquisition of PAMN as if the acquisition
took place May 1, 1996 is as follows:

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

4. MORTGAGE LOAN SERVICING

The  Company's origination and servicing activity is concentrated primarily
within   California.   The  Company's  servicing  portfolio  is   primarily
comprised  of  conventional mortgage loans which are not  included  in  the
accompanying balance sheet and which had outstanding principal balances  of
$168 million, representing 1,182 loans, at April 30, 1997.  The majority of
loans  are  secured through Federal National Mortgage Association  ("FNMA")
and  Federal  Home  Loan  Mortgage  Corporation  ("FHLMC")  programs  on  a
nonrecourse   basis   whereby  foreclosure   losses   are   generally   the
responsibility  of  the investor and not the Company.  In  connection  with
mortgage  loan  servicing  activities, the Company  segregates  escrow  and
custodial  funds  in  separate trust accounts and excludes  these  balances
(approximately  $1.1  million  at April 30,  1997)  from  the  accompanying
balance  sheet.   The  Company is required to maintain separate  accounting
records  for  its  escrow  and  custodial cash  accounts  and  the  related
liabilities.

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

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

As a routine part of servicing operations, the servicing portfolio contains
a number of loans that are in the process of foreclosure, or that have been
foreclosed  upon by the Company (real estate owned). The dollar  amount  of
loans  in  foreclosure  and  real  estate owned  represented  3.2%  of  the
outstanding servicing portfolio balance as of April 30, 1997.   The  losses
(recoveries)  to  the Company arising from the foreclosed  loans  and  real
estate owned were $111,386 and $(44,802) for the years ended April 30, 1997
and 1996, respectively.

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

The  Company  carried  fidelity bond coverage of $ 950,000  and  errors  or
omission coverage of $950,000 as of April 30, 1997.
<PAGE> 42

5. MORTGAGE SERVICING RIGHTS

ORIGINATED MORTGAGE SERVICING RIGHTS

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

PURCHASED MORTGAGE SERVICING RIGHTS

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

<TABLE>
                                            1997
                                           -------
<S>                                        <C>
Beginning Balance, May 1, 1996
    Purchases............................  $286,263
    Sales................................      -
    Amortization.........................   (39,581)
                                           ---------
Ending Balance, April 30, 1997             $246,682
                                           =========
</TABLE>

The  Company  amortizes Purchase Mortgage Service Rights over  four  years,
using  a  declining balance method at a rate that approximates the rate  of
its working capital borrowing facilities.

6. FURNITURE, FIXTURES AND EQUIPMENT

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

<TABLE>
<S>                                            <C>
    Furniture and fixtures...................  $   493,317
    Computer equipment.......................    1,211,872
    Office equipment.........................      215,480
    Video conferencing equipment.............      374,954
    Leasehold improvements...................      183,953
    Capitalized software costs...............      329,938
                                              -------------
        Total cost...........................    2,809,514
Less: Accumulated Depreciation...............   (1,712,848)
                                              -------------
Furniture, fixtures and equipment, Net........ $  1,096,666
                                               ============
</TABLE>
<PAGE> 43

7. LOSS ON SALES OF MORTGAGE LOANS

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

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

8. DEBT

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

On December 31, 1996, in conjunction with the reverse acquisition of MMI by
Finet, and the acquisition of PAMN, the Company acquired capitalized leases
related  to  PAMN operations in the amount of $169,247.  The  Company  also
acquired  convertible  debt  and notes payable related  to  pre-acquisition
operations   of  Finet  of  approximately  $1,220,000.  Of   this   amount,
approximately  $1,170,000  was retired through the  issuance  of  2,373,000
shares of Finet common stock, and $50,000 was retired by a cash payment.
<PAGE> 44

The  following table and comments present summary information regarding the
Company's debt as of April 30, 1997:

<TABLE>
<CAPTION>
                                                  Interest          Expires
or
Facility                          Balance         Rate              Due
--------------------------------  --------------  --------------   --------
-----------
<S>                                <C>            <C>              <C>
REVOLVING
Warehouse line of credit:                         Federal Funds
  $10 million committed,                          plus variable
   $25  million uncommitted gestation $ 10,209,197  spread           August
31, 1997
Revolving line of credit                          Prime plus
   $1  million committed                   100,000  0.625%           August
31, 1997
                                   ------------
Total                                10,309,197
                                   ------------
NOTES AND CAPITAL LEASES:
Note  payable                                      Prime  plus        April
30, 2000
   $1 million original note              729,167   0.625%           1999 to
2000
Capitalized leases                      288,745
                                   ------------
Total                                 1,017,912
                                   ------------
Total debt                         $ 11,327,109
                                   ============
</TABLE>

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

<TABLE>
<CAPTION>
                                                   Capitalized   Total
Year                                 Note Payable     Leases    Payments
----                                 ------------  -----------  ---------
<S>                                    <C>           <C>        <C>
1998                                   $250,000      $145,264   $  395,264
1999                                    250,000       133,434      383,434
2000                                    229,167        36,027      265,194
2001                                       -             -            -
2002                                       -             -            -
                                      -----------  -----------  ----------
                                        729,167       314,725    1,043,892
Amounts representing interest              -          (25,980)     (25,980)
                                      -----------  -----------  ----------
                                       $729,167      $288,745   $1,017,912
                                      ===========  ===========  ===========
</TABLE>
<PAGE> 45

COLLATERAL

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

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

DEBT COVENANTS

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

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

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

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

9. LIABILITIES SUBJECT TO COMPROMISE

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

10. COMMITMENTS AND CONTINGENCIES

DEBT COVENANTS

As discussed in Note 8, at April 30, 1997, the  Company was in violation of
three  of  its debt covenants related to its warehouse line of credit,  its
note  payable and its revolving line of credit.  The violations are related
to  the  Company's  tangible net worth, adjusted  tangible  net  worth  and
required   minimum   servicing   portfolio  balance.    Additionally,   the
acquisition  of  MMI  created  a breach of the  terms  of  these  borrowing
activities as of December 31, 1996.  The lender was notified and, to  date,
has not restricted the Company's borrowing ability.  The warehouse line  of
credit  and  the revolving line of credit agreements expire on  August  31,
1997.  The Company is in the process of negotiating new agreements with the
lender,  and  has  no  reason  to  believe the  negotiations  will  not  be
successful.  However, no assurances can be given that the credit facilities
will be renewed.
<PAGE> 46

LOAN SALE COMMITMENTS

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

MORTGAGE LOAN APPLICATIONS IN PROCESS

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

LEASES

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

<TABLE>
<CAPTION>
                                 Lease      Sublease    Net Lease
Fiscal Year ending               Expense    Income      Expense
---------------------          ----------   ---------   -----------
<S>                            <C>          <C>         <C>
  1998.......................  $  395,485   $ (25,482)  $  370,003
  1999.......................     316,653           0      316,653
  2000.......................     313,173           0      313,173
  2001.......................     234,335           0      234,335
  2002                                -           -            -
                               ----------    --------   -----------
                               $1,259,646   $ (25,482)   $1,234,164
                               ==========   =========   ===========
</TABLE>

Rental  expense amounted to $372,671 and $310,675 in fiscal year  1997  and
1996  respectively.   There is no sublease rental  income  expected  beyond
1998.

GUARANTEES

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

CONTINGENCIES

Certain  claims arising in the ordinary course of business have been  filed
against  the Company.  One claim by two previous stockholders  of  MMI  had
sought  recession of prior contracts for the sale of the plaintiff's  stock
to  MMI's  stockholders to restore them to their former status as  minority
stockholders of MMI.  This claim was settled during the fiscal  year  ended
April  30, 1997.  The settlement amount may not be disclosed as a condition
of  the  settlement  agreement, however said  settlement  did  not  have  a
material adverse effect on the Company's financial position.
<PAGE> 47

Under the terms of an agreement with NDS Software, Inc. ("NDS") the Company
has  a  contingent  obligation to adjust the share  consideration  of  that
agreement if the market price of the Company's common shares is not  at  or
above  $4.00  per  share upon the earlier of the Company's registration  of
NDS's shares or June 3, 1998, to maintain a value equal to $808,000 at that
time, to a maximum additional shares issuable of 1,414,000 shares (see Note
17).

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

COMMON STOCK PURCHASE WARRANTS

The  Common  Stock  Purchase Agreement for the December 30,  1996  sale  of
6,000,000  common shares under Regulation S of the United States Securities
Act of 1993 provides that in the event a registration of the shares subject
to  the  Agreement does not become effective within 150 days of  the  final
closing  (January  15, 1997) for any reason other than matters  beyond  the
control  of  the  Company,  the purchasers shall be  granted  common  stock
purchase  warrants in an aggregate amount of 500,000 shares  at  $0.50  and
500,000 shares at $1.00 per share.

11. FAIR VALUE OF FINANCIAL INSTRUMENTS

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

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

<TABLE>
<CAPTION>
                                                 Carrying         Estimated
                                                     Value             Fair
Value
--------------------------------------------  ---------------    ----------
-
<S>                                           <C>               <C>
Assets:
     Cash                                           $      603,296        $
603,296
  Receivables from sales of mortgage loans
        and    loan    servicing    rights                        3,453,199
3,453,199
      Mortgages    held    for    sale                            7,268,877
7,268,877
  Mortgage loan servicing advances and
          other      receivables                                    644,072
644,072
      Owned     servicing     rights                                579,018
579,018
Liabilities:
        Warehouse      borrowings                                10,209,197
10,209,197
      Revolving    line    of    credit                             100,000
100,000
     Note    payable    and   capitalized   leases                1,017,912
1,017,912

                                                                   Contract
Unrealized
                                                                     Amount
Gain(Loss)
                                               ---------------   ----------
-
OFF BALANCE SHEET:
      Loan    commitments    to    fund                          17,474,851
77,092
      Loan    commitments    to    sell                          12,500,000
(97,261)
</TABLE>
<PAGE> 48

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:

For  cash,  receivables  from sales of mortgage loans  and  loan  servicing
rights, mortgage loans held for sale, mortgage loan servicing advances  and
other  receivables, other accounts and notes receivable warehouse  line  of
credit,  revolving line of credit and note payable and capitalized  leases,
the  carrying value is considered to be a reasonable estimate of fair value
based   on  interest  rates  of  similar  financial  instruments   in   the
marketplace.

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

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

The Company does not acquire or issue derivative financial instruments.

12. STOCKHOLDERS' EQUITY

The  Company is authorized to issue 30,000,000 shares of common stock,  par
value $.01 per share, and 100,000 shares of preferred stock, par value $.01
per  share.  An increase in the number of shares authorized from 20,000,000
to  30,000,000 was approved by shareholders in October, 1996 as part of the
plan  of  recapitalization.   In  January, 1997,  the  Board  of  Directors
resolved  to  increase the number of shares authorized  to  40,000,000,  to
which a required majority of shareholders have indicated their assent.  The
Company has filed this amendment with the State of Delaware.

COMMON STOCK

In  connection with the December 1996 reverse acquisition between  MMI  and
Finet, the 8.4 million shares issued in that transaction (see Note 3)  have
been treated as a recapitalization of MMI and, as such, have been reflected
as  outstanding common shares as of the beginning of the reporting periods,
and  the outstanding common shares of Finet at the date of the transaction,
6.4  million shares, have been treated as shares issued for the acquisition
of Finet.

Immediately  following  the reverse acquisition the Company  repurchased  3
million  shares  from  a major shareholder of Finet for  the  shareholder's
original  cost  of $180,000.  This shareholder was also the  holder  of  an
$800,000  convertible  debenture assumed by  the  Company  in  the  reverse
acquisition,   which  together  with  accrued  interest,  was  subsequently
converted  into  1.85 million common shares.  In total, the Company  issued
2.3  million  shares for principal and interest of Finet debt comprised  of
the $800,000 convertible debenture and bridge loans of $370,000 outstanding
at the date of the reverse acquisition (see note 10).

From December 1996 through April 30, 1997, four private placements resulted
in stock subscriptions totaling $8.1 million to acquire 11.9 million shares
of  the Company's common stock.  Of these subscriptions, $4.2 million  were
received by April 30, 1997, with the remainder received shortly thereafter,
for net cash receipts of $7.35 million, as summarized below:
<PAGE> 49

<TABLE>
<CAPTION>
                             Price
                             Per    Gross                     Net
Offering         Shares      Share  Subscription  Expenses    Consideration
---------------  ----------  -------  ------------  ----------  -----------
--
<S>              <C>         <C>      <C>           <C>         <C>
December, 1996    1,000,000  $  0.50  $    500,000  $        0  $
500,000
December, 1996    6,000,000     0.50     3,000,000     348,065
2,651,935
March, 1997       1,000,000     0.60       600,000           0
600,000
April, 1997       3,991,250     1.00     3,991,250     390,227
3,601,023
                 ----------           ------------  ----------  -----------
-
Totals           11,991,250           $  8,091,250  $  738,292
7,352,958
                 ==========           ============  ==========
Less Subscriptions receivable
(2,693,038)
                                                                -----------
-
Total                                                           $
4,659,920

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

As part of the above listed offerings, a total of 5,243,125 investor
warrants and 859,125 placement agent warrants were granted.

On  April  30, 1997, the Company had 24,763,030 shares of its common  stock
issued  and outstanding.  As of April 30, 1997, the Company had outstanding
subscriptions for an additional 3,991,250 shares of its common stock.

In  February  1997  the  Company issued 2.3  million  common  shares  to  a
management group in satisfaction of outstanding share rights authorized and
recorded by Finet in 1996 prior to the reverse acquisition with MMI.

In  February and March 1997 the Company issued approximately 230,100 common
shares  in  settlement of certain creditors' claims recorded as liabilities
subject  to  compromise and assumed by the Company in connection  with  the
reverse acquisition with Finet (Note 9).

WARRANTS

Current  warrants  outstanding  for  the  purchase  of  common  shares  are
summarized below:


</TABLE>
<TABLE>
                             Number of   Exercise
Holder                       shares      Price        Expiration
---------------------------  ---------   ----------   --------------
<S>                          <C>         <C>          <C>
Jose Salema Garcao           3,500,000   $0.50-3.00   December, 2001
                               600,000    1.50-2.50   March, 2002
                               200,000    1.50-3.50   April, 2000
                               400,000    3.00        April, 2002
Placement Agent                859,125    1.50        December, 2000
November, 1993 unit holders    131,167    4.50        November, 2003
April, 1997 investors          543,125    1.50-3.50   April, 2000
Cumberland Partners            214,781    1.50        December, 2006
Bridge lenders                  17,776    1.50-3.50   April, 2000
July, 1993 investors           437,223    1.50-3.50   April, 2000
Former employee                  4,750    2.68        October, 2001
                             ---------
Total                        6,907,947
</TABLE>
<PAGE> 50

The  Company  had outstanding exercisable warrants, at April 30,  1997,  to
purchase  5,834,041  shares of the Company's common stock  at  prices  that
ranged from $.50 to $4.50 per share.

ARRANGEMENTS FOR FUTURE ISSUANCE OF STOCK, OPTIONS AND WARRANTS

The  number  of  shares  outstanding, at April 30,  1997,  including  stock
subscriptions was 28,754,280 shares.  Also, 6,392,519 shares, at April  30,
1997, were subject to currently exercisable options and warrants issued  by
the Company.  The Company contemplates the future issuance of other options
to  certain  members  of  management pursuant to  its  stock  option  plan.
Consequently,  there would have been insufficient authorized  but  unissued
shares remaining in the event of the exercise of all of the warrants and/or
options outstanding.  In order to reserve and assure an adequate number  of
authorized but unissued shares to accommodate warrant and option exercises,
the Company recommended, its Board of Directors resolved, and a majority of
shareholders have indicated their written assent to increase the number  of
shares  authorized from 30,000,000 shares to 40,000,000 shares  to  provide
for  these  requirements.  The Company expects to record this amendment  in
the near future.

13.  STOCK OPTION PLAN

The  Company  maintains a stock option plan (the "1989 Stock Option  Plan")
for  key employees, non-employee Directors and others which permits  grants
of  stock  options  for the purchase of common stock with  exercise  prices
equal to the fair market value on the date of grant; or, in the case of any
participant who owns stock representing more than 10% of the voting  rights
of  the  Company's  outstanding common stock, the  exercise  price  of  the
options  must be at least equal to 110% of the fair value on  the  date  of
grant.   The  maximum  option  term is ten  years.   Employee  options  are
exercisable upon grant of the option and non-employee Director options vest
at  a  rate  of  25% per year.  The plan also authorizes stock appreciation
rights  to be issued in connection with the grant and exercise of  options,
however,  to  date  no stock appreciation rights have been  awarded  either
individually or in connection with grants of stock options.

The  company applies Accounting Principles Board Opinion No. 25 and related
interpretations  in accounting for its stock option plan.  Accordingly,  no
compensation expense has been recognized as the exercise price has  equaled
the  stock fair value on the date of grant.  Had compensation expense  been
determined for stock options granted in fiscal 1997 and 1996 based  on  the
fair  value  at grant dates consistent with SFAS No. 123 the Company's  pro
forma fiscal 1997 and 1996 would have been as follows:

<TABLE>
                                             1997        1996
                                         ----------    ---------
<S>                                      <C>           <C>
Estimated stock-based compensation       $   125,146   $    490
Net (loss) income as reported             (3,186,265)   226,736
Pro forma net (loss) income               (4,179,272)   226,246
(Loss)earnings per share as reported            (.24)      0.03
Pro forma (loss) earnings per share             (.25)      0.03
</TABLE>

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

The pro forma amounts were estimated using the Black-Scholes option pricing
model   with   the  following  assumptions  for  fiscal  1997   and   1996,
respectively:  risk-free  interest rate of  6.609%  to  6.675%;  volatility
factor  of the expected market price of the Company's common stock  of  50%
and  50%; no dividend growth rate since the Company does not intend to  pay
dividends  on  its common stock; and expected lives equal to the  remaining
option terms for both years.
<PAGE> 51

The  following table summarizes employee stock option plan activity for the
years ended April 30, 1997 and 1996:

<TABLE>
<CAPTION>
                                    ----------- 1997 ----------    --------
1996 --------
                                                                   Weighted
Weighted
                                                                    Average
Average
                                                                   Exercise
Exercise
                                      Options      Price             Option
Price
                                    ----------    -------------    --------
------------
<S>                                   <C>             <C>               <C>
<C>
Outstanding,  beginning of year      467,991       $ 0.06           353,994
$ 0.06
Granted  during the year             120,000         0.50           346,634
0.06
Canceled  during the year            (25,950)        0.06         (232,637)
0.06
Exercised  during the year             (3,167)         0.06               -
-
                                    -------                      --------
Outstanding,  end of year            558,874         0.15           467,991
0.06

Eligible  for exercise, end of year  558,478         0.15           467,753
0.06

Weighted-average fair value of
options     granted    during     the     year                         2.15
0.01
</TABLE>

The   following  table  summarizes  information  regarding  stock   options
outstanding at April 30, 1997:

<TABLE>
<CAPTION>
----------Options Outstanding----------  --------Options Exercisable-------
-
                       Weighted          Weighted
Range of  Number       Average           Average       Number       Average
Exercise     Outstanding    Remaining           Exercise        Exercisable
Exercise
Prices                 Contractual Life  Price         at 4/30/97   Price
--------  -----------  ----------------  ------------  ----------   -------
-
<C>       <C>          <C>               <C>           <C>          <C>
$ 0.03    438,874      10 years          $ 0.06        438,478      $ 0.06
  0.50    120,000       5 years            0.50        120,000        0.50
</TABLE>

The  Company  is in the process of making various amendments  to  the  1989
Stock  Option Plan, which currently authorizes the grant of options for  up
to  500,000  shares  of  common  stock, including  an  increase  number  of
authorized shares.

14. INCOME TAXES

Prior  to  December 31, 1996 the Company had elected S Corporation  status.
Accordingly,  prior to that date items of taxable income, credit,  and  tax
preferences  of  the  Company  were primarily that  responsibility  of  the
stockholders  and, as such, the Company was not subject to  federal  income
taxes.   The  Company  was subject to state financial  corporation  tax  of
approximately  3.9%  which comprised the Company's tax  provision  for  the
fiscal year ended April 30, 1996.  No provision or benefit was recorded for
the fiscal year ended April 30, 1997.
<PAGE> 52

The  following  pro forma information presents net (loss)  income  and  per
share  data  as  if the Company had been taxed as a C Corporation  for  the
years ended April 30, 1997 and 1996:
<TABLE>
                                                                       1997
1996
                                                            ------------  -
-----------
<S>                                                         <C>
<C>
Historical(loss) income before income taxes
 as shown above...........................................  $ (3,480,355) $
339,384
Pro forma provision for income taxes......................         -
112,648
                                                            ------------  -
-----------
Pro forma net (loss)income before extraordinary gain........  (3,480,355)
452,032
Extraordinary gain from settlement of liabilities
 subject to compromise......................................     312,090
-
                                                            ------------  -
-----------
Pro forma net (loss) income     ...........................  $(3,168,265)
$   452,032
                                                            ============
============
Per share data:
Pro forma net (loss) income before
 extraordinary gain.......................................   $    (0.26)
$     0.03
Extraordinary gain on liabilities
 subject to compromise....................................         0.02
-
                                                            ------------  -
-----------
Pro forma net (loss) income...............................   $    (0.24)
$     0.03
                                                            ============
============
</TABLE>

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

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

<TABLE>
<S>                                          <C>
DEFERRED TAX ASSETS:
  Net operating loss carryforwards(NOL's)    $ 8,732,038
  Goodwill                                     1,232,310
  Deferred compensation                           40,901
                                             ------------
  Total deferred tax assets                   10,005,249
  Valuation allowance, net                    (9,781,029)
                                             ------------
Net deferred tax assets                          224,220
                                             ------------
DEFERRED TAX LIABILITIES:
  Originated mortgage servicing rights           132,934
  Property plant and equipment, net of
     accumulated depreciation                     91,286
                                              -----------
   Total deferred tax liabilities                224,220
                                              -----------
Total net deferred tax assets and liabilities $     -
                                              ===========
</TABLE>
<PAGE> 53

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

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

<TABLE>
<CAPTION>

    Year
   ------
    <S>                 <C>
    2004                $2,210,062
    2005                 7,051,825
    2006                       -
    2007                 2,308,598
    2008                 1,600,598
    2009-2012            8,659,309
                        ----------
        Total          $21,830,095
                        ==========
</TABLE>
<PAGE> 54

15. SUPPLEMENTAL CASH FLOW INFORMATION

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

<TABLE>
<CAPTION>
                                                                       1997
1996
                                                                 ----------
-- ----------
<S>                                                                     <C>
<C>
Interest     paid                                                         $
1,165,472  $ 1,742,679
Income  taxes paid                                                        -
27,500
Distributions to prior shareholders:
            Distributions           declared           or           imputed
740,695      647,225
                             Distributions                             paid
1,040,008)    (445,710)
                                                                 ----------
--- -----------
            Change            in           distributions            payable
(299,313)     201,515
Assets          and          lease         obligations          capitalized
165,221         -
Common stock issued for settlement of
            liabilities           subject           to           compromise
115,045         -
Common     stock     issued     for    interest     and     lender     fees
259,557         -
Common          stock         in         exchange         for          debt
1,170,000         -
Acquired in acquisition:
                                                                       Cash
50,162         -
            Furniture,            fixtures           &            equipment
246,307         -
                                Other                                assets
279,702         -
       Accounts      payable      and      other      accrued      expenses
(1,609,408)        -
                                                                       Debt
(1,389,247)        -
            Liabilities           subject           to           compromise
(968,736)        -
                             Accumulated                            deficit
3,391,220         -
</TABLE>

16. RELATED PARTY TRANSACTIONS

LOANS TO OFFICERS

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

<TABLE>
<CAPTION>
                                   Loan    Interest
Officer                 Title     Amount    Rate     Term   Collateral
-----------------     ---------  --------  -------   ----   ---------------
--
<S>                   <C>        <C>       <C>       <C>    <C>
L. Daniel Rawitch     CEO        $ 73,000  8.0%      1 yr   Securities
Jan C. Hoeffel        President    12,000  Prime     1 yr   Unsecured
T.  Lee  Decker         MMI SVP      53,350  5.27%     5 yrs  2nd  Deed  of
Trust
William Dullaghan     MMI SVP       6,000  8.0%      2 yrs  Securities
                                 --------
  Total loans to officers        $144,350
                                 ========
</TABLE
<PAGE> 55

CONSULTING AGREEMENTS

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

BORROWINGS

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

FACILITY LEASE

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

17. EMPLOYEE BENEFIT PLAN

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

18. MATERIAL SUBSEQUENT EVENTS

RECEIPT OF ADDITIONAL CAPITAL

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

BORROWING ARRANGEMENTS

As  discussed  in  Note 8 and 10, Residential Funding  Corporation  ("RFC")
provides  MMI  several  borrowing arrangements to  support  MMI's  mortgage
banking activities.  The change of ownership resulting from the acquisition
of  MMI  on December 31, 1996 constituted a breach of the certain terms  of
these  arrangements.  At that time MMI also was in technical  violation  of
several financial covenants.  RFC continued to allow the Company to operate
without disruption and subsequent to April 30, 1997 issued a formal  waiver
of all then existing breaches and covenant violations on the condition that
Finet  issue  a parent company guarantee of MMI's borrowings and  that  the
borrowing  arrangements expiration date be accelerated  from  December  31,
1997 to August 31, 1997, at which time these agreements are expected to  be
renegotiated  and  renewed.  However no assurances can be  given  that  the
credit facilities will be renewed.
<PAGE> 56

NDS SOFTWARE AGREEMENT

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

ACQUISITION

On June 12, 1997, the Company entered into a preliminary agreement with the
shareholders  of  Real  Estate Office Software,  Inc.  ("REOS"),  a  Nevada
corporation, to acquire substantially all of the assets and certain of  the
liabilities  of  REOS.  The consideration for this transaction  is  in  the
process  of being negotiated.  REOS is a software development and marketing
company  whose  primary product is a proprietary Realtor productivity  tool
called  Real Estate Office.  Pursuant to an interim agreement,  all  former
REOS   employees  are  now  employees  of  the  Company  engaged  in  final
development of an enhanced Realtor relationship management tool called  the
Agent  Connector  which  is  scheduled for initial  introduction  in  early
September, 1997.
<PAGE> 57


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

EX-3.(i).1  Amendment of October, 1997
58

EX-3.(i).2  Amendment of January, 1997
60

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

EX-10.1     Term Sheet Agreement
62

EX-10.2     Revised Term Sheet Agreement
68

EX-10.3     Merger Agreement and Plan of Reorganization
74

EX-10.4     Consulting Agreement
80

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

EX-21       Description of the Subsidiaries of the Registrant
83

EX-23       Consent of Independent Accountant
84

EX-27       Financial Data Schedule
85

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

</FN>
</TABLE>