<PAGE> 1
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                                   ====

                  U.S. SECURITIES AND EXCHANGE COMMISSION
                           WASHINGTON, DC 20549
                                     
                             ----------------
                                     
                                FORM 10-QSB
                                     
           [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                  OF THE SECURITIES EXCHANGE ACT OF 1934
                                     
               For the quarterly period ended July 31, 1997
                                     
                         ------------------------
                                     
                      Commission File Number: 0-18108
                                     
                         ------------------------
                                     
                        FINET HOLDINGS CORPORATION
          (Exact name of registrant as specified in its charter)
                                     
                                 DELAWARE
                         (State or jurisdiction of
                      incorporation or organization)
                                     
                            3021 CITRUS CIRCLE
                          WALNUT CREEK, CA 94598
                  (Address of principal executive office)
                                     
                                94-3115180
                   (IRS Employer Identification Number)
                                     
                              (510) 988-6550
           (Registrant's telephone number, including area code)
                                     
                                     
Indicate  by  check mark whether the registrant has (1) filed  all  reports
required to be filed by Section 13 or 15(d) of the Securities Act  of  1934
during  the  preceding  12  months (or for such  shorter  period  that  the
registrant was required to file such reports), and (2) has been subject  to
filing requirements within the past 90 days.

                               Yes 'X'  No.

The  number of shares outstanding of each of the issuer's classes of common
stock  was  29,006,018  shares  of common stock,  par  value  $.01,  as  of
September 12, 1997.
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====
<PAGE> 2
                        FINET HOLDINGS CORPORATION
                                     
                                   INDEX

<TABLE>
Item  Description
Page
----  -------------------------------------------------------------------
----
<S>   <C>
<C>
                      PART I - FINANCIAL INFORMATION

1.    Financial Statements

      Unaudited Balance Sheet............................................
3
        July 31, 1997

      Unaudited Statements of Operations
        Three Months Ended July 31, 1997 and 1996........................
4

      Unaudited Statements of Cash Flow..................................
5
        Three Months Ended July 31, 1997 and 1996

      Notes to Unaudited Financial Statements............................
7

2.    Management's Discussion and Analysis of Financial Condition
        and Results of Operations........................................
12


                        PART II - OTHER INFORMATION

1.    Legal Proceedings..................................................
16

2.    Changes in Securities..............................................
16

4.    Submission of Matters to a Vote of Security Holders................
16

5.    Other Information..................................................
16

6.    Exhibits and Reports on Form 8-K...................................
17

      Signatures.........................................................
18
<PAGE> 3

                       PART I. FINANCIAL INFORMATION

                           FINANCIAL STATEMENTS

</TABLE>
<TABLE>
                        FINET HOLDINGS CORPORATION
                        CONSOLIDATED BALANCE SHEET
                                (UNAUDITED)
<CAPTION>
                                                                  July 31,
                                                                   1997
                                                               ------------
<S>                                                            <C>
                                  ASSETS
Cash.........................................................  $   806,250
Accounts receivable from sales of mortgage
  loans and servicing rights.................................    9,457,199
Mortgage loan servicing advances and
  other receivables..........................................      740,589
Accounts receivable from affiliates (Note 4).................      431,787
Notes receivable.............................................       72,000
Notes receivable - officers..................................      132,350
Mortgages held for sale, net.................................    7,967,308
Mortgage servicing rights....................................      670,744
Furniture, fixtures and equipment, net of
  accumulated depreciation of $1,598,255.....................    1,020,047
Intangible assets (Note 7)...................................    1,010,000
Other assets.................................................      336,052
                                                               ------------
    Total assets.............................................  $22,644,326
                                                               ============
                                     
                   LIABILITIES AND STOCKHOLDERS' EQUITY

Liabilities:
Warehouse line of credit (Note 6)............................  $16,568,596
Accounts payable.............................................      770,582
Note payable and capitalized leases (Note 6).................      918,258
Accrued expenses and other liabilities.......................      443,420
Liabilities subject to compromise............................      452,222
                                                               ------------
    Total liabilities........................................   19,153,078
                                                               ------------
Commitments and contingencies (Note 8)

Stockholders' equity:
Preferred stock, $.01 par value, (100,000 shares
  authorized, none issued and outstanding)...................            -
Common stock, $.01 par value, (40,000,000 shares
  authorized, 28,973,618 shares issued and outstanding)......      354,520
Paid in capital..............................................    6,646,017
Accumulated deficit..........................................   (3,509,289)
                                                               ------------
    Total stockholders' equity...............................    3,491,248
                                                               ------------
    Total liabilities and stockholders' equity..............   $22,644,326
                                                               ============
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
<PAGE> 4
<TABLE>
                        FINET HOLDINGS CORPORATION
                   CONSOLIDATED STATEMENTS OF OPERATIONS
                                (UNAUDITED)
<CAPTION>
                                                     THREE MONTHS ENDED
                                                          July 31,
                                                  -------------------------
-
                                                      1997          1996
                                                  ------------  -----------
-
<S>                                               <C>           <C>
REVENUES
Gain on sale of servicing rights.(Note 5).......  $   692,858   $   696,460
Loss on sale of mortgage loans..................      (67,906)
(104,018)
Interest income.................................      335,036       324,690
Loan servicing fees.............................      128,458       193,456
Retail broker fees..............................       30,857        17,330
Marketing leads.................................       70,579          -
Income from affilites (Note 4)..................        9,808          -
Other...........................................       23,765        16,837
                                                  ------------  -----------
-
    Total revenues..............................    1,223,455     1,144,755

EXPENSES
Compensation and employee benefits..............    1,005,571       823,981
Interest expense................................      331,585       331,119
Office..........................................      307,576       229,681
Marketing.......................................       96,263       107,571
Professional fees...............................      228,149        96,012
Depreciation and amortization...................      113,032        87,297
Occupancy.......................................       91,773        53,677
Insurance.......................................       12,507         8,829
Data processing services........................       27,737        24,908
Other...........................................       86,129        28,985
                                                  ------------  -----------
-
    Total expenses..............................    2,300,322     1,792,060
                                                  ------------  -----------
Loss before income taxes........................   (1,076,867)
(647,305)

Income tax expense..............................         -             -
                                                  ------------  -----------
-
NET LOSS........................................  $(1,076,867)  $
(647,305)
                                                  ============
============

NET LOSS PER COMMON SHARE (Note 3)..............  $      (.04)  $
(.08)
                                                  ============
============
WEIGHTED AVERAGE NUMBER OF COMMON SHARES
  OUTSTANDING...................................   28,936,228     8,400,000
                                                  ============
============
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
<PAGE> 5

<TABLE>
                        FINET HOLDINGS CORPORATION
                   CONSOLIDATED STATEMENTS OF CASH FLOWS
                                (UNAUDITED)
<CAPTION>
                                                        THREE MONTHS ENDED
                                                               July 31,
                                                          1997
1996
                                                     ------------- --------
-----
<S>                                                  <C>           <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
 Net loss........................................... $ (1,076,867) $
(647,305)
 Adjustments to reconcile net loss to net
  cash used in operating activities:
  Depreciation and amortization.....................      113,032
87,297
  Provision for losses on loans and real
   estate owned.....................................       (2,278)
1,065
  Loss on disposition of property, plant and
   equipment........................................       20,045
564
  Gain on sale of puchased mortgage servicing rights      (47,447)
-
 Changes in operating assets and liabilities:
  (Increase) decrease in receivables from sales
   of mortgage loans and loan servicing rights......   (6,004,000)
1,053,822
  Mortgage loans originated.........................  (82,716,807)
(107,545,920)
  Mortgage loans sold...............................   82,020,654
111,696,527
  Decrease (increase) in originated mortgage
   servicing rights, net............................       26,629
(388,968)
  (Increase) decrease in mortgage loan servicing
   advances and other receivables...................      (96,517)
195,509
  Decrease in notes receivable......................      175,000
-
  Decrease in notes receivable - officers...........       12,000
-
  Increase in prepaids and other assets.............     (123,378)
(89,046)
  (Decrease) increase in accounts payable, accrued
   expenses and other liabilities...................     (193,229)
128,569
                                                     ------------- --------
-----
  Net cash (used) provided by operating activities     (7,893,163)
4,492,114
                                                     ------------- --------
-----
CASH FLOWS FROM INVESTING ACTIVITIES:
 Purchase of mortgage servicing rights..............     (165,445)
-
 Proceeds of sale of purchased servicing rights.....       75,331
-
 Purchase of furniture, fixtures and equipment......      (36,514)
(17,465)
 Purchase of intangible assets......................     (202,000)
-
 Advances to affiliates.............................     (431,787)
(183,934)
 Advances repaid by affiliates......................         -
5,411
                                                     ------------- --------
-----Net cash used by investing activities...............     (760,415)
(195,988)
                                                     ------------- --------
-----
<PAGE> 6

CASH FLOWS FROM FINANCING ACTIVITIES:
 Proceeds from issuance of common stock.............    2,693,038
-
  Exercise of common stock warrant..................        3,750
-
 Net (decrease) increase in warehouse borrowings....    6,359,399
(5,111,019)
 Proceeds from advances on note payable and line
  of credit.........................................         -
1,000,000
 Principal payments on note payable and line of
  credit............................................     (199,655)
(862,500)
 Proceeds from notes payable to officer.............         -
83,850
 Cash distributions to former MMI shareholders......         -
(34,000)
                                                      ------------  -------
-----
  Net cash provided (used) by financing activities       8,856,532
(4,923,669)
                                                      ------------  -------
-----
  Increase (decrease) in cash.......................       202,954
(627,543)

  Cash at beginning of period.......................       603,296
672,687
                                                      ------------- -------
------
  Cash at end of period.............................  $    806,250  $
45,144
                                                      ============
============

Supplemental cash flow information (Note 9)

The accompanying notes are an integral part of the consolidated financial
statements.

</TABLE>
<PAGE> 7

                        FINET HOLDINGS CORPORATION
           NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

1.  GENERAL

REPORTING ENTITY

Finet   Holdings   Corporation   ("Finet"  or   the   "Company")   acquired
PreferenceAmerica  Mortgage Network ("PAMN") on December  31,  1996.   This
acquisition  is accounted for as a purchase.  Finet also acquired  Monument
Mortgage,  Inc. ("MMI") on December 31, 1996.  The transaction is accounted
for  as  a  reverse  acquisition whereby MMI is  considered  the  acquiring
corporation  for  accounting and financial statement presentation  purposes
and  MMI's  historical financial statements are deemed to be the historical
financial statements of the reporting entity.

In  February, 1997, the Company established and incorporated a wholly-owned
subsidiary, Property Transaction Network ("PTN"), as a software  developer,
systems  integrator and services provider.  PTN services, including  access
to  the Company's mortgage financing services, are provided to Realtors and
their  customers primarily through electronic means.  PTN became active  in
the quarter ending April 30, 1997.

BUSINESS

Finet  is  a  consumer-oriented, technology  and  residential  real  estate
services  integrator and marketing company that conducts  business  through
three  wholly-owned subsidiaries: PTN, described above;  PAMN,  a  mortgage
broker   conducting  business  through  electronic  connections  with   its
customers; and MMI, a full-service prime and sub-prime mortgage lender  and
leader  in  developing advanced automated loan origination and underwriting
systems.  The Company also owns several inactive corporations.

2.  BASIS OF PRESENTATION

The  accompanying  unaudited consolidated financial  statements  have  been
prepared  in  accordance with generally accepted accounting principles  for
interim  financial  information and the instructions  of  Form  10-QSB  and
Regulation  S-B.  Accordingly, they do not include all the information  and
footnotes required by generally accepted accounting principles for complete
financial  statement  presentation.  In  the  opinion  of  management,  all
adjustments, consisting of normal recurring accruals, considered  necessary
for  a  fair presentation of the results for the interim period  have  been
included.  Operating results for the three months ended July 31,  1997  are
not  necessarily  indicative of the results that may be  expected  for  the
fiscal year ending April 30, 1998.

The  consolidated financial statements of the Company include the  accounts
of  PTN,  PAMN,  MMI  and all wholly owned subsidiaries.   All  significant
intercompany   balances   and  transactions   have   been   eliminated   in
consolidation.

3.  NET LOSS PER COMMON SHARE

Net  loss per common share is computed based on the weighted average number
of  shares  outstanding during the periods.  The effects  of  common  stock
equivalents  have  not  been included because they would  have  been  anti-
dilutive during all periods reported.

4 . PENDING ACQUISITION

On  June  12,  1997,  the Company entered into a preliminary  agreement  to
acquire 100% of the outstanding stock of Real Estate Office Software,  Inc.
("REOS")  for a purchase price of $827,296 in the form of cash, forgiveness
of  advances, and Finet common stock valued at $2.50 per share.  REOS is  a
software  development  and marketing company whose  primary  product  is  a
proprietary Realtor productivity tool called Real Estate Office.

The structure of the transaction is still under negotiation and the Company
is  conducting a due diligence review of REOS.  In the interim, the Company
and  REOS  have  combined  certain business activities.   All  former  REOS
employees
<PAGE> 8

are  now  employees  of PTN and REOS is now engaged in  development  of  an
enhanced  Realtor  Internet connectivity and relationship  management  tool
called  the Agent Connector, which began initial introduction in September,
1997.   The  Company  had advanced $431,787 to REOS at  July  31,  1997  to
support  development and marketing costs for the Agent  Connector  and  had
earned  revenues of $9,808 from REOS for telemarketing services  to  market
the Agent Connector.

5.  MORTGAGE LOAN SERVICING

The  Company's  loan  origination and servicing  activity  is  concentrated
largely  within California.  The Company's servicing portfolio is primarily
comprised  of conventional mortgage loans whose servicing rights  value  is
not  included  in  the  accompanying  balance  sheet,  and  which  had   an
outstanding principal balance of $193.6 million, representing 1,411  loans,
at  July 31, 1997.  The majority of loans are securitized through FNMA  and
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 a separate trust account and excludes  this
balance  of  $2.1  million at July 31, 1997 from the  accompanying  balance
sheet.  The Company is required to maintain separate accounting records for
its escrow and custodial cash account 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  $9.7  million during the three months ended  July  31,  1997,
compared  to  zero in the same period of the prior year.   These  sales  of
prior  fiscal year originations resulted in a net gain of $135,268 for  the
three months ended July 31, 1997.

Servicing  rights  to  mortgage loans with an unpaid principal  balance  of
approximately  $193.6 million were pledged as collateral to lenders  as  of
July 31, 1997.

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
three   months  ended  July  31,  1997  and  1996  with  respect  to  these
representations and warranties.

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  2.8%  of  the
outstanding  servicing portfolio balance as of July 31, 1997.   The  losses
(recoveries)  to  the Company arising from the foreclosed  loans  and  real
estate  owned were ($2,278) and $1,065 for the three months ended July  31,
1997 and 1996, respectively.

The  Company  carried  fidelity bond coverage of $950,000  and  errors  and
omission coverage of $950,000 as of July 31, 1997.

6.  DEBT

The  following table and comments present summary information regarding the
Company's debt as of July 31, 1997:
<TABLE>
<CAPTION>
                                                    Interest
Facility                                      Balance                  Rate
Expires or Due
--------------------------------  --------------  --------------   --------
-----------
<S>                                <C>            <C>              <C>
REVOLVING/CURRENT
Warehouse line of credit           $ 16,568,596   Fed Funds Rate    October
31, 1997
  ($10 million committed, $25                     plus variable
  million uncommitted gestation)                  spread
Revolving line of credit                   -      Prime plus        October
31, 1997
  ($1 million committed)                          0.625%
                                   ------------
Total revolving/current debt         16,568,596
                                   ------------
<PAGE> 9

LONG TERM
Note  payable                            666,667   Prime  plus        April
30, 2000
($1 million original note)                        0.625%
Capitalized leases                      251,591                    1999  to
2000
                                   ------------

Total long term debt                    918,258
                                   ------------
Total debt                         $ 17,486,854
                                   ============
</TABLE>

COLLATERAL

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

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

DEBT COVENANTS

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

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

The  lender has been formally notified of all debt covenant violations and,
to  date, has continued to provide necessary funding to the Company without
disruption.  Subsequent to July 31, 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.  On August 15, 1997, the Agreements were  extended  to
October  31,  1997 to allow sufficient time for the lender  to  complete  a
normal  review  and annual renewal.  The Company has no reason  to  believe
that  negotiations  will not be successful; however, no assurances  can  be
given that the Agreements will be renewed.

8. PURCHASE OF INTANGIBLE ASSETS

On  May  29,  1997, the Company and NDS Software, Inc. ("NDS"),  a  generic
software development company and operator of a nationwide multiple  listing
of  homes  for  sale Internet site, 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  products,  software  development
services, and rights to access certain of NDS' installed customer base  for
marketing purposes.

The  common stock was issued on June 5, 1997.  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 on the earlier  of  the
Company's registration of the common shares issued to NDS or June 3,  1998,
to  maintain  a value equal to $808,000 at the time, subject to  a  maximum
additional  shares issuable of 1,414,000 shares.  The assets acquired  will
be  amortized  to  expense of future periods as they are  used  to  produce
revenue.
<PAGE> 10

8. COMMITMENTS AND CONTINGENCIES

DEBT COVENANTS

As  discussed in Note 6, at July 31, 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 were related
to  the  Company's  tangible net worth, adjusted  tangible  net  worth  and
required   minimum   servicing   portfolio  balance.    Additionally,   the
acquisition  of  MMI  by  Finet created a breach  of  the  terms  of  these
borrowing activities as of December 31, 1996.  The lender was notified and,
subsequently,  the  lender  issued a formal  waiver  of  all  breaches  and
covenant violations. The warehouse line of credit and the revolving line of
credit  agreements  expire on October 31, 1997.   The  Company  is  in  the
process  of an annual review with the lender, and has no reason to  believe
renewal  of  the  credit  facilities will not be successful.   However,  no
assurances can be given that the credit facilities will be renewed.

LOAN SALE COMMITMENTS

The Company has entered into optional and mandatory forward commitments  to
deliver mortgage loans of $8 million as of July 31, 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 that were committed to the borrower,  amount  to
$14.7  million  as  of  July  31,  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.

GUARANTEES

Subsequent  to fiscal year end April 30, 1997, Finet issued to  Residential
Funding Corporation ("RFC") on behalf of its wholly owned subsidiary,  MMI,
a  corporate guarantee of all MMI's borrowing agreements with RFC (See Note
6).

Under  the  terms  of an agreement with 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  on the earlier of the Company's registration of NDS' shares or  June
3, 1998 (See Note 8).

The  Common Stock Purchase Agreement for the December 30, 1996  sale  of  6
million common shares under Regulation S of the U.S. Securities Act of 1993
provides  that in the event a registration of the subject shares  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 $.50 per share and 500,000 shares at $1.00  per
share.

<PAGE> 11

9.  SUPPLEMENTAL CASH FLOW INFORMATION

The   following   table  presents  supplemental  investing  and   financing
activities for the periods ended July 31, 1997 and 1996:

<TABLE>
<CAPTION>
                                                      1997          1996
                                                 -----------   -----------
<S>                                                 <C>            <C>
Cash paid during the period for:
   Interest on line of credit and other borrowings  $  294,049     $
333,455
        Income     taxes                                                  -
-

Non-cash investing and financing activities
  Distributions (reversal of distributions
       declared)   to   former   MMI   shareholders                       -
(264,397)
       Distributions     paid                                             -
(34,000)
                                                    -----------    --------
---
           Change    in   distributions   payable                         -
(298,397)

    Common   stock   issued   for  creditor   settlements            22,257
-
  Common stock issued for purchase of
         intangible     assets                                      808,000
-
</TABLE>

10.  SUBSEQUENT EVENTS

BORROWING ARRANGEMENTS

Subsequent  to  July  31, 1997, Residential Funding  Corporation  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.  On August 15, 1997, the  expiration
date  was extended to October 31, 1997 to allow sufficient time to complete
an  annual  review  and renewal. The Company has no reason  to  expect  the
credit  facilities will not be renewed; however, there can be no  assurance
that they will be renewed (See Note 6).

STOCK OPTION PLAN AMENDMENT

On  August 28, 1997, the Company's Board of Directors unanimously  resolved
to  amend the Company's 1989 Stock Option Plan (the "Plan") to increase the
number of shares of common stock subject to the Plan from 500,000 shares to
1,750,000   shares  and  to  provide  for  the  granting   of   immediately
exerciseable  five-year  options to purchase  40,000  shares  upon  initial
appointment of outside (non-employee) directors and, for each of  the  next
four  years of service as a director, the granting of five-year options  to
purchase  25,000  shares, vested at the rate of 6,250 shares  per  quarter.
These amendments are subject to shareholder approval.

<PAGE> 12

   ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                         AND RESULTS OF OPERATIONS

FORWARD-LOOKING STATEMENTS

Certain  of  the  matters  discussed herein may constitute  forward-looking
statements  within the meaning of the Private Securities Litigation  Reform
Act  of  1995  and  as  such  may  involve  known  and  unknown  risks  and
uncertainties  and  other  factors  that  may  cause  the  actual  results,
performance, or achievements of the Company to be materially different from
any  future  results, performance, or achievements expressed or implied  by
such  forward-looking statements.  The Company undertakes no obligation  to
release  publicly  any  revisions to these  forward-looking  statements  to
reflect  events  or circumstances after the date hereof or to  reflect  the
occurrence of anticipated or unanticipated events.

RESULTS OF OPERATIONS

REPORTING ENTITY

The  acquisition of MMI by Finet 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 July  31,  1997
also  include the financial statements of Finet's wholly owned subsidiaries
PAMN  and  PTN.  The Company also owns several inactive corporate entities.
All material intercompany transactions and amounts have been eliminated  in
consolidation.  All references herein to a year (e.g. 1998)  refer  to  the
fiscal year ended April 30 of that year.

BUSINESS

Finet  is  a  consumer  oriented, technology and  residential  real  estate
services  integrator and marketing company that, through  its  wholly-owned
subsidiaries,  PTN,  PAMN  and  MMI, offers  to  independent  Realtors  and
mortgage  brokers  support services such as call center operations,  video-
conferencing  and other related homeowner services, including the  business
of originating, selling and servicing wholesale and retail mortgage loans.

During the three months ended July 31, 1997, the Company's primary business
activity  was  MMI's  mortgage banking.  PTN and PAMN were  in  a  start-up
phase.  Therefore, during the periods ended July 31, 1997 and 1996, results
of  operations  varied  primarily with the volume of loans  originated  and
sold.  As the Company's operations are expanding and changing rapidly,  the
results  of operations for the three month period ended July 31,  1997  are
not  necessarily  indicative of results that  can  be  expected  in  future
periods.

COMPARISON OF QUARTERS ENDED JULY 31, 1997 AND 1996

The Company is currently implementing a business development plan to expand
the  scope of its services.  The 1998 periods include costs related to this
plan.   The  Company reported a net loss of $1.1 million  for  the  quarter
ended  July  31,  1997,  compared to a net loss of $647  thousand  for  the
quarter  ended July 31, 1996.  The $430 thousand increase in the  1998  net
loss  is  primarily attributable to PTN and PAMN start-up costs.   Combined
PTN  and  PAMN revenues were $28 thousand and expenses were $438  thousand,
for  a loss of $410 thousand from these activities during the quarter ended
July  31,  1997.  Primary expense category increases were $182 thousand  in
compensation and employee benefit expense resulting from staff increases to
implement  the  business  development plan and  a  related  $77.9  thousand
increase in office expense, a $132 thousand increase in professional  fees,
and an $57 thousand increase in other expense.

REVENUES

Revenues  for the quarter ended July 31, 1997 increased 9% to $1.2  million
from  $1.1  million for the quarter ended July 31, 1996.  The  increase  in
revenues  was  attributable to a decrease in the loss on sale  of  mortgage
loans and income from telemarketing services.


<PAGE> 13

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 first quarter of 1998 was $442 thousand  compared
to $592 thousand in the first fiscal quarter of 1997, a decrease of 25%.

Over  the  same  time periods, total loan volume decreased  23%  from  $107
million  in  1997 to $83 million in 1998.  The margin earned  on  sales  of
mortgage  loans/servicing rights declined slightly from 55 basis points  in
1997 to 53 basis points in 1998.

Loan  servicing fee revenues decreased 34% to $129 thousand in the  quarter
ended  July 31, 1997 from $194 thousand in the prior year's first  quarter.
The  decrease  is a result of a 28% decline in 1998 from the  1997  average
outstanding  balance of loans serviced for others.  The  portfolio  balance
declined  due  to  several  bulk sales of servicing  assets  that  occurred
between July 31, 1996 and July 31, 1997.

Marketing lead sales revenue increased from zero in 1996 to $71 thousand in
1997.   The  revenue was generated by a Finet telemarketing  activity  that
began operations in October, 1996.

Income  from affiliates represents telemarketing services provided to  Real
Estate Office Software, an affiliate.

EXPENSES

Compensation and employee benefits expenses increased 21% to $1 million for
the  quarter  ended July 31, 1997 from $824 thousand for the quarter  ended
July  31,  1996.   The increase is due to adding personnel as  the  Company
implemented  its  growth plan, as well as the impact of  consolidating  the
operating  results of Finet, MMI, PTN and PAMN for the quarter  ended  July
31, 1997.  Prior year results are for MMI only.

Office expense increased 34% from $230 thousand in 1997 to $308 thousand in
1998, primarily due to the Company's expansion.

Professional fees increased 138% from $96 thousand in 1996 to $228 thousand
in   1997.   The  increase  is  attributable  primarily  to  the  Company's
acquisitions  and  expansion.   Audit and  accounting  fees  increased  $19
thousand  due  to the increase in complexity arising from  being  a  single
private  company during most of 1997 and being a public company with  three
subsidiaries in 1998.  Consulting fees increased by $128 thousand in  1998,
primarily due to expenses of developing and initiating technologies for the
Company's business development activities.

Other expenses increased 197% from $29 thousand in 1997 to $86 thousand  in
1998, due primarily to business development expenditures.

CAPITAL EXPENDITURES, LIQUIDITY AND CAPITAL RESOURCES

The  Company's  normal  cash requirements are to meet  operating  expenses,
including sales and marketing activities, to fund further expansion of  the
Company's  technology  related  business  activities,  to  satisfy  accrued
liabilities and accounts payable, and to satisfy other liabilities as  they
become due.

CASH FLOWS

The  Company experienced an increase in cash of $203 thousand in the  first
quarter  of 1998, compared to a decrease in cash of $628 thousand  in  same
period in the prior year.

<PAGE> 14

Cash Flow From Operations

Since  MMI  is  curently the largest business segment  in  the  consolidate
group,  the Company's cash flows are significantly affected by fluctuations
in  mortgage  loans  originated and sold during  the  period.   While  loan
originations  decreased  from $108 million to  $83  million  in  the  first
quarters  of 1997 and 1998, respectively, the loans in inventory increased.
This  was the primary factor that contributed to a $7.9 million use of cash
by  operating  activities in the first quarter of 1998,  compared  to  $4.5
million  of  cash provided by operating activities in the first quarter  of
the prior year.

Cash Used for Investing Activities

After   completing  the  acquisitions  of  PAMN  and  MMI,  several  equity
offerings, and integrating the structure of the newly combined entities  by
April  30,  1997, the Company began to agressively implement  its  business
development plans in the first quarter of  1998 by advancing $431  thousand
to  affiliates and purchasing  $165 thousand of mortgage servicing  rights,
$1  million  of  NDS intangible assets ($202,000 in cash  and  $808,000  in
common  stock issued), and additional computer equipment.  Thus,  net  cash
used  in investing activities increased from $196 thousand to $760 thousand
in the first quarters of  1997 and 1998, respectively.

Cash Provided by Financing Activities

The  Company  experienced a $13.7 million increase in cash  from  financing
activities, from a negative $4.9 million in 1997 to a positive $8.8 million
in 1998.  Due to the increase in loans in inventory in the first quarter of
1998  as  compared to the same period in the prior year, warehouse line  of
credit borrowings increased $6.4 million in 1998, compared to a decrease of
$5.1  million  in  1997.  The Company also received $2.7  million  in  cash
proceeds in 1998 from stock issued, compared to zero in 1997.

LIQUIDITY AND CAPITAL RESOURCES

The  Company maintains a $35 million warehouse borrowing facility  that  is
capable  of supporting a monthly loan funding volume of up to $60  million,
given current loan sales and settlement turnaround times.  The Company does
not  expect  to  exceed  that  level before January  1998,  at  which  time
additional warehouse lending authority can be obtained.  Funded  loans  are
immediately  sold  to investors in the secondary market with  the  proceeds
used to reduce warehouse balances.  The Company also maintains a $1 million
working capital line of credit at competitive borrowing rates.

The Company's warehouse and working capital lines of credit are held by the
same  lender.  At  July  31, 1997, the Company was  in  violation  of  debt
covenants  related  to the Company's tangible net worth, adjusted  tangible
net   worth,  and  required  minimum  servicing  portfolio  balance.    The
acquisition of MMI by Finet on December 31, 1996 also created a  breach  of
the borrowing agreements ("Agreements")

The lender was informed of all covenant violations and continued to provide
funding  without  interruption. Subsequent to July  31,  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 Agreement expiration date be accelerated from
December  31, 1997 to August 31, 1997.  On August 15, 1997, the  Agreements
were  extended to October 31, 1997 to allow sufficient time for the  lender
to  complete a normal review and annual renewal.  The Company has no reason
to believe that negotiations will not be successful; however, no assurances
can be given that the Agreements will be renewed.

The  Company  mitigates its mortgage banking risks through  several  common
industry  practices.   The  first  is to purchase  and  originate  mortgage
servicing  rights  ("PMSRs/OMSRs").  When the volume of  loan  originations
declines  due to the rise in interest rates, PMSRs/OMSRs increase in  value
and provide a predictable source of earnings and cash flow.  The second  is
to offset unfavorable interest rate movements when funding loans by hedging
the interest rate locks.

The  Company's business development activities are focused on  diversifying
and increasing revenues from sources other than mortgage banking, including
the  sale  of  proprietary software, the provision of  Internet-based  real
estate services, and brokering of loans to other mortgage lenders.
<PAGE> 15

The  Company is currently expending cash resources to support its  business
development  activities  in  PTN  and  PAMN,  as  the  revenues  they   are
generating, though increasing, are currently insufficient to cover start-up
and  operating costs.  The Company expects within this business cycle  that
all  business  units  will  generate revenues  sufficient  to  cover  their
respective operating expenses.  Management believes it has sufficient  cash
and short term financing alternatives to reach positive cash flow.

CAPITAL EXPENDITURES

The Company is in the process of negotiating the terms and structure of  an
agreement  to  acquire 100% of the outstnding stock of Real  Estate  Office
Software,  Inc for a purchase price of $827,296.  The Company has  advanced
$431,387  to REOS to support development and marketing costs for the  Agent
Connector.  The Company expects the remainder of the consideration to be in
the form of common stock.

The  Company  purchased $1,010,000 in intangible assets from  NDS  Software
(NDS) for $202,000 in cash and $808,000 in common stock issued.  The assets
consisted  of software, contract programming services, mortgage  leads  and
marketing access to certain NDS customers.

In  the third quarter of 1997, the Company implemented a Purchased Mortgage
Servicing  Rights ("PMSR") acquisition strategy.  To date, $73  million  of
PMSRs  have  been  purchased, of which $5.4 million have subsequently  been
resold,  for  a  gain  of  $47.4 thousand.  The Company  plans  to  acquire
approximately  $800  million of additional PMSRs in  1998  to  add  to  its
current  servicing portfolio of $193.6 million.  The PMSR's may be acquired
directly  or  through  an  open market auction process.   Prices  vary  for
servicing   rights,  however  this  represents  a  planned  investment   of
approximately $8 million, which the Company plans to finance on  a  secured
basis.  The Company has begun discussions to arrange the financing required
for  these  planned  investments.  The Company's ability  to  acquire  this
additional  servicing  is  dependent on  the  servicing  available  on  the
market,the  Company's success in pricing and bidding, and  the  ability  to
arrange  the  credit  facilities to do so.   Accordingly,  these  potential
capital expenditures are not assured.

<PAGE> 16
                        PART II - OTHER INFORMATION

Item 1.  LEGAL PROCEEDINGS

The  Company  has  been involved in 22 legal proceedings,  primarily  as  a
result  of  unsecured creditor actions and/or judgments.  These  ranged  in
individual  amounts from $929 to $101,000 and aggregated  to  approximately
$500,000   at  December  31,  1996.   The  Company  negotiated  settlements
averaging  33.8%  of the amount owed for the majority of these  proceedings
prior  to  December  31, 1996 and is continuing to seek resolution  of  the
remainder.

Item 2. CHANGES IN SECURITIES

Authorized common shares were increased to 40 million from 30 million,
effective August 5, 1997 (See Note 4).

The Common Stock of the Company is quoted on the OTC Bulletin Board under
the symbol FNHC.

The following table sets forth the range of high, low and average closing
prices per share of the Common Stock and total number of shares traded
during the period since April 30, 1997.

<TABLE>
<CAPTION>
                         MONTH'S      MONTH'S    MONTH END   MONTH'S
PERIOD:                  HIGH/ASK     LOW/BID    CLOSE/AVG   VOLUME
----------------------   ---------   --------    ---------   -------
<S>                      <C>           <C>       <C>         <C>
May,1997                 $ 6.375     $ 2.500     $ 3.344     680,000
June, 1997                 3.750       2.188       3.531     250,000
July, 1997                 3.500       2.375       2.875     434,700
August, 1997               4.375       2.625       3.734     646,000
September (1st to 11th)    5.125       4.125       4.625     649,100

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

On  July 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,  a  majority of shareholders of record  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.   The
amendment  was recorded by the Secretary of State of Delaware on August  5,
1997

Item 5.  OTHER INFORMATION

The  Company purchased intangible assets from NDS Software, Inc. on May 29,
1997  and  entered  into a pending acquisition agreement with  Real  Estate
Office Software, Inc. on June 12, 1997.

On  September 8, 1997, the Company announced the appointment of Mr.  George
Winkel, CPA,to the position of Executive Vice President and Chief Financial
Officer  of  Finet  Holdings  Corporation.  Mr.  Winkel  succeeds  Mr.  Jan
Hoeffel,  President of Finet, as the Company's Principal Financial Officer.
Mr. Paul R. Garrigues, Senior Vice President and Chief Financial Officer of
Monument  Mortgage,  Inc.,  continues in that  position,  but  will  assume
different duties and responsibilities.

<PAGE> 17

Item 6.  EXHIBITS AND REPORTS ON FORM 8-K

EXHIBITS

     EX-27          Financial Data Schedule

REPORTS ON FORM 8-K

On May 14, 1997, the Registrant filed an amended report on Item 2,
Acquisition of Assets, on Form 8-K/A regarding Item F, Paragraph 1 of Form
8-K filed July 16, 1997. It included the interim financial statements at
October 31, 1996 and prior audited financial statements at April 30, 1996
for MMI.


<PAGE> 18

                                 SIGNATURE

In accordance with the requirements of the Securities and Exchange Act, the
Registrant  caused  this  report  to  be  signed  on  its  behalf  by   the
undersigned, thereunto duly authorized.



                                        FINET HOLDINGS CORPORATION



Date: September 12, 1997                /s/    L. Daniel Rawitch
                                        L. Daniel Rawitch
                                          (CEO   and   Principal  Executive
Officer)



Date September 12, 1997                 /s/    George Winkel
                                        George Winkel
                                        (Principal Financial Officer)
</TEXT?

</TABLE>