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                              UNITED STATES
                   SECURITIES AND EXCHANGE COMMISSION

                         Washington, D.C. 20549

                               FORM 10-Q/A


           QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                   THE SECURITIES EXCHANGE ACT OF 1934

              For the quarterly period ended JUNE 30, 1998

                    Commission File Number: 0-19822 


                    LITCHFIELD FINANCIAL CORPORATION 
         (Exact name of registrant as specified in its charter)


       MASSACHUSETTS       
                                               04-3023928                
(State or other jurisdiction        (I.R.S. Employer Identification No.)
of incorporation or organization)


430 MAIN STREET, WILLIAMSTOWN, MA               01267        
(Address of principal executive               (Zip Code)
offices)

   Registrant's telephone number, including area code: (413) 458-1000

                                                                         
          (Former name, former address and former fiscal year,
                      if changed since last report)

Indicate by check mark whether the  registrant  (1) has filed all reports
required  to be filed by Section 13 or 15(d) of the  Securities  Exchange
Act of 1934 during the  preceding 12 months (or for such  shorter  period
that the  registrant  was  required  to file such  reports),  and (2) has
been subject to such filing requirements for the past 90 days.

                                Yes X No 


As of August 12,  1998,  there were  6,669,751  shares of common stock of
Litchfield Financial Corporation  outstanding.

                                                             FORM 10-Q/A

 
                                   1


                            EXPLANATORY NOTE


Amendment No. 1

      The   Company  is  filing   this  Form   10-Q/A  to  correct   the
Consolidated  Balance  Sheet on Page 3 of Form 10-Q for the period ended
June 30, 1998.  There is a  typographical  error under the June 30, 1998
column in the asset section for the line that reads,  "Other loans,  net
of  allowance  for loan  losses of  $2,459 in 1998 and  $2,044 in 1997".
The Form 10-Q  Consolidated  Balance  Sheet  had an  amount of  137,147.
The correct amount should be 134,147.

      On the  following  page,  please note the  corrected  Consolidated
Balance Sheet.


                     PART I - FINANCIAL INFORMATION
                      Item 1. Financial Statements

                    LITCHFIELD FINANCIAL CORPORATION
                      Consolidated Balance Sheets
           (In thousands, except share and per share amounts)
<TABLE>
<S>                                                 <C>         <C>
                                                    June 30,    December 31,
                                                      1998         1997 
                                                  (unaudited)
                                  ASSETS
Cash and cash equivalents......................   $  14,568    $ 19,295
Restricted cash................................      27,472      23,496
Loans held for sale, net of allowance for loan
losses of
   $942 in 1998 and $1,388 in 1997.............      13,546      16,366
Other loans, net of allowance for loan losses of
   $2,459 in 1998 and $2,044 in 1997...........     134,147      86,307
Retained interests in loan sales, net of             31,007      30,299
allowance for loan loses of
   $3,062 in 1998 and $2,445 in 1997...........
Other..........................................      12,941      11,027
      Total assets.............................    $233,681    $186,790

                   LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
   Lines of credit.............................   $  22,601    $    177
   Term note payable...........................       3,717       5,210
   Accounts payable and accrued liabilities....       9,671       6,479
   Dealer/developer reserves...................      10,444      10,655
   Deferred income taxes.......................       8,178       6,851
                                                     54,611      29,372

   9.3% Notes..................................      20,000      20,000
   8.45% Notes due 2002........................      51,750      51,750
   8.875% Notes due 2003.......................      15,066      15,317
   10% Notes due 2004..........................      18,240      18,280
                                                    105,056     105,347

Stockholders' equity
   Preferred stock, $.01 par value; authorized
1,000,000 shares, none
      issued and outstanding...................         ---         ---
   Common stock, $.01 par value; authorized
12,000,000 shares,
      6,669,751 shares issued and outstanding in
1998 and 5,656,609
      shares issued and outstanding in 1997....          66          56
   Additional paid in capital..................      54,575      36,681
   Accumulated other comprehensive income......       1,251       1,071
   Retained earnings...........................      18,122      14,263
      Total stockholders' equity...............      74,014      52,071
      Total liabilities and stockholders' equity   $233,681    $186,790
 

</TABLE>



 See accompanying notes to unaudited consolidated financial statements.




                               SIGNATURES

Pursuant to the  requirements  of the  Securities  Exchange Act of 1934,
the  registrant  has duly  caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.


                                  LITCHFIELD FINANCIAL CORPORATION




DATE:  August 28, 1998                 /s/ Richard A. Stratton        
                                       RICHARD A. STRATTON
                                       Chief Executive Officer,
                                       President and Director





DATE:  August 28, 1998                 /s/ Ronald E. Rabidou          
                                       RONALD E. RABIDOU
                                       Chief Financial Officer