UNITED STATES
                  SECURITIES AND EXCHANGE COMMISSION
                        Washington, D.C. 20549
                       ________________________
                               FORM 10-K

 X ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
  EXCHANGE ACT OF 1934
               For The Fiscal Year Ended December 31, 1999
                                    OR
   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
  EXCHANGE ACT OF 1934

                        Commission File No. 0-8630

                             AMRESCO, INC.
        (Exact name of registrant as specified in its charter)

             Delaware                             59-1781257
  (State or other jurisdiction of    (I.R.S. Employer Identification No.)
  incorporation or organization)

 700 N. Pearl St. Ste 1900 LB 342 Dallas, TX      75201-7424
  (Address of principal executive offices)        (zip code)
  Registrant's telephone number, including area code: (214) 953-7700

      Securities registered pursuant to Section 12(b) of the Act:

                                                 Name of Each Exchange
        Title of Each Class                      on which Registered
        10% Senior Subordinated Notes due 2003   New York Stock Exchange
        10% Senior Subordinated Notes due 2004   New York Stock Exchange

      Securities registered pursuant to Section 12(g) of the Act:

           Shares of common stock, par value $0.05 per share

      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.  [X] Yes [ ] No

      Indicate  by  check  mark  if disclosure  of  delinquent  filers
pursuant  to  Item 405 of Regulation S-K is not contained herein,  and
will  not  be  contained,  to the best of registrant's  knowledge,  in
definitive  proxy or information statements incorporated by  reference
in Part III of this Form 10-K or any amendment to this Form 10-K [ ]

      As  of  March  22,  2000, 48,750,156 shares of the  registrant's
common  stock  were outstanding.  The aggregate market  value  of  the
voting  stock  held by non-affiliates of the registrant,  computed  by
reference to the closing price of such stock as of March 22, 2000, was
approximately $70,000,000.

                  DOCUMENTS INCORPORATED BY REFERENCE

      Portions of the Registrant's Proxy Statement to be filed for the
Annual  Meeting  of  Shareholders to be held  on  May  25,  2000,  are
incorporated by reference in Part III hereof.

                                PART I

Item 1.   Business

General

      AMRESCO,  INC.,  a Delaware corporation (the  "Company"),  is  a
diversified  financial services company specializing  in  real  estate
lending,  commercial  finance  and  the  acquisition,  resolution  and
servicing  of performing, underperforming and nonperforming commercial
loans.    The  Company  began  operations  in  1987  providing   asset
management and resolution services to governmental agencies, financial
institutions  and others relating to nonperforming and underperforming
commercial and real estate loans.  In early 1994, the Company made the
decision  to  diversify  its  business  lines  and  build  "franchise"
business  units  that  could  use  the  Company's  core  real   estate
management and lending expertise to pursue growth in markets that were
being  underserved  by  traditional lenders.   Since  that  time,  the
Company  entered the commercial mortgage banking, commercial  finance,
residential  mortgage  lending  and  loan  servicing  businesses   and
oriented its asset management activities towards direct investments in
asset  portfolios  and the special servicing of  large  portfolios  of
asset-backed securities.

Business Activities

      During  1999,  the Company's primary businesses  were  organized
along  the  following  lines:  commercial finance,  asset  management,
commercial  mortgage banking, residential mortgage  banking  and  home
equity   lending.   Financial  information  regarding  the   Company's
operating  segments  is  presented  in  Note  15  of  the   Notes   to
Consolidated  Financial  Statements included  in  "Item  8.  Financial
Statements  and Supplementary Data."  Additional financial information
regarding  the Company's operating segments is presented in  "Item  7.
Management's  Discussion  and  Analysis of  Financial  Conditions  and
Results of Operations".

Recent Developments

     Since December 31, 1998, the Company has entered into a number of
transactions  that  will  affect  the  Company's  future   operations,
business  strategy and operating results.  The following is a  summary
of these events.

Formation of Home Equity Joint Venture With Lehman Brothers

     Effective as of June 30, 1999, the Company formed a joint venture
with Lehman Capital, a division of Lehman Brothers Holdings Inc.,  and
various  entities related to Lehman Capital (collectively,  "Lehman").
Formation  of  the  joint venture, now known as  Finance  America  LLC
("Finance  America"),  represents  the  completion  of  the  Company's
previously  announced plan to exit the home equity  subprime  mortgage
finance business.  Finance America took over the subprime home  equity
mortgage  origination and sale business previously  conducted  by  the
Company's   subsidiary,  AMRESCO  Residential   Mortgage   Corporation
("ARMC"),  other  than certain retail branches  which  have  now  been
closed.   The  transaction  allows  the  Company  to  cap  its  future
investment in the home equity mortgage business, partner with a  major
investment  bank  that is substantially involved in  the  home  equity
mortgage  business, both as a lender and as an investment banker,  and
retain an equity upside opportunity.  As part of the transaction,  the
Company  entered  into  a number of transaction agreements  summarized
below.

      In connection with the formation of Finance America, the Company
contributed  substantially all of the operating assets  of  ARMC  (but
excluding  working capital items) and cash aggregating $3.75  million.
In  addition,  substantially  all the  persons  employed  by  ARMC  in
connection  with  the  origination and sale of  loans  were  hired  by
Finance  America.  ARMC retained substantially all of its liabilities,
other  than  certain contractual or other obligations associated  with
the  assets  conveyed  to  Finance America,  and  its  loan  servicing
operations.    Lehman  agreed  to  fund  various  credit   facilities,
including  a  warehouse  facility to  finance  loan  originations  and
purchases by Finance America.  The Company agreed not to engage in the
business of wholesale origination, bulk purchase or securitization  of
subprime  home equity mortgage loans for a period of five years  after
the  closing.   The parties also agreed to the winding  down  of  ARMC
following the organization of the joint venture.  Finance America, the
Company   and   ARMC  also  agreed  to  provide  each  other   certain
transitional  services in respect to the initiation of  operations  by
Finance  America  and the winding down of ARMC, including  any  future
sale of the Company's remaining portfolio of subordinated certificates
and  other  residual  interests remaining from  prior  securitizations
conducted  by  ARMC.   During  the first  quarter  2000,  the  Company
transferred  net  assets of $6.2 million of the  home  equity  lending
business to Finance America, a joint venture with Lehman Brothers  for
a 36% interest.

      ARMC  and Lehman, as owners of Finance America, entered into  an
agreement  to govern their relationship and the management of  Finance
America.  Various restrictions on transfers of the equity interest  in
Finance  America held by each of ARMC and Lehman, as well  as  certain
customary  "drag  along" and "tag along" rights and  rights  of  first
refusal  with  respect  to any transfers of the  equity  interests  in
Finance America were agreed to.

      Initially  Lehman  acquired  a 60% equity  interest  in  Finance
America  and  the Company acquired the remaining 40% equity  interest.
Upon  the  Chief  Executive  Officer's  hiring,  he  received  a   10%
restricted  equity interest in the Company, with that  dilution  being
borne  ratably  by Lehman and the Company (accordingly, the  Company's
equity interest is currently 36%).  No further equity contributions by
the  owners  are  required,  other than  the  Company  has  agreed  to
contribute  $1.2 million to Finance America on June 30,  2000  if  the
Chief  Executive Officer is still employed by Finance America at  that
date.   If  the  Chief Executive Officer leaves or  is  terminated  by
Finance  America prior to June 30, 2002, the Company would  receive  a
rebate of its contribution equal to $50,000 for each month during  the
24  month period between July 1, 2000 and June 30, 2002 that the Chief
Executive Officer did not remain with Finance America.

      Working Capital Facility.  Lehman and the Company also agreed to
provide  up  to  $20  million of working capital to  Finance  America.
Lehman agreed to provide the first $10 million; the Company agreed  to
provide  the  next  $5  million (after Lehman  had  funded  the  first
$10  million of borrowings); and Lehman agreed to provide  $5  million
after  the  Company  had fully funded its $5 million  working  capital
commitment.

      Lehman  and  Finance  America  entered  into  various  financing
arrangements  including a warehouse facility  and  other  similar  and
customary  financing facilities to fund the operation of  the  Finance
America's  business.  Lehman also agreed to provide certain management
services  at  a  fee of $3.15 million per annum for a  period  not  to
exceed  13 years from the closing date.  This fee can be deferred  for
up to three years.

     ARMC also agreed to provide certain transition and other services
to  Finance America.  In exchange for these services, ARMC  is  to  be
paid  $2.1 million per annum for a period not to exceed 13 years  from
the closing date.  In addition, on each of December 31, 1999, June 30,
2000,  December 31, 2000 and June 30, 2001, ARMC will be paid  a  "set
up"  fee aggregating $3.75 million in equal installments.  These  fees
can be deferred under certain conditions for up to three years.

Sale of Assets to Lend Lease (US) Services, Inc.

      General.   On December 8, 1999, the Company and certain  of  its
subsidiaries,  as sellers, and Lend Lease (US) Services,  Inc.  ("Lend
Lease"), as purchaser, entered into an Asset Purchase Agreement, which
agreement  was  amended on March 17, 2000 (as amended,  the  "Purchase
Agreement"),   pursuant to which the Company agreed to  sell  to  Lend
Lease  the  Company's commercial mortgage banking business  (including
commercial  mortgage  servicing,  commercial  mortgage  brokerage  and
commercial  loan origination (excluding the Company's conduit  lending
programs))  and  asset management and real estate  structured  finance
platforms   (collectively,   the   "Businesses").    The   transaction
encompassed  both  the domestic and international  operations  of  the
Businesses, other than those Business operations conducted in  Europe.
This sale was completed on March 17, 2000.

      Purchase  Price.  The gross, unadjusted purchase price  for  the
Businesses  was  approximately $248.6 million  (the  "Consideration").
The Consideration was increased by amendment to the Purchase Agreement
to  reflect certain additional investments made prior to closing  that
inure to the benefit of Lend Lease. The Consideration is comprised  of
approximately  $223.6 million of cash payable at closing  (subject  to
certain  adjustments and holdbacks described below) and an  unsecured,
non-negotiable  promissory  note of Lend Lease  (the  "Note")  in  the
principal  amount  of  $25.0 million.  The Consideration  received  at
closing  was  adjusted for an estimated increase in  the  net  working
capital of the Businesses, decreases in the estimated revenues  to  be
received by Lend Lease pursuant to certain servicing agreements  as  a
result   of   pre-closing   asset  sales  and   estimated   enumerated
expenditures and investments made by the Company prior to closing that
inure  to  Lend  Lease's  benefit.  The cash paid  at  closing,  after
adjustments of $1.2 million, and holdbacks of $50.0 million was $202.7
million  (including an advance by Lend Lease of $4.0  million  against
the  holdbacks, which was repaid on March 22, 2000).   After  closing,
the  actual amount of these adjustments will be calculated as  of  the
closing date, and the parties will promptly compensate each other  for
any  difference  with  the estimated adjustments.   Additionally,  the
amount of Consideration paid was reduced on an item-by-item basis  for
certain  significant consents or approvals not obtained by the Company
at  the  time  of closing.  If any of these consents or approvals  are
obtained  within one year of the closing and certain other  conditions
are  satisfied, the amount of the corresponding closing reduction will
be  repaid to the Company.  The purchase price was the result of arms-
length negotiations between the parties.

      Interest  on the Note accrues at a rate of 7.5% per annum.   The
initial  principal  payment  under the  Note  is  due  on  the  second
anniversary  of closing.  Payment of the principal is subject  to  and
may  be  offset  by any obligation of the Company owed to  Lend  Lease
under  the  Purchase  Agreement or other  agreements  related  to  the
Purchase  Agreement,  including  the Company's  indemnity  obligations
thereunder.   The  Note will not be paid in full until  all  indemnity
claims  of  Lend Lease or other permitted holdbacks have been  finally
resolved.

      Purchased Assets. Lend Lease acquired substantially all  of  the
assets (the "Purchased Assets") used in the Businesses.  The Purchased
Assets  include  the Businesses' real property, real property  leases,
fixtures  and  improvements, furniture, office equipment  and  similar
tangible  personal  property, permits (to  the  extent  transferable),
intellectual   property,  various  servicing  and  other   agreements,
accounts  receivable, earned and unearned fees and cash.  In addition,
certain  computer hardware and software were also conveyed as well  as
the   equity  interests  of  certain  co-investments  related  to  the
Businesses and certain foreign subsidiaries.  With certain exceptions,
Lend  Lease did not acquire the loans and other financial-type  assets
of the Company, whether or not originated by the Businesses.

      Lend  Lease assumed certain pre-closing liabilities relating  to
the  Businesses  and the Purchased Assets, including certain  accounts
payable accrued in the ordinary course of business and included in the
net  working  capital  of  the Businesses, obligations  under  assumed
leases  and contracts, and certain obligations to employees  hired  by
Lend  Lease to the extent included in the net working capital  of  the
Businesses.    Outside  of  enumerated  liabilities   or   obligations
expressly  assumed  by  Lend  Lease, all pre-closing  liabilities  and
obligations related to the Businesses remain with the Company.

      Representations and Warranties.  The Purchase Agreement contains
various   representations and warranties customary for asset  purchase
transactions.   The  representations and  warranties  address  various
matters,  including  the  authorization  of  the  Purchase  Agreement,
required  consents, power and authority, litigation,  compliance  with
laws, title to the assets being conveyed, intellectual property rights
and  software  matters, accuracy of the information supplied  to  Lend
Lease  by the Company, absence of changes and undisclosed liabilities,
and servicing contract matters.

      Covenants.  Following closing, the Company may neither  compete,
directly or indirectly, in any manner with the Businesses nor  solicit
employees, customers, clients, suppliers, or licensors with respect to
any  business  conducted by the Company substantially similar  to  the
Businesses.

     Survival and Indemnification.  Generally, the representations and
warranties  survive until the second anniversary of closing.   Certain
representations   and   warranties  survive  indefinitely   or   until
expiration  of  the applicable statute of limitations.   The  Purchase
Agreement  provides  that the respective parties  will  indemnify  the
other  for certain breaches, actions or other claims, including claims
arising  with  respect to liabilities to be assumed by Lend  Lease  or
retained by the Company.  The indemnities made by each of the  Company
and Lend Lease are subject to a basket or floor of $750,000 before any
claim can be pursued against the indemnifying party.  The indemnity of
the  Company  is  subject  to a cap of $100 million  for  breaches  of
representations  and warranties claimed through the first  anniversary
of  closing and, thereafter, $50 million (plus claims made during  the
first year).  Lend Lease's indemnity is limited to $25 million in  the
aggregate.

      Management  Agreement.  At closing, Lend Lease entered  into  an
Asset  Management and Servicing Agreement (the "Management Agreement")
with  the  Company.  Pursuant to the Management Agreement, Lend  Lease
will manage for the Company various financial and other assets held by
the Company, including commercial and industrial loans, commercial and
multi-family  real  estate  (including partnership  and  other  equity
interests therein) and commercial and multi-family real estate  loans.
The  assets were originated and managed by the Businesses acquired  by
Lend  Lease.   The  services provided by Lend Lease include  advisory,
consultation,  management,  servicing and disposition  services.   The
Management  Agreement  is  similar in  its  terms  to  the  management
agreements that the Company previously entered into with third parties
in  respect of the same type of assets.  The Management Agreement  has
an initial term of three years subject to automatic annual renewals at
the Company's election.

Mortgage Investors Corporation

      On  August  11,  1998, the Company acquired  Mortgage  Investors
Corporation  and  an  affiliated  entity  ("MIC"),  a  privately  held
producer  of  Veteran's Administration ("VA") streamlined  re-financed
loans,  by merging a wholly-owned subsidiary of the Company with  MIC.
The initial Agreement and Plan of Merger (the "Original Agreement") to
purchase  MIC, provided for an acquisition price of approximately  1.8
million shares of the Company's common stock and $2.6 million in cash.
Also, the former owners were to receive an earn-out payment of between
$70.0  million  and $105.0 million over a three-year period  with  the
payments  structured to be paid 82% in the Company's common stock  and
18%  in  cash.   Effective April 12, 1999, the Original Agreement  was
amended (the "Amended Agreement") to provide the Company an option  to
effect  redemption  of  the stock portion of  the  earn-out  for  cash
subject to certain market conditions and restrictions, and to fix  the
earn-out payment at $105.0 million.  During 1999, the Company made  an
earn-out  payment of $9.7 million in cash and advanced  $9.2  million,
the  balance  of the cash portion of the earn-out.  Also, the  Company
extended $17.0 million to the previous owners of MIC in exchange for a
note receivable to be repaid upon issuance of the stock portion of the
earn-out.   The  Company  did  not  exercise  its  option  to   effect
redemption of the stock portion of the earn-out prior to December  31,
1999.   The  issuance of the stock portion of the  earn-out  has  been
extended  until at least March 31, 2000, but no later  than  June  30,
2000.   At  December  31, 1999, $86.1 million was recorded  as  common
stock  to  be  issued for the portion of the earn-out related  to  the
Amended Agreement.

     During January 2000, the Company obtained an option to return MIC
and  its related assets and liabilities to its previous owners  for  a
cash  payment  of $25.0 million and forgiveness of the  $17.0  million
note   in  exchange  for  cancellation  of  the  $86.1  million  stock
obligation currently owed to the previous owners.  The option  expires
April  30,  2000.   The Company expects to exercise  its  option  with
regard  to MIC if sufficient cash is available to do so; as such,  the
Company  recorded  an  impairment charge  of  $103.3  million  on  the
intangible assets related to the MIC acquisition.

Sale  of  Communications  Loans and Shutdown  of  Communications  Loan
Origination Business

      On  November 5, 1999, the Company sold nine of the Company's ten
communications  loans with an aggregate book value of  $132.0  million
for  $131.8  million,  the proceeds of which were  used  to  pay  down
indebtedness outstanding under the Company's credit facility.  As part
of  this  transaction, the Company entered into an agreement with  the
lenders  to permanently reduce the long-term credit facility by  $84.4
million  to  $448.1  million and to reduce the  term  loan  commitment
amount  by  $10.6 million to $56.9 million.  The Company  has  stopped
making  communications  loans and has closed its  communications  loan
origination business.

Sale of Real Estate Structured Finance

     In January 2000, the Company sold approximately $182.4 million of
real  estate  structured  finance loans,  resulting  in  approximately
$170.2  million  in  cash  proceeds.  Consistent  with  the  Company's
strategy to de-leverage its balance sheet, the proceeds were  used  to
pay  down  indebtedness outstanding under its  credit  facility.   The
Company  has  ceased  making  real estate  structured  finance  loans.
Pursuant  to  the Purchase Agreement, the Company has  sold  its  real
estate  structured finance business to Lend Lease.   See  "Business  -
Recent  Developments  - Sale of Assets to Lend  Lease  (US)  Services,
Inc."

Restructuring of CLC Earn-out

      In  March  2000,  the  Company and the  former  shareholders  of
Commercial  Finance  Corporation ("CLC") agreed  to  amend  the  Asset
Purchase  Agreement pursuant to which the Company acquired CLC.   This
amendment  provides that the amount of the final earn-out payment  due
on  June  30, 2000 is fixed at $37.5 million and that, if the  Company
credit facility is paid in full, the Company must issue to such former
CLC shareholders promissory notes in the aggregate principal amount of
$37.5  million in exchange for shares of the Company's common stock  having
such  value.   Such notes would bear interest at the rate  of  8%  per
annum,  would be secured by certain residuals interests from  previous
securitizations  of  CLC and would provide for principal  payments  of
$12.5  million on each of June 30, September 30 and December 29, 2000.
The  notes could be prepaid at any time without penalty.  In the event
that the Company is unable to issue such notes, the June 30, 2000 earn-
out  payment  will be payable in the Company's common stock  having  a
value of $37.5 million based upon the average of the closing price  of
such common stock for the 20 trading days prior to May 31, 2000.

Sale of Asset Management operations in the United Kingdom

      On  March  22,  2000, the Company sold its United Kingdom  asset
management  assets  and operations for $160.0  million.   The  Company
received  cash  proceeds of $47.0 million and a  note  receivable  for
$25.0  million.   Cash proceeds of the sale were used to  reduce  non-
recourse and bank debt.

Commercial Finance Business

      General.  In 1996, the Company formally organized the commercial
finance  group  which  has  grown through a combination  of  corporate
acquisitions   and  business  development  to  provide  financing   to
commercial  borrowers  in  various  targeted  lending  markets.    The
commercial finance group is divided into two operating units: business
lending  and  builder finance.  The Company closed its  activities  in
connection  with  real structured finance and communications  lending,
see   "Recent   Developments  -  Sale  of  Loans  and   Shut-down   of
Communication  Loan Origination Business" and "Recent  Developments  -
Sale of Real Estate Structured Finance."

      Business Lending.  The business lending group, which essentially
began  operations  through the 1997 acquisition of Commercial  Lending
Corporation   ("ACLC"),   focuses  on   three   lending   sub-markets;
conventional  small  business loans, government guaranteed  SBA  loans
("Program 7A") and telephone and equipment financing.

       Conventional  small  business  lending  concentrates   on   the
origination,  securitization and servicing  of  loans  made  to  small
business owners.  Borrower profiles emphasize, among other things, the
borrower's experience with the particular operating concept  and  cash
flow  of  the  respective operating units.  Typically, loans  are  for
refinance,   construction,  remodeling   or   purchase   of   existing
facilities.   The loans are funded primarily by a dedicated  warehouse
facility until they are securitized and sold.

      The SBA lending group was formed by the July 1998 acquisition of
Independence Funding Company, LLC ("IFC").  As one of only 14 non-bank
SBA  lenders  in the United States, the SBA lending group makes  loans
under  SBA Program 7A to qualifying small business owners.  A portion,
typically 75%, of the principal balance is guaranteed by the  SBA  and
sold   at  a  premium  to  individual  investors  via  a  bid  process
approximately  two  to  three weeks after the  loan  is  closed.   The
remaining  non-guaranteed portion of the loan is retained  for  future
securitization along with the interest spread between the  contractual
rate  and  the  investor pass-through rate on the guaranteed  portion.
The SBA loans are funded primarily by a warehouse debt facility.

     The telephone equipment finance group was formed by the July 1998
acquisition of TeleCapital, L.P. ("TeleCapital").  The group's primary
focus   is   the  origination  and  servicing  of  loans   which   are
collateralized  by  privately owned and operated payphone  routes  and
related  equipment.   The  loans  are primarily  accumulated  for  the
purpose of securitization and sale and they are funded largely through
a warehouse debt facility.

      The  equipment finance group also provides lease  financing  for
business equipment, primarily restaurant equipment, based on referrals
from  business lending borrowers.  Typically this group will fund  the
individual equipment purchases during installation and then  sell  the
lease  to  a third party once fully funded and installed.   The  total
leasing  advances in 1999 and 1998 were $7.4 million and $5.8 million,
respectively, and sales of completed leases were $7.4 million and $5.6
million, respectively.

       The  business  lending  group  processes,  underwrites,  sells,
securitizes  and  services  loans  originated  from  producers.    The
producers  solicit  business using a combination of marketing  efforts
that  include direct solicitation, convention attendance and referrals
from   previous  borrowers.   The  following  table  summarizes   loan
origination  volumes for the years ended December 31, 1999  and  1998,
respectively (dollars in thousands):


                                  1999        %          1998        %
Conventional lending            $553,636    71.7%       $392,303    82.2%
SBA lending (1)                  166,403    21.6          59,228    12.4
Telephone equipment lending (1)   51,525     6.7          25,920     5.4
Total                           $771,564   100.0%       $477,541   100.0%

(1)  Acquired July 16, 1998.

      Since the acquisition of ACLC in 1997, the Company has completed
eight securitizations aggregating $1.3 billion.  The loans included in
each   securitization  are  grouped  according  to  type  of  borrower
consisting of either (i) loans to franchisees of nationally recognized
concepts   or  (ii)  loans  to  owners  of  other  independent   small
businesses.   The  securitization structure consists of  (a)  multiple
classes  of  investment grade certificates that are sold  via  private
placement  to  investors and (b) an equity interest  and  subordinated
certificate retained by the Company.

      Investment grade ratings for the securities are achieved by  (i)
limited  cross-guarantee  loan provisions for  the  various  borrowers
within the securitization and (ii) financial guarantee insurance.   In
the  limited cross-guarantee arrangement, each borrower signs  a  Note
for  an amount greater than their net loan proceeds and makes payments
based  on  the  higher  Note amount.  This increment  above  the  loan
amount,  known  as the credit enhancement amount, is  rebated  to  the
borrower  after they make their monthly payment assuming no deficiency
exists  in the securitization pool.  Should a deficiency occur  within
the  pool,  the rebates of the performing loans have been  pledged  to
cure  such deficiency and are applied in an amount to bring  the  loan
pool  to  a non-delinquent status.  Once the deficiency is cured,  the
recovered rebates are returned to the appropriate borrowers.

     As noted above, the business lending group retains a subordinated
interest in the securitization.  The certificate's value at any  point
in  time is based on the projected future cash flow spread between the
interest  collected  from borrowers and interest paid  to  certificate
holders, discounted to present value.  The following table depicts the
business   lending  group's  retained  interests  in   securitizations
balances  and related portfolio delinquency percentages (including  an
SBA  residual  acquired  as a result of the purchase  of  IFC)  as  of
December 31, 1999 and 1998 (dollars in thousands):
<TABLE>
<CAPTION>

                                      1999                   1998
                             Retained      Delinquency  Retained     Delinquency
                             Interest      Percentage   Interest     Percentage
                              Balance   %    90+ days    Balance   %   90+ days
<S>                       <C>        <C>     <C>       <C>      <C>    <C>
Franchise                   $ 34,829  24.2%    2.9%     $39,412  50.9%   1.2%
Conventional small business   92,917   64.5    0.6       31,259  40.3    0.0
SBA Loans                     16,315   11.3    1.9        6,831   8.8    3.1
Total                       $144,061  100.0%   1.5      $77,502 100.0%   1.0
</TABLE>

The  business  lending  group retains the servicing  rights  to  loans
following  sale  or  securitization.   Due  primarily  to  the  cross-
guarantee  credit  enhancement feature  of  the  securities  described
above,  the Company has developed a specialized servicing process  for
these  loans.   In  addition, loan servicing utilizes  a  third  party
software  system  customized  for the servicing  of  SBA  loans.   The
following  table summarizes the loan servicing portfolio  and  related
delinquency  profile  as of December 31, 1999 and  1998,  respectively
(dollars in thousands):


                                    1999       %         1998        %
Conventional lending             $1,367,736   77.4%   $ 898,505    74.4%
SBA lending                         388,360   22.0      267,830    22.2
Telephone equipment lending          10,562    0.6       41,054     3.4
Total                            $1,766,658  100.0%  $1,207,389   100.0%

Delinquencies (1):
31-60 Days                          $13,843            $  6,616
61-90 Days                            3,586               1,145
90+ Days                             25,474              11,870
Total                               $42,903             $19,631

Total delinquencies as a percentage
of total loan balances (2):            2.43%               1.63%

     (1)  The period of delinquency is based on the number of days payments
          are contractually past due.
     (2)  Reflects contractual delinquencies.  At December 31, 1999 and
          1998, all borrower delinquencies related to business lending loans
          were paid by borrower cross guarantees.  See Note 5 of the Notes to
          Consolidated Financial Statements included in "Item 8. Financial
          Statements and Supplementary Data" for a discussion of borrower
          cross guarantees.

      Real  Estate Lending.  Until the Company ceased its real  estate
lending  origination activities in January 1999, the Company  provided
mid-to-high  yield financing to borrowers in special  situations  that
generally  preclude  financing from traditional funding  sources.   In
these   transactions,  the  Company  funded  senior  and  subordinated
indebtedness generally ranging from $2 to $15 million for terms of one
to  four  years  to  borrowers with an established management  record.
Borrowers  targeted  by  the  Company usually  had  a  reputation  for
enhancing value, but may have lacked the financial capacity to qualify
for bank financing beyond a certain level.  Typically these loans have
a  defined  exit  strategy  such as bridge loans,  mezzanine  debt  or
construction loans and are often extended for the purpose  of  turning
around  or  repositioning  assets  to  maximize  their  value.    Loan
structures  varied  as  they  were  usually  customized  to  fit   the
characteristics and purpose of the loans.  Income is generally derived
by  a  combination of interest, fees and (in some cases) a net  profit
interest  tied  to the performance of the collateral at  loan  payoff.
Also,  the  Company made limited equity investments in ventures  where
they are also a lender.  The Company had loan balances outstanding  of
$229.0  million and equity investments of $10.5 million as of December
31,  1999 and loan balances of $195.1 million as of December 31, 1998.
The  following  table shows the combined real estate  loan  and  joint
venture equity balances as of December 31, 1999 and 1998 by collateral
type (dollars in thousands):

                          1999                      1998
                                Delinquency                   Delinquency
                                Percentage                     Percentage
                 Balance    %    90+ days    Balance      %     90+ days
Multi-family     $ 56,705  23.7%  0.0%      $ 57,474    29.5%      0.0%
Office             64,416  26.9   0.0         52,371    26.8       0.0
Industrial         31,588  13.2   2.1         26,911    13.8       0.0
Hospitality        27,350  11.4   0.0         19,584    10.0       0.0
Retail             22,588   9.4   0.0         19,356     9.9       0.0
Land                2,664   1.1   0.0
Mixed Use                                     13,040     6.7       0.0
Other              34,158  14.3   0.0          6,396     3.3       0.0
Total            $239,469 100.0%  0.4       $195,132   100.0%      0.0

      The  Company ceased originating real estate structured loans  in
1999.  During January 2000, the Company sold $182.4 million  principal
amount  of  such real estate loans for $170.2 million and  ceased  its
real estate lending operations.

      Communications Lending.  Through November 1999, the Company also
specialized   in  mid-to-high  yield  lending  in  the  communications
industry   to  operators  that  could  not  obtain  traditional   bank
financing.  Loan amounts range from $3 million to $40 million,  though
loans  in the upper half of this range typically were participated  to
other lenders.  Borrowers generally used proceeds to acquire radio and
television  stations, provide working capital and  refinance  existing
third  party  debt.  In November 1999, the Company sold  substantially
all  of  its communication loans and ceased all communication lending.
The  Company had loan balances outstanding of $5.9 million and  $144.8
million as of December 31, 1999 and 1998, respectively.  The following
table  depicts  the  collateral  distribution  of  the  communications
portfolio as of December 31, 1999 and 1998 (dollars in thousands):

                          1999                      1998
                                 Delinquency                     Delinquency
                                 Percentage                      Percentage
                 Balance     %    90+ days       Balance     %    90+ days
Radio            $   -     - %      - %          $112,940   78.0%    0.0%
Television       5,893   100.0    0.0              31,872   22.0     0.0
Total           $5,893   100.0%   0.0            $144,812  100.0%    0.0

      Builder Finance Group.  In January 1997, the Company established
the  builder  finance  group  to  provide  construction  financing  to
builders  of  first time and first move-up homes.  To facilitate  this
effort,  the  Company hired an experienced lending and servicing  team
formerly  associated  with  a  Texas financial  institution.   Builder
finance  targets  experienced homebuilders that are starting  anywhere
from  100  to  1,500 units per year in the $90,000 to  $200,000  price
range.  Prospective borrowers must also have a minimum of three  years
proven   experience  in  building  and  selling  homes,   satisfactory
financial  condition and acceptable credit history.   Builder  finance
also  provides a limited amount of acquisition and development lending
for residential lots that are ready for home building which will serve
as  feeder stock for the construction loan program.  Funding for these
loans is provided by a warehouse debt facility.

      Based  in  Houston, Texas with a state of the art loan servicing
facility,   the  builder  finance  group  currently  has  eight   loan
production offices in the United States.  Producers are (and will  be)
located  in  markets  that have large or growing populations  of  home
buying  age with qualifying incomes.  These markets must also  have  a
good  balance of housing inventory as well as acceptable lot and  home
absorption patterns.  General economic and employment conditions  must
be positive as well.

      As of December 31, 1999 and 1998, loan balances outstanding were
$218.9  million and $129.6 million on year-to-date advances of  $325.0
million and $268.9 million, respectively.

Asset Management Business

      General.   The Company manages, owns and resolves portfolios  of
performing,   underperforming   and   nonperforming   loans    ("asset
portfolios")  and  provides  special servicing  for  nonperforming  or
underperforming  loans in commercial mortgage-backed bond  trusts  and
similar  securitized  commercial  asset-backed  loan  portfolios.   As
previously  discussed under "Recent Developments - Sale of  Assets  to
Lend Lease (US) Services, Inc." the Company has sold to Lend Lease the
Company's  asset management operations, other than its  operations  in
Europe,  asset portfolios and mortgage backed securities.  Lend  Lease
will  manage these assets for the Company.  The Company has  sold  its
asset  management  operations  in  Europe.   See  "Business  -  Recent
Developments  -  Sale  of Asset Management Operations  in  the  United
Kingdom."

      Asset  Portfolio Management.  The Company manages  and  resolves
asset  portfolios which have been acquired at a discount to Face Value
by the Company alone and by the Company with co-investors.  During the
latter  part of 1999, the Company ceased acquiring for its own account
asset  portfolios or interests therein.  The Company also manages  and
resolves asset portfolios owned by third parties.

      Management  of asset portfolios includes managing and  resolving
loans  and  providing routine accounting servicing  functions.   Asset
portfolios  generally include secured loans of varying  qualities  and
collateral types.  The majority of the loans in which the Company  has
invested  were  in payment default at the time of acquisition.   Asset
portfolios purchased by the Company are comprised of secured loans and
real estate loans, the resolution of which may be based either on cash
flow of a business or on real estate and other collateral securing the
loan.   The Company has not invested in loans with known environmental
liabilities,  unless  the environmental risks can  be  quantified  and
discounted appropriately.

      The  Company  obtains information on available asset  portfolios
from  many  sources,  including banks, insurance companies  and  other
lenders.   Repeat business and referrals from asset portfolio  sellers
with  whom  the  Company  previously has transacted  business  are  an
important and frequent source of business.  The Company believes  that
it  receives many asset portfolio solicitations that result  primarily
from the Company's reputation as an active portfolio purchaser.  Other
important sources of business include referrals from co-investors  who
seek   the  Company's  participation  in  asset  portfolio  purchases,
contacts  initiated by senior management, public advertising of  asset
portfolios for sale and the Company's nationwide presence.

      The  Company  believes that opportunities for  the  acquisition,
management   and   resolution  of  asset   portfolios   are   becoming
increasingly evident in certain international markets and that lenders
in  these  markets are adopting many of the asset portfolio management
and resolution outsourcing techniques currently utilized in the United
States.   Accordingly, the Company opened offices in  Toronto  (August
1994),  employing seven persons, and London (October 1995),  employing
13  persons, each at December 31, 1999, in order to take advantage  of
both  investment  and servicing opportunities in  Canada,  the  United
Kingdom  and certain other Western European nations.  During 1998  and
1999, the Company began providing asset management services in Mexico,
Japan,  South  Korea and Thailand employing 55 persons in  Mexico,  19
persons  in  Japan,  two  persons in South Korea  and  13  persons  in
Thailand,  each at December 31, 1999.  The Company believes  that  the
international  markets are less competitive and, as a result,  provide
more  attractive investments and greater profit margins.  The  Company
had   $55.4   million  (Face  Value)  in  Canadian  asset  portfolios,
$392.9  million  (Face Value) in United Kingdom asset  portfolios  and
$199.5  million  (Face  Value) in Mexican asset  portfolios  and  $1.2
billion (Face Value) in Asian asset portfolios under management as  of
December 31, 1999.

      The  Company has gained its market share in the asset  portfolio
acquisition, management and resolution business through its experience
in managing and resolving asset portfolios and its national reputation
and  strategic  relationships with sellers  and  purchasers  of  asset
portfolios, including financial institutions, large corporate  buyers,
investment banking firms and sophisticated private investors.

     Asset Portfolio Investment.  Prior to making an offer to purchase
an  asset portfolio, whether for its own account or for the account of
third  parties,  the Company conducts an extensive  investigation  and
evaluation  of the individual loans generally comprising 100%  of  the
aggregate  Face  Value  of  all  the loans  therein,  except  in  rare
instances where an unusually large number of smaller assets are  being
purchased.   This  examination typically  consists  of  analyzing  the
information  made available by the seller (generally,  the  respective
credit  and collateral files for the loans), reviewing other  relevant
material  that may be available (including tax and judgment  records),
and  analyzing  the underlying collateral (including  conducting  site
inspections,   obtaining  value  opinions  from  third   parties   and
consulting  with  any  of  the  Company's  asset  managers  who   have
experience  with the local market for such assets).  The Company  also
reviews  information on the local economy and real estate  markets  in
the  area  in  which the loan collateral is located.  Because  of  its
broad, nationwide experience in managing assets, the Company has  been
able to draw on its asset management experience in the specific market
in which an asset is located.  Unlike the original lender, the Company
values  loans based on the present value of estimated total cash  flow
from  resolution, with the expectation that the loans will be resolved
prior  to  scheduled  maturity.   Generally,  the  Company  does   not
refinance or renew purchased loans or grant new credit.

      Asset portfolio evaluations are conducted almost exclusively  by
the  Company's  employees who specialize in analysis of  nonperforming
and underperforming loans, often with further specialization based  on
geographic  or  collateral-specific factors.  Most of these  employees
have  previously served the Company (and some continue  to  serve)  as
asset  managers with responsibility for resolving such  loans.   Their
asset  management experience aids these individuals, working  together
in  teams, in making informed judgments about the status of each  loan
and  the underlying collateral, the probable cash flows from the loan,
the  likely  resolution of the loan and the time and expense  required
for resolution.

       Loan   resolutions  are  typically  accomplished  through   (i)
negotiating   a  discounted  payoff  with  debtors,   which   may   be
accomplished through a refinancing by the obligor with a lender  other
than the Company, or (ii) foreclosure and sale of the collateral.  The
Company  generally  seeks consensual resolution of each  loan,  having
found that a negotiated resolution usually maximizes the Company's  or
investor's rate of return.  Historically, the Company has resolved the
majority  of  the  assets in an asset portfolio within  18  months  of
acquisition.  The goal of the Company's loan resolution process is  to
maximize the cash recovery in a timely manner on each loan in an asset
portfolio.

      The  Company's  investment in asset portfolios is  comprised  of
collateralized  business loans and real estate  collateralized  loans.
At  December  31,  1999, the Face Value of the Company's  wholly-owned
asset  portfolios aggregated approximately $852.5 million,  which  was
composed  of  approximately $604.3 million (70.9%)  of  collateralized
business  loans,  approximately $59.0 million (6.9%)  of  asset-backed
securities and approximately $189.2 million (22.2%) of real estate.

      For  the  years ended December 31, 1999, 1998 and  1997,  $106.8
million  (24.8%),  $111.9 million (23.7%) and $90.5  million  (28.2%),
respectively, of the Company's revenues were attributable to its asset
management  business.   The  following table  reflects  the  ownership
composition of the asset portfolios (based on their face value)  under
management  by  the Company as of December 31, 1999,  1998  and  1997.
Certain  reclassifications of prior period amounts have been  made  to
conform to the current year presentation (dollars in millions).
<TABLE>
<CAPTION>

                                              1999              1998             1997
                                           Amount    %      Amount     %      Amount   %
<S>                                     <C>         <C>    <C>       <C>    <C>       <C>
  Wholly-owned by the Company             $ 793.5   22.4   $1,048.0   33.6% $  593.4    30.7
  Owned by the Company with co-investors  1,240.5   35.0      182.5    5.9     422.9    21.8
  Owned by third parties:
     Securitized mortgage pools             491.1   13.9      574.0   18.4     459.2    23.7
     Government and other owners          1,015.6   28.7    1,313.1   42.1     462.1    23.8
       Total under management            $3,540.7  100.0%  $3,117.6  100.0% $1,937.6   100.0
</TABLE>
      The  following  table reflects the book value of  the  Company's
investment in asset portfolios as of December 31, 1999, 1998 and 1997:

                                           1999       1998       1997
                                             (dollars in millions)
  Wholly-owned by the Company             $384.0      $573.0    $494.9
  Owned by the Company with co-investors    50.2        17.1      22.8
  Total                                   $434.2      $590.1    $517.7

      Special  Servicing.  As part of its third-party asset management
and resolution business, the Company aggressively pursues contracts to
serve  as  the  designated special servicer for pools  of  securitized
commercial  mortgages.   The  competitive  bidding  process  generally
requires  that the Company agree to purchase an interest (a "servicing
strip")  in the securitized portfolio in order to secure the servicing
contract.  In the latter part of 1999, the Company ceased the purchase
of  servicing strips, thereby substantially decreasing the ability  of
the  Company  to  be  a  special  servicer  for  additional  pools  of
securitized  commercial mortgages.  After a loan within a  securitized
pool  of  performing  loans becomes delinquent or  nonperforming,  the
master  servicer  or  primary servicer of the pool will  contractually
transfer  responsibility for resolution of that  loan  to  the  pool's
designated  special servicer.  Special servicers earn  an  annual  fee
(typically  approximately 50 basis points of the  Face  Value  of  the
delinquent or nonperforming loans subject to special servicing),  plus
a  50  to 200 basis points resolution fee based on the total cash flow
from  resolution of each such loan as it is received.  As of  December
31,  1999,  the  Company  was  the  designated  special  servicer  for
securitized pools holding approximately $17.4 billion (Face Value)  of
loans,  $491.1 million (Face Value) of which had been assigned to  the
Company for resolution in its capacity as special servicer.

Commercial Mortgage Banking Business

      General.   The  Company  performed a wide  range  of  commercial
mortgage   banking  services,  including  originating,   underwriting,
placing,  selling and servicing commercial real estate  loans  through
Holliday  Fenoglio Fowler, AMRESCO Capital and AMRESCO  Services.   As
previously  discussed under "Recent Developments - Sale of  Assets  to
Lend Lease (US) Services, Inc.", the Company sold to Lend Lease all of
the  assets and operating platforms of its commercial mortgage banking
businesses.

      Real  Estate Capital Markets.  The Company provides a wide range
of  real estate capital markets services to lenders on, and owners and
developers  of,  commercial  real  estate  properties.   The   typical
consumers of commercial real estate mortgage banking services are both
real  estate developers and owners (as borrowers) and investor/lenders
(as  funding  sources).  Due to the specialized nature  of  commercial
mortgage  lending,  borrowers rely on commercial mortgage  bankers  to
find  competitive  lenders, and these lenders (particularly  insurance
companies  and pension plans, which do not generally have  origination
staffs  located  in  multiple branches) rely  on  commercial  mortgage
bankers  to  source  potential borrowers.  Lenders  generally  include
banks, pension funds and insurance companies.  In arranging loans, the
Company  works  closely with both the borrower and  potential  lenders
from  the  time  a  loan  prospect is  first  contacted,  through  the
application  and proposal process and throughout the documentation  of
the loan to final funding.

      Holliday  Fenoglio  Fowler  was one of  the  largest  commercial
mortgage  bankers in the United States in 1999 (based  on  origination
volume)  and  primarily serves commercial real estate  developers  and
owners  by  arranging  commercial  real  estate  loans  and  providing
brokerage   and  other  real  estate  capital  markets  services   for
commercial   real  estate  transactions.   Holliday  Fenoglio   Fowler
arranged approximately $10.8 billion, $7.3 billion and $4.7 billion of
commercial real estate loans during 1999, 1998 and 1997, respectively.
Holliday Fenoglio Fowler principally targets developers and owners  of
commercial and multifamily real estate properties.  Holliday  Fenoglio
Fowler  serves  prospective borrowers through its own commission-based
mortgage  bankers  in 19 nationwide offices.  The  loans  arranged  by
Holliday   Fenoglio  Fowler  generally  are  funded  by  institutional
lenders,  primarily  insurance companies, and by  Conduit  Purchasers.
The  Company estimates that Holliday Fenoglio Fowler has retained  the
servicing  rights  on approximately 20% of such loans  over  the  last
three  years.   The  Company believes that Holliday Fenoglio  Fowler's
relationship  and  credibility with its institutional  lender  network
provide the Company a competitive advantage in the commercial mortgage
banking industry.

      The  Company  provided brokerage and other real  estate  capital
markets services on commercial real estate sales and other real estate
transactions, including joint ventures and participating mortgages  of
approximately  $13.2  billion, $9.8 billion and  $6.1  billion  during
1999,  1998 and 1997, respectively.  For the years ended December  31,
1999,  1998  and 1997, Holliday Fenoglio Fowler earned gross  fees  of
$71.4  million,  $69.8  million and $44.0 million,  respectively,  for
brokerage services.

      Holliday Fenoglio Fowler generally earns a fee of between 35 and
100  basis  points of the loan amount for originated  or  underwritten
loans,  plus certain additional processing fees.  From time  to  time,
Holliday  Fenoglio  Fowler  also originates  nontraditional  financing
involving  hybrid  forms  of  debt, equity participation's  and  other
creative  financing  structures.  Fees for  equity  or  joint  venture
structures are typically higher.

      Holliday Fenoglio Fowler has established relationships with over
290  institutional  lenders that include insurance companies,  pension
plans  and  Conduit  Purchasers.  In 1999,  1998  and  1997,  Holliday
Fenoglio  Fowler  placed 862, 1,109 and 709  loans with  approximately
174,   198  and  128  different  lenders,  respectively.   Twenty-five
institutional lenders have retained Holliday Fenoglio Fowler as  their
exclusive  or  semi-exclusive loan originator in selected  cities  and
regions.

      Commercial Real Estate Lending.  AMRESCO Capital is a commercial
real estate lender, which has originated, underwritten and closed long
term  fixed  rate commercial mortgages for sale to various  investors.
During 1999, 1998 and 1997, AMRESCO Capital closed approximately  $1.2
billion,  $2.4  billion and $1.7 billion, respectively, of  commercial
real  estate  mortgages.  AMRESCO Capital serves its  market  directly
through  seven offices located in seven states as well  as  through  a
network of independent mortgage brokers located throughout the  United
States.  These independent mortgage brokers serve AMRESCO Capital on a
nonexclusive  basis  and  receive  fees  and  commissions   based   on
transaction  size, type and complexity.  For years ended December  31,
1999  and  1998, approximately 53% and 45% of the loans, respectively,
underwritten  by AMRESCO Capital were originated by Holliday  Fenoglio
Fowler.

      During  the  fourth  quarter of 1998, AMRESCO  Capital  suffered
significant   losses  related  to  its  commercial  mortgage   conduit
operation.   As a result, AMRESCO Capital made the strategic  decision
to  exit  the commercial mortgage conduit business.  AMRESCO Capital's
business is now focused on commercial mortgage lending through  agency
programs,  such as the Fannie Mae DUS and Freddie Mac Program  Plus
programs and a private securitization program.

      AMRESCO Capital is approved by Fannie Mae to participate in  its
DUS  program.   An approved DUS lender is delegated the  authority  to
approve,  commit  and  close  loans for  multifamily  mortgages  on  a
national  basis with the assurance that Fannie Mae will  purchase  the
loans  with  the  lender retaining the servicing.  In return  for  the
delegated authority to make loans and the subsequent purchase of  such
loans by Fannie Mae, DUS lenders must maintain a minimum capital base,
and retain a certain level of credit risk on the loans they make.  The
DUS  lender  takes  first loss risk up to 5% of the loan  amount,  and
above  5%  of the loan amount Fannie Mae and the DUS lender share  the
loss,  with  the DUS lender's maximum loss capped at 20% of  the  loan
amount.   As  of December 31, 1999, AMRESCO Capital, as a DUS  lender,
had  experienced no losses on its portfolio of sold DUS loans, but had
a  reserve of $10.8 million as of December 31, 1999 included in  other
liabilities.  AMRESCO Capital is one of only 27 currently approved DUS
lenders.   While  all  DUS lenders operate on a  national  basis,  the
Company  believes  that ten such lenders (including  AMRESCO  Capital)
account for the majority of DUS volume.

     AMRESCO Capital is also a member of the Freddie Mac Program Plusr
multifamily  seller/servicer  program.   Through  this  program,   the
Company  is authorized to originate multi-family mortgages for Freddie
Mac in 17 states and the District of Columbia.

      The  Company  believes that AMRESCO Capital,  as  an  authorized
Fannie  Mae  DUS  and  Freddie Mac Program Plusr lender,  has  certain
competitive   advantages  in  the  multifamily  mortgage   origination
business.   These advantages include the competitive pricing  afforded
by  Fannie Mae's and Freddie Mac's positions as the largest purchasers
of  housing  related  mortgages in the nation  and  AMRESCO  Capital's
affiliation with Holliday Fenoglio Fowler, one of the largest mortgage
banking  company's  in  the nation.  For these  reasons,  the  Company
expects  Fannie  Mae  and Freddie Mac loan originations  to  become  a
larger   portion  of  its  commercial  mortgage  banking   activities.
Holliday  Fenoglio Fowler has been and is expected to be a significant
source of such loan originations.

      During  February  1999, AMRESCO Capital entered  into  strategic
alliances  with  two  entities  in  which  commercial  mortgage  loans
originated  for a fee by AMRESCO Capital would be funded or  purchased
by  such  entities.   These arrangements were mutually  terminated  in
December, 1999.   AMRESCO Capital also originates commercial mortgages
for   a  private  securitization  program  under  which  the  investor
purchases  all of the resulting commercial mortgage-backed securities.
This  program does not expose the Company to capital markets or credit
risk.   For  the  years  ended  December  31,  1999,  1998  and  1997,
approximately   $485   million,  $450  million   and   $220   million,
respectively,  of  commercial mortgage loans were  funded  under  this
program.

      Commercial  Loan Servicing.  AMRESCO Services is a servicer  for
securitized  pools  of  commercial mortgages  and  whole  loans.   The
average   life   of  these  securitized  pools  is  expected   to   be
approximately  eight  years.  At December 31,  1999,  1998  and  1997,
AMRESCO Services acted as servicer with respect to approximately $33.6
billion, $31.0 billion and  $25.9 billion of loans, respectively.  The
dominant  users of commercial loan servicers are commercial  mortgage-
backed  bond trusts and other owners of commercial real estate  loans,
including  lenders accumulating loans for securitization or sale  that
contract for servicing on an interim basis.  Historically, the revenue
stream  from  servicing  contracts on commercial  mortgages  has  been
relatively predictable as prepayment penalties in commercial mortgages
tend to discourage early loan payoffs.

      Primary  servicing  of whole loans involves  collecting  monthly
mortgage payments, maintaining escrow accounts for the payment  of  ad
valorem taxes and insurance premiums on behalf of borrowers, remitting
payments  of  principal  and interest promptly  to  investors  in  the
underlying  mortgages,  reporting  to  those  investors  on  financial
transactions related to such mortgages and generally administering the
loans.  The servicer of whole loans also must cause properties  to  be
inspected  periodically, determine the adequacy of insurance  coverage
on   each  property  and  monitor  delinquent  accounts  for  payment.
Servicer  rates  are determined by a bidding and negotiating  process.
AMRESCO Services is approved as a primary servicer by all four  rating
agencies.

      Master servicing involves providing administrative and reporting
services   to   securitized   pools  of  mortgage-backed   securities.
Typically,   mortgages  underlying  mortgage-backed   securities   are
serviced  by a number of primary servicers.  In fact, AMRESCO Services
is  a  primary servicer for many of the loans for which it is  also  a
master  servicer.   Under  most  master  servicing  arrangements,  the
primary  servicers  retain principal responsibility for  administering
the mortgage loans and the master servicer acts as an intermediary  in
overseeing  the  work  of  the  primary  servicers,  monitoring  their
compliance  with  the  issuer's  standards  and  consolidating   their
respective  periodic  accounting  reports  for  transmission  to   the
securitization  trustee  in respect of the  related  securities.   The
Company  frequently is designated as the full servicer for a  pool  of
mortgages, in which case the Company acts as master, primary, and,  in
some cases, special servicer for the pool.  Master/full servicers  are
typically paid fees based on the Face Value of loans under management,
and  the  compensation  is  determined by a  bidding  and  negotiating
process.   AMRESCO Services is approved as a master  servicer  by  all
four rating agencies.

Residential Mortgage Banking

      General.   Through its August 11, 1998 acquisition of  MIC,  the
Company  acquired  the business of refinancing and  selling  Veteran's
Administration  ("VA")  residential  mortgage  loans  under  the  VA's
interest  rate  reduction  refinance loan ("IRRRL")  program.   During
1999,  MIC  began refinancing Federal Home Loan ("FHA")  mortgages  as
well.  All loans refinanced under the IRRRL program are guaranteed  or
insured,  usually within 61 days of funding.  MIC's loan  refinancings
aggregated  $1.8  billion during 1999 compared to  $1.6  billion  from
August 11, 1998 through December 31, 1999.
      Loan  Product.   Typically, the refinanced loans  have  a  well-
seasoned  pay  history  and are refinanced at  below  market  interest
rates.   Management  believes  that  these  loans  are  attractive  to
investors and servicers because of the historically low prepayment and
default rates and the below market interest rates offered.  Prepayment
and  default  rates on these loans tend to be low  due  to  the  lower
monthly  payment  as  a  result of the refinance  and  the  underlying
guarantee which limits exposure to losses.

      Loan  Sources.  The Company obtains its refinanced loans through
its  own focused telemarketing database and related loan officers,  of
which the primary operating expense of MIC is commissions to the  loan
officers  which vary with production.  The loan officers  are  located
throughout  the United States.  The telemarketing and loan  processing
functions  are  centralized in St. Petersburg, Florida, thus  allowing
the loan officers to focus solely on selling.

      Sales  of  Loans and Servicing.  Throughout 1999, MIC  sold  all
loans  on  a  servicing released basis.  The Company typically  enters
into forward sale agreements in the 30-year fixed rate GNMA market for
a  portion of its production.  The production is typically sold  at  a
discount  due  to  the below market interest rates on  the  refinanced
loans.   MIC  sells the loans to the entity that will be the  ultimate
servicer   of  the  loans  and  the  servicer  assumes  the  Company's
obligation  to  deliver  on  the GNMA forward  sale  commitment.   The
servicer  pools  the  loans  and creates a  30-year  fixed  rate  GNMA
security,  delivers on the forward sale commitment,  and  retains  the
servicing.

Home Equity Lending Business

      General.   Until  the transfer of its assets and  operations  to
Finance  America, as described under "Recent Developments -  Formation
of  Residential  Finance  Joint Venture  with  Lehman  Brothers",  the
Company  originated,  acquired, warehoused,  serviced  and  sold  home
equity loans.  Home equity lending's loan production was $0.9 billion,
$3.5  billion and $3.6 billion for the years ended December 31,  1999,
1998  and  1997,  respectively.  In late 1998,  the  Company  suffered
significant losses related to home equity loans accumulated  and  held
for  subsequent securitization.  As a result, the Company discontinued
its  "bulk"  purchase  of home equity loans and  origination  of  home
equity   loans  through  correspondent  channels,  which  collectively
accounted  for  approximately $2.4 billion and $2.7  billion  of  loan
volumes  for  the years ended December 31, 1998 and 1997, respectively
and  ceased  its  securitization activities.  During 1999,  all  loans
originated by the Company were sold in "whole loan" sale transactions.

       Borrower  Profile  and  Underwriting.   The  Company   targeted
borrowers  that  had credit profiles that precluded their  loans  from
being  sold  in the government agency secondary markets.  Such  credit
profiles included consumer or mortgage loan delinquencies, high  debt-
to-income  ratios, previous bankruptcy or inability to provide  income
documentation.   Borrowers in the Company's targeted market  typically
had significant equity in their homes and were charged higher interest
rates for loans than more creditworthy borrowers.

      Loan Products.  The home equity loans originated and acquired by
the  Company  consisted  of  fixed and adjustable  rate  conventional,
nonconforming mortgage loans with remaining terms to maturity  of  not
more than 360 months and secured by deeds of trust, security deeds  or
mortgages.   The  properties securing the home equity loans  consisted
primarily   of  single  family  residences  (which  may  be  attached,
detached, part of a two-to-four-family dwelling, a condominium unit or
a  unit  in a planned unit development).  The properties securing  the
home equity loans were owner occupied or non-owner occupied investment
properties.   The Company's home equity loan products  included  fixed
rate  loans  that bear a fixed rate of interest for the  life  of  the
loan,  adjustable rate loans that bear interest at rates that  adjust,
along   with   related   monthly  payments,  periodically   (generally
semiannually) based on a specified financial index or quoted rate  and
loans  that  bear  a  fixed rate of interest for  a  specified  period
following  origination  (generally two,  three  or  five  years)  with
periodic  rate  adjustments thereafter based on a specified  financial
index  or quoted rate.  In a majority of cases, the home equity  loans
can  be  prepaid  by the mortgagor in whole or in part  at  any  time,
although the mortgagor may be required to pay a fee in connection with
certain prepayments.

      Loan  Sources.   During  the  period between  restructuring  its
operations in October 1998 and transferring its operations to  Finance
America,  the Company obtained home equity loans through its wholesale
broker  operations  and  through various  retail  channels,  including
telemarketing, direct mail and retail branches.  Wholesale  operations
involved  the  origination of loans through the Company's  network  of
branch  offices.  Retail operations involved consumer direct  mail,  a
retail  sales  center  and retail branch operations.   In  its  retail
operations  the Company worked directly with consumers  to  originate,
underwrite and close mortgage loans (see "Item 1. Business Activities-
Recent Developments).

  Portfolio  Performance.   The following table  provides  information
with  respect to prepayments, delinquencies and net losses,  prior  to
any  potential  recoveries  for  each of  the  Company's  home  equity
securitizations as of December 31, 1999:
<TABLE>
<CAPTION>
         Issuance  Original   Balance     CPR %           Delinquencies (2)    % Net
Security   Date    Balance   Outstanding  Actual(1)   30-59    60-89     90+  Losses(3)
                        (dollars in millions)
<S>     <C>      <C>       <C>         <C>           <C>     <C>      <C>      <C>
1996-1  01/25/96  $ 275      $ 54.1      33.39%        3.39    1.27     7.28%   1.07%
1996-2  04/25/96    257        34.3      41.56         1.19     .29     6.35     .71
1996-3  06/20/96    267        82.0      28.13          .84     .61     5.20     .84
1996-4  08/28/96    311        56.6      39.27         3.61     .50    14.22    1.52
1996-5  12/18/96    700       167.6      37.10         2.14     .90    19.00    2.03
1997-1  03/26/97    605       203.5      31.93         2.27    1.29    14.82    2.02
1997-2  06/12/97    740       289.3      30.47         2.00    1.58    14.13    1.93
1997-3  09/16/97    950       381.0      32.40         2.57     .98    13.80    1.56
1998-1  02/12/98  1,000       509.5      29.66         2.96    2.10    15.99    1.64
1998-2  06/12/98  1,000       541.1      32.42         4.14    1.72    11.43     .62
1998-3  09/29/98  1,000       709.3      22.71         5.19    1.84     8.27     .29

Weighted average (4)                     29.82         3.40    1.55    12.41    1.16
</TABLE>
(1)     The  Constant Prepayment Rate ("CPR") represents the  rate  of
  prepayment  experienced  by  the  referenced  securitized  pool   of
  mortgage  loans,  expressed  as  an annual  rate,  relative  to  the
  outstanding principal balance over the life of mortgage loans.   CPR
  is  equal  to Pure Prepayment ("PPR") (5) + Liquidation  Proceeds  +
  Realized Losses + Buyouts + Scheduled Principal Payments.

(2)  The period of delinquency is based on the number of days payments
  are  contractually past due.  The delinquency statistics for the 90+
  days data includes loans in foreclosure.

(3)   Net  losses  represents the aggregate  amount,  expressed  as  a
  percentage of the original balance, which has been determined to  be
  uncollectible  relating  to  mortgage loans,  less  recoveries  from
  liquidation proceeds and deficiency judgments.

(4)  Based on the balance outstanding at December 31, 1999.

(5)  "PPR" is equal to voluntary borrower payoffs plus curtailments.

      Home  Equity Loan Servicing.  From October 1996 through December
1999,   the  Company  performed  delinquency  management  and  related
servicing  functions for the asset portfolios acquired and  for  loans
originated by the Company after October 1, 1997 or acquired by it on a
servicing  released basis.  At year end 1999, the Company  transferred
to unaffiliated third parties all of its loan servicing operations.

Competition

      General.  The Company's competition varies by business line  and
geographic market.  Generally, competition within each of the business
lines  in  which  the Company competes is fragmented,  with  national,
local  and  regional competitors, none of which dominates a particular
business  line.  Certain of the Company's competitors within  each  of
its  business  lines  are larger and have greater financial  resources
than the Company.

      Asset Management.  The Asset Management business is a nationwide
(and  increasingly  international) business with numerous  financially
strong   and  experienced  competitors.   The  Company  continues   to
encounter  increased  competition in the market for  asset  portfolios
which  could cause the Company to experience decreasing profit margins
in  this  business  line in order to remain a competitive  bidder  for
asset portfolios.  In addition, declining profit margins presented  by
current bidding opportunities has caused the Company to re-deploy  its
capital in more profitable product lines.

      Commercial Mortgage Banking.  The Company's commercial  mortgage
banking  business consists of real estate capital markets,  commercial
real estate lending and commercial loan servicing business lines.   In
each  of  these business lines, the Company competes on  a  nationwide
basis.   The  real estate capital markets and commercial  real  estate
lending  businesses are fragmented, composed primarily of small  local
or  regional firms.  The Company believes that the commercial mortgage
banking industry is moving toward greater consolidation and that  well
capitalized,  full  service, nationwide mortgage  banking  firms  will
emerge from this consolidation.

      The  commercial  loan servicing business is highly  competitive.
Distinct  markets have developed for the servicing of performing  loan
pools, under-performing loan pools and non-performing loan pools.  The
Company  has  focused its commercial loan servicing  business  on  the
market for performing loan pools, the servicing market that management
believes has the greatest potential for growth.

      Home  Equity  Lending.   The Company has  encountered  increased
competition in the market for conventional, nonconforming home  equity
loans  as  more  originators  enter this  market  which  could  impact
origination  volume and profit margins.  In addition, certain  of  the
Company's   larger,  national  competitors  have  access  to   greater
financial resources and lower costs of capital.

      Commercial Finance.  The markets in which the Commercial Finance
business  operates  are highly competitive and  are  characterized  by
competitive  factors  that  vary based  upon  product  and  geographic
region.   The  Commercial Finance Group's competitors include  captive
and  independent  diversified  finance  companies,  specialty  finance
companies   (including   specialty   franchise   finance   companies),
commercial  banks,  thrift  institutions,  asset-based  lenders,  real
estate   investment  trusts  and  leasing  companies.   Many  of   the
competitors  of the Commercial Finance Group are large companies  that
have  substantial capital, technological and marketing resources,  and
some  of  these  companies may have lower costs  of  capital  than  is
available to the Commercial Finance business.

       Residential  Mortgage  Banking.   The  market  in   which   the
Residential Mortgage Banking business operates is characterized by few
originators  of streamlined FHA and VA refinanced loans.  The  Company
believes that it is an effective competitor in this market.

Employees

      At  December 31, 1999, the Company and its subsidiaries employed
2,572  persons.   Of  that  total, 160  were  employed  in  the  asset
management  group, 712 in the commercial mortgage banking  group,  381
persons  in  the  home  equity lending group, 261  in  the  commercial
finance  group, 847 in the residential mortgage banking group and  211
in  general corporate administration.  The Company believes  that  its
employee  relations are generally good.  The Company has no collective
bargaining arrangements.

Certain Definitions

     The following are certain defined terms used herein:

     "ACLC" means AMRESCO Commercial Lending Corporation, a subsidiary
of the Company.

       "AMRESCO Capital" means AMRESCO Capital L.P., a limited partnership.

     "AMRESCO Funding" means AMRESCO Funding Corporation, a subsidiary
of the Company.

      "AMRESCO Services" means AMRESCO Services L.P., a limited partnership.

      "Company"  means, unless otherwise stated herein or  unless  the
context otherwise requires, the Company and each of its subsidiaries.

     "Conduit Purchasers" means investment bankers and other financial
intermediaries   who  purchase  or  otherwise  accumulate   pools   or
portfolios  of  loans  having  common  features  (e.g.,  real   estate
mortgages, etc.), with the intent of securitizing such loan assets and
selling  them  to a trust that secures its funds by selling  ownership
interests in the trust to public or private investors.

      "DUS"   means  the Delegated Underwriting and Servicing  program
established by Fannie Mae that permits a DUS approved lender to commit
and  close  loans for multifamily mortgages for resale to  Fannie  Mae
without Fannie Mae's prior approval of such loans.

      "Face Value" means, with respect to any loan or asset portfolio,
the aggregate unpaid principal balance of a loan or loans.

     "Fannie Mae" means the Federal National Mortgage Association.

     "Freddie Mac" means the Federal Home Loan Mortgage Corporation.

      "Holliday Fenoglio Fowler" means Holliday Fenoglio Fowler, L.P.,
a limited partnership.

      "MIC" means Mortgage Investors Corporation, a subsidiary of  the
Company.

      "securitization" and "securitized" mean a transaction  in  which
loans originated or purchased by an entity are sold to special purpose
entities organized for the purpose of issuing asset-backed securities.

Item 2.   Properties

     The Company leases approximately 200,000 square feet in the North
Tower  of  the  Plaza  of  the  Americas  in  Dallas,  Texas  for  its
centralized   corporate   functions  including   executive,   business
development  and  marketing, accounting, legal,  human  resources  and
support and also certain line of business operations.  This lease  has
an initial termination date of October 31, 2001 and has an annual base
rent  of  approximately $2.6 million during 1999.   The  Company  also
leases space for branch offices pursuant to leases with varying terms.
Effective  March 17, 2000, in conjunction with the sale to Lend  Lease
of  the  commercial mortgage banking business and the asset management
and  real  estate  structured finance platforms,  Lend  Lease  assumed
approximately 50% of the leased space in the North Tower of the  Plaza
of  the  Americas in Dallas.  The Company retained the balance of  the
space.   The  lease has the same terms as before with an  annual  base
rent of approximately $1.6 million.  Also in conjunction with the sale
to  Lend  Lease,  a  substantial number of branch office  leases  were
assigned or assumed by Lend Lease.

      The  Company believes that its facilities are adequate  for  its
immediate needs or substitute space is available, if needed.

Item 3.   Legal Proceedings

      The  Company  is  involved from time to time  in  various  legal
proceedings arising in the ordinary course of business.  In connection
with  the  Company's loan servicing, asset management  and  resolution
activities, the Company is indemnified to varying degrees by the party
on  whose  behalf the Company is acting.  The Company  also  maintains
insurance  that  management  believes is adequate  for  the  Company's
operations.   None of the legal proceedings in which  the  Company  is
currently involved, either individually or in the aggregate (and after
consideration of available indemnities and insurance), is expected  to
have  a material adverse effect on the Company's business or financial
condition.

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

      No  matters  were submitted to a vote of the Company's  security
holders during the fiscal quarter ended December 31, 1999.

                                PART II

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

     The Company's common stock (Symbol: AMMB) is listed on the Nasdaq
Stock  Market.   At  March  22, 2000, there were  approximately  2,600
stockholders of record of the Company's common stock.  Presented below
are the high and low last sale prices per share for 1999 and 1998,  as
reported  by  NASDAQ.   The Company discontinued  declaring  dividends
beginning  with  the fourth quarter of 1995 and the Company  does  not
expect  to  declare dividends on its common stock in  the  foreseeable
future.

                                    High       Low
1998
 First Quarter                    $33.7500    $23.2500
 Second Quarter                    38.7500     29.1250
 Third Quarter                     30.1250      7.2500
 Fourth Quarter                     8.9375      2.0313
1999
 First Quarter                    $12.1325     $7.6875
 Second Quarter                     7.9375      4.0625
 Third Quarter                      7.8750      3.0000
 Fourth Quarter                     3.1875      1.4062

Item 6.   Selected Financial Data

      The  selected financial data set forth below for the five  years
ended  December  31, 1999 has been derived from the Company's  audited
consolidated financial statements.  This information should be read in
conjunction   with  "Item  1.  Business"  and  "Item  7.  Management's
Discussion  and  Analysis  of  Financial  Condition  and  Results   of
Operations," as well as the audited consolidated financial  statements
and  notes  thereto  included  in "Item 8.  Financial  Statements  and
Supplementary Data."
<TABLE>
<CAPTION>
                                                      Year Ended and as of December 31,
                                                1999       1998       1997      1996     1995
                                                    (in thousands, except per share data)
  Operating Results:
<S>                                       <C>         <C>        <C>         <C>       <C>
  Revenues                                  $ 429,869  $ 471,961  $  320,769  $145,486  $ 87,132
  Income (loss) from continuing operations   (228,277)    (1,330)     39,111    24,250    15,047
  Net income (loss)                          (220,849)   (69,171)     56,224    31,332    21,090
  Earnings (loss) per share from continuing
    operations:
     Basic                                      (4.77)     (0.03)       1.11      0.90      0.63
     Diluted                                    (4.77)     (0.03)       1.07      0.84      0.61
  Earnings (loss) per share:
     Basic                                      (4.61)     (1.61)       1.59      1.16      0.88
     Diluted                                    (4.61)     (1.61)       1.53      1.06      0.85
     Dividends per share                            -          -          -         -       0.15
  Balance Sheet Data:
  Total assets                              1,944,426  2,587,345   2,373,131   998,029   497,098
  Long-term obligations (1)                   580,033  1,150,179     695,845   293,956   112,500
  Total liabilities                         1,484,707  2,001,938   1,964,631   696,514   336,304
  Total shareholders' equity                  459,719    585,407     408,500   301,515   160,794
</TABLE>
___________________________
(1)   For  1999, does not include the $384.7 million outstanding under
  the Company's Credit Agreement which is due June 30, 2000.  For 1998,
  does not include the $70.2 million short-term portion of the Company's
  Credit  Agreement  outstanding as of December 31,  1998,  and  $57.5
  million of indebtedness under the Company's Senior Notes due July 1,
  1999.

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

Overview

      The  Company began the year as a diversified financial  services
company  with  five  principal lines of business: commercial  finance,
asset  management, residential mortgage banking, home equity  lending,
and  commercial mortgage banking.  In its commercial finance business,
the  Company  focuses  on  (i)  loans  to  franchisees  of  nationally
recognized  restaurant,  hospitality and service  organizations,  (ii)
loans  to small business owners, (iii) real estate structured finance,
(iv)   communications  finance  and  (v)  single  family   residential
construction   lending.   The  asset  management   business   involves
acquiring  asset portfolios at a discount to Face Value  and  managing
and  resolving such asset portfolios to maximize cash recoveries.   In
addition,  in  its  asset management business,  the  Company  provides
special  servicing  for non-performing and under-performing  loans  in
commercial   mortgage-backed  bond  trusts  and  similar   securitized
commercial  asset-backed  loan portfolios.  The  residential  mortgage
banking  business originates and sells streamlined refinanced  Federal
Housing  Administration  ("FHA") and, to  a  lesser  extent,  Veterans
Administration   ("VA")  loans.  The  home  equity  lending   business
involves  originating,  selling  and  servicing  nonconforming   first
mortgage  loans. The commercial mortgage banking business,  which  was
discontinued  during  the  year, involved  fee-based  origination  and
servicing  of  commercial real estate mortgages  and  commercial  real
estate brokerage

      During  the latter part of 1998, the capital markets experienced
rapid  and  extreme changes evidenced by a decline of investor  demand
for  corporate  fixed  income investments,  including  mortgage-backed
securities  ("MBS"), and a widening of spreads between interest  rates
on  treasury  securities  and  interest  rates  on  MBS.   This  trend
continued  throughout 1999 and the market for MBS remained  depressed.
The  Company  also  experienced a lack of available  capital  for  new
investments.  Capital constraints particularly impacted the  Company's
ability  to  make  new  investments in asset management,  real  estate
structured  finance,  communications lending and  commercial  mortgage
servicing.   These areas are highly dependent on capital in  order  to
grow.   Facing a lack of capital, the Company decided in 1999 to  exit
its  capital  intensive businesses and sought partners or  buyers  for
these businesses.

      During  the year, the Company also entered into an agreement  to
transfer its interest in its home equity lending subsidiary to a joint
venture  with  Lehman Brothers.  During the first  quarter  2000,  the
Company  transferred its home equity business to  Finance  America,  a
joint  venture  partnership with Lehman Brothers and  retained  a  36%
interest.   At  year-end 1999, the Company's investment in  the  joint
venture was $6.2 million.

      In  the  fourth quarter of 1999, the Company recorded  a  $103.3
million  non-cash  impairment charge on MIC, a $9.6  million  mark  to
market on real estate structured finance assets transferred from loans
held  to maturity to loans held for sale, and a $56.4 million non-cash
loss  on  retained interests in securitizations related  to  its  home
equity retained interests in securitizations.

      In  November  1999, the Company sold nine of the  Company's  ten
communication  loans with a book value of $132.0  million  for  $131.8
million,  exiting from that capital intensive activity.  The  proceeds
of the sale were used to pay down bank debt.

      In  December,  the  Company  announced  that  it  had  signed  a
definitive agreement with Lend Lease (US) Services, Inc. to  sell  the
commercial   mortgage  banking,  asset  management  and  real   estate
structured lending platforms.  In anticipation of the pending sale and
management's  decision to exit this business, the commercial  mortgage
banking  line  of business is deemed a discontinued operation  and  is
recorded as such in the financial statements.  On March 17, 2000,  the
Company completed the sale of the commercial mortgage banking business
and  asset management and real estate structured finance platforms for
cash   of  $202.7  million  and  a  $25.0  million  promissory   note.
Additional payments of up to $21.0 million are payable upon receipt of
certain  consents.  The cash proceeds of the sale were used to  reduce
bank debt.

      On January 18, 2000, the Company sold $182.4 million of its real
estate  structured finance portfolio for $170.2 million and recognized
a loss in the accompanying 1999 financial statements in the line item,
gain  on  sale of loans and investments, net.  Proceeds from the  sale
were used to reduce bank debt.

      During  January 2000, the Company obtained an option  to  return
Mortgage  Investors  Corporation  ("MIC"),  its  residential  mortgage
banking subsidiary and pay cash of $25.0 million to the former  owners
of  MIC and forgive $17.0 million of notes receivable from such owners
in  exchange  for  cancellation of an $86.1 million  stock  obligation
currently  owed to the former owners.  The option can be  extended  to
April 30, 2000. The Company expects to exercise its option with regard
to  MIC if sufficient cash is available to do so.  This business  will
be treated as a discontinued operation beginning in 2000 if the option
is exercised.

      In  March  2000,  the  Company and the  former  shareholders  of
Commercial  Finance  Corporation ("CLC") agreed  to  amend  the  Asset
Purchase  Agreement pursuant to which the Company acquired CLC.   This
amendment  provides that the amount of the final earn-out payment  due
on  June  30, 2000 is fixed at $37.5 million and that, if  the  credit
facility  with the Bank of America, N.A., as Administrative Agent,  is
paid  in  full, the Company must issue to such shareholders promissory
notes  in  the aggregate principal amount of $37.5 million in exchange for
shares  of the Company's common stock having a value of $37.5 million.
Such  notes would bear interest at the rate of 8% per annum, would  be
secured by certain retained interests from previous securitizations of
CLC  and would provide for principal payments of $12.5 million on each
of  June  30, September 30 and December 29, 2000.  The notes could  be
prepaid at any time without penalty.  In the event that the Company is
unable to issue such notes, the June 30, 2000 earn-out payment will be
payable  in the Company's common stock having a value of $37.5 million
based  upon the average of the closing price of such common stock  for
the 20 trading days prior  to May 31, 2000.

      On  March  22,  2000, the Company sold its United Kingdom  asset
management  assets  and  operations for $160.0  million.  The  Company
received  cash  proceeds of $47.0 million and a  note  receivable  for
$25.0  million.   Cash proceeds of the sale were used to  reduce  non-
recourse and bank debt.

     The Company is continuing to evaluate opportunities to further de-
leverage  its  balance  sheet.   Sales  of  additional  assets  and/or
businesses or the entire Company may be considered.

Continuing Operations Overview

      Following  the sale of the commercial mortgage banking  line  of
business  to Lend Lease, the expected exercise of its option regarding
MIC  and  the sale of the United Kingdom asset management  assets  and
operations,  the  Company's operations are  now  centered  around  the
commercial  finance  line  of business which includes  small  business
lending,  franchise lending, loans to residential  home  builders  and
equipment  lending.   The commercial finance line of  business  earned
$66.7  million in operating profit in 1999 and grew revenues by  $54.2
million over 1998, an increase of 44.4%.

      Revenues  from  the  Company's commercial finance  business  are
primarily  earned from (i) interest and fees on real estate structured
and  communications  lending  activities,  loans  to  franchisees   of
nationally  recognized restaurant, hospitality, service  organizations
and other small business owners and loans to single family residential
contractors,   (ii)   accrued  earnings  on  retained   interests   in
securitizations  and  (iii) gains on the securitization  and  sale  of
loans.   Revenues  from  the  Company's  asset  management  activities
primarily  consist of earnings on asset portfolios, fees  charged  for
the  management of asset portfolios and for the successful  resolution
of  the  assets  within such asset portfolios and  gains  on  sale  of
investments. Revenues from the Company's residential mortgage  banking
activities  consist primarily of cash gains from sales of FHA  and  VA
streamlined  re-financed  loans.  Revenues  from  the  Company's  home
equity  lending  activities primarily consist of  interest  earned  on
originated  and  purchased  home equity  loans,  accrued  earnings  on
retained interests in securitizations, gains on the securitization and
sale  of  home  equity  loans and other related  securities  and  fees
generated  by  the  origination, underwriting and  servicing  of  home
equity loans.

     Retained  interests in securitizations are classified as  trading
and are carried at estimated fair value.  Changes in such market value
are  included  in  earnings.   Cash flows for  retained  interests  in
securitizations  are generally subordinated to other security  holders
in  a securitization trust.  The retained interests in securitizations
are  valued  at the discounted present value of the cash  flows  based
upon  the  expected  timing  of  the  release  of  the  cash  by   the
securitization trust ("cash-out method") over the anticipated life  of
the  assets  sold  after  estimated future  credit  losses,  estimated
prepayments  and  normal  servicing  and  other  related  fees.    The
discounted present value of such retained interests is computed  using
management's  assumptions of market discount rates, prepayment  rates,
default  rates, credit losses and other costs.  The carrying value  of
the retained interests in securitizations is determined by the Company
on  a disaggregated basis and considers historical prepayment and loss
experience,  economic  conditions and trends,  collateral  values  and
other relevant factors.  The actual weighted average annual prepayment
rate  on  the  Company's  retained interests in  securitizations  from
inception  to December 31, 1999 was 31.3%.  For additional information
regarding  the  Company's retained interests  in  securitizations  see
"Item  1.  Business"  and Notes 1 and 6 to the Notes  to  Consolidated
Financial  Statements  included in "Item 8. Financial  Statements  and
Supplementary Data."

Results of Operations

      The  following discussion and analysis presents the  significant
changes  in  financial  condition and results  of  operations  of  the
Company  by  primary  business line for the years ended  December  31,
1999, 1998 and 1997.  The results of operations of acquired businesses
are included in the consolidated financial statements from the date of
acquisition.  This discussion should be read in conjunction with "Item
1.   Business"  and  "Item 8.  Financial Statements and  Supplementary
Data" (in thousands, except per share data).
<TABLE>
<CAPTION>
                                                                1999       1998       1997
Revenues:
<S>                                                        <C>         <C>        <C>
 Commercial finance                                          $ 176,202   $122,047  $ 51,212
 Asset management                                              106,461    111,890    90,454
 Residential mortgage banking                                   66,612     74,702
 Home equity lending                                            85,150    161,169   166,407
 Corporate, other and intercompany eliminations                 (4,556)     2,153    12,696
     Total revenues                                            429,869    471,961   320,769

Operating expenses:
 Commercial finance                                            109,470     75,456    32,137
 Asset management                                               70,295     65,256    46,521
 Residential mortgage banking                                  193,868     41,776
 Home equity lending                                           293,792    235,888   120,244
 Corporate, other and intercompany eliminations                 53,495     51,047    56,934

     Total operating expenses                                  720,920    469,423   255,836

Operating income (loss):
 Commercial finance                                             66,732     46,591    19,075
 Asset management                                               36,166     46,635    43,933
 Residential mortgage banking                                 (127,256)    32,926
 Home equity lending                                          (208,642)   (74,719)   46,163
 Corporate, other and intercompany eliminations                (58,051)   (48,895)  (44,238)
   Total operating income (loss) from conintuing operations   (291,051)     2,538    64,933
Income tax expense (benefit)                                   (62,774)     3,868    25,822
Income (loss) from continuing operations                      (228,277)    (1,330)   39,111
Income (loss) from discontinued operation, net of taxes          7,428    (67,841)   17,113
Net income (loss)                                            $(220,849)  $(69,171)  $56,224

Weighted average earnings (loss) per share - basic:
 Income (loss) from continuing operations                       $(4.77)    $(0.03)    $1.11
 Net income (loss)                                               (4.61)     (1.61)     1.59
Weighted average earnings (loss) per share - diluted:
 Income (loss) from continuing operations                        (4.77)     (0.03)     1.07
 Net income (loss)                                               (4.61)     (1.61)     1.53

Weighted average number of common shares outstanding - diluted  47,879     42,846    36,663
</TABLE>

Year Ended December 31, 1999 Compared to Year Ended December 31, 1998

     The  Company reported (i) revenues of $429.9 million, a  decrease
from  $472.0  million, or 9%, from the year ended December  31,  1998,
(ii) an operating loss from continuing operations of $291.1 million as
compared to 1998 operating income from continuing operations  of  $2.5
million and (iii) a net loss of $220.8 million as compared to  a  1998
net  loss  of  $69.2 million.  The losses were due primarily  to  home
equity   lending  non-cash  write-downs  of  retained   interests   on
securitization,  non-cash impairments on MIC and  home  equity  retail
operations, impairment of the Company's investment in AMRESCO  Capital
Trust, mark-to-market losses and operating losses resulting from a low
volume  of home equity originations and a residential mortgage banking
operating   loss  in  1999  driven  by  lower  VA  and  FHA  refinance
originations  and  pricing pressure on loan  sales.  Diluted  weighted
average common shares outstanding increased 12% primarily due  to  CLC
earn-out payments and restricted stock grants.

     Commercial  Finance.  Revenues for the year  ended  December  31,
1999  primarily  consisted of $117.3 million  of  interest  and  other
investment income and $62.4 million of gain on securitization and sale
of loans and investments offset, in part, by a $9.6 million unrealized
loss  on  the sale of certain real estate loans in January 2000.   The
$54.2  million increase in revenues from $122.0 million for the  prior
year  period  to $176.2 million for the year ended December  31,  1999
relates  primarily to a $36.8 million increase in interest  and  other
investment income generated by higher average balances of real  estate
structured finance, communication, small business and franchise  loans
held  for  sale  held during 1999 and increased balances  of  retained
interests.  The net gain on sale increased $14.2 million due primarily
to  the  securitization and sale of approximately  $547.8  million  of
small business and franchise loans by business lending during 1999  as
compared  to  $375.8  million of securitization  and  sales  in  1998,
offset,  in  part, by the previously mentioned $9.6 million unrealized
loss  on  the sale of a substantial part of the real estate structured
finance portfolio.

     Operating expenses for the year ended December 31, 1999 primarily
consisted  of  $62.3  million in interest expense,  $29.9  million  in
personnel  cost,  $13.5  million in other general  and  administrative
expenses,  offset, in part, by reversing a $5.5 million  of  provision
for  loan  losses.  The $34.0 million increase in expenses from  $75.5
million  for  the  prior year to $109.5 million  for  the  year  ended
December 31, 1999 was due primarily to an increase of $23.6 million in
interest  expense  related to the financing for  increased  levels  of
investments  and  loans  held for sale from  1998,  $12.3  million  in
personnel  expense related to expanded operations and $5.6 million  in
other  general  and  administrative  expenses  primarily  related   to
expanded  operations, offset by the aforementioned  reversal  of  $5.5
million of provision for loan losses.

     Asset Management.  Revenues for the year ended December 31,  1999
were  $106.5  million  and primarily consisted  of  $66.6  million  in
interest   and  other  investment  income,  $19.8  million  in   asset
management and resolution fees and $18.7 million of gains on sales  of
loans  and  investments.  The $5.4 million decrease in  revenues  from
$111.9  million for 1998 to $106.5 million for the year ended December
31,  1999  was  primarily  comprised of a $15.6  million  decrease  in
interest  and  other  investment income offset, in  part,  by  a  $6.5
million increase in gain on sale of loans and investments, and a  $4.3
million increase in management and resolution fees. Interest and other
investment  income decreased due primarily to a decrease in  aggregate
investments for the Company's own account.  Gain on sale of loans  and
investments  increased due primarily to a decrease in  impairment  and
hedging losses on Mortgage Backed Securities (MBS) in 1999 as compared
to the prior period.

     Operating expenses for the year ended December 31, 1999 primarily
consisted of $30.0 million in interest expense, $16.8 million in other
general  and  administrative expenses and $20.0 million  in  personnel
expenses.   The $5.0 million increase in expenses from $65.3  for  the
prior  year to $70.3 million for the year ended December 31, 1999  was
due  primarily to a $6.0 million increase in personnel costs,  a  $1.7
million increase in other general and administrative costs, and a $1.5
million  impairment  on the Company's investment  on  AMRESCO  Capital
Trust  offset, in part, by a $3.2 million decrease in interest expense
related to the financing of decreased levels of investments.

     Residential  Mortgage  Banking.   Revenues  for  the  year  ended
December 31, 1999 primarily consisted of $63.9 million in gain on sale
of  loans  and  investments and $2.7 million  in  interest  and  other
investment  income.  The $8.1 million decrease in  revenues  to  $66.6
million  for  the year ended December 31, 1999 from $74.7  the  period
from  inception  (August  11, 1998) to December  31,  1998,  primarily
consisted  of  a $8.2 million decrease in gain on sale resulting  from
decreased  originations as a result of higher interest rates  and  the
Company  re-focusing its primary operation from re-financing Veteran's
Administration   ("VA")   loans   to  re-financing   Federal   Housing
Administration ("FHA") loans.

     Operating  expenses of $193.9 million primarily  consisted  of  a
$103.3   impairment   charge,  $52.1  million  in  personnel   expense
(primarily   commissions),  $21.0  million  in   other   general   and
administrative   expense  and  $14.3  million  in   depreciation   and
amortization.  The $152.1 million increase in operating expenses  from
$41.8 million in the prior period to $193.9 million for the year ended
December  31,  1999  was  primarily  comprised  of  a  $103.3  million
impairment  charge of the residential mortgage banking  operations  in
1999,  a  $21.6  million increase in personnel expense,  and  a  $14.3
million  increase in general and administrative expenses.   The  other
increases  are  primarily  the result of  a  full  year  of  operating
expenses in 1999 as compared to shorter period from inception to  year
end 1998.

     Home  Equity  Lending.  Revenues for the year ended December  31,
1999  primarily  consisted  of $56.9 million  of  interest  and  other
investment  income, a $18.0 million gain on sale of  loans  and  other
investments  and $8.7 million in mortgage banking and servicing  fees.
The  $76.0 million decrease in revenues to $85.2 million for the  year
ended  December  31,  1999  from $161.2 million  for  the  year  ended
December 31, 1998 primarily consisted of a $111.9 million decrease  in
interest  and other investment income offset, in part, by an  increase
of $34.6 million in gain on sale of loans and investments.

     Operating expenses for the year ended December 31, 1999 consisted
of $146.4 non-cash loss on retained interests in securitization, $40.3
million in interest expense, $42.3 million in personnel expense, $43.5
million  in other general and administrative expense, $9.3 million  in
depreciation  and amortization, a $8.7 million non-cash impairment  of
assets  related to closing the retail branches, and a $3.3 million  in
provision  for  loan  and asset portfolio losses.  Operating  expenses
increased  by  $57.9 million from $235.9 million for  the  prior  year
period  to  $293.8 million for the year ended December 31, 1999.   The
largest  component  of the increase is a $130.3  million  increase  in
losses  on  retained  interests in securitizations partly  due  to  changes
in prepayment  and loss assumptions and other assumptions  influenced  by
market   conditions  and  mark-to-market  charges,  a   reduction   in
origination   volume,   soft  pricing  for   sub-prime   product   and
underwriting  issues.  Operating expenses also increased $8.7  million
impairment on assets, $6.1 million in other general and administrative
expenses  and  $2.9  million in depreciation  and  amortization.   The
increases  in  operating  expenses were  offset  by  a  $58.9  million
decrease  in  interest expense related to lower  average  balances  of
warehouse  debt supporting higher average balances of loans  held  for
sale,  a  $18.5  million  decrease in provision  for  loan  and  asset
portfolio  losses from the prior year and a $12.7 million decrease  in
personnel  expenses due primarily to closing retail operations  during
the  year  and  other  staffing reductions in the wholesale  and  home
office operations.

      Corporate, Other and Intercompany Eliminations.  Operating  loss
of  $58.1 million for the year ended December 31, 1999 increased  $9.2
million  over the operating loss of $48.9 million for the prior  year.
The increased loss consisted of a decrease of $4.4 million in interest
and other investments, a decrease of $2.2 million in revenues from the
pension advisory business resulting from the sale of this business  in
1998,  $4.7  million in increased personnel costs and $3.4 million  in
increased  interest expenses, offset, in part, by a decrease  of  $6.2
million  in  general and administrative costs as these  expenses  were
allocated to the lines of business.

      Income Taxes.   As of December 31, 1999, the Company had  a  net
federal income tax receivable due primarily to the 1999 net loss.   In
addition,  as  of December 31, 1999, the Company had  a  deferred  tax
asset  for  which  the  Company must have  future  taxable  income  to
realize.   Certain of these benefits begin to expire in 2002  and  are
subject  to annual utilization limitations.  Management believes  that
recorded net deferred tax assets will be realized in the normal course
of  business.  The decrease in the 1999 effective tax rate to 22% from
152%  in  1998 was due primarily to a minimum level of net  income  in
1998  which  results  in  taxes  at statutory  rates  being  increased
dramatically by non-deductible goodwill and state taxes.

Year Ended December 31, 1998 Compared to Year Ended December 31, 1997

     The Company reported revenues of $472.0 million, an increase from
$320.8  million,  or  47%,  from the year  ended  December  31,  1997,
operating  income  from  continuing  operations  of  $2.5  million  as
compared to 1997 operating income from continuing operations of  $64.9
million, and a net loss of $69.2 million as compared to net income  of
$56.2  million  in  1997.   The  decrease  in  operating  income  from
continuing operations was due primarily to the sale of $1.4 billion of
home equity lending loans held for sale, which occurred in response to
unprecedented capital market conditions that caused spreads on MBS and
related instruments to widen.  The loss in discontinued operations was
due  to the $1.0 billion sale of commercial mortgage conduit loans and
also due to unprecedented capital market conditions.  Diluted weighted
average common shares outstanding increased 17% due primarily  to  the
early 1998 offering of 5.2 million of the Company's common shares  and
new shares issued in business acquisitions.

     Commercial  Finance.  Revenues for the year  ended  December  31,
1998  primarily  consisted  of $80.5 million  of  interest  and  other
investment income and $38.6 million of gain on securitization and sale
of loans and investments.  The $70.8 million increase in revenues from
$51.2 million for the prior year period to $122.0 million for the year
ended  December 31, 1998 relates primarily to a $50.1 million increase
in  interest  and other investment income generated by higher  average
balances  of  small business and franchise loans held  for  sale  held
during  1998  and increased balances of retained interests.   Gain  on
sale  increased $22.8 million due primarily to the securitization  and
sale  of  approximately $375.8 million of small business and franchise
loans  by  business  lending  (formerly known  as  commercial  lending
corporation)   during   1998  as  compared  to   $265.4   million   of
securitization and sales in 1997.

     Operating expenses for the year ended December 31, 1998 primarily
consisted  of  $38.7  million in interest expense,  $17.6  million  in
personnel  cost,  $7.9  million in other  general  and  administrative
expenses  and  $5.8 million of provision for loan losses.   The  $43.4
million increase in expenses from $32.1 million for the prior year  to
$75.5  million for the year ended December 31, 1998 was due  primarily
to  an  increase of $25.5 million in interest expense related  to  the
financing for increased levels of investments and loans held for  sale
from  1997,  $9.4  million in personnel expense  related  to  expanded
operations  and  $3.8  million  in other  general  and  administrative
expenses primarily related to expanded operations.

     Asset Management.  Revenues for the year ended December 31,  1998
primarily  consisted of $82.2 million in interest and other investment
income,  $15.5  million in asset management and  resolution  fees  and
$12.2  million of gains on sales of loans and investments.  The  $21.4
million  increase in revenues from $90.5 million for  1997  to  $111.9
million  for the year ended December 31, 1998 was primarily  comprised
of  a  $28.3 million increase in interest and other investment  income
offset,  in part, by a $5.7 million decrease in gain on sale of  loans
and  investments.  Interest and other investment income increased  due
primarily to a significant increase in aggregate investments  for  the
Company's  own  account.   Gain  on  sale  of  loans  and  investments
decreased  due primarily to impairment and hedging losses  on  MBS  in
1998 as opposed to MBS sale gains in 1997.

     Operating expenses for the year ended December 31, 1998 primarily
consisted of $33.2 million in interest expense, $15.1 million in other
general  and  administrative expenses and $14.0 million  in  personnel
expenses.   The $18.8 million increase in expenses from $46.5  million
for  the  prior year to $65.3 million for the year ended December  31,
1998 was due primarily to a $13.8 million increase in interest expense
related to the financing of increased levels of investments and a $6.8
million  increase in other general and administrative expenses offset,
in part, by a $2.4 million decrease in provision for loan loss expense
resulting from fewer assets being managed.

      Residential Mortgage Banking.  The residential mortgage  banking
line  of  business is comprised of the operations of MIC, acquired  on
August  11, 1998.  Revenues for the period from inception (August  11,
1998)  through December 31, 1998 primarily consisted of $72.1  million
of  gain  on  sale  of  VA streamlined re-financed  loans.   Operating
expenses  of  $41.8 million primarily consisted of  $30.4  million  in
personnel  expense (primarily commissions) and $6.7 million  in  other
general and administrative expense.

      Home  Equity Lending.  Revenues for the year ended December  31,
1998  were  $161.2 million, a decrease of $5.2 million from the  prior
year  period.  Revenues for the year ended December 31, 1998 primarily
consisted  of  $168.9 million in interest and other investment  income
and reflect a $78.7 million increase in interest income, generated  by
higher  average balances of mortgage loans held for sale  during  1998
offset,  in  part, by $16.6 million of net loss on sale of loans  held
for sale.  The decrease in revenues and the $16.6 million net loss  on
sale  is  primarily attributable to a $101.6 million loss on  sale  of
loans held for sale as described below.

     In October 1998, due to the market turmoil caused by the widening
of  spreads in the MBS market and in response to the Company's rapidly
changing liquidity needs, the Company decided to sell its portfolio of
performing  home equity loans aggregating approximately $1.4  billion.
The  Company also decided to negotiate the termination of a commitment
to  purchase approximately $260.0 million of home equity loans.  As of
December  31, 1998, a $19.4 million retained interest (of which  $15.0
million was collected subsequent to December 31, 1998) was carried  on
the  Company's balance sheet representing the Company's interest in  a
subsequent  securitization or sale of the home equity loans  sold  and
also  represents the Company's remaining maximum exposure  related  to
the home equity loan sale.

     Operating expenses for the year ended December 31, 1998 primarily
consisted  of  $99.2  million in interest expense,  $55.0  million  in
personnel  expense, $37.4 million in other general and  administrative
expense, $21.7 million in provisions for loan losses and $16.1 million
loss  on  residuals.  Operating expenses increased by  $115.6  million
from  $120.2  million for the prior year period to $235.9 million  for
the  year  ended December 31, 1998.  This increase primarily consisted
of  $45.3  million  in  interest expense  related  to  higher  average
balances of warehouse debt supporting higher average balances of loans
held  for  sale,  $20.1  million in other general  and  administrative
expenses  due  primarily to AMRESCO Residential  Mortgage  Corporation
("ARMC") expansion, $17.2 million in personnel expense, $16.1  million
in mark-to-market reductions on retained interests in securitizations,
and  $14.1  million  in  provisions for  investment  and  loan  losses
primarily related to delinquent loans.

     Corporate,  Other and Intercompany Eliminations.  Operating  loss
for  the  year  ended  December 31, 1998 increased  $4.7  million  due
primarily to a $8.8 million loss on sales of RMBS, a decrease of  $5.6
million  of  asset management fees and an increase of $6.3 million  in
interest  expense  related  to the $330.2 subordinated  debt  issuance
early  in  1998  offset,  in  part, by a  $10.6  million  decrease  in
personnel  costs  related primarily to reduced incentive  compensation
accruals  due to 1998 losses and a $3.7 million increase  in  interest
and other investments.

      Income  Taxes.  As of December 31, 1998, the Company had  a  net
federal income tax receivable due primarily from the 1998 net loss  of
which $34.8 million was received in January 1999 and $44.5 million was
received in March 1999. The higher effective tax rate in 1998 was  due
primarily  to  the 1998 losses occurring in subsidiary entities  which
had less efficient tax structures compared to a 40% tax rate in 1997.

Liquidity and Funding

      Liquidity is a measure of a company's ability to meet  potential
cash  requirements, including ongoing commitments to repay borrowings,
fund  investment  and  lending activities  and  for  general  business
purposes.   Cash  for  investing, originating and underwriting  loans,
general  operating  expenses and business  acquisitions  is  primarily
obtained  through  cash  flow from operations and  credit  facilities,
including  advances  on  the  corporate and  portfolio  credit  lines,
mortgage  warehouse  lines,  non-recourse  debt  and  other  financing
sources.

      The  Company has significant ongoing liquidity needs to  support
its existing business and continued growth in commercial finance.  The
Company's  liquidity  is actively managed on a  daily  basis  and  the
Company's  financial  status, including  its  liquidity,  is  reviewed
periodically by the Board of Directors.  This process is  intended  to
ensure  the maintenance of sufficient funds to meet the needs  of  the
Company.

     Cash and cash equivalents totaled $42.4 million and $50.3 million
at  December  31,  1999  and  1998,  respectively.   Cash  flows  from
operating  activities plus principal cash collections on loans,  asset
portfolios and asset-backed securities totaled $876.5 million for  the
year ended December 31, 1999 compared to $499.4 million for 1998.  The
increase  in cash flows from these activities resulted primarily  from
collections on loans and asset portfolios.  The following is a summary
of certain cash flow data (dollars in thousands):
<TABLE>
<CAPTION>
                                                                          Year Ended December 31,
                                                                               1999       1998
<S>                                                                        <C>         <C>
Net cash provided (used) in operating activities from continuing operations  $ 120,421  $(122,870)
Net cash provided (used) in investing activities from continuing operations     87,649   (477,799)
Net cash provided (used) in financing activities from continuing operations   (306,825)   757,614
Net cash provided (used) in discontinued operations                             90,769   (132,156)
Other financial measures:
  Cash flow from operations and collections on loans, asset portfolios and
   asset-backed securities                                                     876,538    499,435
 Cash provided by (used in) new capital and borrowings, net (excluding
   warehouse loans payable)                                                   (306,877)   768,843
 Cash used for purchase of asset portfolios, asset-backed securities,
   mortgage servicing rights and originations of loans                        (646,776)  (992,419)
 Ratio of total debt to equity                                                   3.0:1      3.2:1
 Ratio of core debt to equity (1)                                                2.8:1      2.7:1
 EBITDA (2)                                                                     49,604    212,731
 Interest coverage ratio (3)                                                      0.3x       1.1x
</TABLE>

(1)  Excludes indebtedness under warehouse lines of credit.
(2)   EBITDA is calculated as income from continuing operations before
  interest, income taxes, depreciation and amortization.  The  Company
  has  included  information concerning EBITDA because EBITDA  is  one
  measure of an issuer's historical ability to service its indebtedness.
  EBITDA  should  not  be  considered as an alternative  to,  or  more
  meaningful than, net income as an indicator of the Company's operating
  performance or to cash flows as a measure of liquidity.
(3)   Interest coverage ratio means the rolling twelve month ratio  of
  earnings  before  interest, taxes, depreciation and amortization  to
  interest expense.


The  following  table  shows the components of the  Company's  capital
structure, including certain short-term debt, as of December 31,  1999
and 1998 (dollars in millions):


                                    1999            1998
                                Amount    %      Amount    %
Shareholders' equity            $ 459.7  25%     $ 585.4  24%
Senior notes                                        57.5   2
Senior subordinated notes         580.0  31        580.2  24
Mortgage warehouse loans          101.9   6        276.3  11
Notes payable                     708.6  38        957.9  39
Total                          $1,850.2 100%    $2,457.3 100%

      Total  assets decreased $0.7 billion to $1.9 billion at December
31,  1999  from $2.6 billion at December 31, 1998.  This decrease  was
due  primarily  to decreased loans and asset portfolios and  decreased
retained interests in securitization and the impairment write down  on
the residential mortgage banking operations.


Senior Credit Facility

      Effective  August  12, 1998 the Company entered  into  a  Credit
Agreement (the "Credit Agreement") with a syndicate of lenders led  by
Bank  of  America,  N.A., as administrative agent, and  Credit  Suisse
First  Boston, as syndication agent, replacing the Third  Amended  and
Restated  Loan  Agreement  (as  modified  and  amended)  dated  as  of
September  30,  1997.   The  Credit Agreement  provides  for  a  total
commitment  of  $504.3  million with a revolving  loan  commitment  of
$448.1  million  and  a  term  commitment  of  $56.2  million.    Both
facilities terminate as of June 30, 2000.  As of November 26, 1999 the
total  maximum amount available under the Credit Agreement was reduced
to   $460.3   million,  subject  to  certain  requirements   such   as
contractually determined advance percentage applied to each asset that
is  pledged  as collateral ("asset coverage test").  At  December  31,
1999, $384.7 million was outstanding under the Credit Agreement.

     The Credit Agreement was amended and restated as of January 18,
2000.  The amended and restated Credit Agreement provides for a
revolving commitment of $92.0 million and a two term commitments of
$56.2 million (Term Loan A) and $320.4 million (Term Loan B).   In
conjunction with the sale of a substantial part of the real estate
structured finance portfolio, the revolving commitment was reduced by
$10.0 million to $82.0 million, Term Loan A commitment was reduced
$22.4 million to $33.8 million and Term Loan B commitment was reduced
$133.0 million to $187.4 million. On February 8, 2000, Term Loan A was
further reduced by $0.7 million to $33.1 million and Term Loan B was
further reduced by $5.7 million to $181.7 million. Upon completion of the
Lend Lease transaction and the sale of the United Kingdom asset management
operations and other asset sales, Term Loan B was paid off and the revolver
commitment reduced to $30.3 million.  On March 30, 2000,
the Credit Agreement was amended and restated.  In conjunction with the
amendment and restatement, the outstanding balance of Term Loan A was
repaid with an advance from the revolving credit facility. The amended and
restated Credit Agreement provides for a revolving commitment of $75.0
million through May 31, 2000 and $55.0 million thereafter to maturity
on August 15, 2000.  As of March 30, 2000, the revolver debt was $24.8
million.

Commercial Finance Facilities

     The Interim Warehouse and Security Agreement (the "Small Business
Facility")  dated February 26, 1998, between a wholly-owned subsidiary
of   the   Company   and  Prudential  Securities  Credit   Corporation
("Prudential")  provides financing in an amount not to  exceed  $200.0
million  for the origination and purchase of small business loans.  On
March  1, 2000, the Small Business Facility was amended to extend  the
Maturity Date to March 31, 2001.  At December 31, 1999, $34.7  million
was outstanding under the Commercial Concepts Agreement.

     The  Interim  Warehouse  and Security Agreement  (the  "Franchise
Agreement") dated March 17, 1998, between a wholly-owned subsidiary of
the  Company  and Prudential provides financing in an  amount  not  to
exceed  $150.0  million for the origination and  purchase  of  certain
franchise  and  construction loans. On March 1,  2000,  the  Franchise
Facility  was amended to extend the Maturity Date to March  31,  2001.
At December 31, 1999, $3.4 million was outstanding under the Franchise
Facility.

      The  Loan  Agreement ("Loan Agreement") dated August  31,  1998,
between  a wholly-owned subsidiary of the Company and Salomon Brothers
Realty  Corporation  provides financing in an  amount  not  to  exceed
$200.0  million to provide financing for the origination of commercial
mortgage loans secured by certain real estate properties originated or
acquired.   At December 31, 1999, $15.2 million was outstanding  under
the  Loan Agreement.  The maturity date of the Loan Agreement is April
30, 2000.

        The  Loan  Agreement  ("Transamerica Loan  Agreement"),  dated
December 18, 1998 between a wholly-owned subsidiary of the Company and
Transamerica  Business Credit Corporation provides a  working  capital
facility  in  the maximum aggregate principal amount of  up  to  $75.0
million  for  the purpose of funding new Small Business Administration
("SBA")  loans. On November 30, 1999, an amendment of the Transamerica
Loan  Agreement changed the mandatory repayment period  applicable  to
advances  from  one  year to 359 days from the date  of  advance.   At
December   31,   1999,  $47.2  million  was  outstanding   under   the
Transamerica  Loan Agreement.  The Transamerica Loan Agreement  has  a
Maturity Date of December 31, 2001.

     On  May 1, 1999, a wholly-owned subsidiary of the Company entered
into  a  Financing  Agreement  (the "Financing  Agreement")  in  which
approximately $111.4 million of loans made by such subsidiary to small-
to-medium  sized  local  and  regional home  building  companies  were
financed by Adjustable Rate Home Builder Loan Notes issued through the
means  of  a private securitization.  The Financing Agreement's  final
maturity  is  May 25, 2007.  At December 31, 1999, $111.4 million  was
outstanding under the Financing Agreement.

     A  wholly owned subsidiary of the Company entered into a Transfer
and   Administration  Agreement  (the  "Transfer  and   Administration
Agreement")  with Kitty Hawk Funding Corporation and Bank of  America,
N.A.,  as  agent on June 26, 1998, which was subsequently  amended  on
November  26,  1999.   As  of  December 31,  1999,  the  Transfer  and
Administration Agreement provides financing in an amount not to exceed
$55.0 million for construction financing to various home builders  and
is  secured  by the specific assets funded by such debt.  At  December
31,  1999,  $31.1  million  was outstanding  under  the  Transfer  and
Administration  Agreement. The Transfer and  Administration  Agreement
commitment terminates on April 30, 2000.

Home Equity Lending Facilities

     During the year ended December 31, 1998, the Company financed its
home  equity  lending operations with warehouse lines of  credit  with
aggregate  credit  limits  of  $2.9  billion.   As  a  result  of  the
restructuring of the home equity lending business described above, the
Company's  financing  requirements and  financing  sources  have  been
significantly reduced.

      The  Master Repurchase Agreement ("the Agreement") dated October
17,  1996,  between  a  wholly owned subsidiary  of  the  Company  and
Donaldson  Lufkin & Jenrette, provides financing for certain  retained
interests  purchased  or  created during the Company's  securitization
process.  As of December 31, 1999, $7.6 million was outstanding  under
the Agreement.

     On  June  30,  1999,  a wholly-owned subsidiary  of  the  Company
entered  into  a Master Repurchase Agreement Governing  Purchases  and
Sales   of  Mortgage  Loans  (the  "Master  Agreement")  with   Lehman
Commercial  Paper  Inc.,  ("Lehman") for the sale  and  repurchase  of
certain  mortgage loans.  On September 20, 1999, the Master  Agreement
was  modified  by a Letter Agreement ("Letter Agreement")  to  provide
financing  for  certain  exception loans, as  defined  in  the  Letter
Agreement.  At December 31, 1999, $1.4 million was outstanding related
to the Letter Agreement.

General

       Current  liquidity,  unused  revolver  availability  and   cash
available,  as  of March 30, 2000, was approximately $48.0 million. The
primary  sources  of liquidity currently include the Credit  Agreement
and,  to  the  extent described above, the Warehouse  Facilities,  and
internally generated funds.  In addition to the loan sales  and  other
matters  described above, the Company expects to manage its  liquidity
from cash flows generated from its existing operations, and returns of
and on investments in the ordinary course of business.

     The Credit Agreement, the Warehouse Facilities and the indentures
under  which the senior subordinated notes are issued contain  certain
financial covenants relating to among other things, interest coverage,
leverage   and  tangible  net  worth.   If  the  Company   experiences
additional  losses it may be in default under the financial covenants.
Any  such  default  could  materially impact the  Company's  financial
condition and prospects.  The Company does not anticipate that it will
be in default under any of its credit agreements and facilities in the
foreseeable  future.  Although the Company is in compliance  with  all
its   respective  debt  agreements,  these  debt  agreements   contain
restrictions on the incurrence of additional debt.  These restrictions
currently preclude the incurrence of additional long term debt,  other
than  under  the  Credit  Agreement (or any replacement  or  successor
thereto)  and  pursuant  to  warehouse lines  of  credit,  asset-based
financings  and  other similar arrangements designed  to  support  its
various lines of business.

      The Company has historically accessed the capital markets as  an
important part of its capital raising activities, including  to  raise
funds  in  debt  and equity offerings, to finance the  acquisition  of
assets  and  the  origination  and  accumulation  of  loans,  and   to
securitize and sell loans originated by its different business  lines.
The Company anticipates that its access to the capital markets will be
significantly  limited  for  the foreseeable  future  and  that  other
sources of third party financing will also be limited.

Other Matters

      In  June  1998, the Financial Accounting Standards Board  issued
Statement  of  Financial  Accounting  Standards  ("SFAS")   No.   133,
"Accounting for Derivative Instruments and Hedging Activities,"  which
establishes   accounting  and  reporting  standards   for   derivative
instruments embedded in other contracts, (collectively referred to  as
derivatives) and for hedging activities.  It requires the  Company  to
recognize  all  derivatives as either assets  or  liabilities  in  the
statement of financial position and measure those instruments at  fair
value  depending  upon the Company's rights or obligations  under  the
applicable  derivative  contract.  If certain conditions  are  met,  a
derivative  may  be  specifically designated as (a)  a  hedge  of  the
exposure  to  changes  in  the fair value of  a  recognized  asset  or
liability  or  an unrecognized firm commitment, (b)  a  hedge  of  the
exposure to variable cash flows of a forecasted transaction, or (c)  a
hedge  of  the  foreign currency exposure of a  net  investment  in  a
foreign  operation, an unrecognized firm commitment, an available-for-
sale    security,   or   a   foreign-currency-denominated   forecasted
transaction.   In  June  1999, The FASB  issued  SFAS  No.  137  which
deferred  the  effective date of the SFAS No. 133 for one  year.   The
Company will adopt SFAS No. 133 on January 1, 2001, as required.   The
Company  has  not  yet  determined  the  impact  on  the  Consolidated
Financial Statements upon adoption of this standard.

      In October 1998, the Financial Accounting Standards Board issued
SFAS  No.  134,  "Accounting for Mortgage-Backed  Securities  Retained
after the Securitization of Mortgage Loans Held for Sale by a Mortgage
Banking   Enterprise,"  which  establishes  accounting  and  reporting
standards  for certain activities of mortgage banking enterprises  and
other  enterprises  that  conduct operations  that  are  substantially
similar  to  the primary operations of a mortgage banking  enterprise.
SFAS  No. 134 requires that after the securitization of mortgage loans
held  for  sale,  an  entity  engaged in mortgage  banking  activities
classify  the  resulting  mortgage-backed securities  based  upon  its
ability  and  intent  to sell or hold those investments.  The  Company
applied the new rules of SFAS 134 on January 1, 1999.  The adoption of
SFAS  134  did not have a material impact on the Company's results  of
operations or financial position.

Year 2000 Issue Update

     The  Company  did not experience any significant malfunctions  or
errors in its operating or business systems when the date changed from
1999  to  2000.   Based  upon operations since January  1,  2000,  the
Company does not expect any significant impact to its ongoing business
as  a  result of the "Year 2000 issue".  However, it is possible  that
the  full  impact  of the date change, which was  of  concern  due  to
computer programs that use two digits instead of four digits to define
years,  has  not been fully recognized.  For example, it  is  possible
that  Year  2000 or similar issues such as leap year-related  problems
may  occur  with  billing,  payroll or financial  closings  at  month,
quarter, or year-end.  The Company believes that any such problems are
likely  to  be minor and correctable.  In addition, the Company  could
still  be  negatively affected if its borrowers, significant  business
partners,  lenders, vendors and other service providers are  adversely
affected by Year 2000 or similar issues.  The Company is not currently
aware  of  any  significant Year 2000 or similar  problems  that  have
arisen  for  its borrowers, significant business partners, lenders  or
vendors or other service providers.

     The  Company expended $1.0 million on Year 2000 readiness efforts
from  1997 to 1999.  These efforts included assessing, remediating  or
replacing,  testing  and  upgrading the  Company's  business  critical
systems  with the assistance of a consulting firm that specializes  in
Year  2000 readiness. These costs do not include costs associated with
internal resources assigned to the initiative.

Private Litigation Securities Reform Act of 1995

      This  report  contains  forward-looking  statements  based  upon
current expectations that involve a number of risks and uncertainties.
The  forward-looking  statements are  made  pursuant  to  safe  harbor
provisions  of the Private Litigation Securities Reform Act  of  1995.
The  factors  that  could cause actual results  to  differ  materially
include  the following: industry conditions and competition,  interest
rates,  business  mix, availability of additional financing,  and  the
risks  described  from time to time in the Company's  reports  to  the
Securities and Exchange Commission.


Item 7A. Quantitative and Qualitative Disclosures about Market Risk

     Market risk generally represents the risk of loss that may result
from the potential change in the value of a financial instrument as  a
result of fluctuations in interest and currency exchange rates and  in
equity  and  commodity  prices.   Market  risk  is  inherent  to  both
derivative  and non-derivative financial instruments, and accordingly,
the  scope of the Company's market risk management procedures  extends
beyond  derivatives  to  include all market risk  sensitive  financial
instruments.

      The  following  is a discussion of the Company's primary  market
risk exposures as of December 31, 1999, including a discussion of  how
those exposures are managed.

Interest Rate Risk

      The  Company is subject to interest rate risk through its normal
operating  activities.  The Company generates  fixed  rate  loans  and
investments  through its origination and asset management  activities.
A  substantial  portion of these fixed rate loans and investments  are
financed by LIBOR based notes payable and warehouse loans payable.  In
the  normal  course of business, the Company is a party  to  financial
instruments  with off-balance sheet risk.  These financial instruments
help  to  hedge  against changes in interest rates.  The  Company  may
reduce  its  exposure to fluctuations in interest  rates  by  creating
offsetting   positions   through  the  use  of  derivative   financial
instruments.   Derivatives  are  used  to  lower  funding  costs,   to
diversify  sources  of  funding, or to alter interest  rate  exposures
arising  from mismatches between assets and liabilities.  The  Company
does   not  use  derivative  financial  instruments  for  trading   or
speculative  purposes, nor is the Company party  to  highly  leveraged
derivatives.   These financial instruments include interest  rate  cap
agreements,  put  options  and forward  and  futures  contracts.   The
instruments involve, to varying degrees, elements of risk in excess of
the  amount  recognized  in the consolidated statements  of  financial
condition.   The Company controls the risk of its hedging  agreements,
interest rate cap agreements and forward and futures contracts through
approvals, limits and monitoring procedures.

      The Company purchases interest rate cap agreements to reduce the
impact  of  changes in interest rates on its floating rate debt.   The
Company  enters  into  these agreements to change  the  fixed/variable
interest  rate  mix  of  the debt portfolio to  reduce  the  Company's
aggregate  risk  to  movements in interest  rates.   Accordingly,  the
Company  enters  into agreements to effectively convert  variable-rate
debt  to  fixed-rate debt to reduce the Company's  risk  of  incurring
higher  interest  costs  due  to  rising  interest  rates.   The   cap
agreements entitle the Company to receive from the counterparties  the
amounts,  if  any, by which an interest rate index exceeds agreed-upon
thresholds.   The  potential loss in fair value related  to  such  cap
agreements  resulting from a 10% adverse change in interest  rates  is
not material.

      Futures and forward contracts are commitments to either purchase
or  sell  designated  financial instruments at a  future  date  for  a
specified  price and may be settled in cash or through delivery.   The
Company  enters  into these contracts to reduce the risk  of  loss  in
value  on  certain investments and loan portfolios due to  changes  in
interest   rates   and  currency  exchange  rates.    Initial   margin
requirements are met in cash or other instruments.  Futures  contracts
have   little   credit  risk  because  futures   exchanges   are   the
counterparties.  Forward agreements and interest rate swaps  and  caps
are  subject to the creditworthiness of the counterparties, which  are
principally large financial institutions.


Interest  rate sensitivity analyses are used to measure the  Company's
interest  rate  risk  related to its trading and  other  than  trading
portfolios  by  computing  hypothetical  changes  in  fair  values  of
interest  rate  sensitive assets, liabilities and  off  balance  sheet
items  in the event of a hypothetical changes in interest rates.   The
following are the Company's interest rate sensitivity analyses  as  of
December 31, 1999 (dollars in millions):

     Retained Interests in Securitization (trading):

       Change in                Hypothetical   Hypothetical
    Interest Rates  Fair Value    Change ($)    Change (%)
          10%         $310.0       $10.7          3.6%
           0           299.3          -            -
         (10)%         290.0        (9.3)        (3.1)

      A  hypothetical  increase  in interest  rates  is  projected  to
decrease  loan pre-payments increasing the fair value of the  retained
interests.  This increase is projected to more than offset a  decrease
in  fair  value  of  the retained interests caused  by  higher  market
interest rates.

     Other than Trading:

    Change in                 Hypothetical Hypothetical
  Interest Rates  Fair Value    Change $     Change %
       10%          $375.7       $(4.9)       (1.3)%
        0            380.6           -           -
      (10)%          386.2         5.6         1.5

      The  other than trading category includes loans held  for  sale,
loans  and  asset  portfolios,  asset  backed  securities,  derivative
positions, senior subordinated notes and the amount outstanding  under
the  Company's Credit Agreement to the extent the fair value could  be
affected  by  a  widening of spreads.  In an increasing interest  rate
environment,  the  Company  projects  the  fair  value  of  its   debt
obligations to decrease offset, in part, by a fair value reduction  in
its asset and derivative portfolio.

      Any  market  interest  rate change would  adjust  the  Company's
projected  cash  flows from its variable rate assets and  liabilities.
Such changes in cash flows are not reflected in the above analysis  as
the   fair  values  of  variable  assets  and  liabilities  would  not
materially be affected by a 10% change in interest rates.  As with any
method  of  measuring  interest rate risk,  certain  shortcomings  are
inherent  in the method of analysis presented in the foregoing  table.
For  example, although certain assets and liabilities may have similar
maturities  or  periods  to re-pricing, they may  react  in  different
degrees  to  changes  in interest rates.  Changes  in  interest  rates
related  to  certain types of assets and liabilities may fluctuate  in
advance  of changes in market interest rates while changes in interest
rates  related to other types of assets and liabilities may lag behind
changes  in  market interest rates.  Certain assets, such as  variable
rate loans, have features that restrict changes in interest rates on a
short-term  basis  and  over  the life of  the  asset.   Additionally,
changes in market interest rates may increase or decrease due to  pre-
payments  and defaults influenced by changes in market interest  rates
affecting  the  valuation of certain assets.   Accordingly,  the  data
presented  in the above table should not be relied upon as  indicative
of actual results in the event of changes in interest rates.

Foreign Exchange Risk

     Foreign exchange risk arises from the possibility that changes in
foreign exchange rates will impact the value of financial instruments.
The  Company  is  subject to foreign exchange risk to the  extent  its
income  bearing  assets exceeds its related foreign denominated  debt.
At December 31, 1999, the Company had one forward contract in place to
hedge  against  a portion of its foreign exchange rate exposure.   The
following  table summarizes the hypothetical impact to  the  Company's
financial  position due to changes in foreign currency exchange  rates
(dollars in millions):

   Change in
    Foreign
 Exchange Rates                Hypothetical  Hypothetical
  per Dollar     Fair Value       Change        Change
      10%          $16.0         $ (1.4)        (8.0)%
       0            17.4              -            -
     (10)%          19.0            1.6          9.2%


Other Market Risks

      As  with any entity's investment or asset portfolio, the Company
is subject to the risk that certain unpredictable conditions can exist
which combine to have the effect of limiting the Company's ability  to
liquidate its assets through sale or securitization.  As was the  case
in late 1998 when unprecedented market conditions caused a widening of
interest  rate  spreads  resulting  in  losses  to  the  Company   and
substantial requirements on the Company's liquidity position,  certain
events,  however  remote a possibility, can again exist  reducing  the
Company's  ability to liquidate certain assets.  The Company  believes
its  liquidity risk would not be materially impacted solely by  a  10%
change in interest rates without a more substantial change in spreads.

Item 8.   Financial Statements and Supplementary Data

      See  Index  to Financial Statements on Page F-1 of  this  Annual
Report on Form 10-K.

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

     None.

                               PART III

Item 10.  Directors and Executive Officers of the Registrant

      The  information required by this Item is set  forth  under  the
caption "Management" in the Company's definitive Proxy Statement  (the
"Proxy  Statement"),  which  will be filed  with  the  Securities  and
Exchange  Commission pursuant to Regulation 14A under  the  Securities
Exchange Act of 1934 and is incorporated herein by reference.

Item 11.  Executive Compensation

      The  information required by this Item is set  forth  under  the
caption "Executive Compensation" in the Proxy Statement, which will be
filed  with  the  Securities  and  Exchange  Commission  pursuant   to
Regulation  14A  under the Securities Exchange  Act  of  1934  and  is
incorporated herein by reference.

Item  12.    Security  Ownership  of  Certain  Beneficial  Owners  and
Management

      The  information required by this Item is set  forth  under  the
caption   "Security  Ownership  of  Certain  Beneficial   Owners   and
Management"  in  the Proxy Statement, which will  be  filed  with  the
Securities  and Exchange Commission pursuant to Regulation  14A  under
the  Securities  Exchange Act of 1934 and is  incorporated  herein  by
reference.

Item 13.   Certain Relationships and Related Transactions

      The  information required by this Item is set  forth  under  the
caption "Certain Relationships and Related Transactions" in the  Proxy
Statement,  which  will  be  filed with the  Securities  and  Exchange
Commission  pursuant  to Regulation 14A under the Securities  Exchange
Act of 1934 and is incorporated herein by reference.

                                PART IV

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

(1)  Financial Statements

      See  Index  to Financial Statements on page F-1 of  this  Annual
Report on Form 10-K.

(2)  Financial Statement Schedules

      Financial  statement  schedules under the applicable  rules  and
regulations  of  the  Securities  and Exchange  Commission  have  been
omitted  as  the  schedules  are  not applicable  or  the  information
required  thereby is included in the Company's consolidated  financial
statements or notes thereto.

(3)  Exhibits

     The following instruments are included as exhibits to the report.
Exhibits incorporated by reference are so indicated.

Exhibit
Number    Description of Exhibit

3.(a) Restated  Certificate of Incorporation, filed as exhibit  3(a)
     to  Registrant's Form 10K for the fiscal year  ended  December
     31, 1997, which is incorporated herein by reference.
  (b) Amended and Restated Bylaws effective as of February 25,  1997
     filed  as  exhibit  3 (b) to Registrant's Form  10-K  for  the
     fiscal  year  ended December 31, 1996, which  is  incorporated
     herein by reference.
4.(a) See Exhibits 3(a) and (b).
  (b) Indenture,   dated  as  of  January  15,  1996,  between   the
     Registrant and Bank One, Columbus, N.A., as trustee, filed  as
     Exhibit  4.1  to the Registrant's Form 8-K dated  February  2,
     1996, which exhibit is incorporated herein by reference.
  (c) Indenture, dated as of March 1, 1997, between the Company  and
     Bank One, Columbus, N.A., as trustee, filed as Exhibit 4.1  to
     the  Registrant's Form 8-K dated March 12, 1997, which exhibit
     is incorporated herein by reference.
  (d) Officers' Certificate and Company Order dated as of March  12,
     1997,   establishing  the  terms  of  the   Company's   Senior
     Subordinated Notes, Series 1997-A due 2004, filed  as  Exhibit
     4.2  to the Registrant's Form 8-K dated March 12, 1997,  which
     exhibit is incorporated herein by reference.
  (e) Officers'  Certificate and Company Order dated as of  February
     23,  1998,  establishing  the terms of  the  Company's  Senior
     Subordinated Notes, Series 1998-A due 2005, filed  as  exhibit
     4(e)  to  Registrant's  Form 10K for  the  fiscal  year  ended
     December 31, 1997, which is incorporated herein by reference.
  (f) Specimen  Common Stock Certificate, filed as  Exhibit  4.4  to
     the  Company's  Registration Statement on Form  S-3  (No.  33-
     63683), which exhibit is incorporated herein by reference.
10.(a) Form of Indemnification Agreement together with a list of  all
      officers  and directors who have signed such agreement,  filed
      as   Exhibit  10(g)  to  the  Registrant's  Annual  Report  on
      Form  10-K for the year ended October 31, 1987, which  exhibit
      is incorporated herein by reference.
  (b) Form  of  Indemnification Agreement dated  as  of  August  24,
     1993,  together with a list of all officers and directors  who
     have  signed  such agreement, filed as Exhibit  10(g)  to  the
     Registrant's  Quarterly Report on Form 10-Q  for  the  quarter
     ended  September  31,  1993,  which  exhibit  is  incorporated
     herein by reference.
  (c) Fifth  Amended and Restated Incentive Stock Option Plan  dated
     as  of  November  20,  1990, filed as  Exhibit  10(h)  to  the
     Registrant's  Annual Report on Form 10-K for  the  year  ended
     December  31,  1991, which exhibit is incorporated  herein  by
     references.(2)
  (d) Fourth  Amended  and Restated Stock Option Plan  dated  as  of
     November  20, 1991, filed as Exhibit 10(i) to the  Registrants
     Annual  Report  on Form 10-K for the year ended  December  31,
     1991, which exhibit is incorporated herein by reference.(2)
  (e) Stock  Option  Agreement, dated as of April 17, 1990,  between
     the  Registrant  and  Bruce W. Schnitzer, and  Termination  of
     Warrant  between Mr.  Schnitzer and the Registrant,  filed  as
     Exhibit  10(s) to the Registrant's Annual Report on Form  10-K
     for  the  year  ended  October  31,  1990,  which  exhibit  is
     incorporated herein by reference.(2)
  (f) Promissory  Note  dated October 31, 1990 issued  by  James  P.
     Cotton, Jr.  to the Registrant, filed as Exhibit 10(s) to  the
     Registrant's  Annual Report on Form 10-K for  the  year  ended
     October  31,  1990,  which exhibit is incorporated  herein  by
     reference.
  (g) Promissory  Note dated October 31, 1990 issued  by  Gerald  E.
     Eickhoff  to  the Registrant, filed as Exhibit  10(w)  to  the
     Registrant's  Annual  Report Form  10-K  for  the  year  ended
     October  31,  1990,  which exhibit is incorporated  herein  by
     reference.
  (h) Registrant's  1993 Key Individual Stock Option Plan  filed  as
     Exhibit  10(z) to the Registration Statement of Registrant  on
     Form   S-4  under  the  Securities  Act  of  1993  (File   No.
     33-72732), which exhibit is incorporated herein by reference.(2)
  (i) Indemnification  Agreement,  dated  March  30,  1993,  between
     AMRESCO  Holdings,  Inc.  and Richard  L.   Cravey,  filed  as
     Exhibit 10(ab) to the Registrant's Annual Report on Form  10-K
     for  the  year  ended  December 31,  1993,  which  exhibit  is
     incorporated herein by reference.
  (j) The  Registrant's Retirement Savings and Profit  Sharing  Plan
     and  Trust filed as Exhibit 10(ag) to the Registrant's  Annual
     Report  on  Form  10-K for the year ended December  31,  1993,
     which exhibit is incorporated herein by reference.(2)
  (k) The  Registrant's Severance Pay Plan filed as  Exhibit  10(ai)
     to  the  Registrant's Annual Report on Form 10-K for the  year
     ended  December 31, 1993, which exhibit is incorporated herein
     by reference.(2)
  (l) Employment  Agreement,  dated as  of  May  31,  1994,  between
     Registrant  and Robert H.  Lutz, Jr., filed as  Exhibit  10(y)
     to  the  Registrant's  Form 10-K for  the  fiscal  year  ended
     December  31,  1994, which exhibit is incorporated  herein  by
     reference.(2)
  (m) Amendment  to  Stock Option Agreement, dated as  of  April  1,
     1995, between the Registrant and Bruce W.  Schnitzer filed  as
     Exhibit  10(an) to the Registrant's Form 10-K for  the  fiscal
     year  ended  December 31, 1995, which exhibit is  incorporated
     herein by reference. (2)
  (n) Office Lease, dated as of February 9, 1996, between K-P  Plaza
     Limited    Partnership   and   the   Registrant    filed    as
     Exhibit  10(ao) to the Registrant's Form 10-K for  the  fiscal
     year  ended  December 31, 1995, which exhibit is  incorporated
     herein by reference.
  (o) First Amendment to Office Lease dated July 17, 1996, filed  as
     exhibit  10(r)  to Registrant's Form 10K for the  fiscal  year
     ended  December  31,  1997, which is  incorporated  herein  by
     reference.
  (p) Second Amendment to Lease Agreement dated May 27, 1997,  filed
     as  exhibit 10(s) to Registrant's Form 10K for the fiscal year
     ended  December  31,  1997, which is  incorporated  herein  by
     reference.
  (q) Third  Amendment to Lease Agreement dated September 22,  1997,
     filed  as  exhibit  10(t) to Registrant's  Form  10K  for  the
     fiscal  year  ended December 31, 1997, which  is  incorporated
     herein by reference.
  (r) Lease  Expansion and Fourth Amendment to Lease Agreement dated
     January  6, 1998, filed as exhibit 10(u) to Registrant's  Form
     10K  for  the  fiscal year ended December 31, 1997,  which  is
     incorporated herein by reference.
  (s) Form  of  Severance Agreement, dated as of May 29, 1996,  with
     Robert  H  Lutz,  Jr., Robert L. Adair, Barry L.  Edwards,  L.
     Keith  Blackwell,  Ronald  B. Kirkland  and  Ronald  Castleman
     filed  as exhibit 10(x) to the registrants Form 10-K  for  the
     fiscal  year  ended December 31, 1996, which  is  incorporated
     herein by reference. (2)
  (t) Form  of  Letter Agreement, dated as of March 20,  1997,  with
     Harold  E.  Holliday,  Jr.  filed  as  exhibit  10(y)  to  the
     registrants  Form 10-K for the fiscal year ended December  31,
     1996, which is incorporated herein by reference. (2)
  (u) AMRESCO, INC. 1997 Stock Option Plan filed as exhibit 10  (ac)
     to  the  registrants  Form  10-K for  the  fiscal  year  ended
     December  31, 1996, which is incorporated herein by reference.
     (2)
  (v) AMRESCO,  INC.  1995 Stock Option and Award Plan,  as  amended
     and restated. (2)
  (w) AMRESCO,  INC.  1998  Stock Option and  Award  Plan  filed  as
     Exhibit  10  to  the  registrants' Form 10-Q  for  the  fiscal
     quarter  ended June 30, 1998, which is incorporated herein  by
     reference. (2)
  (x) Credit  Agreement  entered into as of August  12,  1998  among
     AMRESCO,   INC.,   as   borrower,   NationsBank,    N.A.    as
     administrative  agent  and  Credit  Suisse  First  Boston   as
     syndication  agent for the "Lenders" filed as  Exhibit  10  to
     the  registrant's  Form  10-Q for  the  fiscal  quarter  ended
     September   30,   1998,  which  is  incorporated   herein   by
     reference.
  (y) The First Modification of Credit Agreement entered into as  of
     September  17,  1998  among AMRESCO, INC.,  as  borrower,  and
     NationsBank,  N.A. as administrative agent for the  "Lenders",
     filed  as  exhibit  10(ac) to Registrant's Form  10K  for  the
     fiscal  year  ended December 31, 1998, which  is  incorporated
     herein by reference.
  (z) The  Second Modification of Credit Agreement entered  into  as
     of  November  30, 1998, among AMRESCO, INC., as borrower,  and
     NationsBank,  N.A. as administrative agent for the  "Lenders",
     filed  as  exhibit  10(ad) to Registrant's Form  10K  for  the
     fiscal  year  ended December 31, 1998, which  is  incorporated
     herein by reference.
 (aa) The   Third  Modification  of  Credit  Agreement  and  Consent
     entered  into as of February 28, 1999 among AMRESCO, INC.,  as
     borrower,  and NationsBank, N.A. as administrative  agent  for
     the  "Lenders",  filed as exhibit 10(ad) to Registrant's  Form
     10K  for  the  fiscal year ended December 31, 1998,  which  is
     incorporated herein by reference.
 (ab) Amendment  No.1  to Rights Agreement, dated  as  of  March  2,
     1999,  executed by and between AMRESCO, INC. and The  Bank  of
     New  York,  as  Rights Agent (attached as Exhibit  1a  to  the
     Registrants  Form 8-A [Amendment No.1] filed as of  March  24,
     1999, which is incorporated herein by reference.
 (ac) Amended  and  Restated  Credit Agreement,  dated  January  18,
     2000,  among AMRESCO, INC. and its subsidiaries, as borrowers,
     and  Bank  of  America,  N.  A. as Administrative  Agent,  and
     certain financial institutions and Funds, as Lenders. (1)
 (ad) First  Modification of Amended and Restated Credit  Agreement,
     dated as of February 25, 2000, by and among AMRESCO, INC.  and
     the  subsidiaries of AMRESCO listed as borrowers and  Bank  of
     America,  N.A., as Administrative Agent, for and on behalf  of
     the Lenders. (1)
 (ae) Asset  Purchase  Agreement, dated December  8,  1999,  by  and
     among,  AMRESCO,  INC.  and certain of  its  subsidiaries,  as
     Sellers  and  Lend  Lease (US) Services, Inc.,  as  Purchaser,
     filed  as  Exhibit  2.1  to the Registrant's  Form  8-K  dated
     December  8,  1999  which  exhibit is incorporated  herein  by
     reference.
 11.  Statement re: Computation of Per Share Earnings. (1)
 21.  Subsidiaries of the Registrant. (1)
 23.  Consent of Independent Auditors-Deloitte & Touche LLP. (1)
 27.(a) Financial Data Schedule- Fiscal year end 1999. (1)
    (b) Financial  Data  Schedule- Fiscal year  ends  1997,  1998  and
        Quarters 1, 2 and 3 of 1998. (1)
    (c) Financial Data Schedule- Quarters 1, 2 and 3 of 1999. (1)

(1)  Filed herewith.

(2)   Management contract or compensatory plan or arrangement required
to be filed as an exhibit pursuant to Item 14(c) of this Report.


Reports on Form 8-K

     The Registrant filed a Current Report on Form 8-K, dated December
8,  1999, reporting pursuant to Items such Form the entering  into  an
Asset Purchase Agreement dated December 8, 1999, by and among AMRESCO,
INC.  and certain of its subsidiaries, as Sellers, and Lend Lease (US)
Services, Inc., as Purchasers.

                                SIGNATURES

      Pursuant  to  the requirements of Section 13  or  15(d)  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 on the 30th day of March, 2000.

                           AMRESCO, INC.

                           By /s/ ROBERT H. LUTZ, JR.
                           Robert H. Lutz, Jr.

                           Chairman of the Board and Chief Executive Officer

      Pursuant to the requirements of the Securities Exchange  Act  of
1934,  this  report has been signed below by the following persons  on
behalf of the registrant and in the capacities and on the 30th day  of
March, 2000:

           Signature                       Title
                                Chairman of the Board and Chief Executive
       /s/ ROBERT H. LUTZ, JR.  Officer
      Robert H. Lutz, Jr.
                              Director, President and Chief Operating Officer
      Robert L. Adair III
                              Executive Vice President and Chief Financial
      /s/ BARRY L. EDWARDS    Officer (Principal Financial Officer)
          Barry L. Edwards
                              Director
     /s/ JAMES P. COTTON, JR.
         James P. Cotton, Jr.
                              Director
     /s/ RICHARD L. CRAVEY
         Richard L. Cravey
                              Director
     /s/ AMY J. JORGENSEN
         Amy J. Jorgensen
                              Director
    /s/ BRUCE W. SCHNITZER
        Bruce W. Schnitzer
                             Senior Vice President and Chief Accounting
    /s/ RON B. KIRKLAND      Officer (Principal Accounting Officer)
           Ron B. Kirkland       (Principal Accounting Officer)



                     INDEX TO FINANCIAL STATEMENTS


                                                                   Page
 I. Financial Statements of AMRESCO, INC. and Subsidiaries

 Consolidated Balance Sheets, December 31, 1999 and 1998          F- 2
 Consolidated Statements of Operations for the Years Ended
 December 31, 1999, 1998 and 1997                                 F- 3
 Consolidated Statements of Shareholders' Equity for the Years
 Ended December 31, 1999, 1998 and 1997                           F- 4
 Consolidated Statements of Cash Flows for the Years Ended
 December 31, 1999, 1998 and 1997                                 F- 5
 Notes to Consolidated Financial Statements                       F- 6
 Independent Auditors' Report                                     F-28


                    AMRESCO, INC.  AND SUBSIDIARIES
                      CONSOLIDATED BALANCE SHEETS
                      December 31, 1999 and 1998
               (In thousands, except for share amounts)

<TABLE>
<CAPTION>
                                                                     1999       1998
                        ASSETS
<S>                                                              <C>         <C>
Cash and cash equivalents                                          $ 42,352   $ 50,338
Loans held for sale, net                                            295,041    350,500
Loans and asset portfolios, net                                     705,353    937,384
Retained interests in securitizations - trading (at fair value)     299,311    515,773
Asset-backed securities - available for sale (at fair value)        107,005    141,181
Accounts receivable, net of reserves of $605 and $496                17,685     15,198
Income taxes receivable                                               3,403     22,210
Deferred income taxes                                                73,983     29,487
Premises and equipment, net of accumulated
 depreciation of $16,781 and $13,870                                 16,846     21,051
Intangible assets, net of accumulated amortization of
$45,812 and $20,745                                                 180,139    211,121
Mortgage servicing rights, net of accumulated
amortization of $939 and $1,589                                       6,283     13,731
Other assets                                                         69,272     81,476
Net assets of discontinued operation                                127,753    197,895

TOTAL ASSETS                                                     $1,944,426 $2,587,345

         LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES:
 Accounts payable                                                $   20,098 $   35,069
 Accrued employee compensation and benefits                          15,415     24,731
 Notes payable                                                      708,611    957,871
 Warehouse loans payable                                            101,894    276,284
 Senior notes                                                                   57,500
 Senior subordinated notes                                          580,033    580,179
 Other liabilities                                                   58,656     70,304

   TOTAL LIABILITIES                                              1,484,707  2,001,938

COMMITMENTS AND CONTINGENCIES (Note 14)

SHAREHOLDERS' EQUITY:
  Common stock, $0.05 par value, authorized 150,000,000
   shares; 49,792,788 and 49,099,135 shares issued                   2,490       2,456
 Capital in excess of par                                          546,762     543,871
 Common stock to be issued for earnouts                             87,548
 Unamortized stock compensation                                     (4,096)     (4,981)
 Treasury stock, $0.05 par value, 1,024,339 shares                 (17,363)    (17,363)
 Accumulated other comprehensive loss                               (8,848)    (12,651)
 Retained earnings (deficit)                                      (146,774)     74,075

   TOTAL SHAREHOLDERS' EQUITY                                      459,719     585,407

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                      $1,944,426  $2,587,345
</TABLE>

            See notes to consolidated financial statements.

                    AMRESCO, INC.  AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF OPERATIONS
         For the Years Ended December 31, 1999, 1998 and 1997
                 (In thousands, except per share data)

<TABLE>
<CAPTION>

                                                                    1999     1998      1997
 REVENUES:
<S>                                                            <C>         <C>       <C>
   Interest and other investment income                          $ 247,420  $342,404  $179,041
   Gain on sale of loans and investments, net                      144,838    97,596   103,385
   Mortgage banking and servicing fees                              14,617     9,983    10,800
   Asset management and resolution fees                             19,799    17,714    24,948
   Other revenues                                                    3,195     4,264     2,595

             Total revenues                                        429,869   471,961   320,769

 EXPENSES:
   Personnel                                                        176,207   144,218   96,756
   Interest                                                         157,708   191,878   98,861
   Loss on retained interests in securitizations                    146,398    16,100
   Impairment of assets                                             113,497
   Other general and administrative                                  90,747    69,278   33,498
   Provisions for loan and asset portfolio losses                    (1,087)   29,634   16,764
   Depreciation and amortization                                     37,450    18,315    9,957

             Total expenses                                         720,920   469,423  255,836

   Income (loss) from continuing operations before income taxes    (291,051)    2,538   64,933
   Income tax expense (benefit)                                     (62,774)    3,868   25,822
   Income (loss) from continuing operations                        (228,277)   (1,330)  39,111
   Income (loss) from discontinued operations, net of income taxes    7,428   (67,841)  17,113

           NET INCOME (LOSS)                                      $(220,849) $(69,171) $56,224

   Weighted average earnings (loss) per common share - basic:
   Income (loss) from continuing operations                          $(4.77)   $(0.03)   $1.11
   Income (loss) from discontinued operation, net of income taxes      0.16     (1.58)    0.48
   Net income (loss)                                                 $(4.61)   $(1.61)   $1.59

  Weighted average earnings (loss) per common share - diluted:
  Income (loss) from continuing operations                           $(4.77)   $(0.03)   $1.07
  Income (loss) from discontinued operation, net of income taxes       0.16     (1.58)    0.46
  Net income (loss)                                                  $(4.61)   $(1.61)   $1.53
</TABLE>


            See notes to consolidated financial statements.

                                 AMRESCO, INC.  AND SUBSIDIARIES
                           CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
                      For the Years Ended December 31, 1999, 1998 and 1997
                                         (In thousands)
<TABLE>
<CAPTION>
                                                 Capital                       Accum Other            Compr.
                                 Common Stock    Excess of           Treasury    Compr.     Retained  Income
                                 Shares  Amount    Par      Other     Stock    Income (Loss) Earnings  (Loss)   Total
<S>                            <C>      <C>     <C>       <C>       <C>      <C>            <C>      <C>       <C>
JANUARY 1, 1997                 33,796   $1,690  $213,843  $(1,129) $  (160)   $  249       $ 87,022            $301,515
Comprehensive income:
Net income                                                                                    56,224   $56,224
Other comprehensive income:
Unrealized gains on securities                                                 15,556                   15,556
Reclassification of gains
included in net income                                                         (2,203)                  (2,203)
Foreign currency translation
adjustments                                                                       (57)                     (57)
Tax effects of other
comprehensive income                                                           (5,186)                  (5,186)
Other comprehensive income                                                                               8,110
Comprehensive income                                                                                   $64,334    64,334
Issuance of common stock
  for acquisition               2,095      105    34,203                                                          34,308
Exercise of stock options
 (including tax benefit)          442       21     5,927                                                           5,948
Issuance of common stock
 for unearned stock compensation  169        9     3,335    (3,344)
Issuance of common stock for
 earnout                           44        2       775                                                             777
Amortization of unearned stock
compensation                                                 1,718                                                 1,718
Other                              (3)              (142)       42                                                  (100)

DECEMBER 31, 1997              36,543    1,827   257,941    (2,713)   (160)     8,359   143,246                  408,500
Comprehensive loss:
Net loss                                                                                (69,171)      $(69,171)
Other comprehensive loss:
Unrealized loss on securities                                                 (32,369)                 (32,369)
Reclassification of gains
included in net loss                                                           (1,261)                  (1,261)
Foreign currency translation
adjustments                                                                      (813)                    (813)
Tax effects of other
comprehensive income                                                           13,433                   13,433
Other comprehensive loss                                                                               (21,010)
Comprehensive loss                                                                                    $(90,181)  (90,181)
Common stock offering,
net of offering costs          5,175     259    147,113                                                          147,372
Issuance of common stock for
purchase of subsidiaries       3,562     177     98,142                                                           98,319
Issuance of common stock for
earnout                        3,359     168     29,914                                                           30,082
Exercise of stock options
(including tax benefit)          307      17     5,957                                                             5,974
Issuance of common stock for
unearned stock compensation      220      11     6,515    (6,526)
Amortization of unearned stock
compensation                                               2,544                                                   2,544
Acquisition of treasury stock                                      (17,203)                                      (17,203)
Other                            (67)     (3)   (1,711)    1,714

DECEMBER 31, 1998             49,099   2,456   543,871    (4,981)  (17,363)   (12,651)    74,075                 585,407
Comprehensive loss:
Net loss                                                                                (220,849)   $(220,849)
Other comprehensive income:
Unrealized loss on securities                                                    (579)                   (579)
Reclassification of losses
included in net loss                                                            2,730                   2,730
Foreign currency translation
adjustments                                                                     3,525                   3,525
Tax effects of other
comprehensive income                                                           (1,873)                 (1,873)
Other comprehensive income                                                                              3,803
Comprehensive loss                                                                                  $(217,046)  (217,046)
Common stock to be issued
for earnouts                                              87,548                                                  87,548
Amortization of unearned stock
compensation                                               6,940                                                   6,940
Purchase of subsidiaries -
adjustment related to stock
price change                                    (4,049)                                                           (4,049)
Issuance of common stock for
 earnout                          27      1        194                                                               195
Issuance of common stock for
unearned stock compensation      708     36      6,598    (6,634)
Other                            (41)    (3)       148       579                                                     724

DECEMBER 31, 1999             49,793 $2,490   $546,762   $83,452   $(17,363)   $ (8,848)  $(146,774)            $459,719
</TABLE>

            See notes to consolidated financial statements.



                           AMRESCO, INC. AND SUBSIDIARIES
                   CONSOLIDATED STATEMENTS OF CASH FLOWS
            For the Years Ended December 31, 1999, 1998 and 1997
                               (In thousands)
<TABLE>
<CAPTION>
                                                                       1999        1998       1997
OPERATING ACTIVITIES:
<S>                                                              <C>           <C>          <C>
 Net income (loss)                                                 $ (220,849)   $ (69,171)  $ 56,224
 (Income) loss from discontinued operation                             (7,428)      67,841    (17,113)
 Income (loss) from continuing operations                            (228,277)     (1,330)     39,111
 Adjustments to reconcile net income (loss) to net cash provided
 by (used in) operating activities of continuing operations:
  Gain on sale of loans and investments                              (144,838)    (97,596)   (103,385)
  Loss on retained interests                                          146,398      16,100
  Depreciation and amortization                                        37,450      18,315       9,957
  Impairment of assets                                                113,497
  Accretion of interest income                                        (20,017)    (18,874)    (35,018)
  Provisions for loan and asset portfolio losses                       (1,087)     29,634      16,764
  Deferred tax benefit                                                (44,496)     (1,638)    (14,564)
  Other                                                                13,763       9,199       4,704
  Changes in assets and liabilities (exclusive
  of such acquired in business combinations):
   Loans held for sale, net                                           297,048     800,943    (657,600)
   Retained interests in securitizations                              149,299    (165,213)    (44,099)
   Other assets                                                        (3,901)    (11,545)    (10,810)
   Accounts payable                                                   (14,971)     17,291       4,242
   Warehouse loans payable                                           (174,390)   (682,465)    582,322
   Income taxes payable/receivable                                     18,807     (54,208)     29,535
   Other liabilities and accrued compensation and benefits            (23,864)     18,517      46,213
     Net cash provided by (used in) operating
      activities of continuing operations                             120,421    (122,870)   (132,628)

INVESTING ACTIVITIES:
 Sale of temporary investments, net                                                            34,190
 Origination of loans and purchase of asset portfolios               (645,734)   (875,758)   (576,647)
 Collections on loans and asset portfolios                            733,246     575,722     223,453
 Purchase of asset-backed securities available for sale                          (116,623)    (75,681)
 Proceeds from sale of and collections on asset-backed
 securities available for sale                                         22,871      46,583      60,304
 Origination and purchase of mortgage servicing rights                 (1,042)        (38)
 Proceeds from sale and transfer of mortgage servicing rights           6,139
 Cash used for purchase of subsidiaries including earnout payments    (27,348)    (68,951)     (2,176)
 Other                                                                   (483)    (38,734)      3,725
   Net cash provided by (used in) investing activities of
     continuing operations                                             87,649    (477,799)   (332,832)

FINANCING ACTIVITIES:
 Net proceeds from notes payable and other debt                       914,254   1,723,807   1,169,816
 Repayment of notes payable and other debt                         (1,221,131) (1,423,164)   (862,092)
 Proceeds from issuance of senior subordinated notes,
  net of issuance costs                                                           320,828     186,146
 Proceeds from common stock offerings                                             147,372
 Other                                                                    52      (11,229)      5,948
    Net cash provided by (used in) financing
     activities of continuing operations                            (306,825)     757,614     499,818

Net cash provided by (used in) discontinued operation                 90,769     (132,156)    (27,489)

Net increase (decrease) in cash and cash equivalents                  (7,986)      24,789       6,869
Cash and cash equivalents, beginning of year                          50,338       25,549      18,680

Cash and cash equivalents, end of year                             $  42,352    $  50,338   $  25,549

SUPPLEMENTAL DISCLOSURES:
 Interest paid                                                      $165,932    $ 184,153   $  92,138
 Common stock issued for purchase of subsidiaries and earn-outs          195      128,401      35,085
 Income taxes paid                                                     5,571       27,505      35,826
 Common stock issued for unearned stock compensation, net              6,100        4,812       3,344
 Equity accrued for earn-out                                          87,548
 Transfer of loans held to maturity to loans held for sale           162,361
</TABLE>
            See notes to consolidated financial statements.

                    AMRESCO, INC.  AND SUBSIDIARIES
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.   Summary of Significant Accounting Policies

      AMRESCO,  INC.  (the  "Company") is  engaged  primarily  in  the
business   of  real  estate  lending,  commercial  finance   and   the
acquisition,   resolution   and   servicing   of   nonperforming   and
underperforming  commercial  loans.  The  Company's  business  may  be
affected  by  many  factors, including real  estate  and  other  asset
values,  the level of and fluctuations in interest rates,  changes  in
the  small  business  and  franchise loan securitization  market,  and
competition.  In addition, the Company's operations require  continued
access  to short term sources of financing.   As further described  in
Notes  3  and 17, the Company has discontinued its commercial mortgage
banking  line  of  business and will concentrate its  efforts  on  its
commercial finance line of  business in the future.

       Principles   of  Consolidation.   The  consolidated   financial
statements include the accounts of the Company and its majority  owned
subsidiaries.  Significant intercompany accounts and transactions have
been eliminated in consolidation.

      Interest  and  Other Investment Income.  The Company's  interest
income  consists of interest earned on loans and asset portfolios  and
accrued   earnings   on   securities  purchased   or   retained   from
securitization  trusts.   Interest  income  on  loans   and   retained
interests  in securitizations is recorded as earned.  Interest  income
represents  the  interest earned on the loans during  the  warehousing
period  (the period prior to their securitization), as well  as  loans
held on the balance sheet on a long-term basis, and the recognition of
interest  income  on  the  securities retained  after  securitization.
Interest and other investment income is recognized using the effective
yield  method  and  includes accretion of discounts,  amortization  of
premiums and market valuation adjustments for securities classified as
trading.

      Gain  (Loss)  on  Sale  of Loans and Investments.   The  Company
computes a gain or loss on the sale and/or securitization of loans and
investments  based  on the fair value of proceeds  received  over  the
allocated  basis (between the assets sold and any retained  interests)
based  upon their relative fair values at the date of sale.   Retained
interests  in  assets sold are initially recorded at  their  allocated
basis  and  are classified as trading securities which are carried  at
estimated fair value.

      Mortgage  Banking  and  Servicing Fees.   Loan  placement  fees,
commitment  fees,  loan  servicing  fees  and  real  estate  brokerage
commissions  are  recognized  as  earned.   Placement  and   servicing
expenses are charged to expense as incurred.

      Asset  Management  and Resolution Fees.   Asset  management  and
resolution fees from management contracts are based on the  amount  of
assets  under  management and the net proceeds from the resolution  of
such  assets,  respectively, and are recognized as  earned.   Expenses
incurred   in  managing  and  administering  the  assets  subject   to
management contracts are charged to expense as incurred.  The  Company
provides  asset  management  and  resolution  services  primarily  for
private  investors.  Generally, the contracts provide for the  payment
of  a fixed management fee which is reduced proportionately as managed
assets  decrease,  a resolution fee using specified  percentage  rates
based  on net cash collections and an incentive fee for resolution  of
certain  assets.  Asset management and resolution contracts are  of  a
finite duration, typically three to five years.  Unless new assets are
added  to  these  contracts during their terms, the  amount  of  total
assets under management decreases over the terms of these contracts.

     Cash and Cash Equivalents.  Cash and cash equivalents include all
highly liquid investments with a maturity of three months or less when
purchased.

      Accounts  Receivable.  Accounts receivable  primarily  represent
receivables related to certain contracts.  Receivables are recorded as
the related revenues are earned according to the respective contracts.
The Company's exposure to credit loss in the event that payment is not
received  for  revenue  recognized  equals  the  balance  of  accounts
receivable on the balance sheet.

      Loans  Held  for Sale.  Loans held for sale are carried  at  the
lower  of  cost or market, net of deferred loan origination  fees  and
associated  direct  costs  and  an  allowance  for  loan  loss.   Loan
origination  fees  and  associated  direct  costs  are  deferred   and
recognized  upon  sale.   Market value is determined  based  upon  the
estimated  fair  value  of similar loans for  the  month  of  expected
delivery.

      Loans and Asset Portfolios.  Loans are stated at face value, net
of  deferred loan origination fees and associated direct costs and net
of   an  allowance  for  loan  losses.   Loan  origination  fees   and
incremental direct costs are deferred and recognized over the life  of
the  loan as an adjustment to yield, using the interest method.  Asset
portfolios  consist  of  pools of loans or  real  estate  acquired  at
significant discounts to face value.  The Company classifies its asset
portfolios  as  loan portfolios, partnerships and joint  ventures  and
real estate.  The original cost of an asset portfolio is allocated  to
individual  assets within that portfolio based on their relative  fair
value  to  the  total  purchase price.  The difference  between  gross
estimated  cash  flows from loans and its cost is  accrued  using  the
level  yield  method.   The Company accounts for  its  investments  in
partnerships  and  joint  ventures  using  the  equity  method   which
generally results in the pass-through of the Company's pro rata  share
of  earnings  as  if  the  Company had  a  direct  investment  in  the
underlying assets.  Loan portfolios, partnerships and joint  ventures,
and  real estate are carried at the lower of cost, adjusted for equity
earnings, or estimated fair value.

      Allowances  for  Loan and Asset Portfolio Losses.   The  Company
provides for estimated loan and asset portfolio losses by establishing
allowances  for  losses through a charge to earnings.   Actual  losses
reduce,   and   subsequent   recoveries  increase,   each   allowance.
Management's  periodic  evaluation of  each  allowance  for  estimated
losses  is  based  upon an analysis of the portfolio, historical  loss
experience,  economic  conditions and trends,  collateral  values  and
other relevant factors.

      Asset-Backed  Securities.  The Company's investments  in  asset-
backed securities are classified as available for sale and are carried
at  estimated  fair  value  determined by  quoted  market  rates  when
available,  otherwise by discounting estimated cash flows  at  current
market   rates.   Any  unrealized  gains  or  losses  on  asset-backed
securities  are  excluded  from earnings and included  in  accumulated
other  comprehensive  income, a separate  component  of  shareholders'
equity.  Any realized gains or losses are included in earnings and are
calculated  based  upon  the  specific  identification  method.    Any
impairment,  other  than  temporary, in the value  of  a  security  is
included in earnings.

      Retained  Interests in Securitizations.  Retained  interests  in
securitizations are classified as trading and are carried at estimated
fair  value.   The  carrying  value  of  the  retained  interests   in
securitizations is analyzed by the Company on a disaggregated basis to
determine whether historical prepayment and loss experience,  economic
conditions  and  trends, collateral values and other relevant  factors
have had an impact on the carrying value.  Changes in market value are
included   in   earnings.   Cash  flows  for  retained  interests   in
securitizations  are generally subordinated to other security  holders
in  a securitization trust.  The retained interests in securitizations
are  valued  at the discounted present value of the cash  flows  based
upon  the expected timing of the release of cash by the securitization
trust ("cash-out method") over the anticipated life of the assets sold
after estimated future credit losses, estimated prepayments and normal
servicing  and  other related fees.  The discounted present  value  of
such retained interests is computed using management's assumptions  of
market  discount rates, prepayment rates, default rates, credit losses
and other costs.

      Premises  and  Equipment.   Premises  and  equipment,  primarily
building  and  improvements,  are  stated  at  cost  less  accumulated
depreciation.  The related assets are depreciated using the  straight-
line  method over their estimated service lives, which range from  one
to  fifteen years.  Improvements to leased property are amortized over
the  life  of  the lease or the life of the improvement, whichever  is
shorter.

      Intangible  Assets.  Intangible assets represent the  excess  of
purchase price over the fair value of tangible net assets acquired  in
connection  with the purchases of other businesses.  These  intangible
assets,  principally goodwill, are amortized using  the  straight-line
method over periods ranging from one to twenty-two years.

      Long-Lived  Assets.  The Company reviews the carrying  value  of
long-lived  assets,  such as intangibles and premises  and  equipment,
used  in  operations when changes in events or circumstances  indicate
that the assets might have become impaired.  The Company evaluates any
possible   impairment  of  long-lived  assets   using   estimates   of
undiscounted   cash  flows.  In  addition,  the  Company  periodically
assesses  the  recoverability of intangible assets and  estimates  the
remaining  useful  life  by reviewing projected  results  of  acquired
operations,  servicing  rights  and  contracts.   If  this  evaluation
indicates  that an asset is impaired, the Company records a charge  to
operations  to  reduce the asset's carrying value to fair  value  (see
Note 2).

      Mortgage  Servicing Rights.  The Company recognizes as  separate
assets  the  rights to service mortgage loans for others, whether  the
servicing  rights are purchased or obtained through loan  originations
and  contractually  separated from the underlying  loans  by  sale  or
securitization,  by allocating total costs incurred between  the  loan
sold  and the servicing rights retained based upon their relative fair
values.   Amortization of mortgage servicing rights ("MSRs") is  based
upon  the ratio of net servicing income received in the current period
to  total net servicing income projected to be realized from the MSRs.
Projected net servicing income is in turn determined on the  basis  of
the   estimated  future  balance  of  the  underlying  mortgage   loan
portfolio,  which declines over time from pre-payments  and  scheduled
loan  amortization.   The Company estimates future  pre-payment  rates
based upon current interest rate levels, other economic conditions and
market forecasts, as well as relevant characteristics of the servicing
portfolio, such as loan types, interest rate stratification and recent
prepayment  experience.  MSRs are periodically assessed for impairment
which would be recognized in the consolidated statement of operations.
The  Company evaluates impairment through stratification of  its  loan
portfolio based upon certain risk characteristics including loan  type
(commercial  or residential) and contractual interest rate  (fixed  or
adjustable).

      Investment in AMRESCO Capital Trust.  The Company currently owns
approximately  1.5 million common shares, or 15%, of  the  outstanding
common  stock of AMRESCO Capital Trust ("ACT"), which is a real estate
investment trust.  The Company also acts as manager of ACT  for  which
it  receives a management fee from ACT for performing asset management
services.   Fees and reimbursable expenses recognized by  the  Company
for  such services totaled $2.3 million and $1.0 million for 1999  and
1998,  respectively.   During the fourth  quarter  1999,  the  Company
recorded an impairment of $1.5 million in its investment in ACT.   The
Company concluded that a loss in value, other than temporary, occurred
regarding  its investment in ACT as the Company would not be  able  to
recover  its recorded investment.  At December 31, 1999, the Company's
investment  in ACT was approximately $20.0 million, which is  included
in  other  assets,  and is accounted for under the  equity  method  of
accounting. The fair value of the ACT common stock held by the Company
at  December  31, 1999 is $12.8 million, based upon the quoted  market
price.

     Income Taxes.  The Company and its subsidiaries file consolidated
tax  returns.   Deferred  income  taxes  are  recorded  for  temporary
differences between the bases of assets and liabilities as  recognized
by  tax  laws  and their carrying value as reported in  the  financial
statements.

      Earnings  per Share.  Basic earnings per share is calculated  by
dividing  income  available to common shareholders  by  the  weighted-
average  number  of  common  shares  outstanding  during  the  period.
Diluted  earnings per share is calculated by dividing income available
to  common  shareholders plus the number of additional  common  shares
that  would  have  been outstanding if any dilutive  potential  common
shares had been issued during the period.

      Foreign Currency Translation.  Assets and liabilities of foreign
subsidiaries  are  translated  into  United  States  dollars  at   the
prevailing  exchange  rate on the balance  sheet  date.   Revenue  and
expense  accounts  for  these subsidiaries are  translated  using  the
weighted-average exchange rate during the period.  Equity accounts are
translated at the historical exchange rate.  These translation methods
give  rise  to  cumulative  foreign currency translation  adjustments,
which  are  reported as a component of accumulated other comprehensive
income.

       Derivative   Financial   Instruments.    Derivative   financial
instruments are utilized by the Company to reduce interest rate  risk.
Derivative financial instruments include interest rate swaps and  caps
and futures and forward contracts.  The Company does not hold or issue
derivative financial instruments for speculative or trading  purposes.
Gains   and  losses  resulting  from  the  termination  of  derivative
financial instruments are recognized over the shorter of the remaining
original contract lives of the derivative financial instruments or the
lives of the related hedged positions or, if the hedged positions  are
sold,  are  recognized in the current period as gain or loss  on  sale
(see Note 16).

     New Accounting Standards.  In June 1998, the Financial Accounting
Standards  Board  issued Statement of Financial  Accounting  Standards
("SFAS")  No. 133, "Accounting for Derivative Instruments and  Hedging
Activities," which establishes accounting and reporting standards  for
stand-alone  derivative  instruments and  for  derivative  instruments
embedded in other contracts, (collectively referred to as derivatives)
and  for hedging activities.  It requires the Company to recognize all
derivatives as either assets or liabilities in the balance  sheet  and
measure  those instruments at fair value depending upon the  Company's
rights  or  obligations under the applicable derivative contract.   If
certain   conditions  are  met,  a  derivative  may  be   specifically
designated as (a) a hedge of the exposure to changes in the fair value
of a recognized asset or liability or an unrecognized firm commitment,
(b)  a  hedge  of the exposure to variable cash flows of a  forecasted
transaction, or (c) a hedge of the foreign currency exposure of a  net
investment in a foreign operation, an unrecognized firm commitment, an
available-for-sale   security,   or   a   foreign-currency-denominated
forecasted  transaction.  In June 1999, the FASB issued SFAS  No.  137
which  deferred the effective date of SFAS No. 133 for one year.   The
Company  will adopt SFAS No. 133 on January 1, 2001, as required.  The
Company  has  not  yet  determined  the  impact  on  the  Consolidated
Financial Statements upon adoption of this standard.

      In October 1998, the Financial Accounting Standards Board issued
SFAS  No.  134,  "Accounting for Mortgage-Backed  Securities  Retained
after the Securitization of Mortgage Loans Held for Sale by a Mortgage
Banking   Enterprise,"  which  establishes  accounting  and  reporting
standards  for certain activities of mortgage banking enterprises  and
other  enterprises  that  conduct operations  that  are  substantially
similar  to  the primary operations of a mortgage banking  enterprise.
SFAS  No. 134 requires that after the securitization of mortgage loans
held  for  sale,  an  entity  engaged in mortgage  banking  activities
classify  the  resulting  mortgage-backed securities  based  upon  its
ability  and  intent  to sell or hold those investments.  The  Company
applied the new rules of SFAS 134 on January 1, 1999.  The adoption of
SFAS  No. 134 did not have a material impact on the Company's  results
of operations or financial position.

      Use  of  Estimates.  The preparation of financial statements  in
conformity  with  generally  accepted accounting  principles  requires
management  to  make  estimates and assumptions that  affect  reported
amounts  of  certain assets, liabilities, revenues  and  expenses  and
disclosures   of  contingent  assets  and  liabilities.    Significant
estimates   include   the   valuation   of   retained   interests   in
securitizations, asset-backed securities and the allowances  for  loan
and asset portfolio losses.  Actual results could differ significantly
from such estimates.

      Reclassifications.   Certain  reclassifications  of  prior  year
amounts  have  been  made to conform to the current year  presentation
(see Note 3).

2.   Acquisitions

      All  of  the Company's acquisitions have been accounted  for  as
purchases.   Operations of acquired companies are included with  those
of  the  Company after the acquisition date.  Goodwill related to  the
following  acquisitions  is amortized using the  straight-line  method
over 11 to 22 years.  Stock issued in connection with acquisitions was
valued at the price of the stock at the time of the agreements.

      On  August  11,  1998, the Company acquired  Mortgage  Investors
Corporation  and  an  affiliated  entity  ("MIC"),  a  privately  held
producer  of  Veteran's Administration ("VA") streamlined  re-financed
loans,  by merging a wholly-owned subsidiary of the Company with  MIC.
The initial Agreement and Plan of Merger (the "Original Agreement") to
purchase  MIC provided for an acquisition price of approximately  1.8
million shares of the Company's common stock and $2.6 million in cash.
Also, the former owners were to receive an earn-out payment of between
$70.0  million  and $105.0 million over a three-year period  with  the
payments  structured to be paid 82% in the Company's common stock  and
18%  in  cash.   Effective April 12, 1999, the Original Agreement  was
amended (the "Amended Agreement") to provide the Company an option  to
effect  redemption  of  the stock portion of  the  earn-out  for  cash
subject to certain market conditions and restrictions, and to fix  the
earn-out  payment at $105.0 million.    During 1999, the Company  made
an earn-out payment of $9.7 million in cash and advanced $9.2 million,
the  balance  of the cash portion of the earn-out.  Also, the  Company
extended $17.0 million to the previous owners of MIC in exchange for a
note receivable to be repaid upon issuance of the stock portion of the
earn-out.   The  Company  did  not  exercise  its  option  to   effect
redemption of the stock portion of the earn-out prior to December  31,
1999.   The  issuance of the stock portion of the  earn-out  has  been
extended  until at least March 31, 2000, but no later  than  June  30,
2000.   At  December  31, 1999, $86.1 million was recorded  as  common
stock  to  be  issued for the portion of the earn-out related  to  the
Amended Agreement.

     During January 2000, the Company obtained an option to return MIC
and  its related assets and liabilities to its previous owners  for  a
cash  payment  of $25.0 million and forgiveness of the  $17.0  million
note   in  exchange  for  cancellation  of  the  $86.1  million  stock
obligation currently owed to the previous owners.  The option  expires
April  30,  2000.   The Company expects to exercise  its  option  with
regard  to MIC if sufficient cash is available to do so; as such,  the
Company  recorded  an  impairment charge  of  $103.3  million  on  the
intangible assets related to the MIC acquisition.

       On  July  16,  1998,  the  Company  purchased  the  assets   of
Independence  Funding  Company  L.L.P. ("IFC")  and  TeleCapital  L.P.
("TeleCapital") for approximately 1.3 million shares of the  Company's
common  stock  and  cash  of $44.0 million.   IFC's  primary  line  of
business  is  providing long term financing to  small  businesses  and
TeleCapital's primary line of business is providing financing  to  the
pay phone industry.

     On January 29, 1998, the Company acquired the home equity lending
business  and operations of City Federal Funding & Mortgage Corp.  and
its   affiliate,  Finance  America  Corporation  (collectively   "City
Federal")  for  286,996  shares of the  Company's  common  stock.   In
addition to the common stock, the Company paid $2.0 million in cash in
connection  with such acquisition and was to pay up to  an  additional
$8.5  million in cash and stock over the next three years in the event
certain performance goals were met or exceeded during the fiscal years
1998,  1999 and 2000.  At December 31, 1999 and 1998, such performance
goals  were  not  attained  requiring no performance  accrual  by  the
Company.   The  purchase  agreement included a  provision  to  further
compensate the sellers if the price of the Company's common  stock  on
the  one-year anniversary date of the purchase was less than the price
of  the  stock  on  the  purchase  date.   During  1999,  the  Company
negotiated a settlement of $4.0 million for the change in stock  price
that  was  recorded  as  a  reduction of shareholders'equity.   Future
obligations   regarding  the  City  Federal  acquisition   have   been
cancelled.  During  1999, the Company closed all the  retail  branches
included  in  the City Federal operations and recorded  an  impairment
charge  of $8.7 million on the intangible assets related to  the  City
Federal acquisition.
The 1998 acquisitions (before earn-outs) were allocated as follows (in
thousands):
<TABLE>
<CAPTION>
                                                                               City
                                           MIC         IFC      TeleCapital   Federal
<S>                                     <C>       <C>           <C>          <C>
Cash and cash equivalents                                       $    263
Accounts receivable                      $ 2,085    $   639           209
Loans held for sale                                  49,008        36,116
Loans                                                 1,390
Retained interests in securitizations                 7,630
Premises and equipment                     4,034        250            25     $ 1,205
Intangible assets - goodwill              54,154     40,843        13,956       9,889
Other assets                                 113      4,517                        34
Accounts payable and accrued liabilities  (4,526)    (1,560)                      (94)
Income taxes payable                      (2,289)
Notes payable                             (2,927)    (39,659)      (31,193)
Other liabilities                                       (877)       (1,519)
 Purchase price of assets acquired       $50,644    $ 62,181      $ 17,857    $11,034
</TABLE>

      On March 31, 1997, the Company purchased the stock of Commercial
Lending  Corporation and the operations and specific assets of certain
of  its  affiliates  ("CLC").   CLC's  primary  line  of  business  is
originating, securitizing, selling and servicing small business loans.
The  purchase price consisted of approximately 2.1 million  shares  of
the Company's common stock valued at $34.3 million, the assumption  of
certain  liabilities  and contingent earn-out payments  of  additional
shares  of  the  Company's common stock based  upon  a  percentage  of
adjusted  net income of the acquired entities through March 31,  2000.
Approximately  3.4 million shares of the Company's common  stock  were
issued  in  1998 and an additional 27,289 shares were issued  in  1999
based on performance targets (see Note 17).

3.   Discontinued Operations

     In  December 1999, the Company announced that it had  reached  an
agreement  to  sell its Commercial Mortgage Banking business  to  Lend
Lease  (US)  Services,  Inc.  subject  to  normal  closing  and  other
conditions (see Note 17). Accordingly, the results from the Commercial
Mortgage Banking segment are shown as discontinued operations with all
prior years restated. Components of amounts reflected in the statement
of  operations  and balance sheets of the discontinued operations  are
presented in the following table (in thousands):

                                                 1999        1998       1997
Operations Statement Data:
   Revenues                                    $150,050   $  71,018   $97,503
Gain (loss) on sale of loans and investments      6,069    (101,042)
 Interest expense                                 6,304      40,619     3,202
 Depreciation and amortization                   15,282       7,540     4,491
   Operating income (loss)                       11,428    (104,371)   27,163
   Income tax (benefit)                           4,000     (36,530)   10,050
   Income (loss) from discontinued operations     7,428     (67,841)   17,113
Balance Sheet Data:
   Cash and equivalents                        $ 11,898   $  16,084
   Loans held for sale, net                      11,513     343,897
   Loans and asset portfolios, net                9,771       5,735
   Retained interests in securitization                      23,204
   Income tax receivable                            248      43,727
   Intangibles                                   57,771      51,694
   Mortgage servicing rights                     69,708      35,656
   Other assets                                  10,704       9,263
   Accounts and other payables                  (12,416)    (11,900)
   Warehouse loans                              (12,675)   (311,142)
   Other liabilities                            (18,769)     (8,323)
   Net assets of discontinued operations       $127,753   $ 197,895



4.   Loans Held for Sale

      Loans  held for sale were originated or acquired by the  Company
and  are  held  for future sale or securitization.   Such  loans  have
mortgages on the underlying real estate or first liens on the  related
property and equipment.  All of the Company's loans held for sale  are
pledged  as  collateral under the Company's various  debt  facilities.
The  maximum  accounting loss if the borrower  fails  to  pay  is  the
carrying  value.   The  Company's lending operations  are  diversified
across  the United States.  Loans held for sale at December  31,  1999
and 1998 consisted of the following (in thousands):

                                                  1999      1998
         Real estate structured finance loans  $162,361    $     -
         Franchise and small business loans    131,749     176,700
         Single family home equity loans         2,864     175,928
                                               296,974     352,628
         Allowance for loan losses              (1,933)     (2,128)
         Balance, end of year, net            $295,041    $350,500

      As  of December 31, 1999 and 1998, the Company was committed  to
sell  approximately $25.0 million and $45.4 million of small  business
loans, respectively, that were part of December 1999 and December 1998
securitizations.

      The activity in the allowance for loan losses on loans held  for
sale  for the years ended December 31, 1999 and 1998 is summarized  as
follows (in thousands):

                                         1999        1998
Balance, beginning of year             $ 2,128     $  6,739
Provision for loan losses                4,539       15,467
Charge-offs                             (4,734)     (20,078)
Balance, end of year                   $ 1,933     $  2,128

5.   Loans and Asset Portfolios

      The  Company's  loans consist primarily of high yield  loans  to
businesses and projects that were unable to access traditional lending
sources  and loans for single family residential construction.   Asset
portfolios  consist of loans purchased at a substantial discount  from
their  principal  amount, real estate and investments in  partnerships
and  joint  ventures that invest in such assets and an  investment  in
preferred  stock.  Substantially all of the Company's loan  and  asset
portfolios are backed by commercial mortgage real estate.  All of  the
Company's  loans  and  asset  portfolios  are  collateral  under   the
Company's  various debt facilities.  The Company's lending  operations
are diversified across the United States.  The maximum accounting loss
if  the borrower fails to pay is the carrying value.  Loans and  asset
portfolios  at  December 31, 1999 and 1998 consisted of the  following
(in thousands):

                                                1999      1998
Loans:
 Commercial loans                             $101,265   $353,410
 Residential construction loans                218,859    129,613
  Total loans                                  320,124    483,023
Asset portfolios:
 Commercial real estate mortgages              140,381    216,276
 Real estate                                   191,400    223,126
 Partnerships, joint ventures and other         62,589     31,376
 Total asset portfolios                        394,370    470,778
Allowance for loan and asset portfolio losses   (9,141)   (16,417)
 Balance, end of year, net                    $705,353   $937,384


The  activity in the allowance for loan and asset portfolio losses for
the  years  ended December 31, 1999 and 1998 is summarized as  follows
(in thousands):

                                                            1999      1998
Balance, beginning of year                                $16,417   $ 8,502
Provision (credit) for loan and asset portfolio losses     (5,626)    7,971
Charge-offs                                                (1,650)      (56)
Balance, end of year                                      $ 9,141   $16,417

During 1999, there was a negative provision for loan and asset
portfolio losses as a result of management's regular assessment of the
estimated losses in the portfolio.  Such estimate of losses is based,
in part, on individual assets and their related cash flow forecasts,
sales values, independent appraisals and the volatility of certain
real estate markets.


6.   Retained Interests in Securitizations

           The Company's retained interests in securitizations consist
primarily  of  interest only certificates retained  in  the  Company's
securitizations of home equity, franchise and small business loans and
are   generally   subordinated  to  other  security   holders   in   a
securitization  trust.   The  retained  interests  are  classified  as
trading securities and are carried on the Company's balance sheets  at
fair  value,  with  the change in fair value during the  period  being
included  in earnings.  The timing and amount of cash flows  on  these
securities  are  significantly  influenced  by  prepayments   on   the
underlying  loans,  estimated foreclosure losses  to  the  extent  the
Company has retained the risk of such losses, and normal servicing and
other  related fees.  The carrying value of the retained interests  in
securitizations at December 31, 1999 was determined by the Company  on
a  disaggregated  basis  by  discounting future  cash  flows  using  a
weighted  average discount rate of approximately 16.2%.  The  discount
rate  used to value the retained interests is influenced primarily  by
the  underlying loan rate and the volatility and predictability of the
underlying  cash  flows which generally become  more  certain  as  the
securities season and prepayments and credit losses are more known.

     The Company did not securitize any home equity loans in 1999 that
generated  retained  interests.  The actual  weighted  average  annual
prepayment rate on the Company's home equity securitizations was 31.3%
for  the  period from inception of each security through December  31,
1999, which is higher than originally projected, and is modeled to  be
25.2%  for  the  next  twelve  months.  The  actual  weighted  average
constant default rate on the Company's home equity securitizations was
1.4% from inception of each security through December 31, 1999 and  is
modeled  to  be 2.8% for the next twelve months.  The actual  weighted
average loss severity from inception of each security through December
31,  1999  is  38.8% and is modeled to be 33.3% over the  next  twelve
months.   During 1999 changes were made in our projected  prepayments,
default  rates  and  loss  severity  assumptions  which  resulted   in
increased  home  equity  retained interests in securitization  losses.
New assumptions were based upon the current interest rate environment,
recent industry trends and our recent portfolio history.

     The Company has utilized, for initial valuation purposes in 1999,
a  discount  rate  of  18% for its commercial finance  franchise  loan
securitizations  and  a  14% to 15% discount rate  on  its  commercial
finance small business loan securitizations. Prepayment rates  on  the
Company's  franchise  and small business loan securitizations  are  in
line  with  expectations.  Current valuations take  into  account  the
change   in  prepayment  assumptions  as  well  as  other  assumptions
influenced by market conditions.

      The  Company  structures its franchise and small business  loans
with  limited  cross  guarantees  between  borrowers  such  that   the
borrowers within a defined pool of loans absorb the first 5% - 10%  of
net  losses.   At the present time, the Company considers it  unlikely
that  net  losses on such loan portfolios will exceed  the  5%  -  10%
range.   Accordingly, losses are assumed to be zero.  The Company  has
assumed  no  prepayments  on its franchise  and  small  business  loan
securitizations   based  on  the  significant   prepayment   penalties
applicable to the loans and historical prepayment experience.


The following table summarizes the significant assumptions used by the
Company regarding its retained interests in securitizations:

<TABLE>
<CAPTION>
                                                            As of and for the Years Ended
                                                                   December 31,
                                                                  1999     1998
Discount Rates:
<S>                                                                <C>            <C>
  Home equity securitizations at inception                              20.0%         20.0%
  Commercial finance franchise loan securitization at inception         18.0%       18.0%-20.0%
  Commercial finance small business loan securizations at inception  14.0% -15.0%     15.0%
  Home equity weighted average discount rate                            16.8%         19.0%
  Commercial finance weighed average discount rate                      15.2%         16.7%

Home Equity:
  Actual weighted average annual prepayment rate, inception to date     31.3%         24.6%
  Projected weighted average annual prepayment rate                     25.2`%        28.3%

  Actual weighted average constant default rate, inception to date       1.4%          0.4%
  Projected weighted average constant default rate                       2.8%          2.3%

  Actual weighted average loss severity rate, inception to date         38.8%         15.8%
  Projected weighted average loss severity rate                         33.3%         25.4%
</TABLE>

      Net  proceeds from sale of retained interests in securitizations
were $174.6 million and $102.2 million in 1999 and 1997, respectively.
There were no sales of retained interests in securitizations in 1998.

     The Company's retained interests in securitizations were measured
by allocating the previous carrying amount between the assets sold and
the  interests retained (including mortgage servicing rights, if  any)
based  on  their  relative fair values at the date of  transfer.   The
interests  retained  were marked-to-market which  resulted  in  $146.4
million and $16.1 million decreases in the value of retained interests
in  securitization during 1999 and 1998, respectively. In all  of  the
Company's securitization transactions completed in 1999 and 1998,  the
Company  has not retained any recourse obligation, other than retained
interests,  with  respect  to  the assets  sold  other  than  standard
representations and warranties.  As of December 31, 1998, the  Company
had  $19.4  million  of retained interests related  to  the  Company's
remaining  interest from sales of home equity loans  in  October  1998
that were collected in the first half of 1999.  Retained interests  in
securitizations  at  December  31, 1999  and  1998  consisted  of  the
following (dollars in thousands):

                                                           1999      1998
 Home equity loan interests                             $155,250   $413,412
 Conventional small business and franchise interests     124,328     69,892
 Home equity whole loan sale interest                                19,440
 SBA interests                                            16,315      7,612
 Other                                                     3,418      5,417
  Total                                                 $299,311   $515,773

7.   Asset-backed Securities

      Asset-backed securities available for sale, carried at estimated
fair  value,  at  December  31, 1999 and 1998,  were  as  follows  (in
thousands):

                                        Gross      Gross
                            Amortized Unrealized Unrealized  Estimated
                              Cost      Gain       Loss      Fair Value
     1999                   $124,079   $30,842   $(47,916)    $107,005
     1998                   $160,351   $18,173   $(37,343)    $141,181

      Net  proceeds  from sales of asset-backed securities  aggregated
$20.7  million,  $18.5 million and $52.3 million for the  years  ended
December  31,  1999, 1998 and 1997, respectively,  which  resulted  in
gross  realized  gains of $8.0 million and $2.1 million  in  1998  and
1997,  respectively, and gross realized losses of $10.6 million  and
$6.7  million in 1999 and 1998, respectively. Maturities of securities
available for sale are not presented because the loans underlying such
securities  are  subject to prepayment.  All of the  Company's  asset-
backed  securities  are  collateral under the Company's  various  debt
facilities.

8.   Mortgage Servicing Rights

      The  activity in mortgage servicing rights for the  years  ended
December 31, 1999 and 1998 was as follows (in thousands):

                                        1999      1998
Balance at beginning of year         $13,731      $    -
Purchased                                254       5,957
Originated                             3,994       9,363
Sales and transfers                   (6,139)
Amortization                          (5,557)     (1,589)
 Balance at end of year             $  6,283     $13,731

9.   Notes Payable and Other Debt

      The  Company's notes payable and other debt at December 31, 1999
and 1998 consisted of the following (in thousands):

                                                       1999       1998
Notes payable:
 Revolving loan agreements                           $384,716    $640,198
 Non-recourse debt                                    173,870     176,960
 Commercial paper conduit and builder note payable    142,457      85,434
 Retained interest financing                            7,568      54,411
 Other                                                                868
  Total notes payable                                $708,611    $957,871

Warehouse loans payable:
 Home equity lending facilities                       $ 1,373    $136,051
 Commercial finance facilities                        100,521     140,233
  Total warehouse loans payable                      $101,894    $276,284

8.75% senior notes due July 1, 1999                  $      -    $ 57,500

Senior subordinated notes:
 10.0% notes due January 15, 2003                   $  57,383   $  57,500
 10.0% notes due March 15, 2004                       192,500     192,500
 9.875% notes due March 15, 2005                      330,150     330,179
  Total senior subordinated notes                    $580,033    $580,179

      Revolving  Loan  Agreements.  Effective  August  12,  1998,  the
Company entered into a Credit Agreement (the "Credit Agreement")  with
a syndicate of lenders led by Bank of America, N.A., as administrative
agent,  and  Credit Suisse First Boston, as syndication  agent,  which
replaced  the  Third Amended and Restated Loan Agreement (as  modified
and amended) dated as of September 30, 1997.  The Credit Agreement was
entered  into  in  order to increase the Company's  borrowing  limits,
among other things.

      The Credit Agreement constitutes senior debt and provides for  a
revolving loan commitment of $448.1 million, and a term commitment  of
$56.2  million.  Interest is payable quarterly and at the end of  each
advance period.  The Credit Agreement is secured by substantially  all
of   the  assets  of  the  Company  not  pledged  under  other  credit
facilities,   including  stock  of  a  majority   of   the   Company's
subsidiaries.  Indebtedness under the Credit Agreement generally bears
interest  at a rate based on the lower of (i) the applicable rate  (as
defined  in the Credit Agreement) selected by the borrower  between  a
variable  rate  (as  defined  in the Credit  Agreement)  or  a  London
Interbank Offered Rate ("LIBOR") based rate (as defined in the  Credit
Agreement)  or (ii) the maximum lawful rate (as defined in the  Credit
Agreement).  Both facilities terminate as of June 30, 2000.  The  debt
offering  costs  were included in other assets and are amortized  over
the life of the debt using the effective interest method.  On November
26,  1999,  the Credit Agreement was modified to, among other  things,
reduce by $44.0 million the total amount available for Advances  under
the  Revolving Credit Facility.  As of December 31, 1999, a  total  of
$384.7  million  was  outstanding under the Credit  Agreement  bearing
interest  at  9.1%  with availability under the  Credit  Agreement  of
approximately  $75.6 million.  At December 31, 1999, the  Company  had
outstanding $10.2 million in face amount of letters of credit pursuant
to such facility (see Note 17).

      Non-recourse  Debt, Commercial Paper Conduit  and  Builder  Note
Payable, Retained Interest Financing and Warehouse Loans Payable.  Non-
recourse  debt  is  used primarily to fund purchases  of  real  estate
mortgage backed securities and under-performing loan portfolios and is
secured  by  the specific assets purchased totaling $180.4 million  at
December  31,  1999.  The commercial paper conduit  and  builder  note
payable is used primarily to provide construction financing to various
home  builders and is secured by the specific assets funded with  such
debt  totaling $173.7 million at December 31, 1999.  Retained interest
financing  is  used  primarily to finance certain  retained  interests
purchased  or created during the Company's securitization process  and
is secured by the specific assets funded with such debt totaling $17.0
million at December 31, 1999.  The Warehouse debt is used primarily to
fund  purchases and originations of commercial finance and home equity
loans  and  is  secured by the specific assets funded with  such  debt
totaling  $121.3  million at December 31, 1999.  The  following  table
summarizes  the Company's non-recourse debt, commercial paper  conduit
and  builder  note payable, retained interest financing and  warehouse
loans payable at December 31, 1999 (in thousands of dollars):
<TABLE>
<CAPTION>
                               Maximum   Outstanding    Maturity                                   12/31/99
       Lender                 Available   Balance         Date         Base Interest Rate      Interest Rate
Non-recourse:
<S>                                  <C>       <C>          <C>            <C>                         <C>
 Nationwide Building Society           $ 85,365   $ 50,977    October 2005     GBP LIBOR + 0.95% to 1.25%    7.38%
 Lehman Brothers (2)                     48,032     48,032
 Bayerische Hypotheken                   25,329     25,329    February 2004    GBP LIBOR + 1.25%             7.33
 Freemont Investment & Loan              15,323     12,096    June 2000        6-mo LIBOR + 3.0% to 3.5%     9.00
 Morgan Stanley                          11,416     11,416    30 day renewals  LIBOR + 1.50%                 7.33
 Bayerische Handelsbank                   8,637      8,637    March 2003       4.40%  fixed                  4.40
 Cargill Financial Service                7,613      7,613    November 2002    LIBOR + 4.0%                 10.14
 Merrill Lynch                           43,539      7,062    November 2000    90-day LIBOR + 2.2% to 3.0%   8.70
 First American Bank Texas                3,201      2,708    May 2001         Prime Rate + 1.0%             9.50
 Total non-recourse                    $245,455   $173,870
Commercial Paper Conduit:
 Private Placement Investors           $111,370   $111,370    May 2007        30-day LIBOR + .95% to 1.30%   7.46%
 Kitty Hawk Funding                      55,000     31,087    April 2000      30-day LIBOR + 1.76%           7.58
 Total commercial paper conduit        $166,370   $142,457
Retained Interest Financing:
 Donaldson Lufkin & Jenrette             $7,568     $7,568    2 week renewals 1-mo LIBOR + 0.75% to 3-mo     7.25%
                                                                              LIBOR + 0.88%
Home equity lending:
 Lehman Brothers                        $40,000     $1,373    February 2000   30-day LIBOR + 2.25%           8.07%
Commercial finance:
 Transamerica                          $ 75,000   $ 47,228    December 2001   30-day LIBOR + 2.0% +2.25%     8.59%
 Prudential (small business Loans) (1)  200,000     34,709    March 2000      30-day Libor + 0.75%           6.57
 Salomon Brothers                       200,000     15,221    April 2000      30-day LIBOR + 0.95%           6.77
 Prudential (franchise Loans ) (1)      150,000      3,363    March 2000      30-day LIBOR + 0.75%           6.57
 Prudential (equipment leases)           10,000
  Total commercial finance             $635,000   $100,521
</TABLE>
__________

(1)   The  maximum  aggregate amount outstanding under the  Prudential
  warehouse facility may not exceed $250.0 million.
(2)   There  is  no  stated maturity date for this obligation  as  the
  underlying securities, which provide the cash
        flows to service the debt, have the ability to prepay.

     8.75% Senior Notes Due July 1, 1999.  On July 1, 1999 the Company
repaid the entire $57.2 million balance of its 8.75% Senior Notes.

       10%  Senior  Subordinated  Notes  Due  January  15,  2003.   On
January 30, 1996, the Company issued $57.5 million principal amount of
senior  subordinated  notes with net proceeds of  approximately  $54.9
million.  There is no sinking fund or amortization of principal  prior
to maturity and the senior subordinated notes are not redeemable prior
to  January 15, 2001.  The debt offering costs are included  in  other
assets and are amortized over the life of the debt using the effective
interest method.  The senior subordinated notes are unsecured  general
obligations of the Company and subordinated to all existing and future
senior indebtedness (as defined in the Indenture) of the Company.

      10% Senior Subordinated Notes Due March 15, 2004.  On March  12,
1997, the Company issued $192.5 million aggregate principal amount  of
senior  subordinated  notes with net proceeds of approximately  $186.6
million.   The senior subordinated notes are unsecured obligations  of
the  Company and are subordinated to prior payment of all existing and
future  senior debt and to indebtedness and other liabilities  of  the
Company's subsidiaries.  The debt offering costs are included in other
assets and are amortized over the life of the debt using the effective
interest method.  The notes are not redeemable prior to maturity.

     9.875% Senior Subordinated Notes Due March 15, 2005.  On February
24,  1998  and March 10, 1998, the Company issued $290.0  million  and
$40.2  million,  respectively, aggregate principal  amount  of  senior
subordinated  notes  with total net proceeds of  approximately  $320.7
million.   The senior subordinated notes are unsecured obligations  of
the  Company  and are subordinated to all existing and  future  senior
debt  and  to  indebtedness  and other liabilities  of  the  Company's
subsidiaries.   The debt offering costs are included in  other  assets
and  are  amortized  over  the life of the debt  using  the  effective
interest  method.   The  notes are redeemable  prior  to  maturity  at
104.938%  of their principal amount, plus accrued interest,  any  time
after  March  15,  2002, declining ratably to 100% of their  principal
amount, plus accrued interest, on or after March 15, 2004.

      Covenants.   Each of the Company's notes payable and other  debt
agreements  has  certain  covenants  which  include  financial  tests,
including   minimum   consolidated   tangible   net   worth,   maximum
consolidated funded debt to consolidated capitalization ratio, minimum
fixed payment ratio, minimum interest coverage ratio, maximum debt  to
net worth ratio and minimum asset coverage ratio.  The agreements also
contain covenants that, among other things, limit incurring additional
indebtedness,   investments,  asset  sales,  loans  to   shareholders,
dividends,  transactions  with affiliates, acquisitions,  mergers  and
consolidations,  liens and encumbrances and other matters  customarily
restricted.  At December 31, 1999, the Company was in compliance  with
all covenants.

      Aggregate  amounts of notes payable and other debt  that  mature
during the next five years are as follows (in thousands):

<TABLE>
<CAPTION>
                                     For the Year Ended December 31,
                              2000    2001    2002    2003      2004    Thereafter
<S>                       <C>        <C>      <C>     <C>      <C>       <C>
Notes payable              $491,204  $ 2,708  $7,613  $120,007  $ 25,329  $ 61,750
Warehouse loans payable      54,667   47,227
Senior subordinated notes                               57,383   192,500   330,150
Total                      $545,871  $49,935  $7,613  $177,390  $217,829  $391,900
</TABLE>

10.  Income Taxes

      Income tax expense (benefit) consisted of the following for  the
years ended December 31, 1999, 1998 and 1997 (in thousands):

                                         1999     1998      1997
Current:
 Federal                              $(14,342) $  2,887   $ 37,913
 State                                  (3,936)    2,619      2,473
  Total current tax expense (benefit)  (18,278)    5,506     40,386
Deferred tax expense (benefit):
 Federal                               (44,179)   (1,849)   (13,673)
 State                                    (317)      211       (891)
  Total deferred tax benefit           (44,496)   (1,638)   (14,564)
  Income tax expense (benefit) from
    continuing operations             $(62,774)  $ 3,868   $ 25,822


     A reconciliation of income taxes on reported pretax income at
statutory rates to actual income tax expense for the years ended
December 31, 1999, 1998 and 1997, is as follows (dollars in
thousands):
<TABLE>
<CAPTION>
                                                     1999           1998          1997
                                                Dollars  Rate   Dollars Rate  Dollars  Rate
<S>                                          <C>          <C>    <C>     <C>    <C>     <C>
Income tax at statutory rates                  $(101,868)  35%   $  888   35%   $22,727   35%
Non-deductible goodwill and other                 42,746  (14)    2,289   90        851    1
State income taxes, net of Federal tax benefit    (3,652)   1       691   27      2,245    3
 Total income tax expense (benefit)            $ (62,774)  22%   $3,868  152%   $25,823   39%
</TABLE>

      The  net  deferred  tax assets at December 31,  1999  and  1998,
consisted of the tax effects of temporary differences related  to  the
following (in thousands):

                                                    1999     1998
Reserves for loan and asset portfolio losses      $25,439    $12,534
Net operating loss carryforwards                   22,990      6,976
Accrued employee compensation                       3,311      4,469
Foreign tax credit carryforward                     6,351      3,592
Intangible assets                                   5,877      2,850
AMT credit carryforwards                            2,123        602
Investment in subsidiaries                            426        426
Securitized loans and investments                   1,989     (5,972)
Other                                               7,977      5,185
 Deferred tax asset before valuation allowance     76,483     30,662
Valuation allowance                                (2,500)    (1,175)
 Net deferred tax assets                          $73,983    $29,487



      Realization  of deferred tax assets is dependent  on  generating
sufficient   taxable   income  prior  to  expiration   of   the   loss
carryforwards.   Although  realization  is  not  assured,   management
believes  it  is  more likely than not that all of  the  deferred  tax
asset,  net of applicable valuation allowance, will be realized.   The
amount  of  the  deferred  tax asset considered  realizable  could  be
reduced or increased if estimates of future taxable income during  the
carryforward  period  are  reduced  or  increased.   As  a  result  of
acquisitions  and  operations,  the Company  has  net  operating  loss
carryforwards  available  for its use.   The  Company  is  subject  to
certain  annual  limitations on the utilization of such  losses.   The
following  were the expiration dates and the approximate net operating
loss carryforwards at December 31, 1999 (in thousands):

Expiration Date                 Amount
2002                             $   874
2003                               1,459
2006                                 372
2007                               2,867
2008                               3,838
2011                               9,283
2018                              12,109
2019                              55,758
 Total                           $86,560


11.  Employee Stock Compensation

      The Company has stock option and award plans for the benefit  of
key  individuals, including its directors, officers and key employees.
The plan is administered by a committee of the Board of Directors.

      On October 20, 1998, the Board of Directors adopted a resolution
to   exchange  approximately  5.7  million  options  to  purchase  the
Company's  common  shares at exercise prices  ranging  from  $7.50  to
$34.56  per common share for approximately 4.0 million options  having
an  exercise price of $7.44 per common share, representing fair  value
at  date  of  grant,  which had no impact on the  Company's  financial
statements.  Stock option activity under the plans for the years ended
December 31, 1999, 1998 and 1997 was as follows:
<TABLE>
<CAPTION>
                                                                      Weighted
                                                       Option          Average
                                        Number of     Price Per        Option
                                         Shares      Share Range     Price Per Share
<S>                                            <C>         <C>               <C>
Options outstanding at January 1, 1997            1,812,352  $  0.60 - $21.75        $  7.67
 Granted                                          2,458,239    17.63 -  34.56          20.16
 Exercised                                         (441,915)    0.60 -  21.75           6.33
 Forfeited                                          (11,796)    6.88 -  11.38           9.34

Options outstanding at December 31,1997           3,816,880     0.60 -  34.56          15.87
 Granted                                          3,215,312     7.53 -  34.44          29.57
 Exercised                                         (307,399)    3.50 -  21.75          12.64
 Forfeited                                       (2,037,725)    3.50 -  34.56          24.82

Options outstanding at December 31, 1998          4,687,068     0.60 - 19.88            7.27
 Granted                                            428,381     2.63 -  9.81            4.69
 Exercised                                           (4,262)    3.50 -  7.44            6.98
 Forfeited                                         (529,020)    2.63 - 19.88            8.25

Options outstanding at December 31, 1999          4,582,167     0.60 -  9.44            6.92

Options exercisable at December 31, 1999          2,204,944     0.60 -  9.44            6.93
Options exercisable at December 31, 1998          1,709,659
Options exercisable at December 31, 1997          1,464,591

Options available for grant at December 31, 1999  4,005,755
</TABLE>

      The  following table summarizes information about stock  options
outstanding at December 31, 1999:
<TABLE>
<CAPTION>

                                    Weighted    Weighted                        Weighted
                                    Average     Average                        Average
                                   Remaining    Exercise Price                 Price of
     Range of           Options   Contractual   of Outstanding     Options   Exercisable
 Exercise Prices      Outstanding     Life        Options        Exercisable    Options
<S>                   <C>           <C>        <C>              <C>          <C>
$0.60  - $2.75          125,045         1         $2.49            125,045      $2.49
 2.63  -  2.69          255,249         9          2.63                500       2.69
          3.50           85,300         4          3.50             85,300       3.50
          6.50           87,500         9          6.50             17,500       6.50
 6.88  -  7.00          328,223         5          6.93            328,223       6.93
          7.44        3,614,250         8          7.44          1,622,356       7.44
 7.38  -  9.44           86,600         9          8.05             26,020       7.88
 Total                4,582,167                    6.92          2,204,944       6.93
</TABLE>
      At  December  31,  1999, the Company has  reserved  a  total  of
4,582,167 shares of common stock for exercise of stock options.

      The Company applies Accounting Principles Board Opinion No.  25,
"Accounting  for  Stock Issued to Employees," in  accounting  for  its
stock  option  and  award plans.  Under the terms of  the  plans,  the
exercise  price  of each option is equal to the market  price  of  the
Company's  stock  on the date of grant.  Accordingly, no  compensation
expense  has  been  recognized under these plans.  Income  (loss)  and
earnings  (loss) per share from continuing operations on a  pro  forma
basis as if the Company had utilized fair value accounting methodology
would have been as follows (in thousands, except per share data):

                                                  For the Years Ended
                                                     December 31,
                                                 1999     1998      1997
Income (loss) from continuing operations:
 As reported                                 $(228,277)  $(1,330)  $39,111
 Pro forma                                    (231,455)   (7,589)   31,205

Basic earnings (loss) per share from
 continuing operations:
 As reported                                    $(4.77)   $(0.03)    $1.11
 Pro forma                                       (4.83)    (0.18)     0.88

Diluted earnings (loss) per share from
 continuing operations:
 As reported                                    $(4.77)   $(0.03)    $1.07
 Pro forma                                       (4.83)    (0.18)     0.85

     The estimated fair value of options granted during 1999, 1998 and
1997  was  $2.90,  $4.21  and  $11.08 per  share,  respectively.   For
purposes  of  determining fair value of each option, the Company  used
the Black-Scholes model with the following assumptions:

                                       1999         1998          1997
    Risk-free interest rate       4.80% - 6.45% 4.19% - 4.50%  5.82% - 6.26%
    Expected life                      7 years      5 years      7 years
    Expected volatility               55% - 60%       54%        43% - 46%
    Expected dividends                    -            -             -

      During  1999,  the Company issued 707,641 shares  of  restricted
common  stock  at  prices ranging from $6.38 per share  to  $9.52  per
share, with a weighted average price of $9.37 per share, under one  of
the  Company's  stock option and award plans.  Although the  Company's
restricted stock typically vests over a period of five years, the 1999
grants  vest  over  periods of two and three years  and  certain  1998
grants  vest  in a lump sum in the year 2001.  During 1999,  1998  and
1997,  $6.9  million, $2.5 million and $1.7 million in unearned  stock
compensation was amortized as compensation expense, respectively.   At
December  31,  1999  and 1998 shareholders' equity  includes  unearned
stock compensation of $4.0 million and $4.9 million, respectively.

12.  Common Stock

      During July and August 1998, the Company repurchased 1.0 million
shares  of the Company's outstanding common stock at an average  price
of $17.20 per common share.

      On  February 24, March 4, May 18, and July 28, 1998, the Company
issued options to purchase approximately 331,000, 15,000, 152,000  and
2,629,000 shares, respectively, of common stock.  On February 24, July
17,  and  July  22,  1998,  the Company issued approximately  166,000,
34,000  and  21,000 restricted shares, respectively, of the  Company's
common stock to certain key employees.

      On  February 23, 1998, the Company completed a registered public
offering  of  5.2  million  shares  of  common  stock,  including  the
underwriters'  over-allotment option.   The  net  proceeds  from  such
offering,   after   underwriter's  discount  and  offering   expenses,
aggregated approximately $147.2 million.  The price to the public  was
$30.00  per  share  and the proceeds to the Company  were  $28.56  per
share, after underwriting discounts.

      On  May 28, 1997, the Company adopted a Stockholders Rights Plan
pursuant to which rights were distributed to stockholders of record as
of  June  9,  1997.  This Stockholders Rights Plan was amended  as  of
March  2,  1999.  The Stockholders Rights Plan, as amended,  provides,
among  other  things,  that if a person (or  group  of  affiliated  or
associated persons) acquires (or ten days after the commencement of  a
tender offer to acquire) "beneficial ownership" of 15% or more of  the
outstanding  shares of common stock, the rights previously distributed
to  stockholders, other than those owned by such acquiring  person  or
group,  will become exercisable.  Under the Stockholders Rights  Plan,
as  amended, the acquisition of 15% or more of the outstanding  common
stock or the completion of the tender offer will entitle the holder to
purchase  shares of common stock having a market value equal to  twice
the purchase price of the right.

      A  reconciliation of the numerators and denominators used in the
basic  and  diluted  earnings (loss) per share  computations  for  net
income (loss) is as follows (in thousands):

                                                 1999     1998      1997
Income (loss) from continuing operations
  basic and diluted                           $(228,277) $(1,330)  $39,111

Weighted average shares outstanding (basic)      47,879   42,846    35,412
Dilutive stock options                                                 958
Contingently issuable shares                                           293
Weighted average shares outstanding (diluted)    47,879   42,846    36,663

     As the Company posted a net loss for the years ended December 31,
1999  and 1998, the effects of dilutive stock options and contingently
issuable  shares for the years ended December 31, 1999  and  1998  are
anti-dilutive and not included in the computation of diluted loss  per
share.  As  of December 31, 1999 and 1998, the Company had  19,582,000
and  1,159,000 anti-dilutive options and contingently issuable shares,
respectively.

      At  December 31, 1999, the Company had 20,000 stock appreciation
rights outstanding related to the market value of the Company's common
stock which were granted to certain non-employees of the Company.  The
stock  appreciation  rights have an award  value  of  $13.125  and  an
automatic conversion into cash on February 20, 2006.

13.  Employee Compensation and Benefits

      Accrued employee compensation and benefits at December 31,  1999
and  1998  included amounts for incentive compensation, severance  and
benefits.   Certain employees are eligible to receive a bonus  from  a
pool  computed  on  pretax income over predetermined  minimum  earning
levels within operating units.

      The  AMRESCO Retirement Savings and Profit Sharing Plan ("Plan")
qualifies  under  Section  401(k) of the  Internal  Revenue  Code  and
incorporates  both a savings component and a profit sharing  component
for  eligible  employees.  As determined each year  by  the  Board  of
Directors, the Company may match the employee contribution up to 6% of
their base pay based on the Company's performance.  For 1999, 1998 and
1997,  the  matching  contribution was set at  $0.50  for  each  $1.00
contributed  by  the employees.  In addition to the  matching  savings
contribution  in 1997, the Company provided an annual contribution  to
the  profit sharing retirement component of the Plan on behalf of  all
eligible  employees. No such contributions were made in 1999  or  1998
due  to  the  Company's net losses.  For the year ended  December  31,
1997,  the  Company  accrued  a profit sharing  contribution  of  $3.1
million.  Allocation  of  the Company's contribution  is  based  on  a
percentage  of an employee's weighted total pay.  Weighted  total  pay
places a stronger emphasis on the age of the employee and provides  an
increasingly  larger profit sharing contribution as an employee  nears
retirement.

14.   Commitments and Contingencies

      The  Company  has  entered into non-cancelable operating  leases
covering office facilities which expire at various dates through 2009.
Certain  of  the  lease agreements provide for minimum annual  rentals
with  provisions  to  increase the rents to cover  increases  in  real
estate  taxes and other expenses of the lessor.  The Company also  has
leases on equipment, some of which are non-cancelable, which expire on
various  dates  through 2002.  The total rent expense  for  the  years
ended  December  31,  1999,  1998 and 1997,  was  approximately  $21.4
million,  $17.7  million and $9.9 million, respectively.   The  future
minimum annual rental commitments under non-cancelable operating lease
agreements  having  a  remaining  term  in  excess  of  one  year   at
December 31, 1999 were as follows (in thousands):

      Year Ended December 31,
      2000                                          $13,899
      2001                                           12,393
      2002                                            9,683
      2003                                            7,341
      2004                                            6,798
      Thereafter                                     16,959

      The  Company  is a defendant in various legal actions.   In  the
opinion  of  management, such actions will not materially  affect  the
financial position, results of operations or cash flows of the Company
(see Note 17).

15.  Segment and Related Information

      The  Company  has four reportable segments which  have  separate
management   teams  and  infrastructures  that  engage  in   different
investments  and offer different services: commercial  finance,  asset
management,  home equity lending and residential mortgage banking.  In
its  commercial finance business, the Company focuses on (i) loans  to
franchisees  of  nationally  recognized  restaurant,  hospitality  and
service organizations, (ii) loans to small business owners, (iii) real
estate  structured finance, (iv) communications finance and (v) single
family residential construction lending. The asset management business
involves  acquiring asset portfolios at a discount to face  value  and
managing  and  resolving  such  asset  portfolios  to  maximize   cash
recoveries.   In  addition,  in  its asset  management  business,  the
Company    provides   special   servicing   for   nonperforming    and
underperforming  loans in commercial mortgage-backed bond  trusts  and
similar securitized commercial asset-backed loan portfolios. The  home
equity  lending business involves originating, selling  and  servicing
nonconforming  residential mortgage loans.  The  residential  mortgage
banking  line of business originates and sells FHA and VA  streamlined
re-financed loans.

      The  accounting policies are the same as those described in  the
summary  of  significant accounting policies  with  the  exception  of
interest  expense  incurred  by the Company  being  allocated  to  the
subsidiaries  in  1999,  1998 and 1997 based  upon  the  subsidiaries'
combined  balance  of common stock, paid in capital  and  intercompany
accounts.  The  Company  evaluates performance  based  upon  operating
income  which is determined by adjusting operating profit  to  include
intangible amortization expense.

       The  following  represents  the  Company's  reportable  segment
position  as  of and for the years ended December 31, 1999,  1998  and
1997 (in thousands):
<TABLE>
<CAPTION>
     1999
                                                      Residential   Home
                                 Commercial   Asset     Mortgage     Equit
                                   Finance   Management Banking     Lending  All Other  Eliminations    Total
<S>                               <C>        <C>        <C>        <C>       <C>        <C>          <C>
Revenues (losses) from external
 sources                           $176,202  $106,461   $ 66,612   $ 85,150  $ (4,556)   $       -    $ 429,869
Gain (loss) on sale of loans and
 investments, net                    52,815    18,726     63,887     18,038    (8,628)                  144,838
Interest expense                     62,259    29,989      3,130     40,331    21,999                   157,708
Depreciation and amortization         9,324       807     14,328      9,261     3,730                    37,450
Income (loss) from continuing
 operatins before income taxes       66,732    36,166   (127,256)  (208,642)  (58,051)                 (291,051)
Segment assets                      486,857   349,004     49,081     23,961 1,674,157     (638,634)   1,944,426

     1998
                                                       Residential  Home
                                  Commercial   Asset    Mortgage    Equity
                                   Finance   Management Banking(1)  Lending  All Other   Eliminations    Total
Revenues from external sources    $122,047  $111,890    $74,702   $161,169   $  2,153     $      -   $  471,961
Gain (loss) on sale of loans
 and investments, net               38,639    12,230     72,135    (16,605)    (8,803)                   97,596
Interest Expense                    38,674    33,184      2,260     99,194     18,566                   191,878
Depreciation and amortization        5,504       841      2,391      6,391      3,188                    18,315
Income (loss) from continuing
 operations before income taxes     46,591    46,635     32,926    (74,719)   (48,895)                    2,538
Segment assets                     453,635   318,665     99,070    359,439  1,960,188     (603,652)   2,587,345

(1)  Began operations August 11, 1998.

     1997
                                                         Home
                                 Commercial   Asset     Equity
                                   Finance  Management  Lending   All Other   Eliminations  Total
Revenues from external sources    $ 51,212  $ 90,454   $165,294  $  13,809    $    -        $ 320,769
Intersegmentj revenue                                     1,113                  (1,113)
  Total revenues                    51,212    90,454    166,407     13,809       (1,113)      320,769
Gain (loss) on sale of loans and
 investments, net                   15,844    17,952     69,616        (27)                   103,385
Interest expense                    13,224    19,387     53,939     13,424       (1,113)       98,861
Depreciation and amortization        1,940     1,429      3,511      3,077                      9,957
Income (loss) from continuing
 operations before income taxes     19,075    43,933     46,163    (44,238)                    64,933
Segment assets                     155,208   192,027  1,072,282  1,206,848     (253,234)    2,373,131
</TABLE>

16.  Financial Instruments and Risk Management

      In  the  normal course of business, the Company is  a  party  to
financial  instruments  with  off-balance  sheet  interest  rate   and
currency  exchange rate risk.  The Company may reduce its exposure  to
fluctuations in interest rates and currency exchange rates by creating
offsetting   positions   through  the  use  of  derivative   financial
instruments.   Derivatives  are  used  to  lower  funding  costs,   to
diversify  sources of funding, or to alter interest rate and  currency
exchange  rate  exposures arising from mismatches between  assets  and
liabilities.    The   Company  does  not  use   derivative   financial
instruments  for trading or speculative purposes, nor is  the  Company
party  to  highly leveraged derivatives.  These financial  instruments
include  interest  rate cap agreements, put options  and  forward  and
futures  contracts.   The  instruments involve,  to  varying  degrees,
elements  of  risk  in  excess  of  the  amount  recognized   in   the
consolidated statements of financial condition.  The Company  controls
the  risk of its hedging agreements, interest rate cap agreements  and
forward and futures contracts through approvals, limits and monitoring
procedures.

      Futures and forward contracts are commitments to either purchase
or  sell  designated  financial instruments at a  future  date  for  a
specified  price  and  may  be settled in cash  or  through  delivery.
Initial  margin  requirements are met in cash  or  other  instruments.
Futures  contracts  have little credit risk because futures  exchanges
are  the  counterparties.  Forward agreements and interest rate  swaps
and  caps  are  subject to the creditworthiness of the counterparties,
which are principally large financial institutions.

      The  notional  amounts of derivatives do not  represent  amounts
exchanged by the parties and, thus, are not a measure of the  exposure
of  the Company through its use of derivatives.  The amounts exchanged
are  calculated  on the basis of the notional amounts  and  the  other
terms  of  the  derivatives, which relate to interest rates,  exchange
rates,  securities  prices, or financial  or  other  indices.   Market
values  of  derivative transactions fluctuate based upon movements  in
underlying  financial indices such as interest rates.   Market  values
are monitored on a continual basis through external pricing mechanisms
and internal calculations.  The Company's objective measurement system
together  with  risk limits and timely reporting to senior  management
help  to  mitigate the risks associated with market fluctuations.   In
the  event  that  a derivative product were terminated  prior  to  its
contractual  maturity,  it is the Company's policy  to  recognize  the
resulting gain or loss over the shorter of the remaining original life
of  the  derivative financial instrument or the life of the underlying
hedged  asset or liability.  If the item being hedged is sold, settled
or terminated, the derivative financial instrument is marked-to-market
and  any  gain (loss) is recognized in earnings.  No such terminations
of  derivative  transactions  prior to contractual  maturity  occurred
during  1999 or 1998.  If the derivative fails to effectively  perform
as  a hedge and/or does not qualify as a hedge, it is marked-to-market
and any gain (loss) is recognized in earnings.

      From  time to time the Company uses forward contracts  to  hedge
interest  rate and currency exchange risk.  At December 31, 1999,  the
Company  has  (i)  one  U.S. Treasury forward contract  with  a  total
notional amount of $20 million related to hedging approximately  $20.7
million in loans held for sale with a settlement date of January  2000
and  (ii) one Japanese Yen forward contract to deliver 490 million Yen
with  a  settlement of February 2000.  As of December  31,  1998,  the
Company  held  (i)  two (U.S. Treasury and Federal  National  Mortgage
Association  ("Fannie Mae")) forward security contracts with  a  total
notional  amount of $63.8 million hedging $82.9 million of loans  held
for sale, with settlement dates of January and February 1999, (ii) two
Government National Mortgage Association thirty-year 6.0% contracts to
sell approximately $65.0 million of residential mortgage banking loans
to  be  delivered in February 1999 and (iii) one U.S. Treasury forward
contract  with  a  notional  amount  of  $33.5  million  which  hedged
approximately $35.3 million of residential mortgage backed  securities
("MBS") with a settlement date of January 1999.  Any gain or loss on a
forward  contract is deferred and recognized when the  related  assets
are sold.

      At  December 31, 1999, the Company has no open option contracts.
As  of December 31, 1998, the Company had one option contract to  sell
(put  option) ten-year U.S. Treasury securities at contracted  forward
prices.   The contract matured in March 1999 and hedged two commercial
MBS with a carrying value of $25.6 million.

      As  of  December  31,  1999, the Company  has  no  open  futures
contracts.   As  of  December 31, 1998, the Company had  one  ten-year
treasury  note Fannie Mae futures contract with a notional  amount  of
$21.4 million related to hedging approximately $18.9 million of loans.

      The  Company purchases interest rate swap and cap agreements  to
reduce  the  impact of changes in interest rates on its floating  rate
debt.   The  Company  enters  into  these  agreements  to  change  the
fixed/variable interest rate mix of the debt portfolio to  reduce  the
Company's aggregate risk to movements in interest rates.  Accordingly,
the  Company  enters into agreements to effectively convert  variable-
rate debt to fixed-rate debt to reduce the Company's risk of incurring
higher  interest  costs  due  to  rising  interest  rates.   The   cap
agreements entitle the Company to receive from the counterparties  the
amounts,  if  any, by which an interest rate index exceeds agreed-upon
thresholds.  The  premiums  paid  for  interest  rate  cap  agreements
purchased  are  included in other assets in the  consolidated  balance
sheets  and  are amortized to interest expense over the terms  of  the
agreements.   Amounts received under cap agreements are recognized  as
yield  adjustments to the related debt.  As of December 31, 1999,  the
Company  has  two  such agreements outstanding with a  total  notional
amount  of  $10.6  million  and a carrying  balance  of  zero  in  its
accounting records.   The contracts have cap rates ranging from 6.375%
to  6.4375%  based  upon  one month LIBOR and  have  expiration  dates
between February and April 2000.  As of December 31, 1998, the Company
had  four such agreements outstanding with a total notional amount  of
$31.7  million which hedge floating rate debt related to the Company's
balances  of  residential MBS with a carrying value of $37.5  million.
The  contracts had cap rates ranging from 6.375% to 6.875% based  upon
one month LIBOR and had various expiration dates between November 1999
and April 2000.

     As  of  December 31, 1998, the Company had an amortizing interest
rate  cap with a notional amount of $1.0 billion hedging approximately
$384.9  million  of  retained interests in securitizations.   The  cap
required  monthly payments from the counterparty when one month  LIBOR
exceeds  5.9375%.   The notional amount amortized monthly  based  upon
levels  agreed to with the counterparty through the expiration of  the
agreement  on July 26, 1999.  The Company paid an initial  premium  of
approximately $3.2 million for the cap.

     Credit  risk  represents  the  accounting  loss  that  would   be
recognized  at the reporting date if counterparties failed  completely
to  perform  as contracted.  Concentrations of credit risk that  arise
from  financial  instruments exist for counterparties when  they  have
similar  economic  characteristics that would cause their  ability  to
meet  contractual obligations to be similarly affected by  changes  in
economic  or  other  conditions. The Company  uses  commercial  rating
agencies to evaluate the credit quality of the counterparties, all  of
whom are major international financial institutions.  The Company does
not  have  a  significant exposure to any individual counterparty  and
does  not  anticipate a loss resulting from any credit risk  of  these
institutions.

     The following disclosure of the estimated fair value of financial
instruments  is 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 valuation methodologies.
However,  considerable judgment is necessarily required  to  interpret
market data to develop the estimates of fair value.  Accordingly,  the
estimates  presented  herein  are not necessarily  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.
<TABLE>
<CAPTION>
                                                   December 31, 1999   December 31, 1998
                                                  Carrying Estimated   Carrying  Estimated
                                                   Amount  Fair Value   Amount   Fair Value
                                                         (Dollars in thousands)
Assets:
<S>                                              <C>       <C>       <C>       <C>
 Cash and cash equivalents                        $ 42,352  $ 42,352  $ 50,338 $  50,338
 Loans held for sale, net                          295,041   297,996   350,500   350,500
 Loans and asset portfolios, net                   705,353   722,109   937,384   978,253
 Retained interests in securizations - trading     299,311   299,311   515,773   515,773
 Asset-backed securities - available for sale      107,005   107,005   141,181   141,181
 Accounts and taxes receivable, net                 21,088    21,088    37,408    37,408
 Mortgage servicing rights, net                      6,283     6,283    13,731    13,731
Liabilities:
 Accounts payable                                   20,098    20,098    35,069    35,069
 Notes payable and warehouse loans payable         810,505   810,505 1,234,155 1,234,155
 Senior notes                                                           57,500    56,063
 Senior subordinated notes                         580,033   362,249   580,179   416,606
Derivative Financial Instruments:
 Interest rate caps                                                               (3,267)
 Forward contracts                                              (408)               (828)
 Futures contracts                                                                     -
 Put options                                                                        (148)
</TABLE>
       The   fair  value  of  loans,  asset  portfolios,  asset-backed
securities,  retained interests in securitizations, notes payable  and
other  debt, senior notes and senior subordinated notes were estimated
based  on  quoted market prices when available, otherwise,  they  were
based  on present values of estimated cash flows using current  entry-
value  interest  rates applicable to each category of  such  financial
instruments  (which notes reflect the credit risk  applicable  to  the
instruments).   Mortgage  loans held for sale  were  valued  at  their
contracted  sales  prices.   The carrying  amount  of  cash  and  cash
equivalents,  accounts  receivable,  net  of  reserves,  and  accounts
payable  approximated  fair  value.   The  Company  has  reviewed  its
exposure on standby letters of credit and has determined that the fair
value  of  such  exposure is not material.  The  fair  values  of  the
interest  rate cap agreements, forward and futures contracts  and  put
options  were estimated using market quotes.  The fair value estimates
presented  herein  were  based on pertinent information  available  to
management  as of December 31, 1999 and 1998.  Although management  is
not aware of any factors that would significantly affect the estimated
fair  value  amounts,  such  amounts  have  not  been  comprehensively
revalued  for  purposes of these financial statements since  the  date
presented,  and therefore, current estimates of fair value may  differ
significantly from the amounts presented herein

17.  Subsequent Events

      On January 18, 2000, the Company sold $182.4 million of its real
estate  structured finance portfolio for $170.2 million and recognized
a loss in the accompanying 1999 financial statements in the line item,
gain  on  sale of loans and investments, net.  Proceeds from the  sale
were used to reduce bank debt.

     During the first quarter 2000, the Company transferred net assets
of $6.2 million of home equity lending business to Finance America,  a
joint venture with Lehman Brothers in exchange for a 36% interest.

      In  March  2000,  the  Company and the  former  shareholders  of
Commercial  Finance  Corporation ("CLC") agreed  to  amend  the  Asset
Purchase  Agreement pursuant to which the Company acquired CLC.   This
amendment  provides that the amount of the final earn-out payment  due
on  June  30, 2000 is fixed at $37.5 million and that, if  the  credit
facility  with the Bank of America, N.A., as Administrative Agent,  is
paid  in  full, the Company must issue to such former CLC shareholders
promissory  notes in the aggregate principal amount of  $37.5  million
in exchange for shares of the Company's common stock having  a  value
of $37.5  million.  Such notes would bear interest at the rate of 8%
per annum,  would  be secured by certain retained interests from
previous securitizations  of  CLC and would provide for principal
payments  of $12.5  million on each of June 30, September 30 and
December 29, 2000. The  notes could be prepaid at any time without
penalty.  In the event that the Company is unable to issue such notes,
the June 30, 2000 earn-out  payment  will be payable in the Company's
common stock  having  a value of $37.5 million based upon the average
of the closing price  of such common stock for the 20 trading days
prior to May 31, 2000.

      On  March  17,  2000,  the Company completed  its  sale  of  the
commercial  mortgage  banking,  asset  management,  and  real   estate
structured  finance platforms, to Lend Lease (US) Services,  Inc.  for
cash of $203.0 million and a $25.0 million promissory note. Additional
payments  of up to $21.0 million are payable upon receipt  of  certain
consents.   The  cash proceeds of the sale were used  to  reduce  bank
debt.   In conjunction with this transaction, a substantial number  of
leases were assigned or assumed by Lend Lease.

      On  March  22,  2000, the Company sold its United Kingdom  asset
management  assets  and  operations for $160.0  million.  The  Company
received  cash  proceeds of $47.0 million and a  note  receivable  for
$25.0  million.   Cash proceeds of the sale were used to  reduce  non-
recourse and bank debt.

     On March 30, 2000, the Credit Agreement was amended and restated.
The amended and restated Credit Agreement provides for a revolving
commitment of $75.0 million through May 31, 2000 and $55.0 million
thereafter to maturity on August 15, 2000.

18.  Quarterly Financial Data (Unaudited)

      The  following  is a summary of unaudited quarterly  results  of
operations  for  the  years  ended December  31,  1999  and  1998  (in
thousands, except per share amounts):
<TABLE>
<CAPTION>
                                                                   Year Ended December 31, 1999
                                                                  First     Second     Third     Fourth
                                                                 Quarter    Quarter    Quarter   Quarter
<S>                                                            <C>       <C>       <C>       <C>
Revenues                                                         $141,602  $134,886  $ 76,645   $ 76,736
Income (loss) from continuing operations                           11,133     7,496   (84,732)  (162,174)
Income (loss) from discontinued operations, net of income taxes      (895)    4,608     2,723        992
Net income (loss)                                                  10,238    12,104   (82,009)  (161,182)

Weighted average earnings (loss) per common share - basic:
 Income (loss) from continuing operations                          $ 0.23     $0.15    $(1.77)    $(3.37)
 Income (loss) from discontinued operations, net of income taxes    (0.02)     0.10      0.06       0.02
 Net income (loss)                                                 $ 0.21     $0.25    $(1.71)    $(3.35)

Weighted average earnings per commonj share - diluted:
 Income (loss) from continuing operations                          $ 0.23     $0.12    $(1.77)    $(3.37)
 Income (loss) from discontinued operations, net of income taxes    (0.02)     0.08      0.06       0.02
 Net income (loss)                                                 $ 0.21     $0.20    $(1.71)    $(3.35)

                                                                      Year Ended December 31, 1998
                                                                  First     Second   Third       Fourth
                                                                  Quarter   Quarter  Quarte      Quarter
Revenues                                                          $99,378  $128,230  $156,739   $ 87,614
Income (loss) from continuing operations                            9,348    15,424    23,068    (49,170)
Income (loss) from discontinued operations, net of income taxes     4,701     4,236   (22,310)   (54,468)

Net income (loss)                                                  14,049    19,660       758   (103,638)

Weighted average earnings (loss) per common share - basic
 Income (loss) from continuing operations                           $0.24     $0.36    $ 0.52     $(1.08)
 Income (loss) from discontinued operations, net of income taxes     0.12      0.10     (0.50)     (1.19)
 Net income (loss)                                                  $0.36     $0.46    $ 0.02     $(2.27)

Weighted average earnings per common share - diluted:
 Income (loss) from continuing                                      $0.23     $0.35    $ 0.51     $(1.08)
 Income (loss) from discontinued operations, net of income taxes     0.12      0.10     (0.49)     (1.19)
 Net income (loss)                                                  $0.35     $0.45    $ 0.02     $(2.27)
</TABLE>
Earnings (loss) per common share calculation for each of the quarters were
based on the basic and diluted weighted average number of shares outstanding
for each quarter. As a result, the sum of the quarters may not necessarily
be equal to the full year earnings (loss) per common share amount.



                     INDEPENDENT AUDITORS' REPORT



To the Board of Directors and Shareholders of AMRESCO, INC.:



      We have audited the accompanying consolidated balance sheets  of
AMRESCO, INC.  and subsidiaries as of December 31, 1999 and 1998,  and
the  related  consolidated  statements  of  operations,  shareholders'
equity and cash flows for each of the three years in the period  ended
December  31, 1999.  These financial statements are the responsibility
of  AMRESCO, INC.'s management.  Our responsibility is to  express  an
opinion on these financial statements based on our audits.

      We  conducted  our audits in accordance with auditing  standards
generally  accepted in the United States of America.  Those  standards
require  that  we  plan  and perform the audit  to  obtain  reasonable
assurance about whether the financial statements are free of  material
misstatement.  An audit includes examining, on a test basis,  evidence
supporting  the  amounts and disclosures in the financial  statements.
An  audit  also includes assessing the accounting principles used  and
significant  estimates made by management, as well as  evaluating  the
overall financial statement presentation.  We believe that our  audits
provide a reasonable basis for our opinion.

      In  our  opinion, such consolidated financial statements present
fairly,  in all material respects, the financial position of  AMRESCO,
INC.  and  subsidiaries  as of December 31, 1999  and  1998,  and  the
results of their operations and their cash flows for each of the three
years  in  the  period  ended December 31, 1999,  in  conformity  with
accounting  principles  generally accepted in  the  United  States  of
America.


/s/ Deloitte & Touche LLP
Dallas, Texas
March 30, 2000