<PAGE> 1
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                                   ====

                  U.S. SECURITIES AND EXCHANGE COMMISSION
                           WASHINGTON, DC 20549
                                     
                             ----------------
                                     
                                FORM 10-QSB
                                     
           [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                  OF THE SECURITIES EXCHANGE ACT OF 1934
                                     
              For the quarterly period ended January 31, 1998
                                     
                         ------------------------
                                     
                      Commission File Number: 0-18108
                                     
                         ------------------------
                                     
                        FINET HOLDINGS CORPORATION
          (Exact name of registrant as specified in its charter)
                                     
                                 DELAWARE
                         (State or jurisdiction of
                      incorporation or organization)
                                     
                            3021 CITRUS CIRCLE
                          WALNUT CREEK, CA 94598
                  (Address of principal executive office)
                                     
                                94-3115180
                   (IRS Employer Identification Number)
                                     
                              (510) 988-6550
           (Registrant's telephone number, including area code)
                                     
                                     
Indicate  by  check mark whether the registrant has (1) filed  all  reports
required to be filed by Section 13 or 15(d) of the Securities Act  of  1934
during  the  preceding  12  months (or for such  shorter  period  that  the
registrant was required to file such reports), and (2) has been subject  to
filing requirements within the past 90 days.

                               Yes 'X'  No.

The  number of shares outstanding of each of the issuer's classes of common
stock  was 30,536,684 shares of common stock, par value $.01, as  of  March
10, 1998.
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====
<PAGE> 2
                        FINET HOLDINGS CORPORATION
                                     
                                   INDEX

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

1.    Financial Statements

      Balance Sheets........................ ............................
3
        January 31, 1998 (unaudited)and April 30, 1997

      Unaudited Statements of Operations
        Three Months Ended January 31, 1998 and 1997.....................
4
        Nine Months Ended January 31, 1998 and 1997......................
5

      Unaudited Statements of Cash Flow
        Nine Months Ended January 31, 1998 and 1997......................
6

      Notes to Unaudited Financial Statements............................
8

2.    Management's Discussion and Analysis of Financial Condition
        and Results of Operations........................................
15


                        PART II - OTHER INFORMATION

1.    Legal Proceedings..................................................
22

2.    Changes in Securities..............................................
22

4.    Submission of Matters to a Vote of Security Holders................
22

5.    Other Information..................................................
22

6.    Exhibits and Reports on Form 8-K...................................
23

      Signatures.........................................................
23
<PAGE> 3
                       PART I. FINANCIAL INFORMATION

</TABLE>
<TABLE>
                        FINET HOLDINGS CORPORATION
                        CONSOLIDATED BALANCE SHEET
<CAPTION>
                                                         January 31,
April 30,
                                                            1998
1997
                                                        (unaudited)
(audited)
                                                        ------------ ------
------
<S>                                                     <C>          <C>
                                  ASSETS
Cash..................................................  $ 2,201,700  $
603,300
Accounts receivable from sales of mortgage
  loans and servicing rights..........................    6,879,500
3,453,200
Mortgage loan servicing advances and
  other receivables (Note 5)..........................      764,800
644,100
Accounts receivable from affiliates...................       18,600
-
Notes receivable......................................       72,000
247,000
Notes receivable - officers...........................      129,100
144,300
Mortgages held for sale, net..........................   12,403,100
7,268,900
Mortgage servicing rights (Note 6)....................    4,450,500
579,000
Furniture, fixtures and equipment, net of
  accumulated depreciation of $1,776,200 & $1,712,800.    1,114,900
1,096,700
Intangible     assets.....................................        2,204,600
-
Other assets (Notes 4 & 7)............................      195,300
213,400
                                                        ------------ ------
------
    Total assets......................................  $30,434,100
$14,249,900
                                                        ============
============
                   LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Warehouse line of credit (Note 8) ....................  $18,529,300
$10,209,200
Accounts payable......................................    4,120,500
720,900
Revolving line of credit .............................      845,000
100,000
Note payable and capitalized leases (Note 8) .........      809,400
1,017,900
Accrued expenses and other liabilities................      446,400
686,300
Liabilities subject to compromise.....................      441,700
474,500
                                                        ------------ ------
------
    Total liabilities.................................   25,192,300
13,208,800
                                                        ------------ ------
------
Commitments and contingencies (Note 9)

Stockholders' equity:
Preferred stock, $.01 par value, (100,000 shares
  authorized, none issued and outstanding)............         -
-
Common stock, $.01 par value, (60,000,000 shares
  authorized, 30,511,709 & 24,763,030 shares issued
  and outstanding.....................................      371,400
312,400
Common stock subscribed (3,991,250 shares)............         -
39,900
Paid in capital.......................................   11,405,600
5,814,200
Less: Stock subscription receivable (2,991,250 shares)         -
(2,693,000
Accumulated deficit...................................   (6,535,200)
(2,432,400)
                                                        ------------ ------
------
    Total stockholders' equity........................    5,241,800
1,041,100
                                                        ------------ ------
------
    Total liabilities and stockholders' equity......... $30,434,100
$14,249,900
                                                        ============
============
</TABLE>
 The accompanying notes are an integral part of the consolidated financial
                                statements.
<PAGE> 4
<TABLE>
                        FINET HOLDINGS CORPORATION
                   CONSOLIDATED STATEMENTS OF OPERATIONS
                                (UNAUDITED)
<CAPTION>
                                                     THREE MONTHS ENDED
                                                        January 31,
                                                  -------------------------
-
                                                      1998          1997
                                                  ------------  -----------
-
<S>                                               <C>           <C>\
REVENUES
Gain on sale of mortgage loans and
  servicing rights..............................  $   967,100   $   448,100
Gain on bulk sale of servicing rights (Note 5)..          -         581,800
Interest income.................................      359,400       339,900
Loan servicing fees, net........................       13,700       167,500
Service center loan brokerage fees..............       89,600        11,400
Sale of mortgage leads..........................       (9,400)       40,600
Membership fees.................................       39,000          -
Other...........................................       14,300
(3,000)
                                                  ------------  -----------
-
    Total revenues..............................    1,473,700     1,586,300

EXPENSES
Compensation and employee benefits..............    1,201,900       767,700
General & Administrative........................      458,100       271,800
Interest expense................................      378,200       345,300
Professional fees...............................      328,300       142,500
Marketing.......................................      177,300       164,500
Depreciation and amortization...................       77,900       112,900
Other...........................................       81,200       330,300
                                                  ------------  -----------
-
    Total expenses..............................    2,702,900     2,135,000
                                                  ------------  -----------
Loss before income taxes and extraordinary gain.   (1,229,200)
(548,700)
Income tax......................................         -             -
Extraordinary gain on liabilities subject to
 compromise, net of taxes.......................         -           33,000
                                                  ------------  -----------
-
NET LOSS........................................  $(1,229,200)  $
(515,700)
                                                  ============
============

NET LOSS PER SHARE BEFORE EXTRAORDINARY GAIN....  $      (.04)  $
(.04)
EXTRAORDINARY GAIN ON LIABILITIES SUBJECT TO
  COMPROMISE....................................  $        --   $        --
                                                  ------------  -----------
-
NET LOSS PER COMMON SHARE (Note 3) .............  $      (.04)  $
(.04)
                                                  ============
============
WEIGHTED AVERAGE NUMBER OF COMMON SHARES
  OUTSTANDING...................................   30,074,897    13,605,900
                                                  ============
============
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
<PAGE> 5
<TABLE>
                        FINET HOLDINGS CORPORATION
                   CONSOLIDATED STATEMENTS OF OPERATIONS
                                (UNAUDITED)
<CAPTION>
                                                      NINE MONTHS ENDED
                                                        January 31,
                                                  -------------------------
-
                                                      1998          1997
                                                  ------------  -----------
-
<S>                                               <C>           <C>
REVENUES
Gain on sale of mortgage loans and
  servicing rights..............................  $ 2,030,200   $ 1,121,800
Gain on bulk sale of servicing rights (Note 5)..      182,200       601,500
Interest income.................................    1,085,100       927,900
Loan servicing fees, net........................      267,000       529,800
Service center loan brokerage fees..............      173,900        30,800
Sale of mortgage leads..........................       87,700        18,400
Membership fees.................................       39,000          -
Other...........................................       79,900        62,800
                                                  ------------  -----------
-
    Total revenues..............................    3,945,000     3,293,000

EXPENSES
Compensation and employee benefits..............    3,312,400     2,059,100
General & administrative........................    1,406,800       950,000
Interest expense................................    1,090,400       953,800
Professional fees...............................    1,026,500       338,300
Marketing.......................................      443,800       269,800
Depreciation and amortization...................      310,200       295,700
Loss on disposition of assets...................       39,300          -
Other...........................................      421,400       366,100
                                                  ------------  -----------
-
    Total expenses..............................    8,050,800     5,232,800
                                                  ------------  -----------
Loss before income taxes and extraordinary gain.   (4,105,800)
(1,939,800)
Income tax expense..............................         -             -
Extraordinary gain on liabilities subject to
 compromise, net of taxes.......................        3,000        33,000
                                                  ------------  -----------
-
NET LOSS........................................  $(4,102,800)
$(1,906,800)
                                                  ============
============
NET LOSS PER SHARE BEFORE EXTRAORDINARY GAIN....  $      (.14)  $
(.19)
EXTRAORDINARY GAIN ON LIABILITIES SUBJECT TO
  COMPROMISE....................................  $       .00   $       .00
                                                  ------------  -----------
-
NET LOSS PER COMMON SHARE (Note 3)..............  $      (.14)  $
(.19)
                                                  ============
============
WEIGHTED AVERAGE NUMBER OF COMMON SHARES
  OUTSTANDING...................................   29,200,211    10,135,304
                                                  ============
============
</TABLE>
 The accompanying notes are an integral part of the consolidated financial
                                statements.
<PAGE> 6

<TABLE>
                        FINET HOLDINGS CORPORATION
                   CONSOLIDATED STATEMENTS OF CASH FLOWS
                                (UNAUDITED)
<CAPTION>
                                                         NINE MONTHS ENDED
                                                            January 31,
                                                          1998
1997
                                                     ------------- --------
-----
<S>                                                  <C>           <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
 Net loss........................................... $ (4,102,800)
(1,906,800)
 Adjustments to reconcile net loss to net
  cash used in operating activities:
  Depreciation and amortization.....................      310,200
295,700
  Extraordinary gain on liabilities subject to
  compromise........................................       (3,000)
(33,000)
  Provision for losses on loans and real
   estate owned.....................................       44,100
49,400
  Amortization of owned servicing rights............      173,100
-
  Loss on disposition of property, plant and
  equipment.........................................       39,300
9,000
  Gain on sale of purchased mortgage servicing rights     (47,500)
-
  Expense paid through the issue of common stock....      157,600
-
 Changes in operating assets and liabilities:
  (Increase) decrease in receivables from sales
   of mortgage loans and loan servicing rights......   (3,426,500)
7,286,000
  Mortgage loans originated......................... (285,017,300)
(278,512,500)
  Mortgage loans sold...............................  279,839,000
282,173,400
  Increase in originated mortgage
   servicing rights, net............................     (582,300)
(829,100)
  (Increase) decrease in mortgage loan servicing
   advances and other receivables...................     (120,700)
181,200
  Decrease in notes receivable - officers...........       15,300
-
  Increase (decrease) in prepaids and other assets..       18,100
(430,600)
  Increase (decrease)in accounts payable, accrued
    Expenses and other liabilities..................    3,316,000
(155,600)
                                                     ------------- --------
-----
  Net cash (used) provided by operating activities     (9,387,400)
8,127,100
                                                     ------------- --------
-----
CASH FLOWS FROM INVESTING ACTIVITIES:
 Purchase of mortgage servicing rights..............   (3,490,100)
(286,300)
 Proceeds of sale of purchased servicing rights.....       75,300
-
 Proceeds of sale of life insurance to officer......         -
165,600
 Purchase of furniture, fixtures and equipment......     (289,600)
(54,400)
 Repurchase of common stock.........................         -
(180,000)
 Proceeds of sale of furniture, fixtures
  and equipment.....................................          400
-
 Purchase of intangible assets......................     (721,600)
-
 Settlements of liabilities subject to compromise...       (7,500)
-
 Creditors' settlements paid with cash..............         -
(26,300)
 Advances to affiliates.............................      (18,600)
-
 Cash acquired with acquisition.....................         -
50,200
                                                     ------------- --------
-----Net cash used by investing activities...............   (4,451,700)
(331,200)
                                                     ------------- --------
-----
<PAGE> 7

CASH FLOWS FROM FINANCING ACTIVITIES:
 Proceeds from issuance of common stock.............    6,581,800
2,825,000
 Proceeds from exercise and sale of
  common stock warrants.............................       22,900
-
 Reimbursement of short swing profits...............       61,300
-
 Net increase (decrease) in warehouse borrowings....    8,320,100
(8,976,200)
 Proceeds from advances on note payable and
  line of credit....................................    1,150,000
1,850,000
 Principal payments on note payable and line of
  credit............................................     (698,600)
(2,208,400)
 Proceeds of life insurance cash surrender value
  loan.............................................          -
159,000
 Repayment of life insurance cash surrender value
  loan.............................................          -
(159,000)
 Proceeds from notes payable to officer............          -
724,200
 Repayment of notes payable to officers............          -
(709,200)
 Cash distributions to former shareholders.........          -
(1,040,000)
 Proceeds of pre-acquisition advances to affiliates          -
(1,377,300)
 Repayment of pre-acquisition advances repaid by
  affiliates.......................................          -
660,100
                                                      ------------  -------
-----
  Net cash provided (used) by financing activities     15,437,500
(8,251,800)
                                                      ------------  -------
-----
  Increase (decrease) in cash.......................    1,598,400
(455,900)

  Cash at beginning of period.......................      603,300
672,700
                                                      ------------- -------
-----
  Cash at end of period.............................  $ 2,201,700   $
216,800
                                                      ============
============

Supplemental cash flow information (Note 11)

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

</TABLE>
<PAGE > 8

                        FINET HOLDINGS CORPORATION
           NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

1.  GENERAL

REPORTING ENTITY

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

BUSINESS

Finet is engaged in electronic commerce (EC) in the residential real estate
industry  and  organized  around  two EC  groups:  Technology  Systems  and
Services  (TS&S)  and  Homeowner  Services  (HS).  With  the  exception  of
occasional  bulk purchase or sale of servicing rights, the  Company's  TS&S
and  HS  revenues are derived from activities that are fully or  materially
conducted  electronically,  and  thus are  considered  electronic  commerce
revenues.

TS&S develops and distributes systems and services that link businesses  to
consumers  and  other  businesses  over the  Internet.  TS&S  includes  the
Property  Transaction  Network  (PTN), an  Internet-based  realty  services
provider and distributor of Agent Connector Internet software for realtors,
and  the  iQualify Internet service enabling consumers to  receive  a  loan
decision from Fannie Mae automated underwriting system.

The HS group conducts electronic wholesale and retail commerce. It includes
Monument  Mortgage,  Inc., Finet's highly automated mortgage  banking  unit
that   provides   and   services  prime   and   sub   prime   home   loans,
PreferenceAmerica  Mortgage Network (PAMN), an electronic  mortgage  broker
representing  many  mortgage lenders, and the Finet Service  Center,  where
salaried counselors assist consumers in selecting appropriate solutions  to
their  homeowner  related  needs. The Company also  owns  several  inactive
corporations.

2.  BASIS OF PRESENTATION

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

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

3.  NET LOSS PER COMMON SHARE

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

<PAGE> 9

4 . ACQUISITIONS

In  December 1997, the Company completed the purchase of substantially  all
of  the  assets  of  Real Estate Office Software, Inc. ("REOS"),  a  Nevada
corporation.   REOS is a software development and marketing  company  whose
primary product was a proprietary Realtor productivity tool called the Real
Estate Office.  The total price paid was $1,140,772, of which $640,772  was
paid  in  cash. The remaining $500,000 is to be paid in the form of Company
stock which has not yet been issued.  Two hundred thousand shares of common
stock  will  be  issued at a price of $2.50 per share.  The stock  will  be
placed   in  an  escrow  account  and  portions  released  to  the   seller
periodically  as certain audits are performed.  The issuance value  of  the
stock  will be adjusted downward for any adverse changes in the  value  and
content of the net assets purchased, as determined by the audits.

On  January  10,  1998  the Company entered into a letter  of  intent  with
Coastal Federal Mortgage Company ("Coastal"), a New Jersey corporation, for
the  purpose of Finet acquiring all of the issued and outstanding stock  of
Coastal. Coastal is a mortgage banking firm operating in 16 eastern  states
and  specializing in sub prime lending. In 1997, Coastal  had  revenues  of
$5.9  million  and  after tax net income of $0.8 million  (unaudited).  The
parties have agreed to complete a formal closing of the transaction  before
April 15, 1998.

5.  MORTGAGE LOAN SERVICING

The  Company's  servicing portfolio is comprised primarily of  conventional
mortgage  loans.  The outstanding principal balance of serviced  loans  was
$553.4  million, representing 4,403 loans, at January 31, 1998, an increase
of 305% from $136.6 million representing 1,017 loans reported for the prior
quarter  ended October 31, 1997. The increase resulted from both  retention
of  servicing rights on some originated mortgages and the bulk purchase  of
servicing rights. The majority of loans are securitized through Fannie  Mae
and  Freddie Mac programs on a nonrecourse basis whereby foreclosure losses
are  generally the responsibility of the investor and not the  Company.  In
connection  with mortgage loan servicing activities, the Company segregates
escrow  and  custodial funds in a separate trust account and excludes  this
balance  of $1.9 million at January 31, 1998 from the accompanying  balance
sheet. The Company is required to maintain separate accounting records  for
its escrow and custodial cash account and the related liabilities.

In  addition  to  the ongoing sale of most servicing rights for  originated
mortgages,  the Company also had bulk sales of servicing rights which  were
originated  and retained in the servicing portfolio in prior fiscal  years.
Bulk  sales of loans with outstanding principal of $44.9 million were  sold
during  the  nine months ended January 31, 1998, compared to $71.7  million
sold in the same period of the prior year. These sales of prior fiscal year
originations  resulted in a net gain of $182,200 for the nine months  ended
January  31,  1998, as compared to a gain of $601,500 for  the  prior  year
period.  Servicing  rights  to loans with an unpaid  principal  balance  of
approximately  $553.4 million were pledged as collateral to lenders  as  of
January 31, 1998.

The  Company  has issued various representations and warranties  associated
with  whole  loan  and  bulk  servicing sales which  are  standard  in  the
industry.  These representations and warranties may require the Company  to
repurchase  defective  loans as defined per the  applicable  servicing  and
sales  agreements. The Company experienced losses of $130,000 and  $0  from
the  repurchase of defective loans during the nine months ended January 31,
1998 and 1997 respectively.

As a routine part of servicing operations, the servicing portfolio contains
a number of loans that are in the process of foreclosure, or that have been
foreclosed  upon by the Company (real estate owned). The dollar  amount  of
loans  in  foreclosure  and  real  estate owned  represented  1.1%  of  the
outstanding servicing portfolio balance as of January 31, 1998.  The losses
to the Company arising from the foreclosed loans and real estate owned were
$74,219  and $49,407 for the nine months ended January 31, 1998  and  1997,
respectively.

<PAGE> 10

The  Company  carried  fidelity bond coverage of $950,000  and  errors  and
omission coverage of $950,000 as of January 31, 1998.

6.   OWNED SERVICING RIGHTS, NET

Owned  servicing rights, net of amortization, at January 31, 1998 and April
30, 1997,consisted of the following:
<TABLE>
                                               January 31,1998    April 30,
1997
<S>                                           <C>                <C>
Originated mortgage servicing rights:         $  891,700         $  332,300
Purchased mortgage servicing rights:           3,558,800            246,700
                                             ------------        ----------
-
Total owned servicing rights                  $4,450,500         $  579,000
                                                               ============
===========
</TABLE>

7. PURCHASE OF INTANGIBLE ASSETS

On  May  29,  1997, the Company and NDS Software, Inc. ("NDS"),  a  generic
software development company and operator of a nationwide multiple  listing
of  homes  for  sale Internet site, entered into an agreement  whereby  the
Company  purchased  certain  rights  to  NDS'  customer  list,  programming
services and mortgage leads for $1,010,000, in the form of $202,000 in cash
and  202,000  shares  of its common stock valued at $4.00  per  share.  The
common  stock  was issued on June 5, 1997. The agreement terms  require  an
adjustment to the share consideration if the market price of the  Company's
shares  is  not at or above $4.00 per share on the earlier of the Company's
registration  of  the  common shares issued to NDS  or  June  3,  1998,  to
maintain  a  value  equal to $808,000 at the time,  subject  to  a  maximum
additional shares issuable of 1,414,000 shares.

On  January 16, 1998, the Company entered into a second agreement with  NDS
to  form  a  company and share equally the net revenues of a  new  intranet
website  for  buyer  agents called CityNet.com., which  combines  the  home
listing  of  Homeseekers.com  with  the Company's  iQualify  system.  Finet
contributed  the  functionality  of its iQualify  system,  NDS  contributed
certain  hardware, Internet connectivity and 300,000 shares of  NDS  stock.
Finet has the right to withdraw a pro rata amount of 100,000 shares of that
stock annually for three years to the extent that NDS fails to meet certain
obligations to bring traffic to the site.

The  Company  is  evaluating the ultimate realizable  value  of  the  asset
recorded  from  the  May 29, 1997 agreement, based on its  expected  future
benefits and its relationship to the January 16, 1998 agreement.

8.  DEBT

The  following table and comments present summary information regarding the
Company's debt as of January 31, 1998 and April 30, 1997:
<TABLE>
<CAPTION>
                                    Jan 31, 1998    Interest
Facility                                      Balance                  Rate
Expires or Due
--------------------------------  --------------  --------------   --------
-----------
<S>                                <C>            <C>              <C>
REVOLVING/CURRENT
Warehouse line of credit           $ 18,529,300   LIBOR + 2.00;    December
31, 1998
  ($10 million committed, $25                     LIBOR + 2.25
  million uncommitted gestation)                  for sub-prime
Revolving line of credit                845,000   Prime plus       December
31, 1998
  ($1 million committed)                          0.625%
                                   ------------
Total revolving/current debt         19,374,300
                                   ------------

<PAGE> 11

LONG TERM
Note  payable                            541,600   Prime  plus        April
30, 2000
($1 million original note)                        0.625%
Capitalized leases                      267,800                    1999  to
2000
                                   ------------
Total long term debt                    809,400
                                   ------------
Total debt                         $ 20,183,700
                                   ============

<CAPTION>
                                    Apr 30, 1997    Interest
Facility                                      Balance                  Rate
Expires or Due
--------------------------------  --------------  --------------   --------
-----------
<S>                                <C>            <C>              <C>
REVOLVING/CURRENT
Warehouse  line of credit           $ 10,209,200   LIBOR + 2.00;     August
31, 1997
  ($10 million committed, $25                     LIBOR + 2.25
  million uncommitted gestation)                  for sub-prime
Revolving  line of credit                100,000   Prime plus        August
31, 1997
  ($1 million committed)                          0.625%
                                   ------------
Total revolving/current debt         10,309,200
                                   ------------

LONG TERM
Note  payable                            729,200   Prime  plus        April
30, 2000
($1 million original note)                        0.625%
Capitalized leases                      288,700                    1999  to
2000
                                   ------------
Total long term debt                  1,017,900
                                   ------------
Total debt                         $ 11,327,100
                                   ============
</TABLE>

COLLATERAL

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

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

DEBT COVENANTS

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

9. COMMITMENTS AND CONTINGENCIES

LOAN SALE COMMITMENTS

The Company has entered into optional and mandatory forward commitments  to
deliver mortgage loans of $50 million as of January 31, 1998.
<PAGE> 12

MORTGAGE LOAN APPLICATIONS IN PROCESS

The   Company  has  open  short-term  commitments  to  fund  mortgage  loan
applications  in  process  subject to credit approval.   Such  commitments,
which  had  interest rates that were committed to the borrower,  amount  to
$77.2  million  as  of January 31, 1998.  Commitments  to  fund  loans  are
agreements  to lend to a customer as long as there is no violation  of  any
condition established in the contract.  Interest rate risk is mitigated  by
the use of forward contracts to sell loans to investors.

GUARANTEES

Subsequent  to fiscal year end April 30, 1997, Finet issued to  Residential
Funding Corporation ("RFC") on behalf of its wholly owned subsidiary,  MMI,
a  corporate guarantee of all MMI's borrowing agreements with RFC (See Note
8).

Under  the  terms  of an agreement with NDS, the Company has  a  contingent
obligation  to  adjust  the share consideration of that  agreement  if  the
market  price of the Company's common shares is not at or above  $4.00  per
share  on the earlier of the Company's registration of NDS' shares or  June
3, 1998 (See Note 7).

10. ISSUANCE OF COMMON STOCK

In October, 1997, a total of 1,300,000 shares of the Company's common stock
were  subscribed  in  a  private placement under  Regulation  D  for  total
proceeds  of  $3,900,000, of which $1.4 million was  received  and  466,667
common shares and warrants to purchase 466,667 common shares at an exercise
price  of  $5.00  per  share and expiring in 2002  were  issued.  Of  these
proceeds,  $1,175,000 are designated and used for investment  purposes.  As
agreed, the Company received the final subscription proceeds in the  amount
of  $2,500,000  on December 29, 1997 and issued 833,333 common  shares  and
warrants to purchase 833,333 common shares under the same terms.

Additionally, during the nine months ended January 31, 1998 a total of
228,917 shares and warrants expiring in 2002 to purchase 2,237,494 common
shares at exercise prices of $1.50 to $4.00 per share were issued to
fulfill the terms of various agreements. A further  9,100 common shares
were issued to 133 employees and consultants as a year-end bonus in amounts
of 25, 50 or 100 shares, depending on their length of service with the
Company. At January 31, 1998 a total of 30,511,709 common shares,
10,438,197 warrants and 748,249 options were outstanding.

11.  SUPPLEMENTAL CASH FLOW INFORMATION

The   following   table  presents  supplemental  investing  and   financing
activities for the nine month periods ended January 31, 1998 and 1997:

<TABLE>
<CAPTION>
                                                       1998          1997
                                                   -----------   ----------
-
<S>                                                <C>            <C>
Cash paid during the period for:
   Interest on line of credit and other borrowings  $1,063,900     $
965,500
   Income taxes                                           -              -

  Common stock issued for:
    Expenses                                           157,600           -
    Settlement of liabilities subject to compromise     22,300           -
    Settlement of accrued liabilities                  149,700           -
    Purchase of intangible assets                    1,308,000           -

Distributions to prior shareholders:
     Distributions    declared   to   prior    shareholders               -
740,700
      Distributions    paid    to    shareholders                         -
(1,040,000)
                                                    -----------    --------
---
Change       in       distributions      payable      to       shareholders
(299,300)

Assets    and    lease    obligations    capitalized                      -
165,200
Common    stock    issued   for   creditor    settlements                 -
115,000
Common   stock   issued   for   interest   and   lender   fees            -
259,600
Common    stock   issued   in   exchange   for   debt                     -
1,170,000

Assets acquired in acquistions:
          Cash                                                            -
50,200
      Furniture,    fixtures    and    equipment                          -
246,300
        Other      assets                                                 -
279,700
     Accounts   payable   and   other   accrued   expenses                -
(1,609,400)
          Debt                                                            -
(1,389,200)
      Liabilities    subject    to    compromise                          -
(968,700)
        Accumulated      deficit                                          -
3,391,200
</TABLE>

12.  SUBSEQUENT EVENTS

NEW STOCK OPTION PLANS

On February 18, 1997, the Company's Board of Directors unanimously resolved
to  replace  the  Company's 1989 Stock Option  Plan  with  a  new  10  year
qualified  incentive  stock option plan, to form a  separate  non-qualified
stock  option for non-employee directors, and to form a stock  bonus  plan.
The number of shares reserved for these three plans were 2,000,000, 500,000
and  875,000,  respectively. Currently granted and unexercised  options  to
acquire 748,249 shares under the 1989 plan are unaffected by the new  plan.
The plans will be submitted to shareholders for approval.

PURCHASE OF MORTGAGE SERVICING RIGHTS

During  February  1998, the Company entered an agreement  to  purchase  the
rights  to service approximately 1,000 Freddie Mac and Fannie Mae  mortgage
loans  with a total principal balance of approximately of $100 million  for
approximately $1.14 million. The transaction closed on February 28, 1998.
<PAGE> 14

PENDING ACQUISITION

On March 4, 1998 Finet entered into a letter of intent with MICAL Mortgage,
Inc.  ("MICAL"),  a  California  corporation,  for  the  purpose  of  Finet
acquiring all of the issued and outstanding stock of MICAL. MICAL is a full
service mortgage banker operating in 18 states and specializing in FHA  and
VA loans. MICAL currently originates approximately $70 million in loans per
month,  of which approximately 65% are higher margin FHA and VA loans.  The
parties have agreed to complete a formal closing of the transaction  before
March 31, 1998.

<PAGE> 15

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

FORWARD-LOOKING STATEMENTS

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

                           RESULTS OF OPERATIONS

REPORTING ENTITY

The  acquisition of Monument Mortgage, Inc. (MMI) by Finet on December  31,
1997  was  accounted for as a reverse acquisition whereby MMI is considered
the  acquiring corporation for accounting and financial statement reporting
purposes  and MMI's historical financial statements are deemed  to  be  the
historical  financial statements of the reporting entity. The  consolidated
financial  statements at January 31, 1998 include the financial  statements
of  Finet's  wholly  owned  subsidiaries  MMI,  PreferenceAmerica  Mortgage
Network  (PAMN)  and Property Transaction Network (PTN).  The  Company  has
established   the   following  Internet  websites:   www.finetholdings.com,
www.monument.com, www.pamn.com, www.theptn.com, and www.iqualify.com. Finet
also  owns  several inactive corporate entities. All material  intercompany
transactions  and  amounts  have  been  eliminated  in  consolidation.  All
references  herein  to a year (e.g. 1998) refer to the  fiscal  year  ended
April 30 of that year.

BUSINESS

Finet  is  engaged  in electronic commerce in the residential  real  estate
industry  and  is  organized around two electronic  commerce  (EC)  groups:
Technology Systems and Services (TS&S) and Homeowner Services (HS).

HS  operates  in  the EC business commerce sector providing  wholesale  and
retail real estate financing and transaction related services. The start up
phase  TS&S group, formed in 1997, operates in the EC sector that  provides
software and services that link businesses and customers over the Internet.

With the exception of occasional bulk purchase or sale of servicing rights,
the  Company's  TS&S and HS revenues are derived from activities  that  are
fully  or  materially  conducted electronically, and  thus  are  considered
electronic commerce revenues.

TS&S   currently  offers  two  unique,  first-to-market  Internet  software
systems: iQualify for consumers and Agent Connector for realtors who become
members  of  Finet's  Property Transaction Network  (PTN).  Each  of  these
products were nominated for several awards for technological innovation and
consumer  empowerment,  including iQualify and  Fannie  Mae  being  jointly
nominated for the prestigious Computerworld Smithsonian Award.

With  Finet's  iQualify.com Website, consumers can submit a  mortgage  loan
application to Fannie Mae's automated underwriting system over the Internet
and receive a decision in minutes. With the decision comes instructions for
closing  and  the  ability  to  connect to  the  Finet  service  center  or
participating lenders to close the loan.

Agent  Connector software, including its realtor customized contact manager
features, is provided free to PTN Realtor members, who pay membership  fees
of  $9.95  per  month to enable all its Internet features.  These  features
enable  Realtors  to maintain a virtual electronic office,  post  and  edit
personal  websites  and  home  listings to the Internet,  exchange  e-mail,
conduct video home tours, and electronically connect directly to Finet loan
counselors, all from a laptop computer.
<PAGE> 16

COMPARISON OF QUARTERS ENDED JANUARY 31, 1998 AND 1997

The  Company's primary source of revenues were from activities  related  to
providing  homeowner financing solutions, either through Monument Mortgage,
the  Company's  highly  automated mortgage banking unit,  through  Monument
Acceptance  Corporation,  the  Company's sub  prime  lending  unit,  or  by
brokering loans to other lenders who provide a competitive product for  the
particular type of loan required.

Currently,  more  than  60% of the Company's loans  are  completed  through
electronic means, compared to less than 10% a year ago. The efficiencies of
conducting  the  majority of its loan origination activities electronically
has  enabled the Company to significantly increase its monthly loan  volume
without a corresponding increase in loan operations personnel. Loan  volume
of $102.7 million for the quarter was up 21% from $85.9 million in the same
quarter of 1997.

The  Company has continued to invest in personnel and technology to develop
TS&S  into a capable computer and Internet systems development and delivery
unit.  The  TS&S  group was in the start-up phase during  the  quarter.  It
introduced  the Agent Connector and iQualify software systems and  recorded
its first revenues in third quarter 1998.

The  table  below  summarizes  the  relative  contributions  of  these  two
operating groups during the quarter:

<TABLE>
<CAPTION>
                                    Corporate       Gain on
         HS Group     TS&S Group Support Services  Bulk Sales  Finet Totals
         -----------  ---------- ----------------  ----------  ------------
<S>      <C>          <C>        <C>               <C>         <C>
Revenue  $ 1,444,100  $  39,000  $  (9,400)        $        0  $ 1,473,700
Expense    1,491,500    377,200    834,200                  0    2,702,900
         -----------  ---------  ----------        ----------  -----------
Net loss $    47,400  $ 338,200  $ 843,600         $        0    1,229,200
</TABLE>

Net  loss  from  the  Company's electronic commerce  activities  for  third
quarter  1998 was $1.2 million compared to $1.8 million in the  immediately
prior quarter and $1.1 million in the same quarter of 1997.

There were no bulk sales of servicing rights in the 1998 quarter and a gain
from the bulk sale of servicing rights of $581,800 in the 1997 quarter. The
Company  has  implemented  a Purchased Mortgage Servicing  Rights  ("PMSR")
acquisition strategy, and rights to service four loan portfolios  totalling
$486.5 million were purchased on December 31, 1997.

Consolidated  net loss for the 1998 quarter was $1.2 million,  compared  to
$0.5  million reported for the same quarter of 1997. Both before and  after
extraordinary gains, loss per share was $.04 for the 1998 quarter and  $.04
for  the same quarter of 1997, based on shares used to compute earnings per
share of 30,074,897 and 13,605,912 in 1998 and 1997, respectively.

A  special  projects division was established during the quarter.  It  will
focus  on providing customized homebuyer financing solutions to major  home
builder organizations and relocation companies.

On  January  10, 1998, Finet entered into a letter of intent  with  Coastal
Federal  Mortgage  Company ("Coastal"), a New Jersey corporation,  for  the
purpose  of   the  Registrant acquiring 100% of the issued and  outstanding
stock  of  Coastal.  Coastal is a mortgage banking  firm  operating  in  16
eastern states and specializing in sub prime lending.

As  the  Company's  operations are expanding  and  its  various  electronic
commerce  revenue  sources and volumes are increasing, management  believes
the  results of operations for the quarter ended January 31, 1998  are  not
indicative of results that can be expected in future periods.
<PAGE> 17

REVENUES

Revenues from electronic commerce activities for the quarter ended  January
31,  1998  increased 50% to $1.5 million from the $1.0 million reported  on
the  same  basis for the same period last year and increased 25% from  $1.2
million  in  the immediately prior quarter. This increase in  revenues  was
attributable to a 55% increase in the net gain on the ongoing (or "flow" as
opposed to "bulk") sale of mortgage loans and servicing rights, offset by a
decrease  in  net  servicing revenue from a smaller portfolio  of  serviced
loans. No bulk sales of mortgage servicing rights occurred during the  1998
quarter,  but 1997 quarterly revenues included a gain of $0.6 million  from
the bulk sale of loan servicing rights.

Loan revenues are comprised of loans originated by MMI's wholesale network,
whose    mortgage   brokers   increasing   use   Fannie    Mae's    Desktop
Originator/Desktop Underwriter automated loan approval  system,  and  loans
originated through Finet's retail service center. Additionally, the service
center  earns fees from brokering loans to other lenders. Such fees,  which
are  included  in the revenue totals above, increased to $89,600  in  third
quarter 1998 as a result of increased service center activity.

In  fiscal  1998, the Company started offering mortgage loans to  borrowers
with credit ratings below the "A" level ("sub prime borrowing"). While  the
volume  of  these  loans is lower ($1.0 million of  sub  prime  loans  were
originated in January 1998, compared to $36 million of A level loans),  the
margin is significantly higher than the margin on "A" quality loans.  These
higher  margins, plus improved pricing strategies, resulted in the  overall
margin  earned on sales of mortgage loans/servicing rights increasing  from
53 basis points in 1997 to 94 basis points in 1998.

Loan  servicing fee net revenues decreased to $13,700 in the quarter  ended
January  31,  1998  from $167,500 in the prior year's  third  quarter.  The
portfolio balance declined from the prior year's quarter due to the routine
payoff  of  serviced  loans  and the bulk sales of  servicing  assets.  The
servicing  portfolio was not materially replenished with  newly  originated
loans  during this period as most originated loans were sold with servicing
rights  attached.  Amortization of PMSR purchased  in  December  1997  also
reduced  net servicing revenue. Servicing cash flow is expected to increase
by  approximately $1.1 million annually from the Company's recent  purchase
of  servicing  rights  described  herein, however  after  amortization  and
financing expense the increase in net income will not be significant.

The  Company's  telemarketing unit, Mortgage Marketing Concepts,  generates
mortgage  leads from a variety of sources and in various states,  sometimes
including  states  in  which the Company is not currently  licensed.  These
leads  may  be used by the Finet service center and/or sold to  other  non-
affiliated  mortgage  brokers. Revenue from  the  sale  of  mortgage  leads
decreased from $40,600 in 1997 to $(9,400) in 1998 as a result of diverting
the  flow of leads to the Finet service center to increase its loan  volume
in 1998.

During the quarter, the startup phase TS&S group, which was formed in  mid-
1997  and  introduced the Agent Connector and iQualify systems in  November
1997, earned its first revenues of $39,000 from PTN realtor membership fees
and  iQualify  usage fees. The Company expects TS&S to  become  a  material
contributor to revenues as its products and services gain wider  acceptance
and  use.  The Company is in discussions with several national real  estate
firms interested in participating in the distribution of these products.

EXPENSES

Compensation  and employee benefits expenses increased 56% to $1.2  million
for  the quarter ended January 31, 1998 from $767,700 for the quarter ended
January  31,  1997.  The increase is due primarily to increasing  the  TS&S
staff and additional management and administrative personnel as the Company
implemented  its  growth plan.  Prior year expenses are primarily  for  MMI
only.

General  &  administrative expense increased 64% from $271,800 to  $458,100
primarily  as a result of leasing and insuring office facilities in  Nevada
that  house the PTN and the Company's telemarketing unit, and the  purchase
of directors and officers liability coverage.

<PAGE> 18

Professional fees increased 130% from $142,500 in 1997 to $328,300 in 1998.
The  increase  is attributable primarily to the Company's acquisitions  and
expansion  and related consulting services for developing new  technologies
as  part  of  the Company's business development activities and  consulting
services provided by a former MMI owner.

Other  expenses declined 75% from $330,300 in 1997 to $81,200 in 1998.  The
decrease is due primarily to nonrecurring expenses incurred by MMI  in  the
1997 quarter prior to its acquisition by Finet.

COMPARISON OF YEAR TO DATE PERIODS ENDED JANUARY 31, 1998 AND 1997

The  Company is currently implementing a comprehensive business development
plan  to expand the scope of its services.  The 1998 periods include  costs
related to this plan. The Company's strategic focus has been to develop and
grow  additional revenue sources as rapidly as possible and secondarily  to
gradually decrease monthly operating losses to zero in 1998.

Accordingly,  monthly loan volume gradually increased  over  calendar  1997
from  $20  million in January 1997 and began to accelerate more rapidly  in
December  1997,  reaching  $36  million in January  1998,  $71  million  in
February  and is currently tracking even higher for March. Finet's  service
center loan originations were $1.2 million in January 1998, $2.6 million in
February,  and  by  mid-March had reached $6.4  million  month-to-date.  As
expected,  third  quarter operating losses declined  32%  from  the  second
quarter as favorable interest rates and results from the Company's business
development activities and introduction of new products began to show their
effect, and are expected to decline further in the current quarter.

For  the  nine  month periods ended January 31, 1998 and  1997,  electronic
commerce  revenues  increased  41%  to  $3.8  million  from  $2.7  million,
respectively,  as  total loan volume increased to $285  million  from  $278
million  and the margin earned on sales of mortgage loans/servicing  rights
increased from 40 basis points to 71 basis points.

Finet's  net  loss from electronic commerce activities for the  first  nine
months  of  1998  was $4.3 million, compared to $2.5 million  reported  for
MMI's results in the corresponding period of 1997.

1998  and  1997  revenues  also included $0.2  million  and  $0.6  million,
respectively, from one-time bulk sales of loan servicing rights.  Including
these  gains, consolidated net loss for the first nine months of  1998  was
$4.1  million,  compared  to $1.9 million for the corresponding  period  of
1997. Rights to service four loan portfolios totalling $486.5 million  were
purchased  on December 31, 1997 and will increase net servicing revenue  in
fourth quarter 1998 as these loans are audited and delivered.

Loss  per share before and after extraordinary gains was $.14 for the first
nine  months  of  1998, versus $.19 for the same period of 1997,  based  on
shares  used to compute earnings per share of 29,200,211 and 10,135,304  in
the first nine months of 1998 and 1997, respectively.

The  most  significant expense category increases were in compensation  and
employee  benefits and general and administrative expenses  resulting  from
staff increases from acquisitions and implementing the business development
plan, with related increases in facilities and professional fees.

REVENUES

Revenues  from  electronic commerce activities for the  nine  months  ended
January 31, 1998 increased 41 percent to $3.8 million from the $2.7 million
reported  on the same basis for the same period last year. The increase  in
revenues  was  attributable to an increase in  the  net  gain  on  sale  of
mortgage  loans  and  service center loan brokerage fees  which  more  than
offset  a  decline in servicing fees from a smaller portfolio  of  serviced
loans.
<PAGE> 19

Loan  servicing fee revenues decreased 50% to $267,000 in the quarter ended
January  31,  1998  from $529,800 in the prior year's  third  quarter.  The
portfolio  balance  declined from the prior  year  due  to  the  payoff  of
serviced loans and the bulk
sales  of  servicing  assets. The servicing portfolio  was  not  materially
replenished  with  newly  originated  loans  during  this  period  as  most
originated loans were sold with servicing rights attached. Amortization  of
PMSR  purchased  in December 1997 also reduced net servicing  revenue.  The
servicing rights purchased during the quarter will, in succeeding  periods,
add approximately $1.1 million to annual cash flow and a small increase  in
net servicing revenue after amortization and financing costs.

EXPENSES

Compensation  and employee benefits expenses increased 61% to $3.3  million
for  the nine months ended January 31, 1998 from $2.1 million for the  same
period  in the prior year. The increase is due primarily to increasing  the
TS&S  staff and modest increases in loan operations personnel, as  well  as
the  impact  of  consolidating  the operating  results  of  Finet  and  its
operating subsidiaries.  Prior year results are primarily for MMI only.

General   and  administrative  expense  increased  48%  from  $950,000   to
$1,406,800, as a result of the Company's expansion.

Professional fees increased 203% from $338,300 in the first nine months  of
fiscal  1997  to $1.0 million in the same period in 1998. The  increase  is
attributable  primarily to the Company's acquisitions and expansion.  Audit
and  accounting fees increased $167,600 due to the increase  in  complexity
arising from being a single private company during most of 1997 and being a
public  company  with  three subsidiaries in 1998.  The  remainder  of  the
increase  relates to consulting fees, primarily due to expenses related  to
developing  new technologies as part of the Company's business  development
activities and the consulting services of a former MMI owner.

Marketing  expense increased from $269,800 in fiscal 1997  to  $443,800  in
fiscal  1998,  an  increase of 64%. The increase was due to  the  Company's
expenditures for marketing its technology services, particularly the  Agent
Connector software.

Loss  on disposition of assets increased to $39,300 from $0 in 1998 as  the
result of the disposition of obsolete equipment.

           CAPITAL EXPENDITURES, LIQUIDITY AND CAPITAL RESOURCES

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

CASH FLOWS

The  Company experienced an increase in cash of $1.6 million in  the  first
nine months of 1998, compared to a decrease in cash of $456 thousand in the
same period of the prior year.

Cash Flow From Operations

With  TS&S  in  the startup phase, the Company's cash flows  are  primarily
reflect  the volume of mortgage loans originated and sold by HS during  the
period.  Loan originations increased from $279 million to $285  million  in
the  first nine months of 1998 and the amount of loans and servicing rights
in inventory increased by $3.4 million. These increases were financed by an
$8.3 million increase in warehouse borrowings.

The  funding  and  inventory  increases  and  the  Company's  $4.1  million
operating loss used $13.5 million in cash from operations. Use of cash  was
offset  primarily by an increase in accounts payable, accrued expenses  and
other  liabilities of $3.3 million. Of these increases, payables  increased
$2.7  million  as  a  result  of  the purchase  of  four  servicing  rights
portfolios on December 31, 1997.
<PAGE> 20

Cash Used for Investing Activities

The Company began to implement its business growth strategy in fiscal 1998.
Mortgage servicing rights were purchased ($3.5 million), intangible  assets
were  purchased  from NDS ($202,000 in cash and $808,000  in  common  stock
issued)  and  from REOS ($641,000 in cash, of which $104,000 was  disbursed
after  January  1998,  and $500,000 in common stock to  be  issued).  Thus,
investing  activities overall used $4,451,700 in cash in 1998  compared  to
using $331,300 in 1997.

Cash Provided by Financing Activities

The  Company  experienced  a $15.4 million increase  in  cash  provided  by
financing activities in 1998, compared to cash used by financing activities
of  $8.3 million in 1997.  Due to the increase in loan funding volumes  and
loans  in  inventory in  1998 as compared to the same period in  the  prior
year,  warehouse line of credit borrowings increased $8.3 million in  1998,
compared  to a decrease of $9.0 million in 1997.  The Company also received
$6.6  million  in cash proceeds in 1998 from stock issued during  the  nine
months  ended January 31, 1998, compared to $2.8 million received in  1997.
Management intends to use these funds primarily for investments,  including
acquisitions of servicing rights and the development and marketing of  TS&S
products and services.

LIQUIDITY AND CAPITAL RESOURCES

The  Company  has  maintained  a $35 million warehouse  borrowing  facility
capable of supporting a monthly loan funding volume of $80 million  or  so,
given  current  loan  sales  and  settlement  turnaround  times.  With  the
introduction  of  Agent  Connector and iQualify and increased  staffing  of
Finet's  service center, loan volumes increased to $36 million  in  January
and  $71 million in February and are expected to increase further in March.
Accordingly, the Company has obtained a temporary increase of its  facility
to  $85  million  while  its  request for a higher  permanent  increase  is
reviewed. The pending acquisitions of Coastal and MICAL, each of whom  have
similar mortgage warehouse borrowing facilities, will need to be integrated
as well upon completion. The Company's current lender, RFC, recommends that
the  additional warehouse lending facility the Company requires be obtained
through a syndicate of lenders led by RFC.

Funded loans are immediately sold to investors in the secondary market with
the  proceeds used to reduce warehouse balances. The Company also maintains
a $1 million working capital line of credit at competitive borrowing rates.

The  Company  mitigates its mortgage banking risks through  several  common
industry  practices.  The  first  is to  purchase  and  originate  mortgage
servicing  rights. When loan originations decline as interest  rates  rise,
servicing rights increase in value and can provide a predictable source  of
earnings  and/or  cash  flow. The second is to offset unfavorable  interest
rate  movements when funding loans by hedging the interest rate locks.  The
Company has been informed by Tuttle & Co., its hedging advisor that,  using
Finet's proprietary hedging software, in calendar 1997 it achieved the best
hedging performance of any Tuttle & Co. client.

The  Company's business development activities are focused on  diversifying
and  increasing the revenues of both TS&S and HS. The Company is  currently
expending  cash resources to support TS&S business development  activities.
For  example,  although  Agent  Connector version  1.0  was  introduced  in
November 1997, a combination of user feedback regarding this unique product
and  continued  rapid  advances in technology have resulted  in  continuous
innovation, with version 4.3 just released. The Company expects in calendar
1998  that  all business units will generate revenues sufficient  to  cover
their  respective operating expenses. Management believes it has sufficient
cash and short term financing alternatives to finance operations until they
reach positive cash flow.



<PAGE> 21

CAPITAL EXPENDITURES

The  Company  completed its purchase of certain assets and  liabilities  of
Real  Estate Office Software, Inc. for a total purchase price of $1,140,800
in  the form of $640,800 in cash and $500,000 in common stock to be issued.
The  Company  purchased $1,010,000 in intangible assets from  NDS  Software
(NDS) for $202,000 in cash and $808,000 in common stock issued.  The assets
consisted  of software, contract programming services, mortgage  leads  and
marketing access to certain NDS customers.

In  third  quarter  1997,  the  Company implemented  a  Purchased  Mortgage
Servicing Rights ("PMSR") acquisition strategy. To date, rights to  service
$486.5  million  in loans have been purchased. On February  28,  1998,  the
Company  entered  into an agreement to acquire PMSR for an additional  $100
million  of  loans  for  $1.1  million. These net  PMSR  additions  to  the
Company's servicing portfolio are expected to increase its net monthly cash
flow, commencing in fourth quarter 1998.

As  resources  permit, the Company plans to retain a higher  percentage  of
Originated  Mortgage Servicing Rights ("OMSR") than in 1997 and to  acquire
additional  PMSRs in 1998 to increase its servicing portfolio  to  over  $1
billion  before  April  30, 1999. The PMSR's may be  acquired  directly  or
through  an open market auction process. Prices vary for servicing  rights,
however  this  plan  represents  a total investment  of  approximately  $10
million, some of which the Company plans to finance on a secured basis. The
Company  has begun discussions to arrange the financing required for  these
planned  investments.   The Company's ability to  acquire  this  additional
servicing  is  dependent  on the servicing available  on  the  market,  the
Company's  success in pricing and bidding, and the ability to  arrange  the
credit  facilities to do so.  Accordingly, the remaining potential  capital
expenditures are not assured.

<PAGE> 22
                        PART II - OTHER INFORMATION

Item 1.  LEGAL PROCEEDINGS

During  the reporting period, the Company was not involved in any  material
legal  proceedings. The Company was involved in routine litigation that  is
incidental to its business.

Item 2. CHANGES IN SECURITIES

During the quarter ended January 31, 1998, a total of 842,433 shares of the
Company's common stock and 833,333 warrants to purchase shares were issued,
as follows:

     An individual agreed to purchase 1,000,000 common shares and warrants
     to purchase 1,000,000 common shares at an exercise price of $5.00 per
     share which expire in 2002 for $3,000,000 under Regulation D. Of these
     shares, 166,667 were purchased for $500,000 and 166,667 warrants were
     issued during the prior quarter. The remainder of the purchase was
     completed on December 29, 1997.
     
     9,100 common shares were issued to 133 employees and consultants as a
     holiday bonus in amounts of 25, 50 or 100 shares, depending on their
     length of service with the Company.

Pursuant to the acquisition of certain assets and liabilities of REOS, the
Company is obligated to, but has not yet issued
200,000 shares of its common stock. (See Note 4)

In May, 1997 the Company applied to have its Common Stock listed on the
Nasdaq SmallCap Market. In November, 1997 its application was approved.
Accordingly, on November 11, 1997 trading of shares of its Common Stock
under the symbol FNHC commenced on the Nasdaq SmallCap Market.

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

<TABLE>
<CAPTION>
                         QUARTER      QUARTER     QUARTER     MONTHLY
PERIOD:                  HIGH/ASK     LOW/BID    CLOSE/AVG    AVG VOL
----------------------   ---------   --------    ---------   ---------
<S>                      <C>           <C>       <C>         <C>
First Quarter            $ 6.375     $ 2.188     $ 2.875       454,900
Second Quarter             8.000       2.875       7.250     1,105,900
Third Quarter              7.375       3.563       4.000     1,495,100
Fourth Quarter (thru 3/10) 4.125       3.625        N/A
</TABLE>

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

Not applicable

Item 5.  OTHER INFORMATION

Not applicable
<PAGE> 23

Item 6.  EXHIBITS AND REPORTS ON FORM 8-K

EXHIBITS

     EX-27          Financial Data Schedule

REPORTS ON FORM 8-K

On  January  6, 1998 the Company filed a report on Form 8-K  under  item  5
announcing  that  effective December 31, 1997, the Company  completed  four
separate  purchases of residential mortgage loan servicing rights totalling
3,460  loans  with a current loan balance outstanding of $427 million.  The
servicing rights were acquired by Monument Mortgage, Inc., Finet's mortgage
banking  subsidiary. These acquisitions are part of a previously  announced
plan  to more fully employ Monument's servicing capacity by increasing  its
total  loan servicing portfolio in excess of $1 billion during  1998.   The
acquired  loans  were  all  Fannie Mae or Freddie Mac  approved  conforming
loans.

On  January 15, 1998 the Company filed a report on Form 8-K under  items  2
and  7  announcing  its signing of a letter of intent  to  acquire  Coastal
Federal  Mortgage  Company.  No financial statements  or  information  were
included in the report.

On March 4, 1998 the Company filed a report on Form 8-K under items 2 and 7
announcing  its  signing of a letter of intent to acquire  MICAL  Mortgage,
Inc. No financial statements or information were included in the report.


                                 SIGNATURE

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



                                        FINET HOLDINGS CORPORATION



Date: March 17, 1998                    /s/    L. Daniel Rawitch
                                        L. Daniel Rawitch
                                          (CEO   and   Principal  Executive
Officer)



Date March 17, 1998                     /s/    George P. Winkel
                                        George P. Winkel
                                          (CFO   and   Principal  Financial
Officer)
</TEXT?