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                    SECURITIES AND EXCHANGE COMMISSION
                           WASHINGTON, DC 20549
                                     
                             ----------------
                                     
                                 FORM 10-Q
                                     
           [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                  OF THE SECURITIES EXCHANGE ACT OF 1934
                                     
               For the quarterly period ended March 31, 1996
                                     
                                    OR
                                     
           [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
                  OF THE SECURITIES EXCHANGE ACT OF 1934
                                     
                         ------------------------
                                     
                      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)
                                     
                     235 MONTGOMERY STREET, SUITE 750
                          SAN FRANCISCO, CA 94104
                  (Address of principal executive office)
                                     
                                94-3115180
                   (IRS Employer Identification Number)
                                     
                              (415) 658-4150
           (Registrant's telephone number, including area code)
                                     
                                     
 (Former name, former address and former fiscal year, if changed since last
                                  report)
                                     
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 17,161,902 shares of common stock, par value $.01, as  of  March
31, 1996.
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<PAGE> 2
                           FINANCIAL STATEMENTS
<TABLE>
                FINET HOLDINGS CORPORATION AND SUBSIDIARIES
                   CONDENSED CONSOLIDATED BALANCE SHEETS
<CAPTION>
                                                   March 31,   December 31,
                                                     1996         1995
                                                 (UNAUDITED)
                                                 ------------  ------------
<S>                                              <C>           <C>
                                  ASSETS
Current assets:
  Cash and cash equivalents....................  $    14,200   $      -
  Accounts receivable..........................       41,200        89,100
  Prepaid expenses and deposits................      104,600        33,700
  Notes receivable.............................       72,000        72,000
  Other receivables............................       69,000
                                                 ------------  ------------
    Total current assets.......................      301,000       194,800
Furniture, fixtures and equipment,
  net of accumulated depreciation
  of $447,900 and $445,400.....................       49,300        51,700
Intangible assets, net of accumulated
  amortization of $909,600 and $856,500........      142,300       195,400
                                                 ------------  ------------
    Total assets...............................  $   492,600   $   441,900
                                                 ============  ============
                                     
              LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
  Note payable.................................   $  150,000   $    25,000
  Accounts payable.............................      929,300       996,600
  Accrued liabilities..........................      195,300       175,200
  Convertible debenture........................      800,000       800,000
  Liabilities of discontinued operations.......        2,500         2,500
                                                 ------------  ------------
    Total current liabilities..................    2,077,100     1,999,300
                                                 ------------  ------------
    Total liabilities..........................    2,077,100     1,999,300
                                                 ------------  ------------

Stockholders' equity (deficit):
  Common stock, par value $.01 issued
    17,161,902 shares in 1996 and 12,930,479
    shares in 1995.............................      171,600       129,300
  Additional paid-in capital...................   19,839,600    19,759,600
  Accumulated deficit..........................  (21,595,700)  (21,446,300)
                                                 ------------  ------------
    Total stockholders' equity (deficit).......   (1,584,500)   (1,557,400)
                                                 ------------  ------------
    Totals.....................................  $   492,600   $   441,900
                                                 ============  ============
</TABLE>
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<TABLE>
                FINET HOLDINGS CORPORATION AND SUBSIDIARIES
              CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
<CAPTION>
                                                     THREE MONTHS ENDED
                                                         March 31,
                                                        (UNAUDITED)
                                                 --------------------------
                                                      1996         1995
                                                  ------------  -----------
<S>                                               <C>           <C>

Revenues........................................  $    30,900   $  267,900

Operating expenses:
  Compensation and benefits.....................       93,500      561,000
  Occupancy and equipment.......................        5,200       73,800
  Communications................................       21,000       51,600
  Loan related fees and costs...................        4,200       25,000
  Amortization & depreciation...................       55,600      139,800
  General & administrative......................       18,900      276,500
                                                  ------------  -----------
                    Total operating expense           198,400    1,127,700
                                                  ------------  -----------
(Loss) from operations..........................     (167,500)    (859,800)
                                                  ------------  -----------
Interest........................................       21,900        4,100
                                                  ------------  -----------
(Loss) from continuing operations...............     (189,400)    (863,900)
                                                  ------------  -----------
Other income/(expense)..........................       40,000     (190,500)
                                                  ------------  -----------

Net income/(loss)...............................  $  (149,400) $(1,054,400)
                                                  ============  ===========
Net income/(loss) per share.....................        $(.01)       $(.14)
                                                  ============  ===========
</TABLE>
<PAGE> 4

<TABLE>
                FINET HOLDINGS CORPORATION AND SUBSIDIARIES
         CONDENSED CONSOLIDATED STATEMENTS OF ACCUMULATED DEFICIT
<CAPTION>
                                               THREE MONTHS ENDED
                                                 March 31, 1996
                                                   (UNAUDITED)
                                               ------------------
<S>                                              <C>
Accumulated deficit at beginning of period......  $(21,446,300)
Net loss........................................      (149,400)
                                                  -------------
Accumulated deficit at end of period............  $(21,595,700)
                                                  =============
</TABLE>
                                     
<TABLE>
              CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
<CAPTION>
                                                     THREE MONTHS ENDED
                                                         March 31,
                                                        (UNAUDITED)
                                                 --------------------------
                                                      1996         1995
                                                  ------------  -----------
<S>                                               <C>           <C>
Cash flows from operating activities:
  Net (loss)....................................  $  (149,400)  $ (875,300)
  Adjustments to reconcile loss to
    cash used in operating activities...........       13,600      116,300
                                                  ------------  -----------
  Net cash used by operating activities.........     (135,800)    (759,000)
                                                  ------------  -----------

Cash flows from financing activities:
  Proceeds of bridge loans......................      150,000         -
  Proceeds from sale of common stock............         -          75,000
  Proceeds from sale of convertible debenture...         -         800,000
                                                  ------------  -----------
  Net cash provided by financing activities.....      150,000      875,000
                                                  ------------  -----------

Cash flows from investing activities:
  Organization expense..........................         -            -
  Acquisition of equipment......................         -         (19,700)
                                                  ------------  -----------
  Net cash used by investing activities.........         -         (19,700)
                                                  ------------  -----------

Increase/(decrease)in cash and equivalents......       14,200       96,300
                                                  ============  ===========
</TABLE>
<PAGE> 5

                        FINET HOLDINGS CORPORATION
           NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1. Due to the Company's inability to complete an audit of its
operations for the fiscal year ended December 31, 1995 until December,
1996, it was unable to file its Form 10-K Annual Report for that period and
the subsequent Form 10-Q Quarterly Reports until the actual signature dates
thereon. During the first quarter of 1996, the Company was in a period of
near operational dormancy while executing a voluntary recapitalization
plan. To the best of the Company's ability, the narrative information in
this report has been prepared and expressed as it would have been if
prepared and submitted on time.

NOTE 2. The financial information included herein as of March 31, 1996 and
for the three months ended March 31, 1996 is unaudited and, in the opinion
of the Company, reflects all adjustments necessary for a fair presentation
of the financial position as of those dates and the results of operations
for that period.  The information in the Condensed Consolidated Balance
Sheet as of December 31, 1995 was derived from the Company's Form 10-K
Annual Report for 1995.

NOTE 3. The accompanying condensed consolidated financial statements have
been prepared on the basis that the Company will complete its
reorganization plan successfully and continue as a going concern, which
contemplates the realization of assets and the satisfaction of liabilities
in the normal course of business. As shown in the accompanying condensed
consolidated financial statements, the Company has incurred losses and
negative cash flow from continuing operations, as of March 31, 1996. Such
conditions raise substantial doubt about the Company's ability to continue
as a going concern. The condensed consolidated financial statements do not
include any adjustments that might result from the outcome of this
uncertainty.

NOTE 4. Net loss per share is calculated by dividing net loss by the
weighted average number of common shares outstanding during the period.
The weighted average number of shares was 15,704,054 shares (three months)
in 1996 and 6,256,245 shares (three months) in 1995. Common stock
equivalents are not included because their effect would have been non-
dilutive in all periods.
<PAGE> 6

                  MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                            FINANCIAL CONDITION
                         AND RESULTS OF OPERATIONS
                                     
                      LIQUIDITY AND CAPITAL RESOURCES

The  Company  is  in  a weak financial position with little  liquidity.  In
December, 1995 the Company reported at its annual shareholder meeting  that
although  considerable progress had been achieved in 1995 in  reducing  the
Company's  losses  from  operating  activities,  the  Company's  continuing
losses,   lack  of  working  capital,  and  additional  pending   financial
obligations required additional capital if operations were to be continued.
The  shareholders  and  the  Board of Directors  authorized  management  to
develop  a  voluntary recapitalization plan (the "Plan"),  which  was  then
created  and  recommended by the Company and approved  by  shareholders  on
January 30, 1996.

The  Plan  calls  for  negotiated settlements with unsecured  creditors,  a
private  placement to raise $2 million additional equity capital,  material
concessions  from the Company's majority shareholder and secured  creditor,
licensing of Finet Corporation's mortgage operations to an affiliate office
and a revised growth strategy and business plan.  The Company has begun  to
implement  the  Plan, which also calls for the Company to be  sustained  by
bridge loans until completion of an equity offering.

The  Company  has continued to incur losses and negative cash flow  through
March  31, 1995. In the event that the Company is unable to fully implement
the  Plan, the ability of the Company continue to operate appears doubtful.
Upon  successful  completion of the Plan, the Company will have  materially
reduced  its  liabilities and believes it will have liquidity  and  working
capital adequate to achieve its objectives.

                                 INFLATION

Inflation has not had any material impact on the Company's operations.


                           RESULTS OF OPERATIONS

Historically, all mortgage brokerage activities have been conducted by
Finet Corporation, a wholly owned subsidiary. As part of the Plan, these
activities, including all mortgage related revenues and expenses, were
temporarily licensed to the owner of a Finet affiliate office. As a result,
both Finet Corporation and the Company entered a period of near operational
dormancy. Personnel were minimized, compensation was materially reduced and
the Company's activities were focused almost exclusively on completing the
Plan.
<PAGE> 7

QUARTER ENDED MARCH 31, 1996 COMPARED TO QUARTER ENDED MARCH 31, 1995

The Company incurred a net loss in the first quarter of 1996 of $149,400.
$167,500 of the loss was from continuing operations as compared with
$863,900 for the first quarter of 1995. There is little basis for
comparison of these two periods. The Company's operations in the first
quarter of 1995 were comprised primarily of the mortgage brokerage
activities of the Finet Corporation branch offices, whereas during most of
the first quarter of 1996 all mortgage brokerage activity was licensed to
another entity.

ACCORDINGLY, IN MANAGEMENT'S OPINION, BECAUSE OF CHANGES IN THE COMPANY'S
STRUCTURE AND OPERATIONS, COMPARISON OF VARIOUS REVENUE AND OPERATING
EXPENSE CATEGORIES DURING PRIOR PERIODS AS DISCUSSED HEREIN IS IRRELEVANT
AND POTENTIALLY MISLEADING. READERS ARE THEREFORE CAUTIONED IN INTERPRETING
ANY PERIOD TO PERIOD COMPARISONS.

The primary operating expense is compensation and benefits, consisting in
1995 of: commissions to brokerage agents; payments to service providers;
and compensation of processing and management personnel and in 1996 of:
payments to service providers and compensation of management personnel.
Such expenses were $93,500 in the first quarter of 1996 and $561,000 in the
first quarter of 1995.

Occupancy and equipment expenses were $15,200 in the first quarter of 1996
and $73,800 in the first quarter of 1995. The reductions were due primarily
to significantly reduced corporate office rental expense, offset by
associated moving and storage expenses.

Communications expense was $21,000 in the first quarter of 1996 and $51,600
in the in the first quarter of 1995. The decrease was related primarily to
office consolidations and staff reductions.

Loan related fees and costs were $4,200 in the first quarter of 1996 and
$25,000 in the first quarter of 1995. The decrease was due primarily to the
change in operating structure and the licensing of mortgage activities to
an affiliate office.

Amortization and depreciation expenses were $55,600 in the first quarter of
1996 and $139,800 in the second quarter of 1995. The decrease was related
primarily to the 1995 write-off of intangible assets.

General and administrative expenses include office expenses, and other
miscellaneous expenses incurred in connection with the development and
management of the business, including travel, legal, entertainment and
corporate printing. Such expenses were $74,500 in the first quarter of 1996
and $416,300 in the first quarter of 1995. The decrease is primarily due to
cost control measures.

Interest expense increased from $4,100 in the first quarter of 1995 to
$21,900 in the first quarter of 1996, primarily due to interest on the
convertible debenture.

The effective overall tax rate remained at 0%.

As a result of the foregoing, net income was $(149,400), a decrease of 86%.
<PAGE> 8

                                  PART II
                                     
ITEM 1.     LEGAL PROCEEDINGS

As a result of the Company's financial position, the Company has
substantial past due accounts payable and is a defendant in several legal
actions brought by unsecured trade creditors for claims totaling
approximately $500,000. As part of its recapitalization plan, the Company
expects to reach settlements with these creditors for approximately 40% of
this amount with the consideration in the form of shares of the Company's
common stock valued at the private placement offering price per share.

The Company is a defendant in three legal actions brought by individuals
who were formerly employees or independent contractors of one of the
Company's subsidiaries. The total of these claims is not material and the
Company expects either to prevail or to settle these actions as part of its
recapitalization plan.

SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

As reported in the Company's Form 10-K Annual Report for the year ended
December 31, 1995, the Company's voluntary recapitalization plan was
approved by shareholders on January 30, 1996.
<PAGE> 9
                                     
                                 SIGNATURE

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

                                     FINET HOLDINGS CORPORATION

<TABLE>
<S>                            <C>
Date: December 27, 1996                 L. DANIEL RAWITCH
                               -------------------------------------
                                        L. DANIEL RAWITCH
                               (CEO AND PRINCIPAL EXECUTIVE OFFICER)

Date: December 27, 1996                   JAN C. HOEFFEL
                               -------------------------------------
                                          JAN C. HOEFFEL
                                          (PRESIDENT AND
                                   PRINCIPAL FINANCIAL OFFICER)
</TABLE>