<PAGE> 1
===========================================================================
                                   ====
                  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 October 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)
                                     
                         505 Sansome Street, #1420
                         SAN FRANCSICSO, CA 94111
                  (Address of principal executive office)
                                     
                                94-3115180
                   (IRS Employer Identification Number)
                                     
                              (415) 263-5400
           (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 36,405,386 shares of common stock, par value $.01, as of December
15, 1998.
===========================================================================
====
<PAGE> 2
                        FINET HOLDINGS CORPORATION
                                     
                                   INDEX


Item  Description
Page
----  -------------------------------------------------------------------
----
                      PART I - FINANCIAL INFORMATION

1.    Financial Statements

      Unaudited Balance Sheet
        October 31, 1998 ................................................
3

      Unaudited Statements of Operations
        Three Months Ended October 31, 1998 and 1997.....................
4
        Six Months Ended October 31, 1998 and 1997.......................
5

      Unaudited Statements of Cash Flow
        Six Months Ended October 31, 1998 and 1997.......................
6

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

2.    Management's Discussion and Analysis of Financial Condition
        and Results of Operations........................................
13


                        PART II - OTHER INFORMATION

1.    Legal Proceedings..................................................
18

2.    Changes in Securities..............................................
18

4.    Submission of Matters to a Vote of Security Holders................
19

5.    Other Information..................................................
19

6.    Exhibits and Reports on Form 8-K...................................
19

      Signatures.........................................................
20
<PAGE> 3
                       PART I. FINANCIAL INFORMATION

                       ITEM 1. FINANCIAL STATEMENTS

                FINET HOLDINGS CORPORATION AND SUBSIDIARIES
                        CONSOLIDATED BALANCE SHEETS
                                (UNAUDITED)
        (Dollars in thousands, except shares and per share amounts)
                                                          October 31,
                                     
                                   1998
                                                         --------------
                                  ASSETS
Cash and cash equivalents                           $      137
Accounts receivable from sales of mortgage loans and servicing rights15,822
Mortgage loan servicing advances and other receivables   3,303
Mortgages held for sale, net of allowances of $1,132   103,771
Mortgage servicing rights (Note 3)                       4,460
Furniture, fixtures and equipment, net of accumulated depreciation 2,323
   of $3,361
Goodwill                                               4,593
Other assets                                             3,591
                                                             -------
Total assets                                        $  138,000
                                                             =======
                                     
                   LIABILITIES AND STOCKHOLDERS' EQUITY

Liabilities:
  Warehouse and revolving lines of credit (Note 4)     116,156
  Notes payable and capitalized leases (Note 4)          2,904
3% Convertible subordinated debentures (Note 4)          7,000
Accounts payable, accrued expenses and other liabilities10,713
                                                             -------
Total liabilities                                      136,773
-------
Commitments and contingencies (Note 5)

Stockholders' equity: (Note 6)
  Preferred stock, $.01 par value, (100,000 shares authorized, 250 issued
and outstanding)                                         2,500
  Common stock, $.01 par value, (150,000,000 shares authorized, 33,905,000
     shares outstanding at October 31, 1998)               400
  Paid-in capital                                       16,343
  Accumulated deficit                                 (18,016)
                                                           ----------
Total stockholders' equity                               1,227
                                                           ----------
Total liabilities and stockholders' equity            $138,000
                                                           ==========
 The accompanying notes are an integral part of the consolidated financial
                                statements.




<PAGE> 4

                FINET HOLDINGS CORPORATION AND SUBSIDIARIES
                   CONSOLIDATED STATEMENTS OF OPERATIONS
                                (UNAUDITED)
       (Dollars in thousands - except shares and per share amounts)
                                                Three months ended
                                                   October 31,
                                                      ---------------------
--
                                    1998                        1997
                                                      ---------     -------
--
REVENUE
  Gain on sale of  mortgage loans and servicing rights, net of
      loan origination costs                  $     2,747 $      1,413
  Interest income                                   2,154          882
  Loan servicing fees                                 283          125
  Retail broker fees                                  907           45
Other                                                 102           58
                                                      ---------     -------
--
    Total revenue                                  6,193         2,523
                                                      ---------     -------
--

EXPENSES
  Compensation and related expenses                 4,071        1,475
  Occupancy and other office expenses               1,887        1,261
  Interest expense                                  3,547          678
  Marketing expenses                                  511          236
  Depreciation and amortization                       359          163
  Other operating expenses                            649          521
                                                      ---------     -------
--
    Total expenses                                 11,024        4,334
                                                      ---------     -------
--
Loss before income taxes                          (4,831)      (1,811)
  Income tax expense                                    -         (42)
                                                      ---------     -------
--
NET LOSS                                     $    (4,831)  $   (1,853)
                                                      =========
=========

Basic and diluted net loss per common share (Note 1)$        (.15)$
(.06)
                                                      =========
=========
Shares used in computing basic and diluted share data32,983     28,812
                                                      =========
=========

 The accompanying notes are an integral part of the consolidated financial
                                statements.
 <PAGE> 5

                FINET HOLDINGS CORPORATION AND SUBSIDIARIES
                   CONSOLIDATED STATEMENTS OF OPERATIONS
                                (UNAUDITED)
             (Dollars in thousands - except per share amounts)
                                                  Six months ended
                                                              
                                                   October 31,
                                                      ---------------------
--
                                    1998                        1997
                                                      ---------     -------
--
REVENUE
  Gain on sale of mortgage loans and servicing rights, net of
      loan origination costs                  $     6,817  $     4,011
  Interest income                                   3,957        1,756
  Loan servicing fees                                 961          253
  Retail broker fees                                1,430           75
Other                                                 196          163
                                                      ---------     -------
--
    Total revenue                                 13,361         6,258
                                                      ---------     -------
--

EXPENSES
  Compensation and related expenses                 7,990        4,115
  Occupancy and other office expenses               3,718        2,194
  Interest expense                                  6,339        1,420
  Marketing expenses                                1,011          501
  Depreciation and amortization                       679          296
  Other operating expenses                          1,003          643
                                                      ---------     -------
--
    Total expenses                                 20,740        9,169
                                                      ---------     -------
--
Loss before income taxes
  Income taxes and extraordinary gain, net of tax (7,379)      (2,911)
Income tax expense                                      -         (45)
Extraordinary gain, net of tax                          -            3
                                                      ---------     -------
--
NET LOSS                                     $    (7,379)  $   (2,953)
                                                      =========
=========

Basic and diluted net loss per common share (Note 1)$        (.23)$
(.10)
                                                      =========
=========
Shares used in computing basic and diluted share data32,728     28,642
                                                      =========
=========

 The accompanying notes are an integral part of the consolidated financial
                                statements.
<PAGE> 6
                FINET HOLDINGS CORPORATION AND SUBSIDIARIES
                   CONSOLIDATED STATEMENTS OF CASH FLOWS
                     (Unaudited, Dollars in thousands)
                                                          Six months ended
October 31,
                                                                1998
                                                                1997
                                                          --------   ------
--
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net loss                                         $ (7,389) $ (2,953)
  Adjustments to reconcile net loss to net cash used in operating
activities:
    Depreciation and amortization                      1,216       296
    Amortization of mortgage servicing rights            903        -
    Amortization of imputed interest on convertible debt1,383       -
    Write down of other assets and provision for losses(126)       423
    Gain on sale of mortgage servicing rights          (466)      (47)
    Deferred tax benefit                               (83)      (114)
  Changes in operating assets and liabilities:
     (Increase) decrease in receivables from sales of mortgage loans and
loan servicing rights                                  9,715   (9,738)
     (Increase) decrease in mortgage loans held for sale(19,572) (7,381)
     (Increase) decrease in originated mortgage servicing rights, net(289)
277
     Increase (decrease) in mortgage loan servicing advances and other
receivables                                              627      (78)
     Net increase (decrease) in other assets             568        12
     Net increase (decrease) in other liabilities    (2,082)       456
                                                           -------    -----
--
     Net cash used by operating activities          (15,595)  (18,847)
                                                           -------    -----
--
CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchase of mortgage servicing rights                   -      (165)
  Proceeds from sale of mortgage servicing rights      1,597        75
  Principal payments on mortgage loans held for investment-       (11)
  Purchase of furniture, fixtures and equipment        (171)     (189)
  Acquisition of purchased technology and intangibles     -      (204)
  Pre-acquisition advances to affiliates                  -      (270)
  Proceeds from sale of fixed assets                     12          -
  Acquisition of business, net of cash acquired      (1,718)         -
                                                           -------    -----
--
    Net cash provided (used) by investing activities   (280)     (764)
                                                           -------    -----
--
CASH FLOWS FROM FINANCING ACTIVITIES:
  Proceeds from issuance of common stock                  2      3,885
  Proceeds from issuance of convertible debt           1,384        -
  Proceeds from issuance of preferred stock            2,286         -
  Proceeds from warrant exercise                         197
-
  Net increase (decrease) in warehouse borrowings   (31,411)    16,470
  Decrease in mortgage loans funded on behalf of Mical42,360        -
  Proceeds from advances on note payable and line of credit(764) (45)
  Repayment of note payable, capitalized leases and line of credit
                                                       (220)       119
                                                       -------   -------
    Net cash provided (used) by financing activities  13,834    20,429
                                                           -------    -----
--
Net increase (decrease) in cash                      (2,041)       818
Cash at beginning of period                            2,178     1,148
                                                           -------    -----
--
Cash at end of period                                $   137  $  1,966
                                                           =======
=======
Supplemental cash flow information (Note 7)
 The accompanying notes are an integral part of the consolidated financial
                                statements.
<PAGE> 7

                        FINET HOLDINGS CORPORATION
           NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1.  SIGNIFICANT ACCOUNTING POLICIES

DESCRIPTION OF BUSINESS
Finet  Holdings  Corporation ("Finet" or the "Company")  is  an  electronic
commerce  firm  operating in one business segment, homeownership  services.
Finet  is  primarily engaged in wholesale and retail mortgage  lending  (as
both  a  mortgage banker and a mortgage broker) and the delivery of related
real  estate  sales  and  financing transaction  settlement  services.  The
majority  of its revenues, including those related to mortgage lending,  is
derived   from   increasingly  automated  electronic  business   processes,
including those conducted over the Internet.

The  operations  of the Company's principal lending subsidiaries,  Monument
Mortgage,  Inc.  ("MMI"),  a  California mortgage  banker  specializing  in
conforming prime loans, Coastal Federal Mortgage Company ("Coastal"), a New
Jersey  sub-prime  mortgage banker, and Mical Mortgage, Inc.  ("Mical"),  a
California  mortgage banker specializing in FHA and VA loans,  are  in  the
process  of  being  consolidated  and integrated.  The  Company's  business
activity  is carried out throughout the 40 states in which the  Company  is
currently licensed.  (See Note 8.)

The acquisition of Coastal on April 30, 1998 was accounted for as a pooling
of  interests. Accordingly, the Company's results for the quarter  and  the
six  months ended October 31, 1997 have been restated to include  Coastal's
results of operations for that period.

BASIS OF PRESENTATION
The  accompanying  unaudited consolidated financial  statements  have  been
prepared  in  accordance with generally accepted accounting principles  for
interim financial information and with the instructions to 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 six months ended October 31, 1998  are
not  necessarily  indicative of the results that may be  expected  for  the
fiscal  year  ending  April  30,  1999.  This  report  should  be  read  in
conjunction  with  the  consolidated  financial  statements  and  footnotes
included  in  the  annual report on Form 10-KSB for the fiscal  year  ended
April 30, 1998 of Finet Holdings Corporation.

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

PER SHARE AMOUNTS
In  February 1997, the Financial Accounting Standards Board issued SFAS No.
128,  Earnings  per  Share.  SFAS  No. 128  simplifies  the  standards  for
computing  earnings  per  share  ("EPS")  and  makes  them  comparable   to
international  standards.   SFAS  No.  128  was  effective  for   financial
statements issued for periods ending after December 15, 1997, with  earlier
application not permitted. Upon adoption, all prior EPS data was restated.

Basic EPS is determined by dividing net loss by the weighted average shares
outstanding during the period.  Since the fully diluted loss per share  for
the  quarters  ended  October 31, 1998 and 1997,  respectively,  was  anti-
dilutive, basic and diluted earnings per share are the same. The effects of
common  stock  equivalents have not been included because they  would  have
been anti-dilutive during the periods reported.

NOTE 2. ACQUISITIONS

On  May 19, 1998 the Company acquired all the issued and outstanding shares
of Mical, a non-public mortgage banker with principal offices in San Diego,
California,  in  exchange for 552,000 shares (including 120,000  contingent
shares) of the Company's common stock. Due to the financial requirements of
Mical, certain transactions and advances were made in
<PAGE> 8

anticipation of the acquisition. The acquisition has been accounted for  as
a   purchase  and  its  operations  included  in  the  Company's  financial
statements since that date. The excess of the purchase price over the  fair
market value of the acquired net assets ($4.6 million at October 31,  1998)
was  recorded  as  goodwill  and is being amortized  over  20  years.   The
following  condensed pro forma statements of operations of the Company  for
the  six  months  ended  October 31, 1998  and  1997  give  effect  to  the
acquisition  of  Mical  as  though  the transaction  had  occurred  at  the
beginning of the periods:

(In thousands)         PRO FORMA
               6 Months Ending October 31,
                   1998          1997
                -----------  -----------
[S]             [C]          [C]
Revenue           $ 13,866      $ 16,861
Expenses            22,264        17,789
                -----------  -----------
Net loss          $ (8,398)     $  (928)
                ===========  ===========
Loss per share    $  (.26)      (.03)
                              ============    ============
     
On  June 23, 1998 the Company acquired, from an individual, certain  assets
which  include an internet site, "interloan.com", in exchange  for  100,000
shares  of  the  Company's common stock.  The Company also entered  into  a
binding  term  sheet agreement that will result in a three-year  employment
agreement with that individual.

NOTE 3.  MORTGAGE SERVICING RIGHTS

During the six months ended October 31, 1998, the activity in mortgage loan
servicing rights was as follows:

                                 October 31,
(Dollar amounts in thousands)      1998
------------------------------   ---------
Mortgage Servicing Rights
  Beginning balance              $  5,478
    Additions                       1,193
    Sales                          (1,330)
    Amortization/Payoff              (881)
                                 ---------
  Ending balance                 $  4,460
                                 =========

Servicing  rights  to  mortgage loans with an unpaid principal  balance  of
approximately  $515 million were pledged as collateral  to  lenders  as  of
October 31, 1998.

NOTE 4.  DEBT

The  following table and comments present summary information regarding the
Company's debt as of October 31, 1998:
<PAGE> 9

(In thousands)
                                                                   Interest
Expires or
Facility                            Balance         Rate              Due
----------------------------------  --------------  --------------   ------
-------------
REVOLVING
Warehouse lines of credit:
  $35 million committed             $  44,085       LIBOR +
                                             variable spread  December  31,
1998
     $24    million                             8,362         Libor   +2.5%
December 31, 1998

  $60 million                          62,709       NY Prime         May 1,
1999

Revolving line of credit:
    $  1  million  committed                  1,000        Prime  +  0.625%
Requires payment to
                                                                     zero 5
days per qtr
                              ---------
                                      116,156

OTHER DEBT AND CAPITAL LEASES:
Servicing acquisition loan
    $1,870   committed                       1,800        Prime  +   0.625%
November 15, 1998
Various notes                             901       Various          Due in
2000
Capitalized leases                        203       3.5% to 11.5%    Varies
to 2002
                                    ---------
                                   $   2,904

3% SUBORDINATED CONVERTIBLE DEBT:  $   7,000

The  Company  issued  the third traunch of its 3% Subordinated  Convertible
Debentures  in  May  1998 in the amount of $1,500,000, bringing  the  total
issue  of  3%  Subordinated  Convertible  Debentures  to  $7,000,000.   The
debentures  and accrued interest are convertible into the Company's  common
stock  at  the  lesser of $5.00 per share or 78% of the  determined  market
price  prior  to  conversion. In connection with  this  issue  the  Company
recorded additional paid-in capital of $1,551,000 for the discount  related
to  imputed interest represented by the market discount conversion  factor.
This  discount is being amortized to interest expense over the period  from
the  date  of  issue  to the date the debentures first become  convertible.
Through October 31, 1998, the Company has amortized the entire discount  to
interest  expense.   In addition, the company recorded $563,000 of  expense
related to debt issuance costs.  (See Note 8.)

COLLATERAL
Collateral for the debt obligations is a combination of mortgage loans held
for sale, receivables from sales of mortgage loans, servicing assets, other
assets of the Company, and Finet's corporate guarantee.

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

DEBT COVENANTS
The  Borrowing Agreements (Agreements) for the warehouse lines  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  the  Company's
credit facilities are due on demand.

On August 25, 1998, Residential Funding Corporation ("RFC") notified the
Company that it was in default of its lending agreements.  The Company did
not satisfy its July interest payment of $119,254, and the Company did not
meet its debt service obligation on August 31, 1998 on its long-term note
of $1.8 million.  The Company was also in violation of certain financial
covenants.  RFC is entitled to exercise certain rights and remedies under
the loan agreement, including the right to cease making advances to the
Company, to accelerate obligations and to sue on the notes and guarantees.
RFC has not granted a waiver of these events of default.  However, RFC has
agreed to forbear from enforcing its remedies in anticipation of additional
equity investments the Company will receive.  (See Note 8.)  All unpaid
interest, fees and principal balances are currently due.
<PAGE> 10

In October RFC increased the interest rates on the Company's borrowings to
4% in excess of the rate otherwise applicable.   RFC also reduced the total
committed lines from $79 million to $59 million.

Notwithstanding  its  rights to remedies, RFC at its  sole  discretion  has
continued  to  make advances to the Company, uninterrupted.  RFC  has  also
allowed  the  warehouse line advances to exceed the committed amount.   The
Company  anticipates  that it will cure its defaults with  respect  to  its
borrowings when it receives additional equity investments in December 1998.
Equity  contributions will be used to service debt, fund operations and  to
make operating capital expenditures. (See Note 8.)

There can be no assurance that the Company will cure its warehouse credit
relationship.  The inability to cure its borrowing relationship or obtain
alternative warehouse financing sources and working capital arrangements
could result in a major disruption and the Company's business relationships
with its brokers, investors and borrowers could be seriously damaged.
Ultimately there could be a material adverse impact on results from
operations and financial condition if the Company's borrowing relationship
is not cured or if additional capital resources are not received.

NOTE 5. COMMITMENTS AND CONTINGENCIES

LEGAL PROCEEDINGS
On January 14, 1998, prior to the acquisition of Mical, a lawsuit was filed
against  Mical in the United States District Court for the Middle  District
of  Georgia (the "Action"). The complaint alleges, among other things, that
in  connection with residential mortgage loan closings, Mical made  certain
payments  to  mortgage brokers in violation of the Real  Estate  Settlement
Procedures  Act  and  induced  mortgage brokers  to  breach  their  alleged
fiduciary  duties  to  their  customers. The  plaintiffs  seek  unspecified
compensatory and punitive damages as to certain claims.

Management  believes  that its compensation programs  to  mortgage  brokers
comply with applicable laws and with long standing industry practices,  and
that it has meritorious defenses to the Action. Management has been advised
by counsel, that the facts of the underlying transaction are not supportive
of  a  court  order  granting class certification. The Company  intends  to
defend  vigorously  against  the  Action and  believes  that  the  ultimate
resolution will not have a material adverse effect on the Company's results
of operations or consolidated financial position.

The  Company  and  certain  subsidiaries are defendants  in  various  legal
proceedings  involving  matters  generally incidental  to  their  business.
Although  it  is  difficult to predict the outcome  of  such  cases,  after
reviewing with counsel all such proceedings, management does not expect the
aggregate  liability  or  loss, if any, resulting  therefrom  will  have  a
material  adverse effect on the consolidated financial position or  results
of operations of the Company and its subsidiaries.

MORTGAGE LOAN APPLICATIONS IN PROCESS
The   Company  has  open  short-term  commitments  to  fund  mortgage  loan
applications in process subject to credit approval.   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.

LOAN SALE COMMITMENTS
The Company has entered into optional and mandatory forward commitments  to
deliver mortgage loans of $61 million as of October 31, 1998.

NOTE 6. STOCKHOLDERS' EQUITY

In  May 1998, the Company issued 432,000 shares of common stock, valued  at
$1,400,000,  as consideration for the acquisition of Mical  (See  Note  2).
Upon  resolution  of  specified contingencies,  120,000  additional  common
shares  may be issued. As a result of the acquisition, 33,000 common shares
were  issued as a finders fee and 73,000 shares were issued under  a  keep-
well agreement with an existing shareholder.
<PAGE> 11

In June 1998, the Company issued 25,000 common shares with the execution of
a  binding term sheet agreement for the acquisition of Interloan (See  Note
2).  An  additional  75,000 common shares remain to  be  issued  under  the
provisions of the term sheet.

In September 1998, the Company issued 250 shares of its $2.5 million Series
A  Convertible  Preferred  Stock  in a private  placement  generating  $2.3
million  of proceeds, net of expenses.  The preferred shareholders are  not
entitled   to   vote  or  to  receive  dividends.   Upon  any  liquidation,
dissolution  or winding up, the holders of the Preferred A are entitled  to
receive  a  cash liquidated value (representing $10,000 per share  plus  6%
interest),  to the extent there are funds sufficient to pay, in  preference
to all Common shareholders

In connection with the Company's offering of the Series A  Preferred
Shares, the Company issued Warrants to investors to purchase 250,000 shares
of the Company`s Common Stock at $1.00 per share. In November, an agreement
was reached to redeem all of the outstanding $2.5 million of Series A
Convertible Preferred Stock.  (See Note 8)

In October 1998, the Company received $196,711 as the result of an exercise
of  262,281  warrants at seventy-five cents per share.    The  Company  had
reduced  the exercise price from $1.50 per share to seventy-five cents  per
share.

In October 1998, the Company entered into an agreement with a private
investor to issue 2.5 million shares of common stock at eighty cents per
share for proceeds of $2.0 million. In connection with the issuance, the
Company agreed to reduce the exercise price of 1,000,000 Common Stock
Purchase Warrants owned by the investor from $5.00 to $1.00 per share.
The  Company received an additional equity infusion in December.  (See Note
8).



NOTE  7.  SUPPLEMENTAL CASH FLOW INFORMATION

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

(Dollars in thousands)                                   1998       1997
                                                        ------     ------
Cash paid during the period for:
   Interest on line of credit and other borrowings      $  294     $  294
   Income taxes                                              -          -
Common stock issued during the period for:
   Creditor settlements                                      -         22
   Purchase of intangible assets                             -        808

In  connection  with the acquisition of all of the common  stock  of  MICAL
Mortgage, Inc. for $1.4 million of Finet common stock, the company acquired
assets with a fair value of $93.5 million and assumed liabilities of  $92.1
million.

NOTE 8.  SUBSEQUENT EVENTS

In November 1998, the Company received $2.0 million from the issuance of
2.5 million shares of common stock at eighty cents per share (see Note 6).

In November 1998, the Company reached agreement with its debenture holders
to convert $1.1 million of its total $7.0 million, 3% Convertible
Subordinated Debentures into 2.2 million common shares at a conversion
price of fifty cents per share, to convert an additional $4.4 million of
debentures into 7,333,333 common shares at a conversion price of sixty
cents per share and to redeem, effective with the closing of the private
placement described below, the remaining $1.5 million of debentures at 100
percent of face value.  The agreement also establishes that the Company
will redeem all of the outstanding $2.5 million of Series A Convertible
Preferred Stock at 100 percent of face value.  $2.0 million will be paid
following the closing of the private placement and the balance will be paid
within 60 days of the closing.  The Company also agreed to issue 840,000, 5-
year warrants, exercisable at $1.50 per share to the Series A Convertible
Preferred shareholders.
<PAGE> 12

The  Company is reviewing operations and quality and compliance  procedures
of  Mical  Mortgage, Inc., acquired in May, 1998 to determine how  best  to
maximize  shareholder  value.  The  Company  is  consulting  with  lenders,
governmental  regulatory  agencies and loan  investors,  and  has  retained
outside  consultants  to assist in this review.  In  connection  with  this
review,  the Company is assessing the future economic value of the goodwill
recorded in the purchase transaction along with the other assets of  Mical.
On  December  15,  1998,  the  Company's  Board  of  Directors  approved  a
preliminary  plan to restructure the operations of Mical.  The  Company  is
determining the provision necessary to recognize costs associated with  the
impairment  of  tangible and intangible assets, to restructure  operations,
and  to  provide for potential liabilities associated with the  plan.   The
Company  anticipates  that the charges will total approximately  $7  to  $8
million.  This charge will be recognized in the third quarter when the plan
is  finalized.   Beyond this charge, management does not expect  a  further
continuing  effect  of  this  action on the Company's  business,  financial
position, or results of operations.

The Company and private investors have agreed to placement of approximately
22  million shares of the Company's common stock at sixty cents per  share,
totaling  $13.6 million.  The Company received $1.3 million and expects  to
receive  the  balance of the capital contribution in December,  1998.  This
equity  contribution will be used to retire debt and other obligations,  to
fund  operations  and  to make capital expenditures  as  necessary  in  the
Company's operations.





<PAGE> 13

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

FORWARD-LOOKING STATEMENTS

The following information should be read in conjunction with the condensed
consolidated financial statements and notes included in Item 1 of this
Quarterly Report, the financial statements and the notes thereto, and
Management's Discussion and Analysis of Financial Condition and Results of
Operations included in the Company's Annual Report on Form
10-KSB for the fiscal year ended April 30, 1998.

The  Private  Securities Litigation Reform Act of  1995  provides  a  "safe
harbor"  for certain forward-looking statements. This Quarterly  Report  on
Form  10-QSB  may  contain  forward-looking statements  which  reflect  the
Company's  current  views  with  respect to  future  events  and  financial
performance. These forward-looking statements are subject to certain  risks
and  uncertainties,  including those identified below,  which  could  cause
actual  results  to  differ  materially from historical  results  or  those
anticipated.   The  words  "believe,"  "expect,"  "anticipate,"   "intend,"
"estimate," "should" and other expressions which indicate future events and
trends  identify forward-looking statements. Readers are cautioned  not  to
place undue reliance on these forward-looking statements, which speak  only
as  of their dates. The Company undertakes no obligation to publicly update
or  revise  any  forward-looking statements, whether as  a  result  of  new
information, future events or otherwise. The following factors could  cause
actual  results  to  differ  materially from historical  results  or  those
anticipated: (1) the level of demand for homeownership services,  including
mortgage credit, which is affected by such external factors as the level of
interest  rates,  the strength of the various segments of the  economy  and
demographics of the Company's markets; (2) the direction of interest rates;
(3) the relationship between mortgage interest rates and the cost of funds;
(4)  federal and state regulation of the Company's operations; (5) the rate
of  acceptance and growth of demand for on-line homeownership  transactions
compared  to  traditional manual business processes;  and  (6)  competition
within the residential real estate services industry.

RESULTS OF OPERATIONS

The  Company has a growing base of electronic commerce revenues, including:
(a)  from  mortgage financing and settlement services provided directly  to
consumers  by the Company's retail activities (including both loans  funded
by  the  Company's lending unit as well as loans funded by other  lenders);
(b)  from  loans  funded  for mortgage brokers by the  Company's  wholesale
lending  activities; (c) from loan servicing fees; (d)  from  the  sale  of
customer  leads  to  other  real estate service  providers;  and  (e)  from
providing  Internet  products and services to realtors,  loan  brokers  and
consumers.

COMPARISON OF QUARTERS ENDED OCTOBER 31, 1998 AND 1997

The  Company  is  currently expanding the scope of its electronic  commerce
mortgage  financing transaction services.  The 1998 period  includes  costs
related to this plan. Revenues for the three months ended October 31,  1998
include the operations of Mical and Interloan, which were both acquired  in
purchase  accounting  transactions in the  first  quarter  of  1998.   Both
periods  include  the  results of the Company's Coastal  unit,  as  it  was
acquired in the prior fiscal year in a pooling transaction.

Revenues  for  the quarter ended October 31, 1998 increased  $3.7  million,
from  $2.5  million to $6.2 million over the 1997 quarter. $3.1 million  of
the  increase was attributable to the incremental revenues of the Company's
Mical  unit.  Excluding the incremental effect of Mical, revenues increased
$592,000 or 23%. Increased interest income and increased retail broker  fee
income  also  contributed to the total increase of $3.7  million  over  the
prior   year.   However,  revenue  increases  were  offset  by  significant
increases   in  operating  expenses,  including  compensation,   occupancy,
interest, and certain non-recurring expenses related to the acquisitions of
Coastal and Mical.  The Company incurred a net loss for the quarter of $4.8
million  compared to a $1.9 million loss for the quarter ended October  31,
1997. Mical accounts for $766,000 of this increased loss.
<PAGE> 14

Gain  on  sale  of  mortgage  loans  and  servicing  rights,  net  of  loan
origination costs, increased primarily due to the gains recorded by  Mical.
Gain on sale of mortgage loans also include loan origination fee income. In
general,  these fees are affected by numerous factors including the  volume
and  mix of loans produced and sold, loan pricing decisions, interest  rate
volatility and the direction of interest rates.

Loan  servicing fee income increased $158,000 over the prior year,  as  the
Company's loan servicing portfolio has a higher balance for the 1998 period
as  a  result  of  assets  purchased in December  of  1997.   However,  the
Company's  loan  servicing  portfolio balance  is  decreasing  (the  second
quarter  of  1998  as compared to the first quarter of 1998)  as  borrowers
refinance  to  take advantage of decreasing borrowing rates.   The  Company
expects  loan servicing fee income to continue to decrease for the  balance
of the fiscal year.

Total loan volume in the Company's production units is summarized below.

(Dollar amounts in thousands)          Three Months Ended October 31,
---------------------------------- ---------------------------
                                      1998           1997
                                   -----------    ------------
    Retail                          $ 87,287       $    922
    Wholesale Prime                  308,350         71,467
    Wholesale Sub-Prime               22,231         51,575
                                    ---------      ---------
    Total Loan Volume               $417,868       $123,964
                                    ========       =========

The  factors  which  affect the relative volume  of  production  among  the
Company's  units include the price competitiveness of each  unit's  product
offerings,  the  level of mortgage lending activity in each unit's  market,
the  success of each unit's sales and marketing efforts and the operational
level of loan processing efficiency achieved. The incremental volume of the
Company's  Mical  unit  since its acquisition in the  current  fiscal  year
contributed  Several  factors  contributed  to  the  increase  in   volume.
(Complete)   The  Company intends to increase its loan  production  volumes
except  in  it's government (VA/FHA) offerings where it plans  to  decrease
those volumes in the short term while reviewing operations related to those
offerings.  (??)

Interest  income  increased $1.3 million to $2.2 million  for  the  quarter
ended October 31, 1998 due to the incremental interest earned at Mical. The
Company  earns interest on, and incurs interest expense to carry,  mortgage
loans  held in inventory.   Although the Company expects interest rates  to
remain stable, interest income is expected to decrease as it decreases  the
time  loans  are carried in inventory.  While interest income may  decline,
the proceeds from the sale of the loan will be received more timely and can
be used to service debt and reduce interest expense.

In   connection  with  mortgage  loan  servicing  activities,  the  Company
segregates  escrow  and  custodial funds in a separate  trust  account  and
excludes  this  balance  of $12.1 million at October  31,  1998  and  $16.0
million  at  April  30, 1998 from the Company's assets on the  accompanying
balance sheet.

Retail  broker  fee  revenue increased significantly, from  45,000  in  the
second  quarter of 1997 to $907,000 for the second quarter of 1998 quarter.
The   increase  was  generated  by  the  Company's  start  up  retail  unit
Interloan.com.

Of  the  total  $6.7  million increase in expenses in 1998  over  the  1997
corresponding  quarter,  interest  expense  increases  accounted  for  $2.9
million. Of this amount, $1.3 million was incurred at Mical.  The remaining
increase of $1.6 million was due primarily to the amortization of debenture
discount  and  debt issuance expenses, but partly due to  interest  expense
associated  with  increased warehouse credit line balances.   Although  the
debt  discount  is  now fully amortized, the Company's interest  rates  and
other  borrowing terms became less favorable (beginning in  October)  as  a
result of the default interest rate imposed by its warehouse lenders.   The
Company expects that interest expense will continue to remain high  in  the
third  quarter  of  1998  then  return to more  favorable  terms  when  its
warehouse relationship and events of default are cured.
<PAGE> 15

Compensation  and related employee expenses increased $2.6  million.   $1.6
million  was incremental expense incurred at Mical and the balance reflects
the Company's strategy of expanding and enhancing its revenue base.

Occupancy and other office expenses increased $626,000 as a result  of  the
incremental expenses incurred by Mical.  In addition, the Company  recorded
certain   nonrecurring  professional  fees,  most  of  which  were   legal,
consulting and accounting expenses related to the acquisitions.

COMPARISON OF SIX MONTHS ENDED OCTOBER 31, 1998 AND 1997

Revenues for the six months ended October 31 increased from $6.3 million in
1997  to  $13.4  million  in  1998.  Of this  $7.1  million  increase,  the
incremental  effect of Mical (acquired in May of 1998) accounted  for  $5.7
million.   Excluding Mical, revenue attributable to the  remainder  of  the
businesses increased $1.4 million or 23%.  The Company incurred a net  loss
for  the period of $7.4 million compared to $3.0 million for the comparable
prior  year  period.   Of the $4.4 million change,  $1.5  million  was  the
incremental loss at Mical and the balance of the businesses suffered a $2.9
million  or  100% increase in net loss.  This increased loss resulted  from
$4.4  million  of  increased  expenses,  excluding  the  effect  of  Mical.
Interest   expense  increased  $2.6  million,  occupancy  and  compensation
increased $1.4 million and marketing expenses increased $.4 million.

Finet's  business  units, excluding Mical, recorded  an  increase  of  $1.4
million  in  overall  revenues.  This increase  was  due  primarily  to  an
increase  in  retail  broker fee income of $1.3 and  an  increase  in  loan
servicing fee income of $.7 million, partially offset by a decrease of  $.6
million  in  gain on sale of mortgage loans and servicing  rights.   Retail
broker  fee  income  increased  as  a  result  of  the  company's  start-up
interloan.com unit.

Total loan volume in the Company's production units is summarized below.

 (Dollar amounts in thousands)         Six Months Ended October 31,
---------------------------------- ---------------------------
                                      1998           1997
                                   -----------    ------------
    Retail                          $145,791       $ 69,338
    Wholesale Prime                  618,810        512,350
    Wholesale Sub-Prime               54,390         85,260
                                    ---------      ---------
    Total Loan Volume               $818,991       $666,948
                                    ========       =========

The  loan volume increase was due equally to the added production of  Mical
and the Company's other units.



Interest  expense,  excluding the impact of Mical, increased  $2.6  million
over  the  comparable  1997  period due  to  the  non-cash  effect  of  the
amortization  of  the  Company's  debt  discount  associated  with  its  3%
Convertible  Subordinated  Debentures, but  also  due  to  higher  interest
charges associated with the units that increased their warehouse borrowings
in  support  of  increased  loan activity.   The  Company  began  incurring
unfavorable  default interest rates in October, which has some  impact  for
the  six  months,  but will increase the Company's year  to  date  interest
expense  more  significantly in the nine months that will end  January  31,
1999.   The  Company expects to cure its default conditions and  return  to
normalized interest rates before the fourth quarter of this fiscal year.

Occupancy  and compensation expenses (excluding Mical) are up $1.4  million
for the current six month period primarily due to..




<PAGE> 16

BUSINESS DEVELOPMENT ACTIVITIES

The  Company's business development activities are focused on  diversifying
its   mortgage  banking  of  prime  conforming  loans,  and  by  increasing
electronic commerce revenues, including: (a) the offering of sub-prime  and
government  subsidized  loans;  (b)  the  distribution  and  use   of   its
proprietary  Agent  Connector  and  iQualify  software;  (c)  the  sale  of
additional  homeowner  related  products and  services;  (d)  the  sale  of
business leads to real estate service providers; and (e) the origination of
loans as a mortgage broker.

Over  the  past  several years, some lenders have expanded  their  mortgage
banking  operations  through acquisition of formerly  independent  mortgage
banking  companies  or through internal growth. The Company  has  similarly
expanded  its mortgage banking operations through acquisitions and internal
growth,  but, believing the growth of market acceptance and demand for  on-
line  homeownership  services  represents the  greatest  near  term  market
opportunity, has also concentrated on expanding its e-commerce  origination
and fulfillment capabilities in these areas.

The Company is currently expending cash resources to support these business
development  activities,  as  the  revenues  they  are  generating,  though
increasing,  are  currently insufficient to cover  start-up  and  operating
costs.   The Company expects, within this business cycle, that all business
units will generate revenues sufficient to cover their respective operating
expenses.   During  the  second quarter and subsequently  the  Company  has
received several equity infusions from private investors.  (See Note 6  and
Note  8  to  the  consolidated  financial  statements.)   Considering   the
additional  equity  financing  from  private  investors  that  was   agreed
subsequent  to  the second quarter, management believes it  has  sufficient
cash  and short term financing alternatives for the remainder of the fiscal
year.

FINANCIAL CONDITION

Although  Finet's revenue is growing, during its limited operating history,
it has experienced operating losses and cash flow deficits. The Company has
relied on external sources of debt and equity financing to fund operations,
to  service debt and to complete acquisitions and capital investments.  The
Company's  operating  losses, net of capital  contributions,  have  had  an
adverse  affect on the Company's financial position, causing  stockholders'
equity  to decrease from $3.4 million at April 30, 1998 to $1.2 million  at
October 31, 1998.

In  response to these operating trends, Finet has installed new leadership,
including  a  new  chairman and chief executive officer.   The  new  team's
charter is to improve operations and to take full advantage of Finet's most
recent  acquisitions  and  technology  capabilities,  ultimately  improving
results  from  operations  and  financial  position.   Improvement  in  the
Company's  financial condition is dependent on its ability to  successfully
integrate  and  consolidate its recent acquisitions, to  improve  operating
processes  and procedures, to cure its warehouse lending defaults,  and  to
manage  interest  expense by returning to more favorable  borrowing  terms.
The   Company's  financial  condition  is  further  dependent  on  economic
conditions  such  as  the  general health of the  economy  and  demand  for
homeownership related services.   Management is committed to the  Company's
future  success; however, there can be no assurance that the  Company  will
attain future profitability.

Total  assets  increased from $101.4 million at April 30,  1998  to  $138.0
million  at  October  31,  1998.  This increase is  due  primarily  to  the
purchase accounting acquisition of Mical, partially offset by a decrease in
accounts  receivable from sales of mortgage loans and servicing rights  due
to  increased  efforts  to sell loans.  Liabilities  increased  from  $98.1
million  to $136.8 million, as the Company, including Mical, increased  its
warehouse borrowings in support of increased loan volumes.



<PAGE> 17

LIQUIDITY AND CAPITAL RESOURCES

The nature of the mortgage lending business requires the Company to advance
cash  on  a  daily  basis to fund newly originated loans to  its  borrowing
customers.  The  majority of these funds are provided through  conventional
mortgage  warehouse  line  of credit from Residential  Funding  Corporation
("RFC")  and from other warehouse lenders. The Company uses cash  from  its
operating  activities to satisfy its obligations to RFC,  to  fund  ongoing
expenses  such as administration, to invest in product line and  geographic
expansion, and to satisfy debt and other obligations as they come due.

Although new operating revenue sources were developed during 1997 and 1998,
cash generated by operations has been insufficient to meet the Company's on-
going  requirements.  Therefore, the Company has employed servicing-secured
credit  facilities,  private  placements  of  debentures  and  common   and
preferred  stock  issuances as additional resources to meet  operating  and
investing cash needs.

The Company was unable to make an interest payment of $119,255 in July, and
was  unable to make a principal payment of $1.9 million due August 31, 1998
on  a  term  loan.   The lender has agreed to forbear from  exercising  its
rights  and  remedies  of default in anticipation of the  completion  of  a
private  placement offering that has been agreed but has not closed.    See
discussion under "Warehousing Facility with RFC".   (See Notes  6  and  8.)
The proceeds will be used to cure the loan defaults described.

Operating Activities

In  the  six  months  ended  October  31,  1998,  the  Company's  operating
activities generated used cash of approximately $xxx,000, compared to  cash
used by operations of $18.7 million during the comparable 1997 period.

Financing Activities

Cash from financing activities was $XX compared to the first six months  of
1997.

In September 1998, the Company issued 250 shares of its $2.5 million Series
A  Convertible  Preferred  Stock  in a private  placement  generating  $2.3
million  of  proceeds,  net of expenses.  See Note 6  to  the  Consolidated
Financial Statements.

In October 1998, the Company received $196,711 as the result of an exercise
of  262,281  warrants  at seventy-five cents per share.   The  Company  had
reduced  the exercise price from $1.50 per share to seventy-five cents  per
share.

Investing Activities

Investing  activities, consisting primarily of sales of mortgage  servicing
rights,  provided  cash $1.9 million for the six months ended  October  31,
1998.   The  Company  does  not  intend  to  purchase  additional  mortgage
servicing  rights  and  is   evaluating the sale of  its  servicing  rights
portfolio.  A sale, if consummated, would generate cash for servicing  debt
and other obligations and for general operating purposes.

The  Company's  capital expenditures totaled $171,000 for  the  six  months
ended  October 31, 1998. The Company expects its level of capital  spending
for  the  rest of the fiscal year to increase somewhat to make  information
systems investments in preparation of Y2K compliance.

The Company believes that its cash resources, including unused borrowing
capacity and other sources of liquidity, are sufficient to finance the
Company's operating, investing and financing needs through April 30, 1999.
This assumption is based on additional equity investments the Company
expects to receive in the near term.  Although agreements for the private
placement of 22.5 million shares netting proceeds of approximately $13.5
million have been reached, there can be no assurance that the financing
will close and that the cash will be received.  Failure to receive such
payment would have a material, adverse affect of the Company's financial
condition and results of operations.
<PAGE> 18

SUBSEQUENT EVENTS

See Note 8 to the Consolidated Financial Statements.


YEAR 2000 COMPLIANCE

The  Company  has made and will continue to make investments  to  identify,
modify  or  replace  any computer systems which are  not  Year  2000  (Y2K)
compliant  and  to address other issues associated with the change  of  the
millennium.  These costs are expensed by the Company during the  period  in
which   they  are  incurred.  The  financial  impact  to  the  Company   of
implementing the systems changes necessary to become Y2K compliant  is  not
anticipated  to  be  material  to  its financial  position  or  results  of
operations  in  any  given year. However, the Company's expectations  about
future  costs  associated with the Y2K are subject  to  uncertainties  that
could  cause  the  actual results to differ materially from  the  Company's
expectations. Factors that could influence the amount and timing of  future
costs  include  the  success  of the Company  in  identifying  systems  and
programs  that are not Y2K compliant, the nature and amount of  programming
required  to  upgrade  or  replace  each  of  the  affected  programs,  the
availability, rate and magnitude of related labor and consulting costs  and
the  success  of  the Company's business partners, vendors and  clients  in
addressing the Y2K issue.

Company's state of readiness:

The Company, together with outside consultants it has engaged, has
formulated its overall plan to address the Y2K issue.  The Company plans to
be substantially Y2K compliant by March 31, 1999, with the remaining effort
to be completed by June 30, 1999.

Steps taken to assure readiness by business partner, vendors, clients:


The Company, together with outside consultants it has engaged, has
          formulated its overall plan to address the Y2K issue.
 The Company:


(a) Has established a senior management steering committee.
          (b) Is taking inventory of internally used hardware and software
          as well as software developed for customers and peripheral
          devices and equipment.
          (c) Is identifying outside parties with whom the Company
          interfaces electronically or operationally, such as business
          partners, loan providers, customers, vendors and any others, to
          1) confirm that their state of readiness will reduce any
          financial or operational risk to the Company, and 2) understand
          Finet's responsibility to its business partners.
          (d) Is developing an external assessment process in order to
          adequately assess the readiness of outside parties.
          (e) Has determined the additional human resources necessary to
          implement its overall plan.
          (f) Has estimated the cost of compliance and determined it to be
          reasonable but not material to the financial condition of the
          Company or its results of operations.
          (g) Is ensuring that new applications are Y2K compliant.
          
  Risks of the company's Y2K issues:
               
The Company believes that given the hardware and software
replacement/modifications that it foresees, the risk of material financial
loss or operational disruption that might lead to financial loss is low to
medium.  However, due to the nature of the mortgage banking industry there
are a significant number of outside third party interfaces that the
Company relies on for conducting business effectively. Their level of
compliance significantly influences the Company's level of risk of
disruption to operations which ultimately impacts the Company's results of
operations and financial condition.

 The Company's contingency plans:
 
Finet is considering various contingency actions including alternative
vendors.  The Y2K project planning calls for a fall back to manual
procedures if absolutely necessary, but the Company considers Y2K to be a
critical project and is being addressed it as such.
<PAGE> 20

PART II - OTHER INFORMATION

Item 1.  LEGAL PROCEEDINGS

The  Company  and  certain  subsidiaries are defendants  in  various  legal
proceedings.   After  reviewing with counsel all such  proceedings  pending
against or involving the Company and its subsidiaries, management does  not
expect  the  aggregate liability or loss, if any, resulting therefrom  will
have  a  material adverse effect on the Company's results of operations  or
consolidated financial position.

On  May  19,  1998, the Company acquired 100% of the issued and outstanding
stock of Mical from its shareholders. Prior to said acquisition, on January
14,  1998, a lawsuit was filed against Mical in the United States  District
Court  for  the  Middle District of Georgia (the "Action").  The  complaint
alleges,  among other things, that in connection with residential  mortgage
loan closings, Mical made certain payments to mortgage brokers in violation
of  the  Real Estate Settlement Procedures Act and induced mortgage brokers
to breach their alleged fiduciary duties to their customers. The plaintiffs
seek unspecified compensatory and punitive damages as to certain claims.

Mical's  management  believes that its compensation  programs  to  mortgage
brokers  comply  with  applicable  laws and  with  long  standing  industry
practices,  and that it has meritorious defenses to the Action.  Management
has  been  advised by counsel, that the facts of the underlying transaction
are  not  supportive  of  a court order granting class  certification.  The
Company  intends to defend vigorously against the Action and believes  that
the  ultimate  resolution will not have a material adverse  effect  on  the
Company's results of operations or consolidated financial position.

Item 2. CHANGES IN SECURITIES

During the six months ended October 31, 1998, the Company issued a total of
825,000  shares  of  common  stock,  as follows:  432,000  shares  for  the
acquisition  of  Mical and 33,000 shares as a finders  fee,  73,000  shares
under  a  keep well agreement, and 25,000 shares toward the acquisition  of
Interloan.   In  addition, 263,000 common shares were issued in  connection
with  warrant  exercises and 654,000 shares were issued in connection  with
option exercises, employment related issuances and other.

250  shares  of  Convertible  Preferred Stock  were  issued  in  a  private
placement.  (See Note 6.)


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

None

Item 5.  OTHER INFORMATION

On November 24, 1998, the Company's annual meeting of shareholders was held
in  San Francisco, California. Including proxies and one shareholder voting
in person, a quorum of 57% of the 33,033,105 shares eligible to vote on the
October  15, 1998 record date were represented at the meeting. All  current
Directors were re-elected for an additional one-year term and the following
measures  detailed and recommended by the Company's Board of  Directors  in
the  proxy  statement were approved by the indicated percentage  of  shares
voted:

     Increase in authorized common shares to 150,000,000                   99.3%
     Ratification of issuance of Common Stock, Debentures,
       Preferred Stock and Warrants:                                       77.0%
     Ratification of the 1998 Stock Option Plan                            99.4%
     Ratification of the 1998 Stock Bonus Plan                             99.5%
     Ratification of the 1998 Non-Employee Director Stock Option Plan      99.5%
<PAGE> 21

Item 6.  EXHIBITS AND REPORTS ON FORM 8-K

EXHIBITS

     EX-27          Financial Data Schedule
     

REPORTS ON FORM 8-K

                            REPORTS ON FORM 8-K
Date      Item  Description
--------  ----  -----------------------------------------------------

12/7/98    2    Amendment of an 8-K previously filed, providing the
                required financial statements and proforma information
                related to the Company's acquisition of 100% of the issued
and
                outstanding stock of Mical Mortgage, Inc.


                                 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: December 21, 1998                 /s/    Mark L. Korell
                                        Mark L. Korell
                                          (CEO   and   Principal  Executive
Officer)



Date December 21, 1998                  /s/    George Winkel
                                        George Winkel
                                        (Principal Financial Officer)