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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 June 30, 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 17,593,152 shares of common stock, par value $.01, as of June 30,
1996.
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<PAGE> 2
                           FINANCIAL STATEMENTS

<TABLE>
                FINET HOLDINGS CORPORATION AND SUBSIDIARIES
                   CONDENSED CONSOLIDATED BALANCE SHEETS
<CAPTION>
                                                  June 30,     December 31,
                                                     1996         1995
                                                 (UNAUDITED)
                                                -----------    ------------
<S>                                             <C>            <C>
                                  ASSETS
Current assets:
  Cash and cash equivalents...................  $      4,800   $      -
  Accounts receivable.........................        39,800        89,100
  Prepaid expenses and deposits...............        59,100        33,700
  Notes receivable............................        72,000        72,000
  Other receivables...........................        62,000          -
                                                -------------  ------------
    Total current assets......................       237,700       194,800
Furniture, fixtures and equipment,
    net of accumulated depreciation
    of $450,300 and $445,400..................        46,800        51,700
Intangible assets, net of accumulated
  amortization of $1,051,900 and $856,500.....        89,200       195,400
                                                -------------  ------------
    Total assets..............................  $    373,700   $   441,900
                                                =============  ============
                                     
              LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
  Note payable................................    $  150,000   $    25,000
  Accounts payable............................       929,300       996,600
  Accrued liabilities.........................       222,200       175,200
  Convertible debenture.......................       800,000       800,000
  Liabilities of discontinued operations......         2,500         2,500
                                                -------------  ------------
    Total current liabilities.................     2,104,000     1,999,300
                                                -------------  ------------
    Total liabilities.........................     2,104,000     1,999,300
                                                -------------  ------------

Stockholders' equity (deficit):
  Common stock, par value $.01 issued
    17,593,152 shares in 1996 and 12,930,479
    shares in 1995............................       175,900       129,300
  Additional paid-in capital..................    19,848,200    19,759,600
  Accumulated deficit.........................   (21,754,400)  (21,446,300)
                                                -------------  ------------
    Total stockholders' equity (deficit)......    (1,730,300    (1,557,400)
                                                -------------  ------------
    Totals....................................  $    373,700   $   441,900
                                                =============  ============
</TABLE>
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<TABLE>
                FINET HOLDINGS CORPORATION AND SUBSIDIARIES
              CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
<CAPTION>
                                                    THREE MONTHS ENDED
                                                          June 30,
                                                        (UNAUDITED)
                                                 --------------------------
                                                      1996         1995
                                                  ------------  -----------
<S>                                               <C>           <C>
Revenues........................................  $       900   $   79,800

Operating expenses:
  Compensation and benefits.....................       76,900      172,400
  Occupancy and equipment.......................        1,500       25,700
  Communications................................        3,900       12,700
  Loan related fees and costs...................        1,200        1,500
  Amortization & Depreciation...................       55,600      167,100
  General & administrative......................          400      105,100
                                                  ------------  -----------
                                                      139,500      484,500
                                                  ------------  -----------
(Loss) from operations..........................     (138,600)    (404,700)
                                                  ------------  -----------
Interest........................................       20,100       20,600
                                                  ------------  -----------
(Loss) from continuing operations...............     (158,700)    (425,300)
                                                  ------------  -----------
Other expense...................................         -          15,900
                                                  ------------  -----------
Net income/(loss)...............................  $( (158,700)  $ (441,200)
                                                  ============  ===========
Net income/(loss) per share.....................        $(.01)       $(.06)
                                                  ============  ===========
</TABLE>
<PAGE> 4

<TABLE>
                FINET HOLDINGS CORPORATION AND SUBSIDIARIES
              CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
<CAPTION>
                                                      SIX MONTHS ENDED
                                                          June 30,
                                                        (UNAUDITED)
                                                  -------------------------
                                                      1996         1995
                                                  ------------  -----------
<S>                                               <C>           <C>
Revenues........................................  $    31,800   $  347,700

Operating expenses:
  Compensation and benefits.....................      170,400      733,400
  Occupancy and equipment.......................        6,700       99,500
  Communications................................       25,300       60,600
  Loan related fees and costs...................        5,500       26,500
  Amortization & Depreciation...................      111,200      342,500
  General & administrative......................       18,800      349,700
                                                  ------------  -----------
            Total operating expense                   337,900    1,612,200
                                                  ------------  -----------
(Loss) from operations..........................     (306,100)  (1,265,200)
                                                  ------------  -----------
Interest........................................       42,000       24,700
                                                  ------------  -----------
(Loss) from continuing operations...............     (348,100)  (1,289,900)
                                                  ------------  -----------
Other income/(expense)..........................       40,000      206,400
                                                  ------------  -----------
Net income/(loss)...............................  $  (308,100)  (1,496,300)
                                                  ============  ===========
Net income/(loss) per share.....................        $(.02)       $(.21)
                                                  ============  ===========
</TABLE>
<PAGE> 4

<TABLE>
                FINET HOLDINGS CORPORATION AND SUBSIDIARIES
         CONDENSED CONSOLIDATED STATEMENTS OF ACCUMULATED DEFICIT
<CAPTION>
                                                SIX MONTHS ENDED
                                                 June 30, 1996
                                                   (UNAUDITED)
                                                -----------------
<S>                                               <C>
Accumulated deficit at beginning of period......  $(21,446,300)
Net loss........................................    ( (308,100)
                                                  -------------
Accumulated deficit at end of period............  $(21,754,400)
                                                  =============
</TABLE>
                                     
<TABLE>
              CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
<CAPTION>
                                                     THREE MONTHS ENDED
                                                          June 30,
                                                        (UNAUDITED)
                                                 --------------------------
                                                     1996         1995
                                                 ------------  ------------
<S>                                              <C>           <C>
Cash flows from operating activities:
  Net (loss)...................................  $  (158,700)  $(1,277,800)
  Adjustments to reconcile loss to
    cash used in operating activities..........      149,300   ,XXX
65,300
                                                 ------------  ------------
  Net cash used by operating activities........       (9,400)   (1,218,500)
                                                 ------------  ------------

Cash flows from financing activities:
  Proceeds from sale of common stock...........         -           75,000
  Proceeds from sale of convertible debenture..         -          800,000
                                                 ------------  ------------
  Net cash provided by financing activities....         -          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.....       (9,400)     (323,800)
                                                 ============  ============
</TABLE>
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                        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 second 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 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 June 30, 1996 and
for the six months ended June 30, 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 June 30, 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 16,333,013 shares (six months) in
1996 and 6,705,152 shares (six 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.  During
1996  to  date, the Company's operations have been sustained  primarily  by
bridge  loans  provided  by  individual  shareholders  in  anticipation  of
completing  the  Company's  previously reported voluntary  recapitalization
plan (the "Plan").

The  Plan  called  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 business plan.

The  Company  has continued to incur losses and negative cash flow  through
June  30,  1995.  Absent successful completion of the Plan, the ability  of
the   Company   continue  operations  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

As previously reported, the Company's activities during the quarter were
focused primarily on completing the Plan. Based on discussions with its
private placement agent in January, 1996, the Company anticipated
completing its $2 million equity offering by May 15, 1996 and, based on a
50% reduction in executive compensation levels, receiving approximately
$200,000 of bridge loans to sustain its operations until then. Of $150,000
in bridge loans arranged by the placement agent, after its expenses the
Company received a net total of $103,000. Accordingly, the Company's staff
was reduced to two executive officers and a part-time administrative
assistant. After April 30, 1996, due to the lack of cash, all executive
compensation has been deferred.

During the second quarter, the plan for settlement with unsecured creditors
was developed in detail and distributed to creditors with a request for
their approval. Expressions of interest obtained by the placement agent
have been insufficient to proceed with the private placement.

The mortgage brokerage activities conducted by Finet Corporation, a wholly
owned subsidiary were licensed to the owner of a Finet affiliate office. On
May 15, 1996, the license expired and mortgage operations reverted to Finet
Corporation. These activities consisted primarily of collecting monthly
affiliation fees from remaining affiliate offices and providing various
marketing and lender support services to affiliates. A percentage of fees
received was used to compensate the individual who provided these services
and coordinated execution of the creditor settlement plan.
<PAGE> 7

During the second quarter, the Company was approached by a local mortgage
banking firm interested in some form of cooperative alliance. After
considerable discussion and negotiation, as previously reported on Form 8-
K, on May 22, 1996 the Company entered into a binding Term Sheet Agreement
(the "Agreement") with Monument Mortgage, Inc. ("MMI"), a California
corporation, and Preference America Mortgage Network ("PAMN"), a California
corporation, to acquire 100% of the issued and outstanding stock of both
corporations. MMI is a mortgage banking firm operating in 15 states. PAMN
is a mortgage broker operating primarily in Florida. Two individuals are
the sole shareholders of MMI and, together with a third individual, are the
shareholders of PAMN.

Pursuant to the Agreement, MMI and PAMN will become subsidiaries of the
Company and continue operations under their current names. It is
contemplated that the acquisition of MMI will be a pooling of interests
involving an exchange of shares for a total consideration to be determined
upon completion of MMI's audit for the year ending April 30, 1996. The
Registrant will purchase PAMN from its three shareholders for $250,000.

The purchase price and terms for these acquisitions were arrived at only
after arms-length negotiations between the principals of the three
corporations.  The underlying principles used in determining the
consideration for the two acquisitions involved an unscientific analysis of
the past performance and existing value of the two companies, and the
future potential of the combined entity. The Agreement further provides for
the Company to enter into employment agreements with the MMI owners upon
terms outlined in the Agreement.

As a result of this event, the Company reviewed and revised its business
development plan to incorporate the expanded opportunities resulting from
these acquisitions.  Completion of these acquisitions is contingent upon
the Company raising a minimum of $2 million in its private placement, the
size of which the Company and placement agent have agreed to increase to $3
million and open to subscription in the third quarter of 1996.

<PAGE> 8

QUARTER ENDED JUNE 30, 1996 COMPARED TO QUARTER ENDED JUNE 30, 1995

The Company incurred a net loss in the second quarter of 1996 of $158,700.
$138,600 of the loss was from continuing operations as compared with
$425,300 for the second quarter of 1995. There is little basis for
comparison of these two periods.  The Company's operations in the second
quarter of 1995 were comprised primarily of the mortgage brokerage
activities of Finet Corporation supporting affiliate offices, whereas in
the second quarter of 1996 through May 15, 1996 all mortgage brokerage
activity was licensed to another entity, and thereafter the number of
affiliates was reduced further for non-payment of affiliate fees.

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 of
payments to service providers and compensation of management personnel.
Such expenses were $76,900 the second quarter of 1996 and $172,400 in the
second quarter of 1995.

Occupancy and equipment expenses were $1,500 in the second quarter of 1996
and $25,700 in the second quarter of 1995. The reductions were due
primarily to significantly reduced corporate office rental expense.

Communications expense was $3,900 in the second quarter of 1996 and $12,700
in the in the second quarter of 1995. The decrease was related primarily to
office consolidations and staff reductions.

Loan related fees and costs were $1,200 in the second quarter of 1996 and
$1,500 in the second quarter of 1995. The decrease was due primarily to the
licensing of mortgage activities to an affiliate office.

Amortization and depreciation expenses were $55,600 in the second quarter
of 1996 and $167,100 in the second quarter of 1995. The decrease was
related primarily to 1995 write-off of intangible assets.

Other 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 $400 in the second quarter of 1996 and $105,100 in the second
quarter of 1995. The decrease is primarily due to cost control measures.

Interest expense decreased from $20,600 in the second quarter of 1995 to
$21,100 in the second quarter of 1996, and is related to the convertible
debenture.

The effective overall tax rate remained at 0%.

As a result of the foregoing, net income was $(158,700), a decrease of 64%.
<PAGE> 9

SIX MONTHS ENDED JUNE 301, 1996 COMPARED TO SIX MONTHS ENDED JUNE 30, 1995

The Company incurred a net loss in the first six months of 1996 of
$308,100. $306,100 of the loss was from continuing operations as compared
with $1,265,200 for the first six months of 1995. As previously discussed
herein, there is little basis for comparison of these two periods.

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 management personnel. Such
expenses were $170,400 the first six months of 1996 and $733,400 in the
first six months of 1995.

Occupancy and equipment expenses were $6,700 in the first six months of
1996 and $99,500 in the first six months of 1995. The reductions were due
primarily to significantly reduced corporate office rental expense.

Communications expense was $25,300 in the first six months of 1996 and
$60,600 in the in the first six months of 1995. The decrease was related
primarily to office consolidations and staff reductions.

Loan related fees and costs were $5,500 in the first six months of 1996 and
$26,500 in the first six months of 1995. The decrease was due primarily to
the licensing of mortgage activities to an affiliate office.

Amortization and depreciation expenses were $111,200 in the first six
months of 1996 and $342,500 first six months of 1995. The decrease was
related primarily to the 1995 write-off of intangible assets.

Other 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 $18,800 in the first six months of 1996 and $349,700 in the
first six months of 1995. The decrease is primarily due to cost control
measures.

Interest expense increased from $24,700 in the first six months of 1995 to
$42,000 in the first six months 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 $(308,100), a decrease of 80%.
<PAGE> 10

                                  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 $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.



<PAGE> 11
                                     
                                 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.


<TABLE>
<S>                            <C>
                               FINET HOLDINGS CORPORATION

Date: December 23, 1996                 L. DANIEL RAWITCH
                               -------------------------------------
                                        L. DANIEL RAWITCH
                               (CEO AND PRINCIPAL EXECUTIVE OFFICER)

Date: December 23, 1996                   JAN C. HOEFFEL
                               -------------------------------------
                                          JAN C. HOEFFEL
                                          (PRESIDENT AND
                                   PRINCIPAL FINANCIAL OFFICER)
</TABLE>