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                  U.S. SECURITIES AND EXCHANGE COMMISSION
                           WASHINGTON, DC 20549

                             ----------------

                                FORM 10-QSB

           [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                  OF THE SECURITIES EXCHANGE ACT OF 1934

              For the quarterly period ended January 31, 1999

                         ------------------------
                                     
                      Commission File Number: 0-18108
                                     
                         ------------------------
                                     
                        FINET HOLDINGS CORPORATION
          (Exact name of registrant as specified in its charter)
                                     
                                 DELAWARE
         (State or jurisdiction of incorporation or organization)
                                     
                            3021 CITRUS CIRCLE
                          WALNUT CREEK, CA  94598
                  (Address of Principal Executive office)
                                     
                                94-3115180
                   (IRS Employer Identification Number)
                                     
                              (925) 988-6550
           (Registrant's telephone number, including area code)


Indicate by check mark whether the registrant has (1) filed all reports
required to be filed by Section 13 or 15(d) of the Securities Act of 1934
during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
filing requirements within the past 90 days.

                              Yes    X   No ___

The number of shares outstanding of each of the issuer's classes of common
stock was 77,242,686 shares of common stock, par value $.01, as of March
12, 1999.



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<PAGE> 1
                                   INDEX

                      PART I - FINANCIAL INFORMATION
                                     
    Item                                              Description
Page

     1.   Unaudited Condensed Consolidated Financial Statements

       Unaudited Condensed Consolidated Balance Sheet January 31, 1999
     2
     
       Unaudited Condensed Consolidated Statements of Operations
          Three Months and Nine Months Ended January 31, 1999 and 1998
     3
     
       Unaudited Condensed Consolidated Statements of Cash Flow
          Nine Months Ended January 31, 1999 and 19984
     
       Notes to Unaudited Condensed Consolidated Financial Statements5
     
     2.  Management's Discussion and Analysis of Financial Condition and
          Results of Operations                      10
     
                        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> 2
                       PART I. FINANCIAL INFORMATION

                       ITEM 1. FINANCIAL STATEMENTS

                FINET HOLDINGS CORPORATION AND SUBSIDIARIES
                   CONDENSED CONSOLIDATED BALANCE SHEET
                                (UNAUDITED)
                   (Dollars in thousands, except shares)
                                     

                                             January 31 1999
                                                           ------------
     ASSETS
     Cash and cash equivalents                         $   2,508
     Accounts receivable                                   5,080
     Mortgages held for sale, net of allowances           31,178
     Mortgage servicing rights                             1,832
     Furniture, fixtures & equipment, net of accumulated depreciation
     1,853
     Other assets                                            356
                                                                -------
     Total assets                                       $ 42,807
                                                                =======
     
     
     LIABILITIES AND STOCKHOLDERS' EQUITY
     Liabilities:
     Warehouse lines of credit                          $ 32,604
     Notes payable and capitalized leases                    323
     Accounts payable, accrued expenses and other liabilities7,077
                                                                -------
              Total liabilities                           40,004
     
     Commitments and contingencies                             -
     
     Stockholders' equity:
     Preferred stock, $.01 par value (100,000 shares authorized, 200
     shares issued and
        outstanding)                                           -
     Common stock, $.01 par value (150,000,000 shares authorized,
     69,774,343 shares
         issued and outstanding)                             697
     Paid-in capital                                      37,861
     Preferred stock discount                               (61)
     Accumulated deficit                                (35,694)
                                                                -------
            Total stockholders' equity                     2,803
                                                                =======
     
     Total liabilities and stockholders' equity      $    42,807
                                                                =======
     
 The accompanying notes are an integral part of the consolidated financial
                                statements.
   
<PAGE> 3
             FINET HOLDINGS CORPORATION AND SUBSIDIARIES
              CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited - Dollars and amounts in thousands - except shares and per share
                                   data)

                                Three Months Ended Jan 31      Nine Months
Ended Jan 31
                                 1999      1998      1999      1998
Revenues:                             ------    -------    -------    -----
--
Warehouse interest income       $1,378    $ 640     $5,335    $2,396
Gain on sale of mortgage loans and servicing rights 1,967     2,315
11,200                          6,818
Loan servicing fees               674        14     1,425       267
Loan brokerage fees               720       187     2,150       262
Other                              73      (44)       269       122
                                   -------    -------    ------    -------
    Total revenues              4,812     3,112     20,379    9,865

Cost of Revenues:
Warehouse interest expense      1,964       589     5,850     2,009
Loan origination costs          2,862       266     5,278       758
Provision for loan losses       3,914        46     4,464       332
Servicing portfolio valuation adjustment  1,675         -     1,675
-
                                   -------    -------    -------    -------
    Total cost of revenues      10,415      901     17,267    3,099
                                   -------    -------    -------    -------
Gross profit                    (5,603)   2,211     3,112     6,766

Operating Expenses
  Compensation and related expenses       3,292     2,198     11,282
6,313
  General and administrative expenses     2,509       968     6,227
3,162
  Marketing expenses              336       146     1,347       647
  Mical reorganization charge     642         -       642         -
  Depreciation and amortization 3,871       131     4,550       427
  Other operating expense (income)        (30)      266       423     623
                                   -------    -------    -------    -------
    Total expenses              10,620    3,709     24,471    11,172

Loss from Operations            (16,223)  (1,498)   (21,359)  (4,406)

Other Expenses:
  Other interest expense          811         -     3,054         -

Loss Before Income Taxes        (17,034)  (1,498)   (24,413)  (4,406)
  Income taxes                      -     (121)         -     (166)
                                   -------    -------    -------    -------
Net Loss                        (17,034)  (1,619)   (24,413)  (4,572)
  In-substance preferred dividend         644       -         644     -
                                   -------    -------    -------    -------
Net Loss for Common Shareholders    $     (17,678)  $(1,619)  $(25,057)
$                               (4,572)
                                   =======    =======    =======    =======
Basic and diluted net loss per common share $       (0.37)    $(0.05) $
(0.66)                          $ (0.15)
                                   =======    =======    =======    =======
Shares used in computing basic and diluted
  share data                    47,884,650 31,324,897         37,738,670
30,450,211
 The accompanying notes are an integral part of the consolidated financial
                                statements.
<PAGE> 4
                FINET HOLDINGS CORPORATION AND SUBSIDIARIES
                   CONSOLIDATED STATEMENTS OF CASH FLOWS
                     (Unaudited, Dollars in thousands)
                                     
                                                 Nine months ended
January 31
                                                    1999      1998
                                                       -------    -------
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net loss                                       $(25,057) $(4,572)
  Adjustments to reconcile net loss to net cash used in operating
activities:
    Depreciation and amortization                  5,193       600
    Write down of goodwill and other asset valuation adjustments     5,043
295
    Gain on sale of mortgage servicing rights      (420)      (47)
  Changes in operating assets and liabilities:
     (Increase) decrease in mortgage loans held for sale and receivables
94,932                                          (1,537)
     (Increase) decrease in originated mortgage servicing rights, net
521                                               (582)
     (Increase) decrease in other assets           1,273       129
     Increase (decrease) in accounts payable and accrued expenses
(4,120)                                           3,678
     Other                                           128     (176)
                                                       -------    -------
     Net cash provided (used) by operating activities      77,493
(2,212)
                                                       -------    -------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchase of mortgage servicing rights               -    (3,490)
  Proceeds from sale of mortgage servicing rights  1,509        75
  Purchase of furniture, fixtures and equipment    (238)     (369)
  Acquisition of purchased technology and intangibles      (481)     (722)
 Cash acquired in acquisition                        185         0
  Other                                                -      (38)
                                                       -------    -------
    Net cash provided (used) by investing activities       975
(4,544)
                                                       -------    -------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Proceeds from issuance of common and preferred stock     16,373    6,740
  Proceeds from issuance of convertible debt       1,384         -
  Net increase (decrease) in warehouse borrowings(91,928)    1,218
  Proceeds from advances on note payable and line of credit 1,400
1,150
  Redemption of convertible debt and preferred stock       (2,000)        -
  Repayment of note payable, capitalized leases and line of credit
(3,890)                                           (664)
 Other equity                                        523        84
                                                       -------    -------
    Net cash provided (used) by financing activities       (78,138)
8,528
                                                       -------    -------
Net increase in cash                                 330     1,772
Cash at beginning of period                        2,178     1,148
                                                       -------    -------
Cash at end of period                            $ 2,508   $ 2,920
                                                       -------    -------


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

<PAGE> 5
                        FINET HOLDINGS CORPORATION
      NOTES TO UNAUDITED CONDENSED 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  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  operations  of  the Company's principal lending  subsidiaries  include
Monument   Mortgage,  Inc.  ("Monument"),  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.  The Company operates or intends to operate throughout the 40 states
in which the Company is currently licensed.

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
nine  months ended January 31, 1998 have been restated to include Coastal's
results of operations for that period.

BASIS OF PRESENTATION
The accompanying unaudited condensed 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 considered necessary for a fair presentation of the results
for  the interim period have been included.  Operating results for the nine
months ended January 31, 1999 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 wholly owned subsidiaries. All significant intercompany balances and
transactions    have    been    eliminated   in   consolidation.    Certain
reclassifications  of the 1998 amounts were made to  conform  to  the  1999
presentation.

PER SHARE AMOUNTS
Basic EPS is determined by dividing net loss for common shareholders by the
weighted  average shares outstanding during the period.   Since  the  fully
diluted  loss  per  share for the quarters and year to date  periods  ended
January  31,  1999  and 1998, respectively, were 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.

OTHER
In   connection  with  mortgage  loan  servicing  activities,  the  Company
segregates  escrow  and  custodial funds in a separate  trust  account  and
excludes  this  balance  of  $8.5 million at  January  31,  1999  from  the
Company's assets on the accompanying balance sheet.

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 431,970 shares of the Company's  common  stock
valued  at  $1,400,000.  Upon  the resolution of  specified  contingencies,
120,460 additional common shares may be issued.  In addition, 33,146 common
shares were issued as a finder's fee and 73,063 shares were issued under  a
keep-well agreement with an existing shareholder.
<PAGE> 6

The acquisition has been accounted for as a purchase, and Mical's financial
position  and  results of operations have been 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 was recorded as goodwill.
Goodwill  was amortized on a straight-line basis over 10 years  during  the
nine months ended January 31, 1999 and totaled $144,000.

During the third quarter, the Company's Board of Directors approved a  plan
to  wind  down its Mical operations located in San Diego, California.   The
Company  also reviewed the amount recorded as goodwill and determined  that
there  was  no future economic value.  Accordingly, the entire  unamortized
balance  of $2,898,000 (after purchase accounting adjustments) was expensed
in the third quarter.  (See Footnote 7)

On  June  23,  1998 the Company acquired certain assets from an  individual
which  include an internet site, "interloan.com" ("Interloan") in  exchange
for 100,000 shares of the Company's common stock.  The Company also entered
into  an employment agreement with that individual which is effective until
June 31, 2001.

NOTE 3.  MORTGAGE SERVICING RIGHTS

During  the  nine months ended January 31, 1999, the activity  in  mortgage
loan servicing rights was as follows:

(In thousands)           January 31,
                             1999
                           -------
Mortgage Servicing Rights
  Beginning balance      $5,478
  Additions              1,231
  Sales                  (1,825)
  Amortization/Payoff    (1,377)
  Valuation adjustment   (1,675)
                           -------
  Ending balance         $1,832
                           =======

In  the  third quarter the Company recorded expense of $1,675,000  for  the
permanent  impairment of the servicing rights portfolio.   The  write  down
reflects  the  rapid  runoff and current condition  of  the  portfolio  and
includes costs to prepare it for sale.

NOTE 4.  DEBT

The  following table and comments present summary information regarding the
Company's debt as of January 31, 1999: (In thousands)

Facility                 Balance                       Interest Rate
Expires or Due
REVOLVING
Warehouse lines of credit:
$35 million committed    $19,859     LIBOR+ variable spread December 31,
1998
$14 million committed    9,180       LIBOR +2.5%       December 31, 1998
$60 million              3,565       NY Prime          May 1, 1999
                             -------
                         32,604
NOTES AND CAPITAL LEASES:
Notes and capital leases   323       Various           Various though 2002
                              -------
TOTAL DEBT               $32,927
                              =======

<PAGE> 7

The  Company  issued $1,500,000, the final tranch, of its  3%  Subordinated
Convertible  Debentures (the "Debentures") in May 1998 bringing  the  total
issue  of Debentures to $7,000,000.  In connection with this final  tranch,
the  Company  recorded  a  discount  and corresponding  additional  paid-in
capital of $423,000, in addition to amounts recorded in the previous fiscal
year.   The  discount represents imputed interest for the  market  discount
conversion  factor,  and  totaled  $1,974,358  for  all  tranches  of   the
Debentures.  The  discount  was amortized to interest  expense  during  the
period  from  the  date  of issue to the date the Debentures  first  became
convertible.   Through  January 31, 1999, the  Company  has  amortized  the
entire  discount  to  interest expense.  $304,110 and  $1,687,077  of  debt
discount  amortization are included in the Company's Consolidated Statement
of  Operations  in "Other interest expense" for the three  and  nine  month
periods  ended  January 31, 1999 respectively.  The company  also  recorded
$563,000 of expense related to debt issuance costs.

In  January  1999, the Company converted $1,100,000 of the total $7,000,000
Debentures  into  2,200,000 common shares at a conversion  price  of  fifty
cents  per share and converted an additional $4,400,000 of Debentures  into
7,333,333  common  shares at a conversion price of sixty cents  per  share.
The remaining $1,500,000 of Debentures were redeemed at 100 percent of face
value.  (See Note 6)

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

DEBT COVENANTS
The  borrowing  agreements (the "Agreements") for the  warehouse  lines  of
credit 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.

In  the second quarter, one of the Company's warehouse lenders, Residential
Funding Corporation ("RFC"), notified the Company that it was in default of
its  lending agreements, as the Company did not meet its required  interest
and  debt service obligations as they became due.  The Company was also  in
violation  of  certain financial covenants.  During the third quarter,  the
Company  paid  the  outstanding  interest due  and  all  principal  amounts
outstanding  on its servicing acquisition loan of $1,800,000,  its  working
capital  revolving facility of $1,000,000 and on its term note of $354,000.
In  March  1999,  the Company cured all monetary defaults  with  RFC.   The
financial  ratio  default  has not been cured, but  RFC  has  continued  to
provide  the warehouse line without interruption.  The warehouse  lines  of
credit  with  RFC expired on December 31, 1988.  RFC and the  Company  have
executed  monthly extension agreements to these warehouse lines,  with  the
most recent extension expiring on March 31, 1999.

As  a  result  of  the  default, RFC imposed additional  fees  of  $280,000
resulting  from excess borrowings over the committed amount.  Also,  during
the  period  from  October  1998 until February  1999,  RFC  increased  the
interest  rates on the Company's borrowings to 4% in excess  of  the  rates
otherwise  applicable,  which  significantly  increased  interest   expense
recorded  for  the  three and nine months periods ended January  31,  1999.
RFC also reduced the total committed lines from $79 million to $49 million.
Effective  March 1, 1999 RFC lowered the rates charged the Company  to  its
normal, non-default rates of LIBOR plus 225 - 275 basis points.

The  Company and RFC have discussed entering into a new committed warehouse
credit  agreement. There can be no assurance that the Company and RFC  will
enter  into such agreement.  The inability to cure the default could result
in  a  major  disruption  to  the Company's  sub-prime  business,  and  the
Company's business relationships with its sub-prime brokers, investors  and
borrowers  could  be seriously damaged.  There could be a material  adverse
impact  on results of operations and financial condition if the Company  is
unable  to  maintain  its  credit facilities or  obtain  additional  credit
facilities.
<PAGE> 8

At the date of and subsequent to the Company's acquisition of Mical, Dryson
Acceptance  Corporation ("Dryson") provided warehouse  financing  to  Mical
through  a  purchase  and repurchase agreement. During  March  1999,  Mical
repurchased  all  remaining loans sold to Dryson under the  terms  of  this
agreement.  In the third quarter, Dryson expanded its lending  relationship
with  the  Company, providing Monument with additional warehouse  financing
for prime mortgage loans. Dryson will make advances (will purchase) 98%  or
97%  of the loan value and the Company will provide the remaining 2% to  3%
to  complete  the funding of the loan.   From the time Dryson has  advanced
(purchased)  the  97%  or  98% until the Company repays  (repurchases)  the
amount,  the  Company will incur interest of LIBOR plus  225  -  275  basis
points.  Amounts are not considered "committed" by Dryson until the Company
receives  a  written  commitment for the purchase  of  a  particular  loan.
Accordingly,  the Company does not incur commitment fees or  unused  credit
facility  charges.   The  Company is required to remit  periodic  financial
statements to Dryson.

Additionally,  the Company received approval for $15 million  of  warehouse
borrowing  capacity  to be provided by Fannie Mae.  The  interest  rate  is
LIBOR  plus 85 - 100 basis points.  There are no borrowings outstanding  at
January 31, 1999 on either of the new Dryson or Fannie Mae facilities.  The
outstanding balance of the Dryson warehouse financing with Mical at January
31, 1999 was $2.0 million, which was reduced to zero in March 1999.

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 for  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 $25,000,000 as of January 31, 1999.

NOTE 6. STOCKHOLDERS' EQUITY

In  May 1998, the Company issued 431,970 shares of common stock, valued  at
$1,400,000,  as  consideration  for the acquisition  of  Mical.   Upon  the
resolution of specified contingencies, 120,460 additional common shares may
be issued. As a result of the acquisition, 33,146 common shares were issued
as  a finders fee and 73,063 shares were issued under a keep-well agreement
with an existing shareholder.

<PAGE> 9

In  June  1998,  the Company purchased Interloan.  100,000  shares  of  the
Company's common stock were issued in connection with this purchase.

In September 1998, the Company issued 250 shares of its $2,500,000 Series A
Convertible Preferred Stock ("Preferred") in a private placement generating
$2,286,250  of  proceeds, net of expenses. In addition, the Company  issued
Warrants  to  the  Preferred investors to purchase 250,000  shares  of  the
Company's  common stock at $1.00 per share. The Preferred shareholders  are
not  entitled  to  vote  or to receive dividends.   Upon  any  liquidation,
dissolution  or  winding up, the holders of the Preferred 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.   The Company  recorded  a  preferred  stock
discount  of $705,000 upon issuance of the preferred stock.  This  discount
is  amortized  to  the date the preferred stock first becomes  convertible.
$644,000  of  this  discount has been amortized and  is  reported  as  "In-
substance  preferred dividend" on the Company's Consolidated Statements  of
Operations.   The  unamortized portion of the discount is reported  on  the
Company's Consolidated Balance Sheet as "Preferred stock discount".

In  the  third quarter, the Company reached an agreement with its Preferred
shareholders  to redeem the entire $2,500,000 outstanding  at  face  value.
$500,000  of  the redemption price was paid in the third quarter,  and  the
Company  expects  to pay the remaining $2,000,000 of the  redemption  price
during  the  fourth quarter of the current fiscal year.  The  Company  also
agreed to issue 840,000, 5-year warrants, exercisable at $1.50 per share to
the Preferred shareholders.

In November 1998, the Company issued 2,500,000 shares of common stock at
eighty cents per share, for proceeds of $2,000,000 in a private placement.
Per the agreement, an additional 1,000,000 shares were issued, bringing the
total issuance to 3,500,000 shares and the price per share to fifty-seven
cents per share, as adjusted.   In connection with the issuance, the
Company agreed to reduce the exercise price of 1.0 million common stock
purchase warrants owned by the investor from $5.00 to $1.00 per share.

In  December 1998, the Company received $12.1 million cash proceeds, net of
expenses,  from  additional private placements of 21.9  million  shares  of
common  stock at sixty cents per share. The Company used these proceeds  to
satisfy debt obligations, to redeem a portion of the Preferred  and to fund
operations.

The  Company received additional equity contributions subsequent to January
31, 1999.  (See Note 8).

NOTE 7. MICAL REORGANIZATION

During  the third quarter, the Company reviewed the operations and  quality
and compliance procedures of Mical Mortgage, Inc., acquired in May, 1998 to
determine how best to maximize shareholder value.  The Company's  Board  of
Directors  approved a plan to wind down Mical's operations  which  includes
closing  the  operation  located  in San Diego,  California.   The  Company
assessed the remaining goodwill balance and determined that the amount  had
no  future  economic  value.  Accordingly, goodwill of $2,898,000,  net  of
purchase  accounting  adjustments, was expensed  and  is  included  in  the
Company's  Consolidated  Statement  of  Operations  in  "Depreciation   and
amortization".

The  Company  also recorded reorganization expense of $642,000  during  the
third  quarter  to recognize costs that are incremental to on-going  normal
operations as follows:

(In thousands)            1999
                           -------
Severance, employee costs    $     242
Excess consulting costs    100
Excess lease costs         300
                           -------
    Total reorganization expense   $    642
                           =======

<PAGE> 10

Except  for the items detailed above totaling $642,000, all other financial
statement  effects  of  winding down Mical are  included  in  results  from
operations as incurred.

NOTE 8.  SUBSEQUENT EVENTS

Subsequent to January 31, the Company received a total of $12,929,000 from
the private placement of 7,010,000 shares of common stock.


   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 the sale of customer  leads  to  other  real
estate  service  providers; and (d) from providing  Internet  products  and
services to realtors, loan brokers and consumers.

COMPARISON OF QUARTERS ENDED JANUARY 31, 1999 AND 1998

The  Company  is  currently expanding the scope of its electronic  commerce
mortgage  financing transaction services.  The 1999 period  includes  costs
related to this plan. Revenues for the three months ended January 31,  1999
include the operations of Mical and Interloan, which were both acquired  in
purchase  accounting  transactions in the  first  quarter  of  1999.   Both
periods  include  the  results of the Company's Coastal  unit,  as  it  was
acquired in the prior fiscal year in a pooling transaction.


<PAGE> 11

Revenues  for the quarter ended January 31, 1999 increased $1.7 million  or
55%, from $3.1 million to $4.8 million over the 1998 quarter. Increases  in
warehouse interest income and loan servicing fees were offset by a decrease
in  gain on sale of mortgage loans and servicing rights.  The Company  also
experienced increases in most operating expenses as it is investing in  its
people  and  technology infrastructure to grow the  business.   However,  a
significant portion of these increases were non-recurring, as follows:


                                        January 31,
(In thousands)                       1999      1998
                                       -------    -------
Loss from operations before non-recurring items   $    (3,573)   $
(1,498)
Non-recurring items:
      Loss attributable to Mical   (8,625)        -
      Loan loss (except Mical)     (1,178)        -
      Loan servicing portfolio valuation (except Mical)          (1,587)
-
      Write off of REOS technology purchase   (571)         -
      Excess warehouse interest and loan fees          (689)          -
                                       -------    -------
Loss from operations               $(16,223)  $(1,498)
                                       =======    =======


Before non-recurring items, the Company incurred a loss from operations  of
$3.6  million  for the quarter compared to a loss from operations  of  $1.5
million  for  the  same 1998 quarter.  Including non-recurring  items,  the
Company's  operating loss was $16.2 million, and the  net  loss  was  $17.7
million.  Mical's  operating  results and  associated  goodwill  impairment
expense accounts for $8.6 million of the loss.  The Company is winding down
its  Mical's  operations, and the Company expects that  losses  related  to
Mical  will  not  extend beyond the end of the current  fiscal  year.   The
remaining  non-recurring expenses are due to increased  reserves  to  cover
potential loan losses, asset valuation adjustments and excess interest  and
loan  fees  incurred  in connection with the Company's warehouse  financing
default,  as  described  in Note 4 to the Condensed Consolidated  Financial
Statements.  The Company does not expect significant additional expenses in
the fourth quarter related to any of these items.

Revenues  increased  55% from $3.1 million to $4.8  million.  All  of  this
increase  was due to the incremental contributions of Mical ($1.9  million)
and  Interloan ($0.7 million).  Excluding the incremental effects of  Mical
and  Interloan, although volumes were up, revenues declined to $2.2 million
from  $3.1 million in the same prior quarter primarily due to lower  prices
received from investors for the Company's sub-prime loans and lower pricing
margins  implemented by the Company in the second fiscal  quarter  for  its
prime  loans.   Excluding contributions from Mical and Interloan,  revenues
were  slightly  down  as increases in loan servicing fees  were  more  than
offset  by  losses on the sale of mortgage loans and servicing rights.  The
Company's loan originations declined through the third quarter and into the
fourth  quarter as the lack of working capital and the related  default  on
the  company's  warehouse  financing arrangements  caused  the  Company  to
default  on its commitments to its mortgage broker customers.  The  Company
has  just  recently  begun to show month-to-month  increases  in  its  loan
originations.

Loan  servicing fee income increased $0.6 million over the prior  year,  as
the  Company's  loan  servicing portfolio balance is higher  for  the  1999
period  as a result of assets purchased in December of 1997.  However,  the
Company's  loan  servicing portfolio balance is decreasing rapidly  quarter
over  quarter  as  borrowers  refinance to  take  advantage  of  decreasing
borrowing rates.  In addition, to reflect the rapid runoff and the  current
condition of the portfolio, the Company recorded $1.7 million of expense to
reflect  a  permanent impairment of the servicing portfolio  and  costs  to
prepare  it  for  sale. The Company expects loan servicing  fee  income  to
continue to decrease for the balance of the fiscal year.


<PAGE> 12

Loan  brokerage fee revenue increased significantly, from $0.2  million  in
the  third  quarter of 1998 to $0.7 million for the third quarter  of  1999
quarter, reflecting the Company's acquisition and growth of Interloan.

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

(In thousands)        Three Months Ended January 31,
                         1999        1998
                           -------    -------
FHA/VA (Mical)           $27,920   $    -
Retail                   70,011    10,455
Wholesale Prime          189,185   88,665
Wholesale Sub-Prime      17,927    23,632
                           -------    -------
     Total Loan Volume   $305,043  $122,752
                           =======    =======

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 increase over the  same
1998 quarter of $182.3 million resulted primarily from increases in FHA/VA,
retail  and  wholesale prime volume offset by a decline in  wholesale  sub-
prime  volumes.   (Because the Company had begun  winding  down  its  Mical
operations  during  the  current  quarter,  the  impact  of  Mical  is  not
representative of future periods.)

  The Company intends to increase its loan production volumes in the coming
quarters, except in its government (FHA/VA) offerings.  With respect to sub-
prime  offerings, the Company expects to continue to decrease those volumes
in  the  fourth  quarter  while reviewing its  sub-prime  operations,  then
increase  them  as  improvements in operations and profitability  of  those
products are achieved.

Warehouse interest income increased $0.7 million due to increased  balances
of mortgages held from the time of origination until the time they are sold
in the secondary market. The Company expects that warehouse interest income
will  decrease in the coming quarter as loans in inventory are turning over
more  rapidly.  Although warehouse interest income will decrease, warehouse
interest expense related to the period the loans are in inventory will also
decrease, netting an overall improvement in results from operations.

Warehouse  interest expense increased $1.4 million. $0.7  million  was  the
result  of  loan  fees charged for excess borrowings and  default  interest
rates  equal  to  4% above normalized rates which were imposed  the  entire
quarter.   The remainder of the increase was due to an increase in  average
warehouse  borrowings related to the Company's increased loan  volume.  The
Company  expects  warehouse interest expense to decrease,  as  the  Company
returned  to  its  "normalized" warehouse borrowing  rates  in  the  fourth
quarter.  The Company secured additional warehouse borrowing capacities  at
favorable  interest  rates and expects that the removal  of  default  rates
coupled  with improved rates on new facilities will have a positive  impact
on the Company's results from operations

Compensation  and  related employee expenses increased  $1.1  million,  due
mostly  to  the incremental expenses of Mical and Interloan incurred  since
the acquisition dates in the current year.

General  and  administrative expenses increased  $1.5  million,  with  $0.5
million  attributable  to  Mical  and $1.0 million  attributable  to  other
operating  units.  This increase reflects the company's efforts  to  expand
its Interloan originations and volume increases at Monument.

Other  interest expense is attributable to the amortization of the  imputed
interest  on  the  Company's  3% Convertible Subordinated  Debentures,  the
amortization  of  debt issue costs and interest on other  borrowings.   The
debt discount has been fully amortized.
<PAGE> 13

COMPARISON OF NINE MONTHS ENDED JANUARY 31, 1999 AND 1998

Revenues  for  the nine months ended January 31 increased  107%  from  $9.9
million  in 1998 to $20.4 million in 1999.  Of this $10.5 million increase,
the  incremental effects of Mical and Interloan accounted for $7.5  million
and  $1.4  million,  respectively, with the remaining  units  recording  an
increase  of  $1.6 million or 16 % over the prior period primarily  due  to
increased volumes.  The Company incurred a net loss for common shareholders
for the period of $25.1 million compared to $4.6 million for the comparable
prior year period.

Excluding the incremental effects of Mical and Interloan, although  volumes
were  up,  revenues for the rest of the units were slightly down  over  the
same  prior  year to date period.  Increases in warehouse interest  income,
loan servicing fees and retail loan brokerage fees were partially offset by
a  decrease  in gain on sale of mortgage loans and servicing  rights.   The
Company  also  experienced increases in most operating expenses  as  it  is
investing in its people and technology infrastructure to grow the business.
However,  a  significant portion of these increases were non-recurring,  as
follows.

                               For the nine months ended January 31,
(In thousands)                      1999      1998
                                     -------    -------
Loss from operations before non-recurring items  $     (7,087)   $
(4,406)
Non-recurring items:
      Loss attributable to Mical  (10,114)       -
      Loan loss (except Mical)    (1,178)        -
      Loan servicing portfolio valuation (except Mical)          (1,587)
-
      Write off of REOS technology purchase  (571)          -
      Excess warehouse interest and loan fees          (822)          -
                                     -------    -------
Loss from operations              $(21,359) $(4,406)
                                     =======    =======

Before non-recurring items, the Company incurred a loss from operations  of
$7.1 million for the nine months compared to a loss from operations of $4.4
million  for  the  same  1998 period.  Including non-recurring  items,  the
Company's  loss  from operations was $21.4 million, and the  net  loss  for
common  shareholders  was  $25.1  million. Mical's  operating  results  and
associated  goodwill impairment expense accounts for $10.1 million  of  the
loss.   The  Company is winding down Mical's operations,  and  the  Company
expects that losses related to Mical will not extend beyond the end of  the
current fiscal year.  The remaining non-recurring expenses are due to asset
valuation adjustments and due to excess interest and loan fees incurred  in
connection with the Company's warehouse lending default.  The Company  does
not expect significant additional expenses in the fourth quarter related to
any of these items.

The  Company  is currently spending cash resources to support its  business
development  activities.  The revenues being generating, though increasing,
are  currently  insufficient to cover start-up and  operating  costs.   All
business  units,  except Mical, are expected to generate  monthly  revenues
sufficient to cover their respective operating expenses by the end  of  the
fiscal year 2000.

Loan  servicing fee income increased $1.2 million over the prior  year,  as
the  Company's  loan  servicing portfolio balance is higher  for  the  1999
period  as a result of assets purchased in December of 1997.  However,  the
Company's  loan  servicing portfolio balance is decreasing rapidly  quarter
over  quarter  as  borrowers  refinance to  take  advantage  of  decreasing
borrowing rates.  In addition, the Company recorded $1.7 million of expense
to  reflect a permanent impairment of the servicing portfolio and  expenses
to  prepare the portfolio for sale. The Company expects loan servicing  fee
income to continue to decrease for the balance of the fiscal year.

Loan  brokerage fee revenue increased significantly, from $0.3 million  for
the nine months ended January 31, 1998 to $2.2 million for the current year
period, reflecting the Company's acquisition and growth of Interloan.

<PAGE> 14

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

(In thousands)   Nine Months Ended January 31,
                      1999      1998
                    ---------   ---------
FHA/VA (Mical)    $323,956   $     -
Retail             149,389    15,073
Wholesale Prime    578,372   234,270
Wholesale Sub-Prime          72,317     108,891
                    ---------   ---------
    Total Loan Volume    $   1,124,034  $    358,234
                    =========   =========

The  increase  in  volumes was due equally to Mical and  to  the  remaining
units.   However, the Company has begun winding down Mical's operations  so
volumes  contributed by Mical will rapidly decline to  zero.   The  Company
intends  to  increase its loan production volumes in the  coming  quarters,
except  in  its government (FHA/VA) offerings.  With respect  to  sub-prime
offerings, the Company intends to continue to decrease those volumes in the
fourth quarter while reviewing its sub-prime operations, then increase them
as  improvements  in  operations and profitability of  those  products  are
achieved.

Warehouse interest income increased $2.9 million due to increased  balances
of mortgages held from the time of origination until the time they are sold
in the secondary market. The Company expects that warehouse interest income
will  decrease in the coming quarter as loans in inventory are turning over
more  rapidly.  Although warehouse interest income will decrease, warehouse
interest expense related to the period the loans are in inventory will also
decrease, netting an overall improvement in results from operations.

Warehouse  interest expense increased $3.8 million. $0.8  million  was  the
result  of  loan  fees charged for excess borrowings and  default  interest
rates  equal  to 4% above normalized rates that were imposed  from  October
1998 through January 1999 for Monument and February 1999 for Coastal.   The
remainder  of  the  increase was due to an increase  in  average  warehouse
borrowings  related  to the Company's increased loan  volume.  The  Company
expects warehouse interest expense to decrease, as the Company returned  to
its  "normalized"  warehouse borrowing rates in the  fourth  quarter.   The
Company  secured  additional warehouse borrowing  capacities  at  favorable
interest  rates and expects that the removal of default rates coupled  with
improved  rates  on  new  facilities will have a  positive  impact  on  the
Company's results from operations.

Compensation   and  related  employee  expenses  increased  $5.0   million,
primarily  due  to  the incremental expenses of Mical  and  Interloan,  but
partially  due  to the Company's additional investment in  human  resources
necessary to improve the operations.

General and administrative expenses increased $3.1 million, with about half
attributable to Mical and half attributable to other operating units.  This
increase reflects the company's efforts to expand its distribution  network
and costs associated with additional employees.

Other  interest  expense  is  primarily the  amortization  of  the  imputed
interest  on the Company's 3% Convertible Subordinated Debentures  and  the
amortization  of  debt  issue  costs.   The  debt  discount  is  now  fully
amortized.

BUSINESS DEVELOPMENT ACTIVITIES

The  Company's business development activities are focused on becoming  the
leading   electronic  mortgage  banker.   This  includes   increasing   the
electronic  origination  and  fulfillment of  prime  conforming  loans  and
increasing other electronic commerce revenues from: (a) offering  sub-prime
and  government  subsidized loans (b) selling additional homeowner  related
products  and  services; (c) selling business leads to real estate  service
providers; and (d) originating loans through Interloan.
<PAGE> 15

Over  the past several years, the Company has 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, is now concentrating
on  expanding  its e-commerce origination and fulfillment  capabilities  in
these areas.

FINANCIAL CONDITION

Although  Finet's revenue is growing, during its limited operating  history
it  has experienced operating losses and 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 $2.8 million  at  January  31,  1999.
However, subsequent to January 31, 1999, the Company received $12.9 million
in additional equity contributions and expects to redeem the remaining $2.0
million  of its preferred stock outstanding, the net effects of which  will
increase equity by $ 10.9 million.

In  response to these operating trends, Finet has installed new leadership,
including a new chairman and chief executive officer.  Management's charter
is  to  improve operations and to take full advantage of Finet's 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 operations,  to
improve  operating processes and procedures, to cure its warehouse  lending
defaults, and to manage interest expense.  As of March 1, 1999, the Company
has  returned  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  decreased from $101.5 million at April  30,  1998  to  $42.8
million at January 31, 1999.  This decrease is due to the Company's winding
down of the Mical operation and liquidating Mical's mortgages held for sale
and  due  to  improved  turnover of mortgages  held  for  sale.   Warehouse
borrowings  decreased as proceeds from loan sales were used to  reduce  the
warehouse  line of credit.  The Company's $7.0 million of convertible  debt
was  partially redeemed and partially converted to equity.  As a result  of
these effects, liabilities decreased from $98.1 million to $40.0 million.

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  lines 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  and marketing,  to  invest  in  product
development  and  geographic  expansion, and  to  satisfy  debt  and  other
obligations as they come due.

Although new operating revenue sources were developed during 1998 and 1999,
cash generated by operations has been insufficient to meet the Company's on-
going  requirements.  Therefore, the Company has employed servicing-secured
credit  facilities  and  private placements of debentures  and  common  and
preferred  stock  as additional resources to meet operating  and  investing
cash needs.

Operating Activities

In  the  nine  months  ended  January 31,  1999,  the  Company's  operating
activities  generated  cash  of $77.5 million  compared  to  cash  used  by
operations of $2.2 million during the comparable 1998 period.
<PAGE> 16

Subsequent  to  January 31, 1999, the Company ceased originating  loans  at
Mical  and  is selling the remaining loans.  The cash generated from  those
sales  is  being  withheld  by the purchaser of  those  loans  pending  the
completion  of certain documentation and other work necessary  to  properly
support  those  prior  sales.  The Company expects  to  receive  the  sales
proceeds in the fourth quarter, upon completion of the work required.

The  Company  expects  its cash flow from the sale  of  mortgage  loans  to
increase  in  the  fourth  quarter  as it  intends  to  increase  both  its
originations and sales through additional marketing and sales efforts.

During  the  third  quarter, loan production was curtailed  to  reduce  the
balance  of  loans  held for sale and reduce warehouse line  borrowings  in
response  to  the Company's default on its warehouse line of  credit.   The
Company  has  subsequently  accelerated its  sale  of  loans,  reduced  its
warehouse  borrowings below the committed amounts and expects  to  increase
loan production during the fourth quarter.

Financing Activities

Cash  used  by  financing activities was $78.1 million for the  first  nine
months  of  fiscal 1999.  Increased net repayments of warehouse borrowings,
repayments  of  other  debt, and the partial redemption  of  the  Company's
convertible  debt preferred stock were partially offset by the issuance  of
convertible  debt  and  the  issuance  of  common  stock  through   private
placements.

The  Company's net warehouse borrowings decreased significantly  reflecting
the Company's reorganization at its Mical subsidiary.  Warehouse borrowings
were  reduced  without  additional offsetting  new  borrowings.   Warehouse
borrowings  are also lower at the Company's on-going operations at  January
31,  1999  as  volumes  were decreasing at the end of the  current  quarter
compared to activity at the end of the prior fiscal year (April 30, 1998).

The  Company  received $1.4 million from the final tranch of its  Debenture
private  placement issue initiated in the prior year.  In  September  1998,
the  Company  issued 250 shares of its $2.5 million Preferred  stock  in  a
private placement generating $2.3 million of proceeds, net of expenses.

During  the  third  quarter, the Company received  $14.1  million,  net  of
expenses  from  the  issuance  of common shares  in  a  series  of  private
placements.  The proceeds were used to repay debt and other obligations, to
redeem $1.5 million of the Company's Debentures, to redeem $0.5 million  of
the Company's Preferred stock and to fund operations.

If RFC continues to provide warehouse financing for the Company's sub-prime
mortgage loans, and the Company continues to maintain at least the  current
level of working capital borrowing resources, the Company believes that its
cash  resources will be sufficient to finance the Company's minimum working
capital  requirements  for  the  coming twelve  months.   The  Company  has
identified  the  release  of  loan sales proceeds  withheld  by  RFC  as  a
significant source of funds in the fourth quarter. The Company has  secured
additional  working capital warehouse resources through  Dryson  Acceptance
Corporation  and  Fannie  Mae.   The Company  intends  to  seek  additional
sources  of warehouse financing, to fund capital expenditures, and to  make
investments in its infrastructure.  Failure to maintain existing levels  of
warehouse  financing would have a material, adverse effect on the Company's
financial condition and results of operations.

See also Note 4 to the Consolidated Financial Statements.

During  the  fourth quarter, the Company will file a Form SB-2 to  register
51.8  million  common  shares previously issued  and  16.9  million  shares
issuable under warrants.  The Company has 17.1 million outstanding warrants
to issue common shares at prices ranging from $0.50 to $5.71.   The Company
has received notice that warrants for approximately 1.2 million shares will
be  exercised  upon  registration  of  the  underlying  common  shares  and
anticipates  that additional warrants will be exercised.  The  issuance  of
common  shares  through warrant exercises will add  to  the  liquidity  and
capital resources of the Company.


<PAGE> 17

Investing Activities

Investing  activities providing cash of  $1.0 million, consisting primarily
of a reduction in the balance of mortgage servicing rights through sales of
$1.5  million for the nine months ended January 31, 1999.  The Company does
not intend to purchase additional mortgage servicing rights and anticipates
selling  its  servicing  rights portfolio. A sale,  if  consummated,  would
generate cash for general operating purposes.

The Company's capital expenditures totaled $0.2 million for the nine months
ended  January 31, 1999. The Company expects its level of capital  spending
for  the rest of the fiscal year to increase to several million dollars  to
make information systems investments to improve infrastructure.

SUBSEQUENT EVENTS

See Note 8 to the Consolidated Financial Statements.

POTENTIAL FOR NASDAQ DELISTING

There are several requirements for continued listing on the Nasdaq SmallCap
Market  ("Nasdaq"), including a minimum stock price of $1.00 per share.  If
the  Company's  common  share price closes below $1.00  per  share  for  30
consecutive days, the Company may receive notification from Nasdaq that its
common stock will be delisted from the Nasdaq unless the stock closes at or
above  $1.00 per share for at least 10 consecutive days during the  90  day
period following such notification.

Delisting  from  the  Nasdaq Market and inclusion of the  Company's  common
stock on the OTC Bulletin Board or similar quotation medium could adversely
affect the liquidity and price of the stock and make it more difficult  for
investors to obtain quotations or trade the stock.

In  December 1998, the Company received notice from Nasdaq that it had  not
met  required financial ratio criteria for continued listing on the Nasdaq.
Nasdaq  requested  that  the Company maintain a minimum  net  worth  of  $2
million  and complete and submit for its review certain periodic  financial
reporting. Nasdaq could initiate delisting procedures if the Company  fails
to  comply.  Finet has subsequently complied and intends to comply with all
special financial reporting requests and ratio criteria required by Nasdaq.

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 September 30, 1999.  The Company has
taken or is taking the following steps to assure readiness by its business
partners, vendors and clients:

<PAGE> 18

(a)Established a senior management steering committee;
(b) Taking inventory of internally used hardware and software as well as
software developed for customers and peripheral devices and equipment;
(c) Identifying outside parties with whom the Company interfaces
electronically or operationally, such as business partners, loan
providers, customers, vendors and any others, to confirm that their state
of readiness will not pose any financial or operational risk to the
Company, and to understand Finet's responsibility to its business
partners;
(d)Developing an external assessment process in order to adequately assess
the readiness of outside parties;
(e) Determined the additional human resources necessary to implement its
overall plan;
(f) 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; and
(g) Is ensuring that new applications are Y2K compliant.

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
is 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.

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 addressing it as such.

                        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's compensation program for its mortgage brokers was in
violation  of  the  Real  Estate Settlement Procedures  Act  which  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 the broker compensation programs complied
with applicable laws and with long standing industry practices, and that it
has  meritorious  defenses to the Action. Management has  been  advised  by
litigation  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

See Notes 6 and 8 to the Consolidated Financial Statements.
<PAGE> 19

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

On  December  21,  1998  the  Company filed a  definitive  proxy  statement
soliciting  the  written  consent  of the shareholders  of  Finet  Holdings
Corporation (the "Company") to approve the issuance, offering and  sale  by
the  Company  of up to 30,000,000 shares of its Common Stock in  a  private
placement  (the  "Offering") at a price of $0.60 per  share.   The  Company
solicited  the shareholders' consent, as the offering, if fully subscribed,
would  result in the issuance in excess of 20% of the Company's outstanding
Common  Stock.   The offering was previously presented to and  approved  by
shareholders of the Company at the 1998 Annual Meeting. However, to  ensure
that  the Company had obtained the informed consent of its shareholders  to
the offering, the consent clarified the price at which the shares of common
stock were expected to be sold.  The Company received the requisite consent
necessary to complete the offering.

Item 5.  OTHER INFORMATION

On November 24, 1998, the Company's annual meeting of shareholders was held
in  San  Francisco,  California. 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%


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
11/30/98 5     Filing of pro forma financial information per the request of
Nasdaq

12/07/98       2              Amendment of previously filed 8-K providing
               proforma information related to the Company's acquisition of
               100% of the issued and outstanding stock of Mical Mortgage,
               Inc.

01/05/99 5     Announcement of private placement of common shares and
results of operations for the
               period ending October 31, 1998

01/15/99 5     Announcement of agreements to restructure the terms  of  the
original 3% Subordinated
                Convertible  Debentures  and  Series  A  Convertible  Stock
agreements

02/19/99 5     Change in Registrant's Certifying Accountants



<PAGE> 20
                                SIGNATURES

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

                                        FINET HOLDINGS CORPORATION

Date: March 17, 1999                    /s/    Mark L. Korell
                                        Mark L. Korell
                                          (CEO   and   Principal  Executive
Officer)

Date: March 17, 1999                    /s/    Gary A. Palmer
                                        Gary A. Palmer
                                        (Principal Financial Officer)