<PAGE> 1
===========================================================================
====

                  U.S. SECURITIES AND EXCHANGE COMMISSION
                           WASHINGTON, DC 20549
                                     
                             ----------------
                                     
                               FORM 10-QSB/A
                                     
           [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                  OF THE SECURITIES EXCHANGE ACT OF 1934
                                     
               For the quarterly period ended July 31, 1998
                                     
                         ------------------------
                                     
                      Commission File Number: 0-18108
                                     
                         ------------------------
                                     
                        FINET HOLDINGS CORPORATION
          (Exact name of registrant as specified in its charter)
                                     
                                 DELAWARE
                         (State or jurisdiction of
                      incorporation or organization)
                                     
                         505 SANSOME STREET, #1420
                          SAN FRANCISCO, CA 94111
                  (Address of principal executive office)
                                     
                                94-3115180
                   (IRS Employer Identification Number)
                                     
                              (415) 263-5400
           (Registrant's telephone number, including area code)
                                     
                3021 CITRUS CIRCLE, WALNUT CREEK, CA 94598
(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   No. `X'

The  number of shares outstanding of each of the issuer's classes of common
stock was 36,405,386 shares of common stock, par value $.01, as of December
2, 1998.
===========================================================================
====
<PAGE> 2
                        FINET HOLDINGS CORPORATION
                                     
                                   INDEX

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

1.    Financial Statements

      Unaudited Balance Sheet and Audited Balance Sheet...................
3
        July 31, 1998 and April 30, 1998

      Unaudited Statements of Operations
        Three Months Ended July 31, 1998 and 1997........................
4

      Unaudited Statements of Cash Flows..................................
5
        Three Months Ended July 31, 1998 and 1997

      Notes to Unaudited Financial Statements............................
6

2.    Management's Discussion and Analysis of Financial Condition
        and Results of Operations........................................
11


                        PART II - OTHER INFORMATION

1.    Legal Proceedings..................................................
15

2.    Changes in Securities..............................................
15

4.    Submission of Matters to a Vote of Security Holders................
15

5.    Other Information..................................................
15

6.    Exhibits and Reports on Form 8-K...................................
15

      Signatures.........................................................
16
<PAGE> 3
                       PART I. FINANCIAL INFORMATION

                       ITEM 1. FINANCIAL STATEMENTS

                FINET HOLDINGS CORPORATION AND SUBSIDIARIES
                        CONSOLIDATED BALANCE SHEETS
               (Dollars in thousands, except per share data)
                                                               July 31,
                                                              April 30,
                                                                  1998
                                                                  1998
                                                            (unaudited)
                                                              (audited)
                                                           ----------  ----
-----
                                  ASSETS
Cash and cash equivalents                        $       3,111$      1,993
Accounts receivable from sales of mortgage loans and servicing rights15,822
23,008
Mortgage loan servicing advances and other receivables   1,007     1,307
Notes and advances receivable from Mical Mortgage, Inc. ("Mical")    -
1,930
Mortgages held for sale, net of allowances of $1,102 and $39687,31620,226
Mortgages held for sale on behalf of Mical                  52    42,808
Mortgage servicing rights (Note 3)                       5,016     5,478
Furniture, fixtures and equipment, net of accumulated depreciation 1,837
1,441
  of $3,157 and $1,854
Goodwill                                                 4,648       -
Other assets                                             4,153     3,277
                                                           ----------  ----
-----
Total assets                                          $122,962$  101,468
                                                           ==========
=========
                                     
                                     
                   LIABILITIES AND STOCKHOLDERS' EQUITY

Liabilities:
  Warehouse line of credit (Note 4)               $    100,103   $42,851
  Warehouse line of credit of behalf of Mical (Note 4)      52    42,808
  Notes payable and capitalized leases (Note 4)          2,108     1,860
  3% Convertible subordinated debentures (Note 4)        7,000     5,500
  Accounts payable, accrued expenses and other liabilities10,851   5,090
                                                           ----------  ----
-----
Total liabilities                                      120,114    98,109
                                                           ----------  ----
-----
Commitments and contingencies (Note 5)

Stockholders' equity: (Note 6)
  Preferred stock, $.01 par value, (100 shares authorized, none issued and
outstanding)                                                 -         -
  Common stock, $.01 par value, (60,000 shares authorized, 32,616 and
32,052
     shares outstanding at July 31, 1998 and April 30, 1998, respectively)
391                                                        386
  Paid-in capital                                       15,642    13,610
  Accumulated deficit                                 (13,185)  (10,637)
                                                           ----------  ----
-----
Total stockholders' equity                               2,848     3,359
                                                           ----------  ----
-----
Total liabilities and stockholders' equity            $122,962 $ 101,468
                                                           ==========
=========

 The accompanying notes are an integral part of the consolidated financial
                                statements.
<PAGE> 4
                FINET HOLDINGS CORPORATION AND SUBSIDIARIES
                   CONSOLIDATED STATEMENTS OF OPERATIONS
                                (UNAUDITED)
             (Dollars in thousands - except per share amounts)
                                                Three months ended
                                                      July 31,
                                                      ---------------------
--
                                    1998                        1997
                                                      ---------     -------
--
REVENUE
  Gain on sale of  mortgage loans and servicing rights, net of
      loan origination costs                  $     3,662 $      2,016
  Interest income                                   1,803          874
  Loan servicing fees                                 678          129
  Retail broker fees                                  523           31
  Loan origination fees                               408          -
  Other                                                94          103
                                                      ---------     -------
--
    Total revenue                                  7,168         3,153
                                                      ---------     -------
--

EXPENSES
  Compensation and related expenses                 3,917        2,057
  Occupancy and other office expenses               1,832          933
  Interest expense                                  2,792          743
  Marketing expenses                                  499          265
  Depreciation and amortization                       321          134
  Other operating expenses                            355          122
                                                      ---------     -------
--
    Total expenses                                  9,716        4,254
                                                      ---------     -------
--
Loss before income taxes                          (2,548)      (1,101)
  Income tax expense                                    -         (29)
                                                      ---------     -------
--
NET LOSS                                     $    (2,548)  $   (1,130)
                                                      =========
=========

Basic and diluted net loss per common share (Note 1)$        (.08)$
(.04)
                                                      =========
=========
Shares used in computing basic and diluted share data32,489     28,936
                                                      =========
=========

 The accompanying notes are an integral part of the consolidated financial
                                statements.
<PAGE> 5
                FINET HOLDINGS CORPORATION AND SUBSIDIARIES
                   CONSOLIDATED STATEMENTS OF CASH FLOWS
                                (UNAUDITED)
                          (Dollars in thousands)
                                                          Three months
ended July 31,
                                                                1998
                                                                1997
                                                          --------   ------
--
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net loss                                         $ (2,548) $ (1,233)
  Adjustments to reconcile net loss to net cash used in operating
activities:
    Depreciation and amortization                        307       144
    Amortization of mortgage servicing rights            453        -
    Amortization of imputed interest on convertible debt 933        -
    Write down of other assets and provision for losses(302)        62
    Gain on sale of mortgage servicing rights          (465)      (47)
    Deferred tax benefit                               (83)       (84)
  Changes in operating assets and liabilities:
    (Increase) decrease in receivables from sales of mortgage loans and
loan servicing rights                                 46,364   (6,004)
    Decrease (increase) in mortgage loans held for sale(19,830) (12,794)
Increase in originated mortgage servicing rights, net  (243)        27
    (Increase) decrease in mortgage loan servicing advances and other
receivables                                            1,299      (97)
    Net increase in other assets                     (2,649)      (42)
    Net increase in other liabilities                (1,173)      (25)
                                                                ---------
---------
     Net cash provided (used) by operating activities 22,063  (20,093)
                                                                ---------
---------
CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchase of mortgage servicing rights                   2      (165)
  Proceeds from sale of mortgage servicing rights      1,384       105
  Acquisition of mortgage loans held for investment       -          -
  Principal payments on mortgage loans held for investment-       (36)
  Purchase of furniture, fixtures and equipment        (102)      (76)
  Acquisition of purchased technology and intangibles     -      (202)
  Pre-acquisition advances to affiliates                  -      (432)
  Proceeds from sale of fixed assets                     11
                                                                ---------
---------
    Net cash provided (used) by investing activities   1,354     (806)
                                                                ---------
---------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Proceeds from issuance of common stock              1,494      2,693
  Proceeds from issuance of convertible debt           1,384        -
  Proceeds from exercise of common stock warrants and other-.        4
  Net increase (decrease) in warehouse borrowings   (67,586)    18,477
  Decrease in mortgage loans funded on behalf of Mical42,756        -
  Proceeds from advances on note payable and line of credit(477)    -
  Repayment of note payable, capitalized leases and line of credit(240)
(179)
  Cash received in acquisition                           185         -
                                                                ---------
---------
    Net cash provided (used) by financing activities(22,484)    20,995
                                                                ---------
---------
Net increase (decrease) in cash                          933        96
Cash at beginning of period                            2,178     1,148
                                                                ---------
---------
Cash at end of period                              $   3,111  $  1,244
                                                                =========
=========
Supplemental cash flow information (Note 7)

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

                        FINET HOLDINGS CORPORATION
                                     
           NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1.  SIGNIFICANT ACCOUNTING POLICIES

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

The  operations  of the Company's principal lending subsidiaries,  Monument
Mortgage,  Inc.  ("MMI"),  a  California mortgage  banker  specializing  in
conforming prime loans, Coastal Federal Mortgage Company ("Coastal"), a New
Jersey  sub  prime mortgage banker, and Mical Mortgage, Inc.  ("Mical"),  a
California  mortgage banker specializing in FHA and VA loans,  are  in  the
process  of  being  consolidated  and integrated.  The  Company's  business
activity  is carried out throughout the 42 states in which the  Company  is
currently licensed, with additional state license applications in process.

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

BASIS OF PRESENTATION
The  accompanying  unaudited consolidated financial  statements  have  been
prepared  in  accordance with generally accepted accounting principles  for
interim financial information and with the instructions to Form 10-QSB  and
Regulation S-B.   Accordingly, they do not include all the information  and
footnotes required by generally accepted accounting principles for complete
financial  statement  presentation.  In  the  opinion  of  management,  all
adjustments, consisting of normal recurring accruals, considered  necessary
for  a  fair presentation of the results for the interim period  have  been
included.  Operating results for the three months ended July 31,  1998  are
not  necessarily  indicative of the results that may be  expected  for  the
fiscal  year ending April 30, 1999. For further information, refer  to  the
consolidated  financial statements and footnotes thereto  included  in  the
annual  report on Form 10-KSB for the fiscal year ended April 30,  1998  of
Finet Holdings Corporation.

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

ERROR CORRECTION AND FORMAT CHANGE
The  Company  is  filing this form 10-QSB/A to amend its  previously  filed
quarterly  report  on  Form  10-Q to change to the  small  business  issuer
presentation, consistent with its report on Form 10-KSB for its year  ended
April  30,  1998.  In addition, the Company is reclassifying items  on  its
Consolidated Financial Statements to correct misclassifications.

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

Basic  EPS  is determined using net income divided by the weighted  average
shares  outstanding during the period.  Diluted EPS is computed by dividing
net  income  by  the  weighted  average shares  outstanding,  assuming  all
dilutive potential common shares were issued. Since the fully diluted  loss
per  share for the quarters ended July 31, 1998 and 1997, respectively, was
anti-dilutive,  basic  and diluted earnings per share  are  the  same.  The
effects  of  common stock equivalents have not been included  because  they
would have been anti-dilutive during the periods reported.
<PAGE> 7

NOTE 2. ACQUISITIONS

On  May 19, 1998 the Company acquired all the issued and outstanding shares
of  Mical,  a  non-public  mortgage  banker  with  offices  in  San  Diego,
California  and Las Vegas, Nevada, in exchange for 552,000  shares  of  the
Company's  common stock. See Note 6.  Due to the financial requirements  of
Mical,  certain transactions and advances were made in anticipation of  the
acquisition. The acquisition has been accounted for as a purchase  and  its
operations included in the Company's financial statements since that  date.
The excess of the purchase price over the fair market value of the acquired
net  assets, which approximates $5.6 million has been recorded as goodwill.
Goodwill  is  being amortized over 20 years.  The following  condensed  pro
forma  statements of operations of the Company for the three  months  ended
July  31,  1998 and 1997 give effect to the acquisition of Mical as  though
the transaction had occurred at the beginning of the periods:


</TABLE>
<TABLE>
(In thousands)         PRO FORMA
                 3 Months Ending July 31,
                   1998          1997
                -----------  -----------
<S>             <C>          <C>
Revenue           $ 7,672      $ 11,424
Expenses           11,240        13,085
                -----------  -----------
Net loss          $(3,568)     $ (1,661)
                ===========  ===========
</TABLE>

On  June 23, 1998 the Company acquired, from an individual, certain  assets
which  include an internet site, "interloan.com", in exchange  for  100,000
shares  of  the  Company's common stock.  The Company also entered  into  a
binding  term  sheet agreement that will result in a three-year  employment
agreement with that individual.

NOTE 3.  MORTGAGE SERVICING RIGHTS

During  the  quarter  ended July 31, 1998, the activity  in  mortgage  loan
servicing rights was as follows:

<TABLE>
                                 July 31,
(Dollar amounts in thousands)      1998
------------------------------   ---------
<S>                              <C>
Mortgage Servicing Rights
  Beginning balance              $  5,478
    Additions                       1,147
    Sales                          (1,178)
    Amortization/Payoff              (431)
                                 ---------
  Ending balance                 $  5,016
                                 =========
</TABLE>

Servicing rights for mortgages with outstanding principal balances of $75.8
million  and $9.7 million were sold during the three months ended July  31,
1998  and  1997,  respectively, resulting in  net  gains  of  $274,000  and
$135,000, respectively.

Servicing  rights  to  mortgage loans with an unpaid principal  balance  of
approximately $628 million were pledged as collateral to lenders as of July
31,  1998.  Subsequent  to  July 31, 1998,  the  Company  entered  into  an
agreement  to sell a significant portion of its servicing rights  portfolio
(See Note 8).
<PAGE> 8

NOTE 4.  DEBT

The  following table and comments present summary information regarding the
Company's debt as of July 31, 1998:
<TABLE>
(In thousands)
                                                                   Interest
Expires or
Facility                            Balance         Rate              Due
----------------------------------  --------------  --------------   ------
-------------
<S>                                 <C>             <C>              <C>
REVOLVING
Warehouse lines of credit:
  $55 million committed             $  34,288       LIBOR +
    $25  million  uncommitted  gestation         52        variable  spread
December 31, 1998
  $60 million                          58,271       NY Prime         May 1,
1999
     $24    million                             7,544         Libor   +2.5%
December 31, 1998
  $ 5 million                            -          Fed Funds + 1%   Due in
2002
                                    ---------
                                    $ 100,155
                                    =========
Servicing acquisition:
    $1,870  committed                   $      417        Prime  +   0.625%
November 15, 1998
Revolving line of credit:
    $1   million  committed                   1,000        Prime  +  0.625%
Requires payment to
                                    ---------                        zero 5
days per qtr
                                    $   1,417
                                    =========
LONG TERM  AND CAPITAL LEASES:
  Various notes                     $     352       Various          Due in
2000
  Capitalized leases                      339       3.5% to 11.5%    Varies
to 2002
                                    ---------
                                    $     691
                                    =========
</TABLE>

The  Company  issued  the third traunch of its 3% Subordinated  Convertible
Debentures  in  May 1998 in the amount of $1.5 million. The debentures  and
accrued  interest are convertible into the Company's common  stock  at  the
lesser  of $5.00 per share or 78% of the determined market price  prior  to
conversion. In connection with this issue the Company has recorded $423,000
as  additional paid-in capital for the discount related to imputed interest
represented  by  the  market  discount conversion  factor.  This  discount,
together with the $1.6 million of discount recorded in March and April 1998
with  the  issue of the first two traunches, is being amortized to interest
expense  over the period from the date of issue to the date the  debentures
first become convertible. Subsequent to July 31, 1998, the Company and  the
debenture holder renegotiated the debenture conversion terms (See Note 8).

In March, 1995, Mical issued a $200,000 note payable to the pension plan of
an  affiliate.  The note bears interest at 15%, payable monthly, and is due
in  May  1999.   The  note is subordinated to Mical's   warehouse  line  of
credit.

COLLATERAL
The  warehouse  lines of credit, the revolving line of credit  and  a  note
payable are with the same lender. The collateral for these obligations is a
combination of mortgages held for sale, receivables from sales of  mortgage
loans, servicing assets, other assets of the Company, and Finet's corporate
guarantee.

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

DEBT COVENANTS
The  Borrowing Agreements (Agreements) for the warehouse lines  of  credit,
the  revolving line of credit and a note payable contain various  financial
covenants  including  net  worth  computed  in  accordance  with  generally
accepted  accounting  principles, current  ratio  and  tangible  net  worth
leverage  ratio requirements. Should an event of default occur, as  defined
in
<PAGE> 9

the  Agreements,  outstanding principal and interest on all  three  of  the
Company's  credit  facilities are due on demand.  At  July  31,  1998,  the
Company  was  in  violation  of one of its debt covenants  related  to  its
warehouse line of credit, a note payable and its revolving line of  credit.
The  violation was related to the Company's tangible net worth. The  lender
was  notified and, subsequently, the lender issued a formal waiver  of  the
covenant  violation. The Company subsequently defaulted  on  its  warehouse
line  of credit with Residential Funding Corporation ("RFC").  See  Note  8
regarding  subsequent events. Some of the warehouse lines  credit  and  the
revolving line of credit agreements expire in 1998.  The Company is in  the
process  of negotiating an increase in the credit facility with the lender,
and  has no reason to believe an increase of the credit facilities will not
be  successful.   However,  no assurances can  be  given  that  the  credit
facilities will be increased.

NOTE 5. COMMITMENTS AND CONTINGENCIES

LEGAL PROCEEDINGS

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

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

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

LOAN SALE COMMITMENTS

The Company has entered into optional and mandatory forward commitments  to
deliver mortgage loans of $106 million as of July 31, 1998.

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.

NOTE 6. STOCKHOLDERS' EQUITY

In  May 1998, the Company issued 432,000 shares of common stock, valued  at
$1.4 million, for the acquisition of Mical (See Note 2). Upon resolution of
specified contingencies, 120,000 additional common shares may be issued. As
a  result of the acquisition, 33,000 common shares were issued as a finders
fee  and  73,000  shares were issued under a keep well  agreement  with  an
existing shareholder.

In June 1998, the Company issued 25,000 common shares with the execution of
a  binding term sheet agreement for the acquisition of Interloan (See  Note
2).  An  additional  75,000 common shares remain to  be  issued  under  the
provisions of the term sheet.
<PAGE> 10

The  Company recorded $423,000 as additional paid-in capital for  the  debt
discount related to imputed interest on the issuance of $1.5 million of  3%
Subordinated Convertible Debentures in May 1998 (See Note 4).

The  Company  has received equity infusions since July 31 and is  currently
negotiating with additional equity investors.  (See Note 8).

NOTE  7.  SUPPLEMENTAL CASH FLOW INFORMATION

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

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

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

NOTE 8.  SUBSEQUENT EVENTS

In  September, 1998, the Company and the holder of its 3% debenture reached
an  agreement  in principle whereby the right to convert the  debenture  to
equity  would  be extended for approximately six months at which  time  the
minimum  conversion  price  per  share  would  be  $1.50  per  share.  This
transaction  was executed in September, and the Company received  proceeds,
net  of  associated costs, from the issuance of 250 shares of its Series  A
Convertible Preferred stock.

In November, 1998, the Company received $2 million from the issuance of 2.5
million shares of common stock at eighty cents per share.

Certain  events  of  default have occurred with respect  to  the  Company's
warehouse  line  of  credit with Residential Funding  Corporation  ("RFC").
However, RFC has agreed to forbear exercising the rights and remedies it is
entitled  to  under  its agreement with the Company in anticipation  of  an
equity  infusion the Company expects to receive in December,  1998  as  the
result of a private placement.

The Company is finalizing a private placement offering of common stock, and
expects  to receive up to $15 million in December, 1998.  Equity  infusions
are  used  to fund operations and to make capital expenditures as necessary
in the Company's operations.

The  Company is reviewing operations and quality and compliance  procedures
of  Mical  Mortgage, Inc., acquired in May, 1998 to determine how  best  to
maximize  shareholder  value.   The Company  is  consulting  with  lenders,
governmental  regulatory  agencies and loan  investors,  and  has  retained
outside  consultants  to assist in this review.  In  connection  with  this
review,  the Company is assessing the future economic value of the goodwill
recorded in the purchase transaction along with the other assets of Mical.

<PAGE> 11

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

FORWARD-LOOKING STATEMENTS

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

RESULTS OF OPERATIONS

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

While the Company provides certain real estate financing services that  are
comparable  to those provided by more traditional manual means  within  the
industry,  the methods by which the Company earns revenues from  delivering
them  are increasingly electronic and non-traditional. The Company's policy
is  to  use the most automated processes currently available and  to  fully
implement  the  business process simplifications that  electronic  commerce
enables.  Over  the  past five years the Company has developed  technology-
based  Internet  applications and business processes and  is  a  leader  in
delivering  homeownership-related solutions to consumers  and  real  estate
services  providers  through electronic commerce. The  Company  is  a  very
active   sponsor  of  mortgage  brokers  to  use  Fannie  Mae's   Automated
Underwriting System and is one of only a few lenders to allow borrowers  to
fully  use the simplified loan documentation that this streamlined  process
provides.

COMPARISON OF QUARTERS ENDED JULY 31, 1998 AND 1997
The  Company  is currently expanding its operations and the  scope  of  its
electronic  commerce homeownership transaction services.  The  1998  period
includes  costs related to this plan. Revenues for the quarter  ended  July
31,  1998 include the operations of Mical and Interloan subsequent to their
acquisition by the Company in May and June, respectively.

Revenues for the quarter ended July 31, 1998 increased 127% to $7.2 million
from  $3.2 million for the quarter ended July 31, 1997. Net loss  was  $2.5
million  for  the quarter ended July 31, 1998 compared to $1.1 million  for
the  quarter ended July 31, 1997. The increase in revenues for the  quarter
ended  July  31,  1998  compared to the quarter ended  July  31,  1997  was
attributable  primarily to the added production of  acquired  entities  and
generally  higher loan production volume in all Company business units  for
the  quarter ended July 31, 1998. An increase in interest earned and in the
size  of the Company's servicing portfolio also contributed to the increase
in  revenues  for  the quarter ended July 31, 1998. These positive  factors
were  offset by increased compensation, occupancy and certain non-recurring
expenses  related to the acquisitions of Coastal and Mical, and an increase
in interest charges resulting from greater use of mortgage warehouse credit
facilities.
<PAGE> 12

Gain  on  sale  of  mortgage  loans  and  servicing  rights,  net  of  loan
origination costs, increased 82% to $3.7 million from $2.0 million  as  the
total  volume  of loans produced increased 260% to $401 million  from  $112
million  for  the quarters ended July 31, 1998 and 1997, respectively.  The
increase  in loan production was primarily due to the expansion of  lending
activities  resulting  from  acquisitions as well  as  to  generally  lower
interest  rates  that  prevailed during the quarter  ended  July  31,  1998
compared to the quarter ended July 31, 1997.

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

 (Dollar amounts in thousands)     Three Months Ended July 31,
---------------------------------- ---------------------------
                                      1998           1997
                                   -----------    ------------
    Retail                          $ 58,504       $  4,696
    Wholesale Prime                  310,460         73,138
    Wholesale Sub Prime               32,159         33,685
                                    ---------      ---------
    Total Loan Volume               $401,123       $111,519
                                    ========       =========

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 and
the success of each unit's sales and marketing efforts.

Interest  income increased to $1.8 million for the quarter ended  July  31,
1998  from  $0.9 million for the quarter ended July 31, 1997.  The  Company
earns  interest  on, and incurs interest expense to carry,  mortgage  loans
held  in  inventory. The higher interest earned was due to  increased  loan
production and, due to the higher borrowing costs of Mical compared to  the
remainder of the Company, was more than offset by a corresponding  increase
in  interest  expense. Through consolidation of mortgage credit  facilities
enterprise-wide  currently in process, the Company  expects  to  lower  its
average interest expense and increase its total net interest income.

During the quarter ended July 31, 1998, loan servicing fees were positively
affected by the growth of the loan servicing portfolio, increasing 428%  to
$679,000  in  the quarter ended July 31, 1998 from $128,000 in the  quarter
ended  July  31,  1997. The increase in the Company's  servicing  portfolio
during the quarter ended July 31, 1998 was the result of mortgage servicing
rights  purchased  in December 1997 and the addition of loans  serviced  by
Mical.

In   connection  with  mortgage  loan  servicing  activities,  the  Company
segregates  escrow  and  custodial funds in  separate  trust  accounts  and
excludes  this balance of $16.4 million at July 31, 1998 and $16.0  million
at  April  30,  1998 from the Company's assets on the accompanying  balance
sheet.

Retail  broker fees increased to $523,000 from $31,000 and loan origination
fees  increased to $408,000 from $0, respectively, during the quarter ended
July 31, 1998 as compared to the quarter ended July 31, 1997. The increases
were  due  to  higher  retail  production and the  additional  activity  of
acquired entities. In general, these fees are affected by numerous  factors
including  the  volume  and mix of loans produced and  sold,  loan  pricing
decisions,  interest rate volatility and the general direction of  interest
rates.

Expenses  increased for the quarter as a result of higher loan volumes  and
the  acquisition  of  Mical.  Compensation and  related  employee  expenses
increased 90% to $3.9 million for the quarter ended July 31, 1998 from $2.1
million for the quarter ended July 31, 1997.  The increase is due primarily
to  the  increase of personnel as a result of acquisitions, reflecting  the
Company's  strategy  of  expanding  and  enhancing  its  revenue  base.  In
addition,  a  larger servicing portfolio and growth in the  Company's  non-
mortgage banking activities also contributed to the personnel increase.
<PAGE> 13

Occupancy  and  other office expenses for the quarter ended July  31,  1998
increased to $1.8 million from $0.9 million for the quarter ended July  31,
1997 primarily due to: (i) acquisitions of Coastal and Mical to expand  the
Company's distribution network; (ii) higher loan production; (iii) a larger
servicing portfolio; and (iv) growth in the Company's non-mortgage  banking
activities.  Included in this increase was a 182% increase in  professional
fees  to  $711,000,  most  of which were legal, consulting  and  accounting
expenses related to the acquisitions and should be mostly non-recurring.
For  the quarter ended July 31, 1998 compared to the quarter ended July 31,
1997,   marketing  expenses  increased  to  $499,000  from   $265,000   and
depreciation and amortization expenses increased to $321,000 from $134,000,
respectively, for similar reasons.

Interest  expense  for the quarter ended July 31, 1998  increased  to  $2.8
million  from $0.7 million in the quarter ended July 31, 1997. The increase
was  due  primarily to the additional interest expense from  Coastal's  and
Mical's  warehouse lines of credit. Additionally, during the quarter  ended
July  31, 1998 the Company incurred an interest amortization charge related
to  a total of $7 million 3% subordinated convertible debentures issued  in
three traunches between March 18, 1998 and May 26, 1998. In accordance with
certain  accounting  requirements, the Company  recorded  $1.6  million  as
additional  paid-in capital for the discount deemed related to the  imputed
interest in the debentures. The discount is being amortized over the period
from  the  date of issue to the date each traunch first becomes convertible
six  months later. $287,000 was amortized during the preceding quarter  and
$923,000 was amortized during the quarter ended July 31, 1998.

Other  operating expenses for the quarter ended July 31, 1998 increased  to
$355,000  from $122,000 for the quarter ended July 31, 1997. This  increase
was due primarily to higher provisions for credit losses and Mical's losses
on  the  sales of real estate owned in the quarter ended July 31,  1998  as
compared to the quarter ended July 31, 1997.

BUSINESS DEVELOPMENT ACTIVITIES

The  Company's business development activities are focused on  diversifying
and  increasing  electronic  commerce  revenues  from  sources  other  than
mortgage banking of prime conforming loans, including: (a) the offering  of
sub prime and government subsidized loans; (b) the distribution and use  of
its proprietary Agent Connector and iQualify software; (c) promotion of the
Property  Transaction Network as a vendor-neutral alliance of  real  estate
settlement service providers who conduct business on-line and the marketing
of  those  services  by  the  Company's retail centers;  (d)  the  sale  of
additional  homeowner  related  products and  services;  (e)  the  sale  of
business leads to real estate service providers; and (f) the origination of
loans as a mortgage broker.

Over  the  past  several years, some lenders have expanded  their  mortgage
banking  operations  through acquisition of formerly  independent  mortgage
banking  companies  or through internal growth. The Company  believes  that
these  transactions and activities have not had a material  impact  on  the
Company  or on the degree of competitive pricing in the market. The Company
has similarly expanded its mortgage banking operations through acquisitions
and  internal  growth, but, believing the growth of market  acceptance  and
demand for on-line homeownership services represents the greatest near term
market  opportunity,  has  also concentrated on  expanding  its  e-commerce
origination and fulfillment capabilities in these areas.

The Company is currently expending cash resources to support these business
development  activities  as  the  revenues  they  are  generating,   though
increasing,  are  currently insufficient to cover  start-up  and  operating
costs.   The Company expects, within this business cycle, that all business
units will generate revenues sufficient to cover their respective operating
expenses.   Management  believes  it has sufficient  cash  and  short  term
financing  alternatives  to  reach  positive  cash  flow  and,  thereafter,
profitability.
<PAGE> 14

LIQUIDITY AND CAPITAL RESOURCES

The  Company's principal financing needs are the financing of loan  funding
activities  and  technology investments, and, as working  capital  permits,
investments in servicing rights. To meet these needs, the Company currently
utilizes  its  mortgage warehouse credit facilities  and  cash  flows  from
operations. In addition, the Company has utilized servicing-secured  credit
facilities,  private placements of debentures and offerings of  common  and
preferred  stock.  Certain of the debt obligations of the  Company  contain
various provisions that may affect the ability of the Company to remain  in
compliance  with  such  obligations. These provisions include  requirements
concerning  net  worth,  current ratio and other financial  covenants.  The
Company  continues  to  consider other methods to  finance  its  operations
through  the  public  and  private capital markets.   See  Note  8  to  the
Company's Consolidated Financial Statements regarding subsequent events.

CASH FLOWS

Operating Activities
Cash  provided by operations for the quarter increased $42.2  million  over
the  prior  year  quarter.  Receivables from the  sale  of  mortgage  loans
decreased  $52.4  million,  partially offset  by  net  decreases  in  other
operating activities.

Investing Activities
Investing  activity provided $1.4 million for the quarter  ended  July  31,
1998.

Financing Activities
Net cash used by financing activities increased $43.5 million primarily  as
the  result net repayments of warehouse borrowings of $86.1 million  offset
by a $42.8 million decrease in mortgage loans funded on behalf of Mical.

MARKET FACTORS

Loan production increased 260% from the quarter ended July 31, 1997 to  the
quarter ended July 31, 1998. This increase was primarily due to the  effect
of  acquisitions  as  well  as  several market related  factors  including:
mortgage  interest rates generally decreased in the quarter ended July  31,
1998;  and  home purchase market activity was stronger during  the  quarter
ended July 31, 1998 than in the quarter ended July 31, 1997.

POTENTIAL FOR NASDAQ DELISTING

There are several requirements for continued listing on the Nasdaq SmallCap
Market,  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 SmallCap Market 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 SmallCap 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.

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  compliant
and  to  address other issues associated with the change of the millennium.
These  costs are being 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 Year 2000 compliant has not been and 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 Year 2000 are subject  to  uncertainties
that      could     cause     the     actual     results     to      differ
<PAGE> 15

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 Year  2000  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 Year 2000 issue.

                        PART II - OTHER INFORMATION

Item 1.  LEGAL PROCEEDINGS

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.

Item 2. CHANGES IN SECURITIES

During the three months ended July 31, 1998, the Company issued a total  of
564,000  shares  of  common  stock,  as follows:  432,000  shares  for  the
acquisition  of  Mical and 33,000 shares as a finders  fee,  73,000  shares
under  a  keep  well  agreement,  25,000 shares toward the  acquisition  of
Interloan and 1,000 shares from warrants exercised.

The  Company recorded $423,000 as additional paid-in capital for  the  debt
discount related to imputed interest on the issuance of $1.5 million of  3%
Subordinated Convertible Debentures.

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

None

Item 5.  OTHER INFORMATION

None

Item 6.  EXHIBITS AND REPORTS ON FORM 8-K

EXHIBITS

     EX-27          Financial Data Schedule

REPORTS ON FORM 8-K

<TABLE>
<CAPTION>
                            REPORTS ON FORM 8-K
Date      Item  Description
--------  ----  -----------------------------------------------------
<S>       <C>   <C>
5/18/98    2    Announcement of the acquisition of 100% of the issued and
                outstanding stock of Coastal Federal Mortgage Company

5/28/98    2    Announcement of the acquisition of 100% of the issued and
                outstanding stock of Mical Mortgage, Inc.

12/04/98   2    Amendment to the announcement of the acquisition of 100% of
               the issued and outstanding stock of Mical Mortgage, Inc.
<PAGE> 16

                                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: December 4, 1998                  /s/    Mark L. Korell
                                        Mark L. Korell
                                          (CEO   and   Principal  Executive
Officer)



Date: December 4, 1998                  /s/    George Winkel
                                        George Winkel
                                        (Principal Financial Officer)

</TABLE>