<PAGE>



Exhibit 99.3

First Alliance Mortgage Company 
                                  Series 1997-2
                             1997 - Annual Statement
                              DISTRIBUTION DOLLARS
                                                                    ENDING
PERIOD     CLASS      CUST     INTEREST        PRINCIPAL            BALANCE
 199707     A-1               $120,500.00     $224,547.59       $19,775,452.41
 199708     A-1               $119,147.10     $297,457.93       $19,477,994.48
 199709     A-1               $117,354.92     $321,103.65       $19,156,890.83
 199710     A-1               $115,420.27     $603,638.77       $18,553,252.06
 199711     A-1               $111,783.34     $530,832.94       $18,022,419.12
 199712     A-1               $108,585.08     $375,188.43       $17,647,230.69
Total by Class                $692,790.71   $2,352,769.31
                                                                    ENDING
PERIOD     CLASS      CUST     INTEREST        PRINCIPAL            BALANCE
 199707     A-2               $226,397.57     $492,442.21       $54,507,557.79
 199708     A-2               $269,244.62     $512,799.58       $53,994,758.21
 199709     A-2               $293,382.77     $512,905.46       $53,481,852.75
 199710     A-2               $246,566.20   $1,264,601.93       $52,217,250.82
 199711     A-2               $263,718.87   $1,433,413.12       $50,783,837.70
 199712     A-2               $270,395.72   $1,228,397.29       $49,555,440.41
Total by Class              $1,569,705.75   $5,444,559.59

Total Class R:                     $0.00

Factor Information Per $1,000
             PRINCIPAL       INTEREST     ENDING NOTE    INIT NOTE   CURR NOTE
  CLASS     DISTRIBUTION   DISTRIBUTION     BALANCE         RATE        RATE

   A-1      117.63846550   34.63953550    882.36153450     7.23000%   7.23000%

   A-2       98.99199254   28.54010454    901.00800745     5.92750%   5.99000%

                                                          Per $1,000
NOTE DISTRIBUTION:                        $10,059,825.36     134.13

SCHEDULED PRINCIPAL:                         $310,947.19
PREPAYMENTS:                               $6,479,740.64
SUBORDINATION INCREASE:                    $1,006,641.07
                                          --------------

TOTAL PRINCIPAL DISTRIBUTION:              $7,797,328.90     103.96

TOTAL INTEREST DISTRIBUTION:               $2,262,496.46

INSURED PAYMENT
   CLASS A-1:                                       0.00
   CLASS A-2:                                       0.00


<PAGE>

CODE INFORMATION:                                 NONE

LOAN PURCHASE PRICES
  GROUP I:                                        0.00
  GROUP II:                                       0.00

SUBSTITUTION AMOUNTS
  GROUP I:                                        0.00
  GROUP II:                                       0.00

SUBORDINATION REDUCTION AMOUNT
  GROUP I:                                        0.00
  GROUP II:                                       0.00

CURRENT REALIZED LOSSES
  GROUP I:                                        0.00
  GROUP II:                                       0.00

CUMULATIVE REALIZED LOSSES
  GROUP I:                                        0.00
  GROUP II:                                       0.00

LOAN BOUGHT PURSUANT TO
SECTION 3.4, 3.6 AND 8.10
  GROUP I:                                        0.00
  GROUP II:                                       0.00

AVAILABLE FUNDS CAP CARRY-FORWARD AMOUNT
  GROUP I:                                        0.00
  GROUP II:                                       0.00

POOL FACTOR
  CLASS A-1:                                0.88236153
  CLASS A-2:                                0.90100801

DELINQUENT MORTGAGE LOANS(includes loans in foreclosure and bankruptcy):

         GROUP I:
                                  AGGREGATE
            CATEGORY    NUMBER   LOAN BALANCE   PERCENTAGE
           30-59 DAYS      5      $398,798.61      2.23%
           60-89 DAYS      1       $84,906.00      0.47%
            90+ DAYS       0            $0.00      0.00%

         GROUP II:
                                  AGGREGATE
            CATEGORY    NUMBER   LOAN BALANCE   PERCENTAGE
            30-59 DAYS    10      $941,523.13      1.87%
            60-89 DAYS     0            $0.00      0.00%
             90+ DAYS      8      $515,349.96      1.02%


<PAGE>


LOANS IN FORECLOSURE(included in delinquencies above)

      GROUP I:                    AGGREGATE
                         NUMBER  LOAN BALANCE   PERCENTAGE
                            6     $483,704.61      2.70%

      GROUP II:                   AGGREGATE
                         NUMBER  LOAN BALANCE   PERCENTAGE
                           13   $1,134,387.11      2.26%


LOANS IN BANKRUPTCY(included in delinquencies above)

      GROUP I:                    AGGREGATE
                         NUMBER  LOAN BALANCE   PERCENTAGE
                            0           $0.00      0.00 %

      GROUP II:                   AGGREGATE
                         NUMBER  LOAN BALANCE   PERCENTAGE
                            1      $76,052.75      0.15%

REO PROPERTIES(included in delinquencies above)

      GROUP I:                    AGGREGATE
                         NUMBER  LOAN BALANCE   PERCENTAGE
                            0           $0.00      0.00%

      GROUP II:                   AGGREGATE
                         NUMBER  LOAN BALANCE   PERCENTAGE
                            0           $0.00      0.00%

ENDING AGGREGATE LOAN BALANCE
  GROUP I:                              $17,920,652.57
  GROUP II:                             $50,290,303.70

ENDING INITIAL MORTGAGE LOANS
  GROUP I:                                   N/A
  GROUP II:                                  N/A

ENDING SUBSEQUENT MORTGAGE LOANS
  GROUP I:                                   N/A
  GROUP II:                                  N/A

BOOK VALUE OF REO PROPERTY:
  GROUP I:                                        0.00
  GROUP II:                                       0.00

SERVICING FEE
  GROUP I:                                   48,205.81
  GROUP II:                                 134,166.03