EXHIBIT 10.2

As of June 25, 2002

Mark H. Peterman
Wilshire Financial Services Group Inc.
1776 SW Madison Street
Portland, OR  97205

Re:   Wilshire Financial Services Group Inc. Change in Control Plan

Dear Mark,

This
is to confirm that we have agreed that the Wilshire Financial Services Group
Inc. Change in Control Plan (the Plan) will apply to you with two
modifications.

The
first modification is that the first sentence of Section 2.1 of the Plan, as
applied to you, shall provide as follows:

| | Conditioned
on the execution and delivery by you (or your beneficiary or personal
representative, if applicable) of the Release, and subject to the provisions of
Section 2.7, you shall be entitled to receive a Severance Payment from the
Company in the amount provided in Section 2.2 if (a) you are an Eligible
Employee, and (b) either (i) within 120 days after the occurrence of a Change in
Control, your employment is involuntarily terminated by the Company or any of
its Subsidiaries for any reason other than Cause or your death or Disability, or
you voluntarily terminate your employment with the Company and all Subsidiaries
for Good Reason, or (ii) more than 120 days after a Change in Control, your
employment with the Company and all of its Subsidiaries is terminated for any
reason other than Cause, your death, or Disability.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The
second modification is that Section 2.2 of the Plan, as applied to you, shall
provide in its entirety as follows:

2.2   Amount of Severance Payment

| | If
you become entitled to a Severance Payment under this Plan, the amount of your
Severance Payment, when added to any payments which the Company or its
Subsidiaries are required to make to you under WARN, shall equal two times your
Compensation.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

In
all other respects, the provisions of the Plan, as generally applicable to
Eligible Employees, will apply to you also. This letter supercedes any earlier
agreement between you and Wilshire Financial Services Group Inc. relating to the
application of the Plan to you individually.

This
letter is being furnished to you in duplicate. If this letter correctly
expresses your understanding of our agreement, please sign one duplicate
original in the space provided below and return it to me.

| | Sincerely yours,
| | ----------------

| | Stephen P. Glennon     
| | -----------------------
| | Chief Executive Officer

SPG:lb

ACCEPTED AND AGREED TO:

---

Mark H. Peterman