Exhibit 10


                              UNOFFICIAL COMMITTEE
                                       OF
                        WILSHIRE FINANCIAL SERVICES GROUP
                               SENIOR NOTEHOLDERS


                                November 23, 1998



CONFIDENTIAL

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

          Re:
Wilshire Financial Services Group Inc.
--------------------------------------


Ladies/Gentlemen:

          This letter is submitted by the signatories  hereto,  who comprise the
Unofficial  Committee of Senior Noteholders of Wilshire Financial Services Group
Inc.,  a Delaware  corporation  ("WFSG" or the  "Company"),  in our  capacity as
holders or  representatives of a majority of the 13% Notes due 2004 of WFSG (the
"Majority  Noteholders")  issued pursuant to an indenture,  dated as of December
24,  1996,   between  WFSG  and  Bankers  Trust  Company,  a  New  York  banking
corporation,  as trustee  (the "13%  Notes") and the 13% Series B Notes due 2004
issued pursuant to an indenture,  dated as of August 15, 1997,  between WFSG and
Bankers  Trust  Company,  as trustee (the "13% Series B Notes" and together with
the 13% Notes,  the "Senior Notes").  This letter  incorporates by reference the
term sheet (the "Term Sheet") attached as Exhibit "A" hereto.

          Upon our  countersignatures  hereto,  this  letter  constitutes  (a) a
statement of our agreement as follows,  so long as an Event of Termination shall
not have  occurred:  (i) to effect the  restructuring  as  reflected in the Term
Sheet (the  "Restructuring")  to the fullest extent permitted by law, whether in
connection  with  or  outside  a  bankruptcy  proceeding,  and,  in the  event a
bankruptcy  proceeding with respect to the Company is commenced,  to file (as to
the  Company  and  its  affiliates)  and to  support  a plan  of  reorganization
embodying the  restructuring (a "Plan") and to cooperate to obtain  confirmation
and  consummation  of a Plan,  subject  to the  terms and  conditions  set forth
therein;  (ii) to proceed diligently with all reasonable effort to negotiate and
execute  the  definitive  documents  required  to carry  out the  intent  of the
Restructuring;  and (iii) to undertake to cause companies directly or indirectly
owned by the Company or by the individual  signatories to proceed diligently and
with all reasonable  effort to consummate all  transactions  contemplated by the
Term Sheet to which they may be a party; and (b) a statement of the agreement of
each of the Majority Noteholders and Wilshire Real Estate Investment Trust, Inc.
("WREIT"),  so long as an Event of Termination  shall not have occurred,  (i) to
sell or transfer its holdings of Senior Notes,  in whole or in part,  only to an
entity  that  has  agreed  to be  bound  hereby;  and  (ii) to  provide  written
directions  to the  indenture  trustees for the Senior Notes in the form annexed
hereto as Exhibits A and B. As used herein,  "Event of Termination"  shall mean:
(i)  breach  by  Andrew  A.  Wiederhorn,  Lawrence  A.  Mendelsohn,  WFSG or any
affiliate or the Majority Noteholders of any

<PAGE>


obligation  hereunder or under the Term Sheet;  (ii) any material adverse change
in the business or  financial  condition of the Company from the dates hereof as
compared  to  consolidated  and  consolidating  financial  projections  of WFSG,
covering the 6 month period  beginning  December 1, 1998,  to be  designated  in
writing by WFSG and the Majority  Noteholder's  financial advisors and delivered
to the  Company  and the  Majority  Noteholders;  and (iii)  failure  to provide
documentation and due diligence satisfactory to the Majority Noteholders,  or to
satisfy  any  other  condition  to the  Restructuring,  as set forth in the Term
Sheet.

          You agree to keep this  letter and the Term Sheet  confidential,  with
disclosure  on a need  to  know,  confidential  basis  only to  your  legal  and
financial  advisors,  and you  acknowledge  that this  letter and the Term Sheet
shall be considered to be "confidential" (or words of similar import); provided,
however, that you may make a public announcement regarding the execution of this
letter shortly after such  execution and comply with Federal  securities law and
similar  reporting  requirements  as determined to be necessary by the Company's
counsel.

          This agreement shall be governed by the laws of the state of New York,
without regard to the conflict of law provisions thereof.

          Please  confirm your  acceptance  of and agreement to the foregoing by
signing  this  letter  where  indicated  below.  This  letter may be executed in
counterparts,  each of which shall be deemed to be an original,  and all of such
counterparts  taken  together  shall be  deemed to  constitute  one and the same
instrument.

                          Very truly yours,

                          CAPITAL RESEARCH AND MANAGEMENT
                          COMPANY, on behalf of:
                                 The Income Fund of America, Inc.
                                 The Bond Fund of America, Inc.
                                 American Variable Insurance Series - High Yield
                          Bond   Fund
                                 Anchor Pathway Fund - High Yield Bond Fund


                          By:    s/
                                 --

                                 Name:   Paul G. Haaga, Jr.
                                 --------------------------
                                 Title:  Executive Vice President
                                 --------------------------------


                          CAPITAL GUARDIAN TRUST COMPANY,
                          on behalf of the following accounts: 9500, 012,
                          002, 2894 and 2905

                          By:    s/
                                 --

                                 Name:   Peter C. Kelly
                                 ----------------------
                                 Title:  Vice President
                                 ----------------------


<PAGE>



                          RYBACK MANAGEMENT CORPORATION


                          By:    s/
                                 --

                                 Name:   Eric Ryback
                                 -------------------
                                 Title:  President
                                 -----------------
                                                                               
                    The  undersigned  as  investment  advisor to various  client
                    accounts with regard to the  Restructuring  of WFSG,  hereby
                    confirms and accepts on behalf of such clients the documents
                    attached  hereto which may include,  but not  necessarily be
                    limited to, letter agreements and term sheets.

                          AMERICAN EXPRESS FINANCIAL CORP.


                          By:    s/
                                 --

                                 Name:   Frederick C. Quirsfeld
                                 ------------------------------
                                 Title:  Senior Vice President - Fixed Income
                                 --------------------------------------------

As  Noteholder,  but  not  as
as member of the  Unofficial
Committee  of  Senior
Noteholders.

WILSHIRE REAL ESTATE INVESTMENT TRUST INC.


By:   s/
      --
      Name:  Lawrence A. Mendelsohn
      -----------------------------
      Title: President
      ----------------

Agreed and accepted:

WILSHIRE FINANCIAL SERVICES GROUP INC.


By:   s/
      --

      Name:  Andrew A. Wiederhorn
      ---------------------------
      Title: Chairman and Chief Executive Officer
      -------------------------------------------

                              UNOFFICIAL COMMITTEE
                                       OF
                        WILSHIRE FINANCIAL SERVICES GROUP
                               SENIOR NOTEHOLDERS


<PAGE>



                                November 23, 1998


CONFIDENTIAL
------------

Andrew A. Wiederhorn
c/o Wilshire Financial Services Group Inc.
1776 SW Madison Street
Portland, OR 97205

Lawrence A. Mendelsohn
c/o Wilshire Financial Services Group Inc.
1776 SW Madison Street
Portland, OR 97205

          Re:
Wilshire Financial Services Group Inc.
--------------------------------------

Ladies/Gentlemen:

          This letter is submitted by the signatories  hereto,  who comprise the
Unofficial  Committee of Senior Noteholders of Wilshire Financial Services Group
Inc.,  a Delaware  corporation  ("WFSG" or the  "Company"),  in our  capacity as
holders or  representatives of a majority of the 13% Notes due 2004 of WFSG (the
"Majority  Noteholders")  issued pursuant to an indenture,  dated as of December
24,  1996,   between  WFSG  and  Bankers  Trust  Company,  a  New  York  banking
corporation,  as trustee  (the "13%  Notes") and the 13% Series B Notes due 2004
issued pursuant to an indenture,  dated as of August 15, 1997,  between WFSG and
Bankers  Trust  Company,  as trustee (the "13% Series B Notes" and together with
the 13% Notes,  the "Senior Notes").  This letter  incorporates by reference the
term sheet (the "Term Sheet") attached as Exhibit "A" hereto.

          Upon our  countersignatures  hereto,  this  letter  constitutes  (a) a
statement of our agreement as follows,  so long as an Event of Termination shall
not have  occurred,  to cause the Company:  (i) to effect the  restructuring  as
reflected  in  the  Term  Sheet  (the  "Restructuring")  to the  fullest  extent
permitted by law, whether in connection with or outside a bankruptcy proceeding,
and,  in the event a  bankruptcy  proceeding  with  respect  to the  Company  is
commenced,  to file (as to the Company and its affiliates) and support a plan of
reorganization embodying the restructuring (a "Plan") and to cooperate to obtain
confirmation and consummation of a Plan, subject to the terms and conditions set
forth therein;  and (ii) to proceed  diligently  with all  reasonable  effort to
negotiate and execute the definitive  documents required to carry out the intent
of the  Restructuring;  (b) a  statement  of  agreement  by  each of  Andrew  A.
Wiederhorn and Lawrence A. Mendelsohn to cause the Company,  companies  directly
or indirectly  owned by the Company,  companies  directly or indirectly owned by
them as individuals or companies directly or indirectly under their control,  to
proceed diligently and with all reasonable effort to consummate all transactions
contemplated by the Term Sheet;  and (c) a statement of the agreement of each of
the  Majority  Noteholders  and  Wilshire  Real Estate  Investment  Trust,  Inc.
("WREIT"),  so long as an Event of Termination  shall not have occurred,  (i) to
sell or transfer its holdings of Senior Notes,  in whole or in part,  only to an
entity  that  has  agreed  to be  bound  hereby;  and  (ii) to  provide  written
directions  to the  indenture  trustees for the Senior Notes in the form annexed
hereto as Exhibits A and B. As used herein,  "Event of Termination"  shall mean:
(i)  breach  by  Andrew  A.  Wiederhorn,  Lawrence  A.  Mendelsohn,  WFSG or any
affiliate or the Majority  Noteholders of any obligation  hereunder or under the
Term Sheet; (ii) any material adverse change in the business or


<PAGE>



financial  condition  of the  Company  from the  dates  hereof  as  compared  to
consolidated and  consolidating  financial  projections of WFSG,  covering the 6
month period beginning December 1, 1998, to be designated in writing by WFSG and
the Majority  Noteholder's  financial  advisors and delivered to the Company and
the Majority  Noteholders;  and (iii) failure to provide  documentation  and due
diligence  satisfactory  to the  Majority  Noteholders  as set forth in the Term
Sheet.

          You agree to keep this  letter and the Term Sheet  confidential,  with
disclosure  on a need  to  know,  confidential  basis  only to  your  legal  and
financial  advisors,  and you  acknowledge  that this  letter and the Term Sheet
shall be considered to be "confidential" (or words of similar import); provided,
however, that you may make a public announcement regarding the execution of this
letter shortly after such  execution and comply with Federal  securities law and
similar  reporting  requirements  as determined to be necessary by the Company's
counsel.

          This agreement shall be governed by the laws of the state of New York,
without regard to the conflict of law provisions thereof.

          Please  confirm your  acceptance  of and agreement to the foregoing by
signing  this  letter  where  indicated  below.  This  letter may be executed in
counterparts,  each of which shall be deemed to be an original,  and all of such
counterparts  taken  together  shall be  deemed to  constitute  one and the same
instrument.

                          Very truly yours,

                          CAPITAL RESEARCH AND MANAGEMENT
                          COMPANY, on behalf of:
                                 The Income Fund of America, Inc.
                                 The Bond Fund of America, Inc.
                                 American Variable Insurance Series - High Yield
                                   Bond Fund
                                 Anchor Pathway Fund - High Yield Bond Fund


                          By:    s/
                                 --

                                 Name:   Paul G. Haaga, Jr.
                                 --------------------------
                                 Title:  Executive Vice President
                                 --------------------------------


                          CAPITAL GUARDIAN TRUST COMPANY,
                          on behalf of the following accounts: 9500, 012,
                          002, 2894 and 2905

                          By:    s/
                                 --

                                 Name:   Peter C. Kelly
                                 ----------------------
                                 Title:  Vice President
                                 ----------------------


<PAGE>



                          RYBACK MANAGEMENT CORPORATION


                          By:    s/
                                 --

                                 Name:   Eric Ryback
                                 -------------------
                                 Title:  President
                                 -----------------
                                                                               
                    The  undersigned  as  investment  advisor to various  client
                    accounts with regard to the  Restructuring  of WFSG,  hereby
                    confirms and accepts on behalf of such clients the documents
                    attached  hereto which may include,  but not  necessarily be
                    limited to, letter agreements and term sheets.

                          AMERICAN EXPRESS FINANCIAL CORP.


                          By:    s/
                                 --

                                 Name:   Frederick C. Quirsfeld
                                 ------------------------------
                                 Title:  Senior Vice President - Fixed Income
                                 --------------------------------------------

As  Noteholder,  but  not  as
as member of the  Unofficial
Committee  of  Senior
Noteholders.

WILSHIRE REAL ESTATE INVESTMENT TRUST INC.

By:   s/
      --
      Name:  Lawrence A. Mendelsohn
      -----------------------------
      Title: President
      ----------------

Agreed and accepted:

      s/
      --
      Andrew A. Wiederhorn
      --------------------

      s/
      --
      Lawrence A. Mendelsohn
      ----------------------


                        WILSHIRE FINANCIAL SERVICES GROUP

                                   Term Sheet

Financial Restructuring of the 13% Notes due 2004 and the 13% Series B Notes due
2004 (collectively, the "Senior Notes")


<PAGE>


Issuer:                       Wilshire Financial Services Group Inc.("WFSG")

Conditional Forbearance:      Holders of 50% or more of the principal  amount of
                              Senior   Notes  agree  to  direct  the   indenture
                              trustees to forbear from  exercising  any remedies
                              arising from scheduled known defaults  existing as
                              of  acceptance  of this  Term  Sheet by WFSG  (the
                              "Forbearance"), subject to stock pledges described
                              below and WFSG and all  affiliates  agreeing to be
                              bound by this Term Sheet,  and to  consummate  the
                              transactions  contemplated hereby (the "Prepack").
                              The Forbearance shall terminate upon any breach of
                              this Term Sheet  (including,  without  limitation,
                              all deadlines set forth under  "Timing"  below) or
                              the letter agreement to which it is attached.

Transaction Structure:        Senior Notes Exchanged for Common Stock:

                              -    100 % of the principal amount of Senior Notes
                                   and other pari passu  unsecured debt, if any,
                                   exchanged for 8.75 million  shares of the new
                                   common stock of WFSG (the "New Stock").

                               -   All existing common stock of WFSG or options,
                                   warrants   or   other   existing   forms   of
                                   securities  convertible  into common stock of
                                   WFSG    ("Existing     Stock")    shall    be
                                   extinguished,  provided, however, upon mutual
                                   agreement   of  WFSG  and  the  Senior   Note
                                   Majority  (as  defined  below),   holders  of
                                   Existing Stock may receive dilutive shares of
                                   New Stock in lieu of the  Series 1 and Series
                                   2 warrants (as defined below) if necessary to
                                   insure  sufficient  numerosity  of holders of
                                   the New Stock following the Restructuring.

                                -  Existing  common  shareholders   receive  two
                                   warrants  ("Series 1" and "Series  2"),  with
                                   the following material terms:



                                                Series 1           Series 2
--------------------------------------------   ----------------  ---------------
Term                                              3 years           5 years1
--------------------------------------------   ----------------  ---------------
Shares of common stock issued on exercise         500,000           750,000
--------------------------------------------   ----------------  ---------------
Exercise Price Per Share                        P/8,750,000      (P+1)/8,750,000
--------------------------------------------   ----------------  ---------------


P =  Principal  amount  of debt plus accrued  interest on the  consummation
     date of the  transaction  converted into common stock.

I =  Amount of interest that would have accrued on the Senior Notes up to the
     first day of the month of the  exercise  date had the Senior  Notes not
     been converted into common stock in the restructuring transaction.



Existing Equity Interests:         Within  30 days of the  consummation  date of
                                   the transaction, any shareholder may purchase
                                   his/her  pro-rata share of the New Stock at a
                                   price per share  which is 97% of the Series 1
                                   warrant  exercise  price.  All cash so raised
                                   shall redeem,  pro-rata,  New Stock allocated
                                   to unsecured creditors.



<PAGE>




Management Compensation/Stock      Management  compensation or severance  terms,
Options:                           as applicable,  to be acceptable  Options: to
                                   the Senior Note Majority. Stock options of up
                                   to a maximum  percentage of the fully diluted
                                   post-restructuring  common  stock of WFSG may
                                   be  granted  by the new  board to  continuing
                                   employees with pricing,  vesting and exercise
                                   terms  to be  determined.  If  granted,  such
                                   options  shall  be on terms  reflective  of a
                                   policy  of  rewarding  the   contribution  of
                                   management   to   the   long-term   financial
                                   performance  of  the  Company  and  shall  be
                                   consistent with employee  incentive  programs
                                   for similarly situated companies.

Board:                             Board to be comprised  of 7 members,  5 to be
                                   appointed  by holders of the Senior  Notes in
                                   connection with the restructuring transaction
                                   and the other 2 to be  Andrew  A.  Wiederhorn
                                   and  Lawrence  A.  Mendelsohn.  The  Majority
                                   Noteholders  shall give due  consideration to
                                   creating  two  (2)  additional  seats  on the
                                   Board to be  filled by  current,  independent
                                   directors of the Company.

Restricted Transactions:           In addition  to and without  waiver of any of
                                   the  covenants   contained  in  each  of  the
                                   indentures, as supplemented, no incurrence of
                                   indebtedness  other than as  reflected in the
                                   consolidated  and   consolidating   financial
                                   projections of WFSG (as further  described in
                                   the attached letter  agreement,  paragraph 2,
                                   definition  of  an  "Event  of  Termination",
                                   sub-section (ii) (the "Agreed Projections")),
                                   without  the  approval  of the holders of the
                                   Senior  Notes  representing  more than 50% of
                                   the   principal   amount  (the  "Senior  Note
                                   Majority").   Indenture  covenants  governing
                                   affiliate   transactions   remain  in  effect
                                   except,  where  such  covenants  require  the
                                   approval  of  disinterested  directors,  such
                                   covenants shall also require  approval of the
                                   Senior Note Majority.

Pledge of Bank Stock:              In connection  with granting the  Forbearance
                                   and  agreeing  to be bound by the Term Sheet,
                                   WFSG shall grant a first priority pledge (the
                                   "WAC   Pledge")  of  the  stock  of  Wilshire
                                   Acquisition  Corporation (the "WAC Stock") in
                                   favor of the Senior  Notes  with such  pledge
                                   terminating   upon    consummation   of   the
                                   restructuring transaction; provided, however,
                                   that if in the written  opinion of counsel to
                                   WFSG  such  pledge  would   violate  laws  or
                                   regulations governing the operations of First
                                   Bank of Beverly Hills F.S.B.  ("First Bank"),
                                   then  WFSG  shall  agree,   in  lieu  of  the
                                   foregoing,   not  to   transfer,   pledge  or
                                   encumber  all or any portion of the WAC Stock
                                   (the  "WAC   Negative   Pledge");   provided,
                                   further,  however,  that the WAC Pledge shall
                                   be  released if an Event of  Termination  (as
                                   such term is defined in the letter  agreement
                                   attached  to this  Term  Sheet)  occurs  as a
                                   result   of  a   breach   by   the   Majority
                                   Noteholders  of an  obligation  hereunder  (a
                                   "Bondholder  Breach  Termination").  The  WAC
                                   Pledge  and the WAC Stock  shall be held in a
                                   mutually  acceptable  escrow  account with an
                                   independent  escrow  agent for the benefit of
                                   the parties  hereto.  Upon the effective date
                                   of the  restructuring  or  upon a  Bondholder
                                   Breach Termination (as



<PAGE>



                                   determined    by   a   court   of   competent
                                   jurisdiction    (or    mutually    acceptable
                                   arbitrator)),  the  WAC  Pledge  and  the WAC
                                   Stock  shall be  returned  to  WFSG.  Upon an
                                   Event of Termination  other than a Bondholder
                                   Breach  Termination,  or if the restructuring
                                   does not occur within 180 days after the date
                                   hereof, physical possession of the WAC Pledge
                                   and the WAC Stock shall be  delivered  to the
                                   indenture  trustee  for  the  benefit  of the
                                   holders  of  the  Senior   Notes;   provided,
                                   however,   that  if  physical  possession  is
                                   delivered  solely by reason of the passage of
                                   180 days, and a Bondholder Breach Termination
                                   (but no  other  Event of  Termination)  shall
                                   thereafter   occur,   then  the  Senior  Note
                                   Majority shall instruct the indenture trustee
                                   to release  the WAC Pledge and return the WAC
                                   Stock to WFSG.

Pledge of WREIT Stock:             In connection  with granting the  Forbearance
                                   and  agreeing  to be bound by the Term Sheet,
                                   WFSG shall grant a first priority pledge (the
                                   "WREIT Pledge") of the stock of Wilshire Real
                                   Estate  Investment  Trust Inc.  ("WREIT")  in
                                   favor of the Senior  Notes  with such  pledge
                                   terminating   upon    consummation   of   the
                                   restructuring transaction; provided, however,
                                   that the WREIT Pledge shall be released if an
                                   Event of Termination (as such term is defined
                                   in the letter agreement attached to this Term
                                   Sheet)  occurs as a result of a breach by the
                                   Majority   Noteholders   of   an   obligation
                                   hereunder.  The WREIT Pledge and the stock of
                                   WREIT shall be held in a mutually  acceptable
                                   escrow  account  with an  independent  escrow
                                   agent for the benefit of the parties  hereto.
                                   Upon the effective date of the  restructuring
                                   or upon a Bondholder  Breach  Termination (as
                                   determined    by   a   court   of   competent
                                   jurisdiction    (or    mutually    acceptable
                                   arbitrator)),  the WREIT Pledge and the stock
                                   of WREIT shall be  returned to WFSG.  Upon an
                                   Event of Termination  other than a Bondholder
                                   Breach  Termination,  or if the restructuring
                                   does not occur within 180 days after the date
                                   hereof,  physical  possession  of  the  WREIT
                                   Pledge  and  the  stock  of  WREIT  shall  be
                                   delivered  to the  indenture  trustee for the
                                   benefit of the  holders of the Senior  Notes;
                                   provided,    however,    that   if   physical
                                   possession  is delivered  solely by reason of
                                   the  passage  of 180 days,  and a  Bondholder
                                   Breach  Termination  (but no  other  Event of
                                   Termination) shall thereafter occur, then the
                                   Senior  Note  Majority   shall  instruct  the
                                   indenture trustee to release the WREIT Pledge
                                   and return the stock of WREIT to WFSG.

DIP Financing:                     Provided  that:  (i) WFSG shall  have  timely
                                   obtained  the  requisite  formal  consents of
                                   holders of the Senior Notes to the conditions
                                   of the  Prepack;  (ii)  neither  WFSG nor any
                                   affiliate  is  otherwise  in  default  of its
                                   obligations  hereunder  or under  any  letter
                                   agreement   to  which   the  Term   Sheet  is
                                   attached;  and (iii) WFSG seeks  approval  of
                                   debtor  in  possession   financing  on  terms
                                   otherwise   acceptable  to  the  Senior  Note
                                   Majority  (the  "Approved  DIP   Financing"),
                                   then, if


<PAGE>


                                   required  by the lender of the  Approved  DIP
                                   Financing,   each  of  the  WAC   Pledge  (if
                                   applicable)  and the  WREIT  Pledge  shall be
                                   subordinated, and the WAC Negative Pledge (if
                                   applicable)   shall  be   waived  as  to  the
                                   Approved  DIP  Financing  in an amount not to
                                   exceed  the  amount  reflected  in the Agreed
                                   Projections.

Tax Attributes:                    To the extent not inconsistent with the other
                                   terms hereof,  the parties agree to structure
                                   the  transaction  in a  way  which  preserves
                                   favorable  tax  attributes  of  WFSG  to  the
                                   fullest reasonable extent.

Consolidation of WCC:              Acquisition  of Wilshire  Credit  Corporation
                                   ("WCC")  or  its  business  assets  by a  new
                                   subsidiary of WFSG on terms acceptable to the
                                   Senior Note Majority.

Restructuring of CCI Loan:         Restructuring  of  the   approximately   $155
                                   million   loan  by  CCI  to  WCC  (the   "CCI
                                   Restructuring")  on terms  acceptable  to the
                                   Senior Note Majority.

                                   Renegotiation  (or approval) of current terms
                                   of   all   affiliate   servicing/subservicing
                                   agreements  on  terms   satisfactory  to  the
                                   Senior Note Majority.


Due Diligence:                     Final   agreement   subject   to   definitive
                                   documentation   and   continued   legal   and
                                   financial  due diligence by holders of Senior
                                   Notes  and  their  advisors.  Full  access to
                                   management  and  books and  records  of WFSG,
                                   WCC, WREIT, First Bank, and all affiliates.


Reorganization/Recapitalization    All      further       discussions       with
Discussion:                        strategic/financial  partners  to take  place
                                   with  participation of advisors to the Senior
                                   Note  Majority.  The  Company  will share all
                                   offers,  correspondence  or other information
                                   in connection with such  discussions with the
                                   Senior Note Majority and their advisors.


Releases:                          Mutual releases among holders of Senior Notes
                                   and  their  advisors,  WFSG,  WCC,  Andrew A.
                                   Wiederhorn,  Lawrence A.  Mendelsohn  and CCI
                                   effective upon consummation of Prepack.


Timing:                            1.  Agreement  on Term  Sheet no  later  than
                                       Monday, November 23, 1998.

                                          2.   Designation and delivery of the
                                               Agreed Projections no later than
                                               December 1, 1998.

                                          3.   Draft Restructuring documentation
                                               to be circulated  no  later  than
                                               Friday, December 4, 1998.

<PAGE>


                                          4.   Solicitation period to begin
                                               December 19, 1998.

                                          5.   Solicitation period to  conclude
                                               by  January 19, 1999.

                                          6.   Prepack filing (if required) no
                                               later than January 20,  1999,
                                               with day one request to shorten
                                               notice of confirmation hearing.

                                          7.   Plan  confirmation (if  required)
                                               by  February 1, 1999.

                                          8.   Effective date of Restructuring
                                               no later than February 11, 1999.


                                   All dates subject to extension only by mutual
                                   agreement  of the Senior  Note  Majority  and
                                   WFSG.


                                    EXHIBIT A

                              UNOFFICIAL COMMITTEE
                                       OF
                        WILSHIRE FINANCIAL SERVICES GROUP
                               SENIOR NOTEHOLDERS


                                November 23, 1998



CONFIDENTIAL
------------

Bankers Trust Company
4 Albany Street
New York, New York 10006

Attention: Corporate Trust & Agency Group

<PAGE>




                                                                             Re:

13% Notes  due 2004  issued by  Wilshire  Financial  Services  Group  Inc.  (the
"Notes")

Ladies/Gentlemen:

     This letter is  submitted  by the  signatories  hereto,  who  comprise  the
Unofficial  Committee of Senior Noteholders of Wilshire Financial Services Group
Inc.,  a Delaware  corporation  ("WFSG" or the  "Company"),  in our  capacity as
holders or  representatives of a majority of the 13% Notes due 2004 of WFSG (the
"Majority  Noteholders")  issued pursuant to an indenture,  dated as of December
24, 1996 (the "13% Note Indenture"),  between WFSG and Bankers Trust Company,  a
New York banking  corporation,  as trustee (the "Trustee").  The amount of notes
issued under the 13% Note  Indenture  which are held,  represented or advised by
the Majority Noteholders is provided on Schedule 1 attached hereto.

     Under  Section  316 of the  Trust  Indenture  Act of 1939 and  pursuant  to
Section  5.12 of the 13% Note  Indenture,  we the  Majority  Noteholders  hereby
direct the  Trustee  not to  exercise  any  remedies  with  respect to  defaults
resulting from breaches of the following covenants:  (i) Section 9.9, "Net Worth
Maintenance";  (ii)  Section 9.10 (a), the  Leverage  Ratio  restriction;  (iii)
existing defaults under Section 9.10 (b) by reason of the Company's guarantee of
the  indebtedness  of WCC pursuant to the  Guaranty,  dated October 15, 1998, by
WFSG and WREIT for the  benefit of CCI and entry in to the  Pledge and  Security
Agreement,  dated  October 15,  1998,  by WFSG for the benefit of CCI;  and (iv)
Section 9.10 (d) due to  Subsidiary  guarantees of  Guaranteed  Indebtedness  by
reason of the  Guarantee,  dated  October  15,  1998,  by Andrew A.  Wiederhorn,
Lawrence   Mendelsohn,   Wilshire   Leasing  Limited,   Wilshire   Properties  1
Incorporated,   Wilshire   Properties   2   Incorporated,   Portland   Servicing
Corporation,  and Wilshire Securities Corporation to and for the benefit of CCI;
and (v) Section 9.14, "Limitations on Transactions with Affiliates" by reason of
the  transactions  described  in Item 11 to the  Company's  unaudited  financial
statements for the nine month period ended September 30, 1998.

     Please be on notice that, upon the occurrence of an Event of Termination as
that term is defined in the  attached  Term  Sheet,  dated  November  23,  1998,
between the Unofficial  Committee of Senior  Noteholders of WFSG,  Wilshire Real
Estate  Investment  Trust Inc., the Company and the  individuals  named therein,
this  direction may be terminated by written notice of the holders of a majority
of the 13% Notes due 2004. This letter may be executed in counterparts,  each of
which  shall be deemed to be an  original,  and all of such  counterparts  taken
together shall be deemed to constitute one and the same instrument.


                             Very truly yours,

                             CAPITAL RESEARCH AND MANAGEMENT
                             COMPANY, on behalf of:
                                 The Income Fund of America, Inc.
                                 The Bond Fund of America, Inc.
                                 American Variable Insurance Series - High Yield
                                 Bond Fund

<PAGE>

                                 By:      s/
                                          --

                                          Name:   Paul G. Haaga, Jr.
                                          --------------------------
                                          Title:  Executive Vice President
                                          --------------------------------
               

                             RYBACK MANAGEMENT CORPORATION


                                 By:      s/
                                          --

                                          Name:   Eric Ryback
                                          -------------------
                                          Title:  President
                                          -------------------

                                The undersigned as investment advisor to various
                                client accounts with regard to the Restructuring
                                of WFSG,  hereby  confirms and accepts on behalf
                                of such clients the  documents  attached  hereto
                                which  may  include,   but  not  necessarily  be
                                limited to, letter agreements and term sheets.

                             AMERICAN EXPRESS FINANCIAL CORP.

                                 By:      s/
                                          --

                                          Name:  Frederick C. Quirsfeld
                                          -----------------------------

                                          Title: Senior Vice President - Fixed
                                                 Income
                                          ------------------------------------


                                   SCHEDULE I

                     Wilshire Financial Services Group Inc.

                               13% Notes due 2004
                 Cusip: 971867 - AA - 4 Outstanding: $84,245,000



Noteholder                              Principal Amount     Percentage of Total
-------------------------------------   -----------------   --------------------

American Express Financial Advisors         $19,000,000              22.6%

Capital Research and Management Co.          13,500,000              16.0

Lindner Dividend Fund                        10,000,000              11.9
-------------------------------------   -----------------    -------------------


<PAGE>




Total                                       $42,500,000              50.4%
------------------------------------    -----------------    -------------------




                                    EXHIBIT B


                              UNOFFICIAL COMMITTEE
                                       OF
                        WILSHIRE FINANCIAL SERVICES GROUP
                               SENIOR NOTEHOLDERS


                                November 23, 1998



CONFIDENTIAL
------------

Bankers Trust Company
4 Albany Street
New York, New York 10006

Attention: Corporate Trust & Agency Group


                                                                             Re:


13% Series B Notes due 2004 issued by  Wilshire  Financial  Services  Group Inc.
(the "Notes")

Ladies/Gentlemen:

     This letter is  submitted  by the  signatories  hereto,  who  comprise  the
Unofficial  Committee of Senior Noteholders of Wilshire Financial Services Group
Inc.,  a Delaware  corporation  ("WFSG" or the  "Company"),  in our  capacity as
holders or  representatives  of a majority of the 13% Series B Notes due 2004 of
WFSG (the "Majority  Noteholders") issued pursuant to an indenture,  dated as of
August 15, 1997 (the "13% Series B Note  Indenture"),  between  WFSG and Bankers
Trust Company, a New York banking corporation,  as trustee ("the Trustee").  The
amount of notes  issued  under the 13% Series B Note  Indenture  which are held,
represented  or advised by the  Majority  Noteholders  is provided on Schedule 1
attached hereto.

     Under  Section  316 of the  Trust  Indenture  Act of 1939 and  pursuant  to
Section 5.12 of the 13% Series B Note  Indenture,  we the  Majority  Noteholders
hereby  direct the Trustee not to exercise any remedies with respect to defaults
resulting from breaches of the following covenants:  (i) Section 9.9, "Net Worth
Maintenance";  (ii)  Section 9.10 (a), the  Leverage  Ratio  restriction;  (iii)
existing defaults under Section 9.10 (b) by reason of the Company's guarantee of
the indebtedness of WCC pursuant to the



<PAGE>



Guaranty,  dated  October 15, 1998, by WFSG and WREIT for the benefit of CCI and
entry in to the Pledge and Security  Agreement,  dated October 15, 1998, by WFSG
for the benefit of CCI; and (iv) Section 9.10 (d) due to  Subsidiary  guarantees
of Guaranteed  Indebtedness by reason of the Guarantee,  dated October 15, 1998,
by Andrew A. Wiederhorn, Lawrence Mendelsohn, Wilshire Leasing Limited, Wilshire
Properties  1  Incorporated,   Wilshire  Properties  2  Incorporated,   Portland
Servicing  Corporation,  and  Wilshire  Securities  Corporation  to and  for the
benefit  of  CCI;  and (v)  Section  9.14,  "Limitations  on  Transactions  with
Affiliates" by reason of the transactions  described in Item 11 to the Company's
unaudited  financial  statements  for the nine month period ended  September 30,
1998.

     Please be on notice that, upon the occurrence of an Event of Termination as
that term is defined in the  attached  Term  Sheet,  dated  November  23,  1998,
between the Unofficial  Committee of Senior  Noteholders of WFSG,  Wilshire Real
Estate  Investment  Trust Inc., the Company and the  individuals  named therein,
this  direction may be terminated by written notice of the holders of a majority
of the 13% Series B Notes due 2004.

     This letter may be executed in counterparts,  each of which shall be deemed
to be an original,  and all of such counterparts  taken together shall be deemed
to constitute one and the same instrument.


                             Very truly yours,

                             CAPITAL RESEARCH AND MANAGEMENT
                             COMPANY, on behalf of:
                                 The Income Fund of America, Inc.
                                 The Bond Fund of America, Inc.
                                 American Variable Insurance Series - High Yield
                                 Bond Fund
                                 Anchor Pathway Fund - High Yield Bond Fund


                                 By:      s/
                                          --

                                          Name:   Paul G. Haaga, Jr.
                                          --------------------------
                                          Title:  Executive Vice President
                                          --------------------------------
               

                             CAPITAL GUARDIAN TRUST COMPANY, on behalf of the 
                             following accounts:  9500, 012, 002, 2894 and 2905


                                 By:      s/
                                          --

                                          Name:   Peter C. Kelly
                                          ----------------------
                                          Title:  Vice President
                                          ----------------------

<PAGE>
                             WILSHIRE REAL ESTATE INVESTMENT TRUST INC.

                                 By:      s/
                                          --

                                          Name:   Lawrence A. Mendelsohn
                                          ------------------------------
                                          Title:  President
                                          ------------------------------

                                The undersigned as investment advisor to various
                                client accounts with regard to the Restructuring
                                of WFSG,  hereby  confirms and accepts on behalf
                                of such clients the  documents  attached  hereto
                                which  may  include,   but  not  necessarily  be
                                limited to, letter agreements and term sheets.

                             AMERICAN EXPRESS FINANCIAL CORP.

                                 By:      s/
                                          --

                                          Name:  Frederick C. Quirsfeld
                                          -----------------------------

                                          Title: Senior Vice President - Fixed
                                                 Income
                                          ------------------------------------



                                   SCHEDULE I

                     Wilshire Financial Services Group Inc.

                           13% Series B Notes due 2004
                Cusip: 971867 - AE - 6 Outstanding: $100,000,000



Noteholder                                 Principal Amount  Percentage of Total
------------------------------------------ ----------------  -------------------

Capital Research and Management Co.            $31,600,000           31.6%
 
American Express Financial Advisors             21,200,000           21.2

Wilshire Real Estate Investment Trust Inc.      20,000,000           20.0
------------------------------------------ ----------------- -------------------

Total                                          $72,800,000           72.8%
------------------------------------------ ----------------- -------------------