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                                                                     Exhibit 3.1

                              AMENDED AND RESTATED
                            ARTICLES OF INCORPORATION
                                       OF
                   WILSHIRE REAL ESTATE INVESTMENT TRUST INC.

                              (A Stock Corporation)


     Wilshire Real Estate Investment Trust Inc., a Maryland corporation having
its principal office in the State of Maryland in Baltimore City, Maryland
(hereinafter called the "Corporation"), hereby certifies to the State Department
of Assessments and Taxation of Maryland (the "SDAT") that:

     FIRST: The Charter of the Corporation is hereby amended and restated in its
entirety as follows:


                                       I.

     The name of the corporation (which is hereinafter called the "Corporation")
is:

                      WILSHIRE REAL ESTATE INVESTMENT INC.

                                       II.

     The purpose for which this Corporation is formed is to transact any and all
lawful act or activity for which corporations may be organized under the General
Laws of the State of Maryland now or hereafter in force.

                                      III.

     The total number of shares of stock of all classes which the Corporation
has authority to issue is 225,000,000 shares of capital stock (par value $.0001
per share), of which 200,000,000 shares are initially classified as "Common
Stock" and 25,000,000 shares are initially classified "Preferred Stock." The
aggregate par value of all authorized shares of stock having par value is
$22,500. The Board of Directors may classify and reclassify any unissued shares
of capital stock by setting or changing in any one or more respects the
preferences, conversion or other rights, voting powers, restrictions,
limitations as to dividends, qualifications, or terms or conditions of
redemption of such shares of capital stock.

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     No holder of any stock or any other securities of the Corporation, whether
now or hereafter authorized, shall have any preemptive right to subscribe for or
purchase any stock or any other securities of the Corporation, including,
without limitation: (i) any shares of any class of the Corporation; (ii) any
warrants, rights, or options to purchase any such shares; or (iii) any
securities or obligations convertible into any such shares or into warrants,
rights, or options to purchase any such shares.

     The Board of Directors is hereby empowered to authorize the issuance from
time to time of shares of its stock of any class, whether now or hereafter
authorized, or securities convertible into shares of its stock of any class or
classes, whether now or hereafter authorized, for such consideration as may be
deemed advisable by the Board of Directors and without any action by the
stockholders. Also, the Preferred Stock may be issued from time to time by the
Board of Directors of the Corporation, in such series and with such preferences,
conversion or other rights, voting powers, restrictions, limitations as to
dividends, qualifications, or other provisions as may be fixed by the Board of
Directors without any action by the stockholders.

                                       IV.

     The present address of the principal office of the Corporation in this
State is 11 East Chase Street, Suite 9E, Baltimore, Maryland 21202.

                                       V.

     The name and address of the resident agent of the Corporation in this State
are CSC-Lawyers Incorporating Service Company, 11 East Chase Street, Suite 9E,
Baltimore, Maryland 21202. Said resident agent is a Maryland corporation.

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                                       VI.

     A. The number of directors of the Corporation shall be five (5), which
number may be increased or decreased pursuant to the Bylaws of the Corporation;
provided that in no case shall the Board of Directors consist of less than three
(3) or more than nine (9) members unless otherwise determined from time to time
by resolution adopted by the affirmative vote of at least eighty percent (80%)
of the members of the Board of Directors; provided further that in any case the
number of directors of the Corporation shall never be less than the minimum
number permitted by the General Laws of the State of Maryland now or hereafter
in force. Any director, or the entire Board of Directors, may be removed from
office at any time, but only for cause and then only by the affirmative vote of
not less than two-thirds (2/3) of all the votes entitled to be cast by the
outstanding shares of capital stock of the Corporation generally in the election
of directors which are cast on the matter at any meeting of the stockholders
called for that purpose, voting together for this purpose as a single class. A
director need not be a stockholder. At each annual meeting of the stockholders,
the stockholders shall elect directors to serve a one (1) year term and until
successors are elected and qualify.

     B. The following Persons are the current directors of the Corporation, to
serve until their successors are elected and qualified: Andrew Wiederhorn,
Lawrence Mendelsohn, David Egelhoff, Jordan Schnitzer and Patrick Terrell.

     C. Notwithstanding anything herein to the contrary, at all times (except
during a period not to exceed sixty (60) days following the death, resignation,
incapacity, or removal from office of a director prior to expiration of the
director's term of office), a majority of the Board of Directors shall be
"Independent Directors." "Independent Director" shall mean a director who,
within the last two years, has not (i) been employed by WFSG or any of its
Affiliates, (ii) been an officer or director of WFSG or any of its Affiliates,
(iii) or whose business or employer within the last two years has not performed
services for WFSG or any of its Affiliates that annually exceeded the lesser of
(a) the dollar amount provided in Item 404(a) of Regulation S-K or (b) 10% of
the gross revenue of the entity that provided such services, or (iv) had any
material business or professional relationship with WFSG or any of its
Affiliates. "WFSG" shall mean Wilshire Financial Services Group Inc., a Delaware
corporation. "Affiliate" shall mean (i) any person directly or indirectly
owning, controlling, or holding, with power to vote ten percent or more of the
outstanding voting securities of such other person, (ii) any person ten percent
or more of whose outstanding voting securities are directly or indirectly owned,
controlled, or held, with power to vote, by such other person, (iii) any person
directly or indirectly controlling, controlled by, or under common control with
such other person, (iv) any executive officer, director, trustee or general
partner of such other person, and (v) any legal entity for which such person
acts as an executive officer, director, trustee or general partner. The term
"person means" and includes any natural person, corporation, partnership,
association, limited liability company or any other legal entity. An indirect
relationship shall include circumstances in which a person's spouse, children,
parents,

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siblings or mothers-, fathers-, sisters- or brothers-in-law is or has been
associated with a person.

         D. To the extent permitted by applicable law, and subject to such
approval of the Independent Directors and such other conditions, if any, as
may be required by any applicable law or other applicable rule or regulation,
the Board of Directors may engage a manager to advise the Board of Directors
and be responsible for directing the day-to-day affairs of the Corporation (a
"Manager") pursuant to a written agreement (a "Management Agreement"). The
approval of any Management Agreement and the renewal or termination thereof
shall require the affirmative vote of a majority of the Independent Directors.

         E. A majority of the Independent Directors shall approve general
guidelines ("Guidelines") for the Corporation's investments, borrowings and
operations, and the Independent Directors shall conduct a quarterly review of
all transactions engaged in by the Corporation. The Independent Directors shall
approve any transactions with WFSG or any Affiliate of WFSG, in advance, to
insure compliance with the Guidelines.

         F. Notwithstanding any other provisions of the Charter or the Bylaws of
the Corporation (and notwithstanding that some lesser percentage may be
specified by law, the Charter or the Bylaws of the Corporation), the provisions
of this Article VI shall not be amended, altered, changed, or repealed, and no
provision inconsistent with this Article VI shall be adopted, without the
affirmative vote of at least eighty percent (80%) of the members of the Board of
Directors and by the affirmative vote of not less than two-thirds (2/3) of all
the votes entitled to be cast by the outstanding shares of capital stock of the
Corporation generally in the election of directors which are cast on the matter
at any meeting of the stockholders called for that purpose, voting together for
this purpose as a single class.

                                      VII.

         A. The Corporation shall indemnify (A) its directors and officers,
whether serving the Corporation or, at its request, any other entity, to the
full extent required or permitted by the General Laws of the State of Maryland
now or hereafter in force, including the advance of expenses under the
procedures and to the full extent permitted by law and (B) other employees and
agents to such extent as shall be authorized by the Board of Directors of the
Corporation or the Corporation's Bylaws and be permitted by law. The foregoing
rights of indemnification shall not be exclusive of any other rights to which
those seeking indemnification may be entitled. The Board of Directors may take
such action as is necessary to carry out these indemnification provisions and is
expressly empowered to adopt, approve, and amend from time to time such bylaws,
resolutions, or contracts, implementing such provisions or such further
indemnification arrangements as may be permitted by law. No amendment of the
Charter of the Corporation or repeal of any of its provisions shall limit or
eliminate the right to indemnification provided hereunder with respect to acts
or omissions occurring prior to such amendment or repeal.

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         B. To the fullest extent permitted by Maryland statutory or decisional
law, as amended or interpreted, no director or officer of this Corporation shall
be personally liable to the Corporation or its stockholders for money damages.
No amendment of the Charter of the Corporation or repeal of any of its
provisions shall limit or eliminate the limitation on liability provided to
directors and officers hereunder with respect to any act or omission occurring
prior to such amendment or repeal.

                                      VIII.

         The Corporation shall not, without the affirmative vote of at least
eighty percent (80%) of the members of the Board of Directors and the
affirmative vote of a majority of shares present in person or represented by
proxy and entitled to vote on the matter at any meeting of the stockholders
called for that purpose at which a quorum is present, seek to elect to be taxed
as a real estate investment trust ("REIT") under Section 856 under the Internal
Revenue Code of 1986, as amended from time to time (the "Code"). However, in the
event the Board of Directors and the stockholders should so vote, (i) it shall
be the duty of the Board of Directors to ensure that the Corporation satisfies
the requirements for qualification as a REIT under the Code, including, but not
limited to, the ownership of its outstanding stock, the nature of its assets,
the sources of its income, and the amount and timing of its distributions to its
stockholders, and (ii) the Board of Directors shall take no action thereafter to
disqualify the Corporation as a REIT or to otherwise revoke the Corporation's
election to be taxed as a REIT without the affirmative vote of at least eighty
percent (80%) of the members of the Board of Directors and the affirmative vote
of a majority of shares present in person or represented by proxy and entitled
to vote on the matter at any meeting of the stockholders called for that purpose
at which a quorum is present.

                                       IX.

         A.       Restrictions on Transfer.

                  1.       Definitions.  The following terms shall have the
following meanings:

                  "Beneficial Ownership" shall mean ownership of shares of
Equity Stock by a Person who would be treated as an owner of such shares of
Equity Stock either directly or indirectly through the application of Section
544 of the Code, as modified by Section 856(h)(1)(B) of the Code. The terms
"Beneficial Owner," "Beneficially Owns," and "Beneficially Owned" shall have
correlative meanings.

                  "Beneficiary" shall mean, with respect to any Trust, one or
more organizations described in each of Section 170(b)(1)(A) (other than clauses
(vii) or (viii) thereof) and Section 170(c)(2) of the Code that are named by the
Corporation as the beneficiary or beneficiaries of such Trust, in accordance
with the provisions of Section (B)(1) of Article IX hereof.

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                  "Board of Directors" shall mean the Board of Directors of
the Corporation.

                  "Closing Price" on any date shall mean the average of the high
bid and low asked prices in the over-the-counter market, as reported by The
Nasdaq Stock Market, or, if such system is no longer in use, the principal other
automated quotations system that may then be in use or, if the shares of Equity
Stock are not quoted by any such organization, the average of the closing bid
and asked prices as furnished by a professional market maker making a market in
the shares of Equity Stock selected by the Board of Directors.

                  "Constructive Ownership" shall mean ownership of shares of
Equity Stock by a Person who would be treated as an owner of such shares of
Equity Stock either directly or indirectly through the application of Section
318 of the Code, as modified by Section 856(d)(5) of the Code. The terms
"Constructive Owner," "Constructively Owns," and "Constructively Owned" shall
have correlative meanings.

                  "Disqualified Person" means (A) the United States, any State
or political subdivision thereof, any foreign government, any international
organization, or any agency or instrumentality of any of the foregoing, (B) any
organization (other than a cooperative described in Section 521 of the Code)
which is exempt from tax unless such organization is subject to the tax imposed
by Section 511 of the Code, and (C) any organization described in Section
1381(a)(2)(c) of the Code.

                  "Equity Stock" shall mean Preferred Stock and Common Stock of
the Corporation. The term "Equity Stock" shall include all shares of Preferred
Stock and Common Stock of the Corporation that are held as Shares-in-Trust in
accordance with the provisions of Section (B) of Article IX hereof.

                  "Market Price" on any date shall mean the average of the
Closing Price for the five consecutive Trading Days ending on such date.

                  "Non-Transfer Event" shall mean an event other than a
purported Transfer that would cause any Person to Beneficially Own or
Constructively Own shares of Equity Stock in excess of the Ownership Limit,
including, but not limited to, the granting of any option or entering into any
agreement for the sale, transfer, or other disposition of shares of Equity Stock
or the sale, transfer, assignment, or other disposition of any securities or
rights convertible into or exchangeable for shares of Equity Stock.

                  "Operating Partnership" shall mean Wilshire Real Estate
Partnership L.P., a Delaware limited partnership.

                  "Operating Partnership Agreement" shall mean the agreement of
limited partnership governing the Operating Partnership.

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                  "Ownership Limit" shall mean the restriction on ownership (or
deemed ownership by virtue of the attribution provisions of the Code) of more
than 9.8% of the number of shares or value (whichever is more restrictive) of
the outstanding Common Stock by any Person other than Wilshire Financial
Services Group Inc., a Delaware corporation ("WFSG"), or twenty percent (20%) of
the number of shares or value (whichever is more restrictive) of Common Stock by
WFSG (provided that the Board of Directors has obtained representations and
undertakings from WFSG in form and substance satisfactory to the Board of
Directors in its sole discretion as it may deem necessary or advisable in order
to determine that WFSG's Beneficial Ownership or Constructive Ownership will not
impair the Corporation's status as a REIT and provided further that WFSG agrees
that any actual or attempted violation of such representations or undertakings
(or other action which is contrary to the restrictions contained in Section
(A)(2) of Article IX hereof) will result in the transfer of such Equity Stock to
a Trustee in his capacity as trustee of a Trust in accordance with Section
(A)(3) of Article IX hereof) or 9.8% of the number of shares or value (whichever
is more restrictive) of the outstanding Preferred Stock (or such other number or
value of Preferred Stock as the Board of Directors may determine in fixing the
terms of the Preferred Stock). In determining the Ownership Limit, the number
and value of Common Stock and/or Preferred Stock of the Corporation shall be
determined by the Board in good faith, which determination shall be conclusive
for all purposes hereof.

                  "Permitted Transferee" shall mean any Person designated as a
Permitted Transferee in accordance with the provisions of Section (B)(5) of
Article IX hereof.

                  "Person" shall mean an individual, corporation, limited
liability company, partnership, estate, trust, a portion of a trust permanently
set aside for or to be used exclusively for the purposes described in Section
642(c) of the Code, association, private foundation within the meaning of
Section 509(a) of the Code, joint stock company, or other entity and also
includes a "group" as that term is used for purposes of Section 13(d)(3) of the
Securities Exchange Act of 1934, as amended.

                  "Prohibited Owner" shall mean, with respect to any purported
Transfer or Non-Transfer Event, any Person who, but for the provisions of
Section (A)(3) of Article IX hereof, would be the actual owner (within the
meaning of Treasury Regulation Section 1.857-8(b)) of shares of Equity Stock.

                  "Redemption Rights" shall mean the rights granted under the
Operating Partnership Agreement to the limited partners to redeem, under certain
circumstances, their limited partnership interests for shares of Common Stock
(or cash at the option of the Corporation).

                  "REIT Disqualification Meeting" shall mean an annual or
special meeting of the stockholders of the Corporation at which a proposal to
delete provisions of the Articles of Incorporation that require the Corporation
to elect to be taxed as a REIT is approved by the

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affirmative vote of not less than two-thirds (2/3) of all the votes entitled
to be cast by the outstanding shares of the capital stock of the Corporation
on the matter, voting together for this purpose as a single class.

                  "Restriction Termination Date" shall mean (A) if the
Corporation has elected not to be taxed as a REIT, the first day after at least
80% of the Board of Directors determines in writing that it is no longer in the
best interests of the Corporation to retain the restrictions on transfer and
ownership contained in Article IX; or (B) if the Corporation has elected to be
taxed as a REIT, the first day after (i) at least 80% of the Board of Directors
determines in writing that it is no longer in the best interests of the
Corporation to retain the restrictions on transfer and ownership contained in
Article IX and (ii) such restrictions are no longer required for the Corporation
to qualify, or to continue to qualify, as a REIT.

                  "Shares-in-Trust" shall mean any shares of Equity Stock
designated Shares-in-Trust pursuant to Section (A)(3) of Article IX hereof.

                  "Tax Benefits" shall mean the Corporation's net operating loss
carryforwards, capital loss carryforwards and built-in losses.

                  "Tenant" shall mean any Person (other than an individual) from
whom the Corporation derives (or is deemed to derive for purposes of applying
Section 856 of the Code to the Corporation), directly or indirectly, gross
income.

                  "Tenant Interest" shall mean an interest, expressed as a
percentage, of the total combined voting power or total number of shares of all
classes of stock of a Tenant that is a corporation, or an interest, expressed as
a percentage, of the assets or net profits (within the meaning of Section
856(d)(2)(B) of the Code) of a Tenant that is not a corporation.

                  "Trading Day" shall mean any day other than a Saturday, a
Sunday, or a day on which banking institutions in the State of New York are
authorized or obligated by law or executive order to close.

                  "Transfer" shall mean any sale, transfer, gift, assignment,
devise, or other disposition of shares of Equity Stock, whether voluntary or
involuntary, whether of record, constructively or beneficially, and whether by
operation of law or otherwise.

                  "Trust" shall mean any separate trust created pursuant to
Section (A)(3) of Article IX hereof and administered in accordance with the
terms of Section (B) of Article IX hereof, for the exclusive benefit of any
Beneficiary.

                  "Trustee" shall mean any Person or entity unaffiliated with
both the Corporation and any Prohibited Owner, such Trustee to be designated by
the Corporation to act as trustee of any Trust, or any successor trustee
thereof.

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                  2.       Restriction on Transfers.

                           a.       Except as provided in Section (A)(7) of
Article IX hereof, from the date of a REIT Disqualification Meeting and prior
to the Restriction Termination Date, (i) no Person shall Beneficially Own or
Constructively Own outstanding shares of Equity Stock in excess of the
Ownership Limit and (ii) any Transfer that, if effective, would result in any
Person Beneficially Owning or Constructively Owning shares of Equity Stock in
excess of the Ownership Limit shall be void AB INITIO as to the Transfer of
that number of shares of Equity Stock which would be otherwise Beneficially
Owned or Constructively Owned by such Person in excess of the Ownership
Limit, and the intended transferee shall acquire no rights in such excess
shares of Equity Stock.

                           b.       Except as provided in Section (A)(7) of
Article IX hereof, from the date of a REIT Disqualification Meeting and prior
to the Restriction Termination Date, any Transfer that, if effective, would
result in shares of Equity Stock being beneficially owned by fewer than 100
Persons (determined without reference to any rules of attribution) shall be
void AB INITIO as to the Transfer of that number of shares which would be
otherwise beneficially owned (determined without reference to any rules of
attribution) by the transferee, and the intended transferee shall acquire no
rights in such shares of Equity Stock.

                           c.       From the date of a REIT Disqualification
Meeting and prior to the Restriction Termination Date, any Transfer of shares
of Equity Stock that, if effective, would result in the Corporation being
"closely held" within the meaning of Section 856(h) of the Code shall be void
AB INITIO as to the Transfer of that number of shares of Equity Stock which
would cause the Corporation to be "closely held" within the meaning of
Section 856(h) of the Code, and the intended transferee shall acquire no
rights in such shares of Equity Stock.

                           d.       From the date of a REIT Disqualification
Meeting and prior to the Restriction Termination Date, any Transfer of shares
of Equity Stock that, if effective, would cause the Corporation to
Constructively Own a Tenant Interest of ten percent (10%) or more shall be
void AB INITIO as to the Transfer of that number of shares of Equity Stock
which would cause the Corporation to Constructively Own a Tenant Interest of
ten percent (10%) or more and the intended transferee shall acquire no rights
in such excess shares of Equity Stock.

                           e.       From the date of a REIT Disqualification
Meeting and prior to the Restriction Termination Date, any Transfer of shares
of Equity Stock that, if effective, would result in shares of Equity Stock
being Beneficially Owned by a Disqualified Person shall be void AB INITIO as
to the Transfer of that number of shares which would be otherwise
Beneficially Owned by the transferee, and the intended transferee shall
acquire no rights in such shares of Equity Stock.

                           f.       It is expressly intended that the
restrictions on ownership and Transfer described in this Section (A)(2) of
Article IX shall apply to the Redemption Rights.

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Notwithstanding any of the provisions of the Operating Partnership Agreement
to the contrary, a partner of the Operating Partnership shall not be entitled
to effect an exchange of an interest in the Operating Partnership for Common
Stock if the Beneficial Ownership or Constructive Ownership of Common Stock
would be prohibited under the provisions of this Article IX.

                  3.       Transfer to Trust.

                           a.       If, notwithstanding the other provisions
contained in this Section (A) of Article IX, at any time after a REIT
Disqualification Meeting and prior to the Restriction Termination Date, there
is a purported Transfer or Non-Transfer Event such that any Person would
either Beneficially Own or Constructively Own shares of Equity Stock in
excess of the Ownership Limit, then, (i) except as otherwise provided in
Section (A)(7) of Article IX hereof, the purported transferee shall acquire
no right or interest (or, in the case of a Non-Transfer Event, the actual
owner (within the meaning of Treasury Regulation Section 1.857-8(b)) of the
shares of Equity Stock Beneficially Owned or, Constructively Owned by such
Beneficial Owner or Constructive Owner, shall cease to own any right or
interest) in such number of shares of Equity Stock which would cause such
Beneficial Owner or Constructive Owner to Beneficially Own or Constructively
Own shares of Equity Stock in excess of the Ownership Limit, (ii) such number
of shares of Equity Stock in excess of the Ownership Limit (rounded up to the
nearest whole share) shall be designated Shares-in-Trust and, in accordance
with the provisions of Section (B) of Article IX hereof, transferred
automatically and by operation of law to a Trustee in his capacity as trustee
of a Trust to be held in accordance with that Section (B) of Article IX, and
(iii) the Prohibited Owner shall submit such number of shares of Equity Stock
to the Corporation for registration in the name of the Trustee. Such transfer
to a Trustee and the designation of shares as Shares-in-Trust shall be
effective as of the close of business on the business day prior to the date
of the Transfer or Non-Transfer Event, as the case may be.

                           b.       If, notwithstanding the other provisions
contained in this Section (A) of Article IX (after application of paragraph
(a) above), at any time after a REIT Disqualification Meeting and prior to
the Restriction Termination Date, there is a purported Transfer or
Non-Transfer Event that, if effective, would (i) result in the shares of
Equity Stock being Beneficially Owned by fewer than 100 Persons (determined
without reference to any rules of attribution), (ii) result in the
Corporation being "closely held" within the meaning of Section 856(h) of the
Code, or (iii) cause the corporation to Constructively Own a Tenant Interest
of ten percent (10%) or more, or (iv) result in the shares of Equity Stock
being Beneficially Owned by a Disqualified Person, then (x) the purported
transferee shall not acquire any right or interest (or, in the case of a
Non-Transfer Event, the Person who, but for the provisions of this Section
(A)(3), would be the actual owner (within the meaning of Treasury Regulation
Section 1.857-8(b)) of the shares of Equity Stock with respect to which such
Non-Transfer Event occurred, shall cease to own any right or interest) in
such number of shares of Equity Stock, the ownership of which by such
purported transferee or purported actual owner would (A) result in the shares
of Equity Stock being beneficially owned by fewer

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than 100 Persons (determined without reference to any rules of attribution),
(B) result in the Corporation being "closely held" within the meaning of
Section 856(h) of the Code, (C) cause the Corporation to Constructively Own a
Tenant Interest of ten percent (10%) or more or (D) result in the shares of
Equity Stock being Beneficially Owned by a Disqualified Person, (y) such
number of shares of Equity Stock (rounded up to the nearest whole share)
shall be designated Shares-in-Trust and, in accordance with the provisions of
Section (B) of Article IX hereof, transferred automatically and by operation
of law to a Trustee in his capacity as trustee of a Trust to be held in
accordance with that Section (B) of Article IX, and (z) the Prohibited Owner
shall submit such number of shares of Equity Stock to the Corporation for
registration in the name of the Trustee. Such transfer to a Trustee in his
capacity as trustee of a Trust and the designation of shares as
Shares-in-Trust shall be effective as of the close of business on the
business day prior to the date of the Transfer or Non-Transfer Event, as the
case may be.

                  4. Remedies for Breach. If the Corporation, or its designees,
shall at any time determine in good faith that a Transfer or Non-Transfer Event
has taken place that, if effective, would result in a violation of Section
(A)(2) of Article IX hereof or that a Person intends to acquire or has attempted
to acquire Beneficial Ownership or Constructive Ownership of any shares of
Equity Stock in violation of Section (A)(2) of Article IX hereof, the
Corporation shall take such action as it deems advisable to refuse to give
effect to or to prevent such Transfer or acquisition of Beneficial Ownership or
Constructive Ownership, including, but not limited to, causing the Corporation
to redeem shares of Equity Stock, refusing to give effect to such Transfer on
the books of the Corporation or instituting proceedings to enjoin such Transfer
or acquisition.

                  5. Notice of Restricted Transfer. Any Person who acquires or
attempts to acquire Beneficial Ownership or Constructive Ownership of shares of
Equity Stock in violation of Section (A)(2) of Article IX hereof, or any Person
who owned shares of Equity Stock that were transferred to a Trustee in his
capacity as trustee of a Trust pursuant to the provisions of Section (A)(3) of
Article IX hereto, shall immediately give written notice to the Corporation of
such event and shall provide to the Corporation such other information as the
Corporation may request in order to determine the effect, if any, of such
Transfer or Non-Transfer Event, as the case may be, on the Corporation's status
as a REIT.

                  6. Owners Required To Provide Information. From the date of a
REIT Disqualification Meeting and prior to the Restriction Termination Date:

                           a.       Every Beneficial Owner or Constructive
Owner of more than five percent (5%), or such lower percentages as required
pursuant to regulations under the Code, of the outstanding shares of all
classes of capital stock of the Corporation shall, within thirty (30) days
after January 1 of each year, provide to the Corporation a written statement
or affidavit stating the name and address of such Beneficial Owner or
Constructive Owner, the number of shares of Equity Stock Beneficially Owned
or Constructively Owned, and a description of how such shares are held. Each
such Beneficial Owner or Constructive Owner shall provide to the

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Corporation such additional information as the Corporation may request in
order to determine the effect, if any, of such Beneficial Ownership or
Constructive Ownership on the Corporation's status as a REIT and to ensure
compliance with the restrictions on ownership set forth in this Article IX.

                           b.       Each Person (including the stockholder of
record) who is holding shares of Equity Stock for a Beneficial Owner or
Constructive Owner shall provide to the Corporation a written statement or
affidavit stating such information as the Corporation may request in order to
determine the Corporation's status as a REIT and to ensure compliance with
the Ownership Limit.

                  7.       Exceptions.

                           a.       The provisions of Section (A)(2) of
Article IX hereof shall not apply to the acquisition of shares of Equity
Stock by an underwriter that participates in a public offering of such shares
or securities convertible into such shares for a period of ninety (90) days
following the purchase by such underwriter of such shares provided that the
restrictions contained in Section (A)(2) of Article IX hereof will not be
violated following the distribution by such underwriter of such shares.

                           b.       The Board of Directors, in its sole
discretion, may exempt a Person from the restrictions set forth in Section
(A)(2) of this Article IX if:

                                    (i)     the Board of Directors obtains
         such representations and undertakings from such Person as are deemed
         by the Board of Directors to be reasonably necessary to ascertain
         that no individual's Beneficial Ownership of shares of Equity Stock
         will violate the restrictions set forth in Section (A)(2) of this
         Article IX or that any such violation will not cause the Corporation
         to fail to qualify as a REIT under the Code, and such Person agrees
         that any actual or attempted violation of such representations or
         undertakings (or other action which is contrary to the restrictions
         contained in Section (A)(2) of this Article IX) will result in the
         transfer of such Equity Stock to a Trustee in his capacity as
         trustee of a Trust in accordance with Section (A)(3) of this Article
         IX; or

                                    (ii) such Person does not own, and
         represents that it will not own, actually or Constructively, a
         Tenant Interest that would cause the Corporation to own, actually or
         Constructively, a Tenant Interest of more than 9.8%, the Corporation
         obtains such other representations and undertakings from such Person
         (or any other Person who could be treated as Constructively Owning
         the Equity Shares actually or Constructively Owned by such Person)
         as are deemed by the Board of Directors to be reasonably necessary
         to ascertain this fact and such Person agrees that any actual or
         attempted violation of such representations or undertakings will
         result in the transfer of such Equity Stock to a Trustee in his
         capacity as trustee of a Trust in accordance with

                                       12

<PAGE>

         Section (A)(3) of this Article IX. Notwithstanding the foregoing,
         the inability of a Person to make the certification described in
         this paragraph shall not prevent the Board of Directors, in its sole
         discretion, from exempting such Person from the restrictions set
         forth in Section (A)(2) of this Article IX if the Board of Directors
         determines that the resulting application of Section 856(d)(2)(B) of
         the Code would affect the characterization of less than 0.5% of the
         gross income (as such term is used in Section 856(c)(2) of the Code)
         of the Corporation in any taxable year.

                           c.       Prior to granting any exception pursuant
to Section (A)(7)(b)(i) or (ii) of this Article IX, the Board of Directors
may require a ruling from the IRS, or an opinion of counsel, in either case
in form and substance satisfactory to the Board of Directors in its sole
discretion, as it may deem necessary or advisable in order to determine or
ensure the Corporation's status as a REIT or otherwise would not affect the
Corporation's status as a REIT.

         B.       Shares-in-Trust.

                  1. Trust. Any shares of Equity Stock transferred to a Trustee
in his capacity as trustee of a Trust and designated Shares-in-Trust pursuant to
Section (A)(3) of Article IX hereof shall be held for the exclusive benefit of
the Beneficiary. The Corporation shall name a Beneficiary (such that the shares
of Equity Stock held in the Trust would not violate the restrictions set forth
in Section (A)(2) of Article IX hereof) for each Trust within five (5) days
after discovery of the existence thereof. Any transfer to a Trust, and
subsequent designation of shares of Equity Stock as Shares-in-Trust, pursuant to
Section (A)(3) of Article IX hereof shall be effective as of the close of
business on the business day prior to the date of the Transfer or Non-Transfer
Event that results in the transfer to the Trust. Shares-in-Trust shall remain
issued and outstanding shares of Equity Stock of the Corporation and shall be
entitled to the same rights and privileges on identical terms and conditions as
are all other issued and outstanding shares of Equity Stock of the same class
and series. When transferred to a Permitted Transferee in accordance with the
provisions of Section (B)(5) of Article IX hereof, such Shares-in-Trust shall
cease to be designated as Shares-in-Trust.

                  2. Dividend Rights. The Trust, as record holder of
Shares-in-Trust, shall be entitled to receive all dividends and distributions as
may be declared by the Board of Directors on such shares of Equity Stock and
shall hold such dividends or distributions in trust for the benefit of the
Beneficiary. The Prohibited Owner with respect to Shares-in-Trust shall be
required to repay to the Trust the amount of any dividends or distributions
received by it that (i) are attributable to any shares of Equity Stock
designated Shares-in-Trust and (ii) the record date of which was on or after the
date that such shares became Shares-in-Trust. The Corporation shall take all
measures that it determines reasonably necessary to recover the amount of any
such dividend or distribution paid to a Prohibited Owner, including, if
necessary, withholding any portion of future dividends or distributions payable
on shares of Equity Stock Beneficially Owned or Constructively Owned by the
Person who, but for the

                                       13

<PAGE>

provisions of Section (A)(3) of Article IX hereof, would Constructively Own
or Beneficially Own the Shares-in-Trust; and, as soon as reasonably
practicable following the Corporation's receipt or withholding thereof, shall
pay over to the Trust for the benefit of the Beneficiary the dividends so
received or withheld, as the case may be.

                  3. Rights upon Liquidation. In the event of any voluntary or
involuntary liquidation, dissolution, or winding up of, or any distribution of
the assets of, the Corporation, each holder of Shares-in-Trust shall be entitled
to receive, ratably with each other holder of shares of Equity Stock of the same
class or series, that portion of the assets of the Corporation which is
available for distribution to the holders of such class and series of shares of
Equity Stock. The Trust shall distribute to the Prohibited Owner the amounts
received upon such liquidation, dissolution, or winding up, or distribution;
provided, however, that the Prohibited Owner shall not be entitled to receive
amounts pursuant to this Section (B)(3) of Article IX in excess of, in the case
of a purported Transfer in which the Prohibited Owner paid fair market value for
shares of Equity Stock and which Transfer resulted in the transfer of the shares
to the Trustee in his capacity as trustee of a Trust, the price per share, if
any, such Prohibited Owner paid for the shares of Equity Stock and, in the case
of a Non-Transfer Event or Transfer in which the Prohibited Owner did not pay
fair market value for such shares (E.G., if the shares were received through a
gift or devise) and which Non-Transfer Event or Transfer, as the case may be,
resulted in the transfer of shares to a Trustee in his capacity as trustee of a
Trust, the price per share equal to the Market Price on the date of such
Non-Transfer Event or Transfer. Any remaining amount in such Trust shall be
distributed to the Beneficiary.

                  4. Voting Rights. The Trustee shall be entitled to vote all
Shares-in-Trust. Any vote by a Prohibited Owner as a holder of shares of Equity
Stock prior to the discovery by the Corporation that the shares of Equity Stock
are Shares-in-Trust shall, subject to applicable law, be rescinded and shall be
void AB INITIO with respect to such Shares-in-Trust and the Prohibited Owner
shall be deemed to have given, as of the close of business on the business day
prior to the date of the purported Transfer or Non-Transfer Event that results
in the transfer to the Trust of shares of Equity Stock under Section (A)(3) of
Article IX hereof, an irrevocable proxy to the Trustee to vote the
Shares-in-Trust in the manner in which the Trustee, in its sole and absolute
discretion, desires.

                  5. Designation of Permitted Transferee. The Trustee shall have
the exclusive and absolute right to designate a Permitted Transferee of any or
all Shares-in-Trust. In an orderly fashion so as not to materially adversely
affect the Market Price of the Shares-in-Trust, the Trustee shall either sell
the Shares-in-Trust using the facilities of a national stock exchange on which
the class and series of such Shares-in-Trust are then actively traded, if any,
or designate any Person as Permitted Transferee, provided, however, that (i) the
Permitted Transferee so designated purchases for valuable consideration (whether
in a public or private sale) the Shares-in-Trust and (ii) the Permitted
Transferee so designated may acquire such Shares-in-Trust without such
acquisition resulting in a transfer to a Trustee in his capacity as trustee of
the Trust and the redesignation of such shares of Equity Stock so acquired as
Shares-

                                       14

<PAGE>

in-Trust under Section (A)(3) of Article IX hereof. Upon the sale of
Shares-in-Trust by the Trustee of a Permitted Transferee in accordance with
the provisions of this Section (B)(5) of Article IX, the Trustee shall (i) if
such sale was to a Permitted Transferee, cause to be transferred to the
Permitted Transferee that number of Shares-in-Trust acquired by the Permitted
Transferee, (ii) if such sale was to a Permitted Transferee, cause to be
recorded on the books of the Corporation that the Permitted Transferee is the
holder of record of such number of shares of Equity Stock, (iii) cause the
Shares-in-Trust to be canceled, and (iv) distribute to the Beneficiary any
and all amounts held with respect to the Shares-in-Trust after making that
payment to the Prohibited Owner pursuant to Section (B)(6) of Article IX
hereof.

                  6. Compensation to Record Holder of Shares of Equity Stock
that Become Shares-in-Trust. Any Prohibited Owner shall be entitled (following
discovery of the Shares-in-Trust and subsequent sale of such Shares-in-Trust in
accordance with Section (B)(5) of Article IX hereof or following the acceptance
of the offer to purchase such shares in accordance with Section (B)(7) of
Article IX hereof) to receive from the Trustee following the sale or other
disposition of such Shares-in-Trust the lesser of (i) in the case of (a) a
purported Transfer in which the Prohibited Owner paid fair market value for
shares of Equity Stock and which Transfer resulted in the transfer of the shares
to the Trust, the price per share, if any, such Prohibited Owner paid for the
shares of Equity Stock, or (b) a Non-Transfer Event or Transfer in which the
Prohibited Owner did not pay fair market value for such shares (E.G., if the
shares were received through a gift or devise) and which Non-Transfer Event or
Transfer, as the case may be, resulted in the transfer of shares to the Trust,
the price per share equal to the Market Price on the date of such Non-Transfer
Event or Transfer, and (ii) the price per share received by the Trustee from the
sale or other disposition of such Shares-in-Trust in accordance with Section
(B)(5) of Article IX hereof. Any amounts received by the Trustee in respect of
such Shares-in-Trust and in excess of such amounts to be paid the Prohibited
Owner pursuant to this Section (B)(6) shall be distributed to the Beneficiary in
accordance with the provisions of Section (B)(5) of Article IX hereof. Each
Beneficiary and Prohibited Owner waive any and all claims that the may have
against the Trustee and the Trust arising out of the disposition of
Shares-in-Trust, except for claims arising to or out of the gross negligence or
willful misconduct of, or any failure to make payments in accordance with this
Section (B), by such Trustee or the Corporation.

                  7. Purchase Right in Shares-in-Trust. Shares-in-Trust shall be
deemed to have been offered for sale to the Corporation, or its designee, at a
price per share equal to the lesser of (i) the price per share in the
transaction that created such Shares-in-Trust (or, in the case of devise, gift
or Non-Transfer Event, the Market Price at the time of such devise, gift or
Non-Transfer Event) and (ii) the Market Price on the date the Corporation or its
designee accepts such offer. The Corporation shall have the right to accept such
offer for a period of ninety (90) days after the later of (i) the date of the
Non-Transfer Event or purported Transfer which resulted in such Shares-in-Trust
and (ii) the date the Corporation determines in good faith that a Transfer or
Non-Transfer Event resulting in Shares-in-Trust has occurred, if the

                                       15

<PAGE>

Corporation does not receive a notice of such Transfer or Non-Transfer Event
pursuant to Section (A)(5) of Article IX hereof.

         C. Remedies Not Limited. Nothing contained in this Article IX shall
limit the authority of the Board of Directors to take such other action to the
extent permitted by law as it deems necessary or advisable to protect the
Corporation and the interests of its stockholders by preserving the ability of
the Corporation to elect to be taxed as a REIT or, once such election has been
made, preserving the Corporation's status as a REIT or preserving the Tax
Benefits. Without limiting the generality of the foregoing, the Board of
Directors may, by adopting a written resolution, (i) extend the Restriction
Termination Date, (ii) modify the Ownership Limit, or (iii) modify the
definitions of any terms set forth in this Article IX; provided, however, that
the Board of Directors shall not cause there to be such extension, change or
modification unless it concludes in writing that such action is reasonably
necessary or advisable to preserve the Corporation's status as a REIT or to
preserve the Tax Benefits, or that the continuation of these restrictions is no
longer reasonably necessary for the preservation of the Corporation's status as
a REIT or the preservation of the Tax Benefits. Such written conclusion shall be
filed with the Secretary of the Corporation and shall be mailed by the Secretary
to all stockholders of this Corporation within 10 days after the date of any
such conclusion.

         D. The Corporation and the members of the Board of Directors shall be
fully protected in relying in good faith upon the information, opinions, reports
or statements of the chief executive officer, the chief financial officer or the
chief accounting officer of the Corporation or of the Corporation's legal
counsel, independent auditors, transfer agent, investment bankers or other
employees and agents in making the determinations and findings contemplated by
this Article IX and the members of the Board of Directors shall not be
responsible for any good faith errors made in connection therewith.

         E. Ambiguity. In the case of an ambiguity in the application of any of
the provisions of this Article IX, including any definition contained in Section
(A)(1) of Article IX hereof, the Board of Directors shall have the power to
determine the application of the provisions of this Article IX with respect to
any situation based on the facts known to it.

         F.       Legend.

                  1. Each certificate for shares of Equity Stock or securities
convertible into Equity Stock shall bear the following legend:

                           "The securities represented by this certificate are
                  subject to restrictions on transfer and ownership for the
                  purpose of the Corporation's maintenance of its status as a
                  real estate investment trust under the Internal Revenue Code
                  of 1986, as amended (the "Code"). No Person other than WFSG
                  may (i) Beneficially Own

                                       16

<PAGE>

                  or Constructively Own in excess of 9.8% of the number of
                  shares or value (whichever is more restrictive) of the
                  outstanding Common Stock or 9.8% of the number of shares or
                  value (whichever is more restrictive) of the outstanding
                  Preferred Stock (or such other number or value of Preferred
                  Stock as the Board may determine in fixing the terms of the
                  Preferred Stock), (ii) Beneficially Own shares of Equity
                  Stock that would result in the shares of Equity Stock being
                  Beneficially Owned by fewer than 100 Persons (determined
                  without reference to any rules of attribution), (iii)
                  Beneficially Own shares of Equity Stock that would result
                  in the Corporation being "closely held" under Section
                  856(h) of the Code, (iv) Constructively Own shares of
                  Equity Stock that would cause the Corporation to
                  Constructively Own a Tenant Interest of 10% or more or (v)
                  Beneficially Owned shares of Equity Stock that would result
                  in the shares of Equity Stock being Beneficially Owned by
                  (A) the United States, any international organization, or
                  any agency or instrumentality of any of the foregoing, (B)
                  any organization (other than a cooperative described in
                  Section 521 of the Code) which is exempt from tax unless
                  such organization is subject to the tax imposed by Section
                  511 of the Code, and (C) any organization described in
                  Section 1381(a)(2)(c) of the Code. Any Person who attempts
                  to Beneficially Own or Constructively Own shares of Equity
                  Stock in excess of the above limitations must immediately
                  notify the Corporation in writing. Furthermore, upon the
                  occurrence of certain events, attempted transfers in
                  violation of the restrictions described above may be void
                  AB INITIO. If the restrictions above are violated, the
                  shares of Equity Stock represented hereby will be
                  transferred automatically and by operation of law to a
                  Trustee for the benefit of one or more Beneficiaries and
                  shall be designated Shares-in-Trust and the Prohibited
                  Owner shall acquire no rights or interest in such shares of
                  Equity Stock. All capitalized terms in this legend have the
                  meanings defined in the Corporation's Amended and Restated
                  Articles of Incorporation, as the same may be further
                  amended from time to time, a copy of which, including the
                  restrictions on transfer and ownership, will be sent
                  without charge to each stockholder who so requests."

                  2. The restrictions on transfer and ownership contained in
this Article IX, as amended or modified from time to time in accordance with the
provisions hereof, shall be valid and binding on all holders of shares of Equity
Stock or securities convertible into Equity Stock, regardless of whether the
legend borne on the certificates representing such shares or

                                       17

<PAGE>

securities accurately reflects the restrictions on transfer and ownership as
so amended or modified.

         G. Exchange of OP Units. So long as the Corporation remains the sole
stockholder of the general partner of the Operating Partnership, the Board of
Directors of the Corporation is hereby expressly vested with authority (subject
to the restrictions on ownership, transfer and redemption set forth in this
Article IX) to issue, and shall issue to the extent provided in the Operating
Partnership Agreement, Common Stock in exchange for the units into which
partnership interests of the Operating Partnership are divided (the "OP Units"),
and as the same may be adjusted, as provided in the Partnership Agreement.

         H. Reservation of Shares. The Board of Directors is hereby required to
reserve and authorize for issuance a sufficient number of authorized but
unissued shares of Common Stock to permit the issuance of Common Stock in
exchange for OP Units that may be exchanged for or converted into Common Stock
as provided in the Operating Partnership Agreement.

         I. Severability. If any provision of this Article IX or any application
of any such provision is determined to be invalid by any federal or state court
having jurisdiction over the issues, the validity of the remaining provisions
shall not be affected and other applications of such provision shall be affected
only to the extent necessary to comply with the determination of such court.

         J.       Removal of Restrictions.  The restrictions on transfer
contained in this Article IX shall not be removed until the Restriction
Termination Date.

         K. Notwithstanding any other provisions of the Charter or the Bylaws of
the Corporation (and notwithstanding that some lesser percentage may be
specified by law, the Charter or the Bylaws of the Corporation), the provisions
of this Article IX shall not be amended, altered, changed, or repealed, and no
provision inconsistent with this Article IX shall be adopted, without the
affirmative vote of at least eighty percent (80%) of the members of the Board of
Directors and by the affirmative vote of not less than two-thirds (2/3) of all
the votes entitled to be cast by the outstanding shares of capital stock of the
Corporation on the matter at any meeting of the stockholders called for that
purpose, voting together for this purpose as a single class.

                                       X.

         A. The following provisions are hereby adopted for the purpose of
defining, limiting, and regulating the powers of the Corporation and of the
directors and stockholders:

                  1. The Board of Directors of the Corporation shall, consistent
with applicable law, have power in its sole discretion to determine from time to
time in accordance

                                       18

<PAGE>

with sound practice or other reasonable valuation methods what constitutes
annual or other net profits, earnings, surplus, or net assets in excess of
capital; to fix and vary from time to time the amount to be reserved as
working capital, or determine that retained earnings or surplus shall remain
in the hands of the Corporation; to set apart out of any funds of the
Corporation such reserve or reserves in such amount or amounts and for such
proper purpose or purposes as it shall determine and to abolish any such
reserve or any part thereof; to distribute and pay distributions or dividends
in stock, cash, or other securities or property, out of surplus or any other
funds or amounts legally available therefor, as such times and to the
stockholders of record on such dates as it may, from time to time, determine;
and to determine whether and to what extent and at what times and places and
under what conditions and regulations the books, accounts, and documents of
the Corporation, or any of them, shall be open to the inspection of
stockholders, except as otherwise provided by statute or by the Bylaws, and,
except as so provided, no stockholder shall have any right to inspect any
book, account, or document of the Corporation unless authorized so to do by
resolution of the Board of Directors.

                  2. Notwithstanding any provision of law requiring the
authorization of any action by a greater proportion than a majority of the total
number of shares of all classes of capital stock or of the total number of
shares of any class of capital stock, such action shall be valid and effective
if authorized by the affirmative vote of the holders of a majority of the total
number of shares of all classes outstanding and entitled to vote thereon, except
as otherwise provided in the Charter.

                  3. Except as otherwise specifically set forth in Articles VI
and IX, the Corporation reserves the right from time to time to make any
amendments of its Charter which may now or hereafter be authorized by law,
including any amendments changing the terms or contract rights, as expressly set
forth in its Charter, of any of its outstanding stock by classification,
reclassification, or otherwise.

         B. The enumeration and definition of particular powers of the Board of
Directors included in the foregoing shall in no way be limited or restricted by
reference to or inference from the terms of any other clause of this or any
other Article of the Charter of the Corporation, or construed as or deemed by
inference or otherwise in any manner to exclude or limit any powers conferred
upon the Board of Directors under the General Laws of the State of Maryland now
or hereafter in force.

                                       XI.

         The duration of the Corporation shall be perpetual.


         SECOND:  This Amendment and Restatement does not increase the
authorized capital stock of the Corporation.

                                       19

<PAGE>

         THIRD:   The foregoing Amendment and Restatement to the Charter has
been advised by the Board of Directors and approved by the stockholders of
the Corporation.

         IN WITNESS WHEREOF, Wilshire Real Estate Investment Trust Inc. has
caused these presents to be signed in its name and on its behalf by its
President and witnessed by its Secretary this ___ day of __________, 1999.

WITNESS:                             WILSHIRE REAL ESTATE INVESTMENT
                                     TRUST INC.

_____________________________        By:__________________________________(SEAL)
Andrew Wiederhorn, Secretary            Chris Tassos, Executive Vice President


         THE UNDERSIGNED, the Executive Vice President of Wilshire Real Estate
Investment Trust Inc. (the "Corporation"), who executed on behalf of the
Corporation the foregoing Amended and Restated Articles of Incorporation, of
which this certificate is made a part, hereby acknowledges in the name and on
behalf of said Corporation the foregoing Amended and Restated Articles of
Incorporation to be the corporate act of said Corporation and hereby certifies
that to the best of his knowledge, information and belief the matters and facts
set forth therein with respect to the authorization and approval thereof are
true in all material respects under the penalties of perjury.


Dated: _____________, 1999          By:___________________________________(SEAL)
                                       Chris Tassos, Executive Vice President

                                       20