-- 0 --
<PAGE>
                                 UNITED STATES

                       SECURITIES AND EXCHANGE COMMISSION

                              WASHINGTON, DC 20549

                                    FORM 10-Q


(Mark  One)

[X]  QUARTERLY  REPORT  PURSUANT  TO  SECTION  13  OR  15(d)  OF  THE SECURITIES
      EXCHANGE  ACT  OF  1934

For  the  quarterly  period  ended  March  31,  1999

                                       OR

[   ]  TRANSITION  REPORT  PURSUANT  TO  SECTION  13  OR 15(d) OF THE SECURITIES
       EXCHANGE  ACT  OF  1934

For  the  transition  period  from  _______  to  _______

                        COMMISSION FILE NUMBER 000-21673
                                               ---------

                         AUTOBOND ACCEPTANCE CORPORATION

             (Exact name of registrant as specified in its charter)


<TABLE>
<CAPTION>
<S>                                                 <C>

                           TEXAS                      75-2487218

               (State or other jurisdiction         (I.R.S. Employer
              of incorporation or organization)     Identification No.)


             100 CONGRESS AVENUE, AUSTIN, TEXAS           78701

          (Address of principal executive offices)      (Zip Code)

</TABLE>


                                 (512) 435-7000

               Registrant's telephone number, including area code

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding  12  months  (or  for such shorter period that the registrant was
required  to  file  such  reports),  and  (2)  has  been  subject to such filing
requirements  for  the  past  90  days.

Yes  ___X___    No  _____

As  of November 15, 1999, there were 6,531,311 shares of the registrant's Common
Stock,  no  par  value,  outstanding.

                                    -- i --
<PAGE>

<TABLE>
<CAPTION>

<S>                                                                                             <C>
TABLE OF CONTENTS


PART I - FINANCIAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   1
Item 1.  Financial Statements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   1
Item 2.  Management's Discussion And Analysis Of Financial Condition And Results Of Operations  11
PART II.  OTHER INFORMATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  27
Item 1.  Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  27
Item 2.  Changes in Securities and use of Proceeds . . . . . . . . . . . . . . . . . . . . . .  30
Item 3.  Defaults UPON SENIOR SECURITIES . . . . . . . . . . . . . . . . . . . . . . . . . . .  30
Item 4.  Submission of Matters to a Vote of Security Holders . . . . . . . . . . . . . . . . .  30
Item 5.  Other Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  30
Item 6.  Exhibits and Reports on Form 8-K. . . . . . . . . . . . . . . . . . . . . . . . . . .  31
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  33
EXHIBIT 27.1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  34
</TABLE>



                                    -- ii --
<PAGE>


                                   PART I - FINANCIAL INFORMATION

ITEM  1.  FINANCIAL  STATEMENTS
<TABLE>
<CAPTION>

                       AUTOBOND ACCEPTANCE CORPORATION AND SUBSIDIARIES
                                 CONSOLIDATED BALANCE SHEETS

<S>                                                           <C>             <C>
                                                              DECEMBER 31,    SEPTEMBER 30,
                                                                       1998             1999
                                                              --------------  ---------------
    (UNAUDITED)
ASSETS
------------------------------------------------------------

Cash and cash equivalents. . . . . . . . . . . . . . . . . .  $   5,170,969   $    1,102,317
Receivable from Dynex Capital, Inc.. . . . . . . . . . . . .      6,573,107                -
Finance contracts held for sale, net . . . . . . . . . . . .        867,070          318,240
Collateral acquired, net . . . . . . . . . . . . . . . . . .         70,957           88,053
Retained interest in securitizations - Trading . . . . . . .      4,586,908        2,684,151
Retained interest in securitizations - Available for Sale. .      9,286,443        4,321,271
Debt issuance costs. . . . . . . . . . . . . . . . . . . . .        729,206          461,328
Due from affiliates. . . . . . . . . . . . . . . . . . . . .        396,015          204,325
Property, plant, and equipment, net. . . . . . . . . . . . .      1,187,421          981,578
Other assets . . . . . . . . . . . . . . . . . . . . . . . .      1,463,046        1,326,775
                                                              --------------  ---------------
     Total assets. . . . . . . . . . . . . . . . . . . . . .  $  30,331,142   $   11,488,038
                                                              ==============  ===============


LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------------------------------

Liabilities:
  Notes Payable. . . . . . . . . . . . . . . . . . . . . . .  $  10,166,969   $   10,276,133
  Non-recourse debt. . . . . . . . . . . . . . . . . . . . .      3,185,050        1,282,293
  Payables and accrued liabilities . . . . . . . . . . . . .      1,324,951          776,292
  Deferred income taxes. . . . . . . . . . . . . . . . . . .        101,800                -
                                                              --------------  ---------------
     Total liabilities . . . . . . . . . . . . . . . . . . .  $  14,778,770   $   12,334,718
                                                              --------------  ---------------

Commitments and contingencies

Shareholders' equity:
Preferred stock, no par value; 5,000,000 shares authorized;.  $  10,856,000   $   10,856,000
1,125,000 shares of 15% Series A cumulative preferred
stock, $10 liquidation preference, issued and outstanding,
(Dividends in arrears of $1,265,625)
Common stock, no par value; 25,000,000 shares authorized;. .          1,000            1,000
6,531,311 shares issued and outstanding
Capital in excess of stated capital. . . . . . . . . . . . .      8,291,481        8,291,481
Due from shareholders. . . . . . . . . . . . . . . . . . . .        (10,592)         (10,592)
(Accumulated deficit). . . . . . . . . . . . . . . . . . . .     (3,057,602)     (19,456,654)
Investment in common stock agreement . . . . . . . . . . . .       (527,915)        (527,915)
                                                              --------------  ---------------
     Total shareholders' equity. . . . . . . . . . . . . . .  $  15,552,372   $     (846,680)
                                                              --------------  ---------------
          Total liabilities and shareholders' equity . . . .  $  30,331,142   $   11,488,038
                                                              ==============  ===============

<FN>

    The accompanying notes are an integral part of the consolidated financial statements.
</TABLE>


                                    -- 1 --
<PAGE>

<TABLE>
<CAPTION>


                                 AUTOBOND ACCEPTANCE CORPORATION AND SUBSIDIARIES
                           CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
                                                   (UNAUDITED)


                                                              THREE MONTHS ENDED         NINE MONTHS ENDED
                                                                 SEPTEMBER 30,             SEPTEMBER 30,
                                                         ------------  ------------  -------------  -------------
                                                             1998          1999          1998           1999
                                                         ------------  ------------  -------------  -------------
<S>                                                      <C>           <C>           <C>            <C>

Revenues:
  Interest income . . . . . . . . . . . . . . . . . . .  $   468,726   $   414,552   $  2,134,509   $  1,494,929
  Gain on sale of finance contracts . . . . . . . . . .    3,456,303       (50,066)    10,093,123      1,704,219
  Servicing income. . . . . . . . . . . . . . . . . . .      798,368       802,473      2,116,310      2,787,613
  Other income. . . . . . . . . . . . . . . . . . . . .            -        44,803        (79,716)       898,598
                                                         ------------  ------------  -------------  -------------
     Total revenues . . . . . . . . . . . . . . . . . .    4,723,397     1,211,762     14,264,226      6,885,359
                                                         ------------  ------------  -------------  -------------
Expenses:
  Provision for credit losses . . . . . . . . . . . . .            -       243,377        100,000        303,842
  Interest expense. . . . . . . . . . . . . . . . . . .    1,015,794       810,274      3,391,600      2,328,394
  Salaries and benefits . . . . . . . . . . . . . . . .    2,601,865     1,716,209      7,468,197      7,529,900
  General and administrative. . . . . . . . . . . . . .    1,523,132     2,611,664      4,398,016      6,298,051
  Impairment of retained interest in securitizations. .    1,637,191     2,100,491      7,515,015      4,672,698
  Other operating expenses. . . . . . . . . . . . . . .    1,044,852       379,433      2,573,723      2,253,326
                                                         ------------  ------------  -------------  -------------
     Total expenses . . . . . . . . . . . . . . . . . .    7,822,834     7,861,448     25,446,551     23,386,211
                                                         ------------  ------------  -------------  -------------
Loss before income taxes. . . . . . . . . . . . . . . .   (3,099,437)   (6,649,686)   (11,182,325)   (16,500,852)
(Benefit) provision for income taxes. . . . . . . . . .   (1,047,961)            -     (3,775,923)      (101,800)
                                                         ------------  ------------  -------------  -------------
            Net loss. . . . . . . . . . . . . . . . . .   (2,051,476)   (6,649,686)    (7,406,402)   (16,399,052)

Income attributable to preferred stock. . . . . . . . .      421,875       421,875      1,018,125      1,265,625
                                                         ------------  ------------  -------------  -------------

Net loss attributable to common shareholders. . . . . .  $(2,473,351)  $(7,071,561)  $ (8,424,527)  $(17,664,677)
                                                         ============  ============  =============  =============

Weighted average number of common shares:
            Basic . . . . . . . . . . . . . . . . . . .    6,531,311     6,531,311      6,531,311      6,531,311
            Diluted . . . . . . . . . . . . . . . . . .    6,531,311     6,531,311      6,531,311      6,531,311
Loss per common share:
           Basic. . . . . . . . . . . . . . . . . . . .  $     (0.38)  $     (1.08)  $      (1.29)  $      (2.70)
           Diluted. . . . . . . . . . . . . . . . . . .  $     (0.38)  $     (1.08)  $      (1.29)  $      (2.70)

Net Loss. . . . . . . . . . . . . . . . . . . . . . . .  $(2,051,476)  $(6,649,686)  $ (7,406,402)  $(16,399,052)
Other comprehensive income, net of tax:
Unrealized loss on retained interests in securitization    1,416,628             -      1,049,256              -
                                                         ------------  ------------  -------------  -------------
Comprehensive loss. . . . . . . . . . . . . . . . . . .  $(3,468,104)  $(6,649,686)  $ (8,455,658)  $(16,399,052)
                                                         ============  ============  =============  =============

<FN>

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

</TABLE>


                                    -- 2 --
<PAGE>

<TABLE>
<CAPTION>

                AUTOBOND ACCEPTANCE CORPORATION AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
                                   (UNAUDITED)


                                        NINE MONTHS ENDED
                                        SEPTEMBER 30, 1999
                                       --------------------
<S>                                    <C>                   <C>
                                       SHARES                AMOUNT
                                       --------------------  -----------
Preferred stock:
  Beginning balance . . . . . . . . .            1,125,000   $10,856,000
  Ending balance. . . . . . . . . . .            1,125,000    10,856,000

Common stock:
  Beginning balance . . . . . . . . .            6,531,311         1,000
  Ending balance. . . . . . . . . . .            6,531,311         1,000

Capital in excess of stated capital:
  Beginning balance . . . . . . . . .                        8,291,481
  Ending balance. . . . . . . . . . .                        8,291,481


Due (from) shareholders:
  Beginning balance . . . . . . . . .                          (10,592)
  Ending balance. . . . . . . . . . .                          (10,592)

Accumulated Deficit:
  Beginning balance . . . . . . . . .                       (3,057,602)
  Net loss. . . . . . . . . . . . . .                      (16,399,052)
                                                   --------------------
  Ending balance. . . . . . . . . . .                      (19,456,654)

Investment in common stock agreement:
  Beginning balance . . . . . . . . .                         (527,915)
  Ending balance. . . . . . . . . . .                         (527,915)
                                                   --------------------
Total shareholders' equity. . . . . .               $         (846,680)
                                                    ====================

<FN>

     The accompanying notes are an integral part of the consolidated financial
                                   statements.
</TABLE>


                                    -- 3 --
<PAGE>

<TABLE>
<CAPTION>

                        AUTOBOND ACCEPTANCE CORPORATION AND SUBSIDIARIES
                             CONSOLIDATED STATEMENTS OF CASH FLOWS
                                          (UNAUDITED)



                                                              NINE MONTHS ENDED
                                                                SEPTEMBER 30,
                                                                    1998              1999
                                                             -------------------  -------------
<S>                                                          <C>                  <C>
OPERATING ACTIVITIES:
  Net loss. . . . . . . . . . . . . . . . . . . . . . . . .  $       (7,406,402)  $(16,399,052)
  Reconcile net loss to net cash from operating activities:
    Depreciation and amortization . . . . . . . . . . . . .           1,111,826        804,599
    Provision for credit losses . . . . . . . . . . . . . .             100,000        303,842
    Market impairment of finance contracts held for sale. .                   -      1,070,737
    Impairment of retained interest in securitizations. . .           7,515,015      4,672,698
    Gain on sale of finance contracts . . . . . . . . . . .         (10,093,123)    (1,704,219)
    Deferred income taxes . . . . . . . . . . . . . . . . .          (3,775,923)      (101,800)
  Changes in operating assets and liabilities:
    Increase in restricted funds. . . . . . . . . . . . . .           6,904,111              -
    Receivable from Dynex . . . . . . . . . . . . . . . . .                   -      6,573,107
    Finance contracts held for sale . . . . . . . . . . . .           5,702,007      1,104,751
    Retained interest in securitizations. . . . . . . . . .          (6,451,412)       292,474
    Due from affiliate. . . . . . . . . . . . . . . . . . .            (294,759)       (20,172)
    Prepaids and other assets . . . . . . . . . . . . . . .            (247,828)        97,486
    Accounts payable and accrued liabilities. . . . . . . .          (2,447,875)      (548,659)
    Payable to affiliates . . . . . . . . . . . . . . . . .            (554,233)             -
                                                             -------------------  -------------
      Cash (used) provided by operating activities . . . . .          2,964,228     (3,854,208)
INVESTING ACTIVITIES:
    Proceeds from disposal of collateral acquired . . . . .             128,569              -
    Purchases of property, plant and equipment. . . . . . .                   -       (197,308)
                                                             -------------------  -------------
      Cash provided (used) by investing activities . . . . .            128,569       (197,308)
FINANCING ACTIVITIES:
    Net payments on revolving credit facilities . . . . . .          (7,639,201)             -
    Payments for debt issuance costs. . . . . . . . . . . .          (1,110,261)             -
    Proceeds from notes payable . . . . . . . . . . . . . .          10,650,000              -
    Payments on notes payable . . . . . . . . . . . . . . .          (6,241,810)       (17,136)
    Decrease in bank overdraft. . . . . . . . . . . . . . .          (1,137,409)             -
    Proceeds from public offering of preferred stock, net .           9,631,407              -
    Dividends paid on preferred stock . . . . . . . . . . .          (1,018,125)             -
    Proceeds from issuance of common stock warrants . . . .           1,918,131              -
    Payment for common stock agreement. . . . . . . . . . .            (500,000)             -
                                                             -------------------  -------------
      Cash provided (used) by financing activities. . . . .           4,552,732        (17,136)
                                                             -------------------  -------------
Increase (decrease) in cash . . . . . . . . . . . . . . . .           7,645,529     (4,068,652)
Beginning cash balance. . . . . . . . . . . . . . . . . . .             159,293      5,170,969
                                                             -------------------  -------------
ENDING CASH BALANCE . . . . . . . . . . . . . . . . . . . .  $        7,804,822   $  1,102,317
                                                             ===================  =============

<FN>

     The accompanying notes are an integral part of the consolidated financial statements.
</TABLE>


                                    -- 4 --
<PAGE>


               AUTOBOND ACCEPTANCE CORPORATION AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)


1.     Basis  of  Presentation

     The  consolidated  financial  statements of AutoBond Acceptance Corporation
(the  "Company")  included  herein  are  unaudited  and  have  been  prepared in
accordance  with  generally  accepted accounting principles ("GAAP") for interim
financial  reporting and Securities and Exchange Commission ("SEC") regulations.
Certain  information  and  footnote  disclosures  normally included in financial
statements  prepared  in  accordance  with  GAAP  have been condensed or omitted
pursuant  to regulations. In the opinion of management, the financial statements
reflect all adjustments (consisting only of a normal and recurring nature) which
are  necessary  to present fairly the financial position, results of operations,
changes  in shareholders' equity and cash flows for the interim periods. Results
for  interim  periods  are  not necessarily indicative of the results for a full
year.  For  further  information,  refer to the audited financial statements and
footnotes  thereto  included in the Company's Annual Report on Form 10-K for the
year ended December 31, 1998, (SEC File Number 000-21673). Certain data from the
prior  year  has  been  reclassified  to  conform  to  the  1999  presentation.


2.     Earnings  per  Share

     Basic  earnings  per  share excludes potential dilution of potential shares
and  is  computed  by  dividing  income  available to common shareholders by the
weighted-average  number  of  common  shares outstanding for the period. Diluted
earnings  per  share  reflects  the  potential  dilution  that  could  occur  if
securities  or other contracts to issue common stock were exercised or converted
into  common  stock or resulted in the issuance of common stock that then shared
in  the  earnings  of  the  Company unless such issuance would be anti-dilutive.





3.     Finance  Contracts  Held  for  Sale
<TABLE>
<CAPTION>

          The  following amounts are included in finance contracts held for sale
as  of:

                            December 31,     September 30,

                                  1998        1999
                                ---------  -----------
<S>                             <C>        <C>
Unpaid principal balance . . .  $944,830   $1,266,597
Contract acquisition discounts   (64,067)           -
Allowance for market loss. . .         -     (948,357)
Allowance for credit losses. .   (13,693)           -
                                ---------  -----------
                                $867,070   $  318,240
                                =========  ===========
</TABLE>



4.     Retained  Interests  In  Securitizations

     The  Company's  retained interests in securitizations represent the present
value  of  expected  future  cash  flows  to  the  Company from sales of finance
contracts.  The  amount  of  these  retained  interests  may  be  increased  by
additional sales or securitizations.  The amount of these retained interests may
decrease  in  the case of impairments caused by a revaluation of the future cash
flows.  Retained  interests  in  securitizations  will  also decrease due to the
Company's  receipt  of  cash  flows  from  their  investment.

     The  Company  utilizes  a  financial model to project the cash flows from a
pool  of  finance  contracts.  This  model  projects  cash flows for contractual
parties  including  investors,  trustees and servicers, as well as the Company's
retained  interests.  As  is  the  case  with  most  financial  models,  its
effectiveness  is primarily driven by the performance over time of key financial
model  assumptions,  including:  default  rates;

                                    -- 5 --
<PAGE>
delinquency  rates;  prepayment  rates;  discount  rates;  initial,  ongoing and
minimum  cash  reserve requirements; the interest rates earned on cash reserves;
recovery amounts for repossessions; repossession recovery lags; insurance claims
recovery  amounts; insurance recovery lags; and on-going servicing/trustee fees.
Periodically,  the  Company's financial models and related assumptions have been
updated  to  reflect  the  actual  performance  characteristics  of  the finance
contracts.  All valuations are conducted on a disaggregated basis. Impairment of
retained  interest  in  securitizations for the quarter ended September 30, 1999
was  $  4,672,698.

     The  Company's  term  securitizations have involved the placement of excess
spread  backed  notes,  sometimes  referred to as "B Pieces", with institutional
investors.  All  assumptions  used  to  size  and  sell  these  "B  Pieces" were
identical  to  the  initial  gain-on-sale  assumptions  the Company applied with
respect to retained interests. The discount rates applied for retained interests
ranged  from  15% to 17%.  The non-vector equivalent of annualized default rates
typically  ranged  from  10%  to 12%. The default rate assumptions are estimated
based  on the historical static pool results. Repossession recovery ratios, with
deficiency  insurance  proceeds  reflected,  typically  ranged  from 80% to 90%.

     Three primary causes led to the impairment charges to retained interests in
securitizations.  The  first  cause  was  the  delay  and cessation of insurance
payments  on  defaulted  finance  contracts.  The  Company  has  been engaged in
litigation with Progressive Northern Insurance Company ("Progressive") regarding
the interpretation of default insurance coverage the Company acquired to enhance
recoveries.  During  the  early  stages of the dispute, Progressive continued to
pay  claims.  However, in April 1998 Progressive stopped paying claims. The loss
of  cash  flow  from  Progressive necessitated drawing funds from the applicable
trust cash reserves to pay senior investors. The depletion and expected delay in
receiving  any  ultimate cash flows reduced the value of the retained interests.
The Company has continued to include the expected cash flows from Progressive in
its  cash  flows  models  until  a  claim  is made and not paid  Even though the
Company  and  its  legal counsel are optimistic that the Company will prevail in
its  litigation,  at  this  time, Progressive has not resumed payment of claims.
Should  the  Company's  interpretation  be  incorrect, the Company would need to
reassess  the  carrying value of its retained interests in securitizations under
new  assumptions  and  the  result  of  this  revaluation could be material. The
Progressive  matter  is set for trial in late November, 1999. Delays in payments
under the Interstate insurance policy have also contributed to the impairment of
retained  interests.

     The  second  primary  factor was the transfer of servicing functions to the
Company  from a third party service provider, Loan Servicing Enterprise ("LSE").
In  March 1998, the Company commenced litigation against LSE, alleging, in part,
that  LSE breached its servicing obligations.  After assuming all servicing, the
Company  accelerated  the  rate  of  charge-offs as compared with prior periods.
Accelerated  charge-offs resulted in the diversion of any available cash flow to
the  senior  investors that otherwise would flow to subordinated investors or to
the  benefit  of  the Company.  In attempting to resolve certain of these issues
with  Moody's  Investors  Service  ("Moody's"),  the  agency  rating  the senior
securities,  the  Company  committed  to  Moody's  in May 1998 that it would not
release  monies  to  the  "B  Piece"  investors  until all charge-offs have been
reflected  in the cash flows attributable to the senior investors.  The delay of
payments  to the subordinated investors causes accretion of the principal amount
of  their  high  interest  rate  B  Pieces and a corresponding impairment of the
Company's  retained  interest.  The  accelerated  charge-offs  and the Company's
decision  in  May  1998 to commit to Moody's to withhold monies from the B Piece
investors  resulted  in  a  direct  impact  on  the  valuation  of  the retained
interests.  A  total  of  eight  securitizations  were  affected by this action.

     The  third primary factor was the change in the VSI deductible for the pool
of loans purchased by Dynex. The Company increased the deductible on the VSI for
the  pool  of  loans  funded  by  Dynex  after  cessation  of  funding by Dynex.

                                    -- 6 --
<PAGE>


5.     Notes  Payable  and  Non-Recourse  Debt

<TABLE>
<CAPTION>

     The  following  amounts  are  included  in  notes  payable  and  non-recourse debt as of:

                                                                    December 31,   September 30,
<S>                                                                  <C>            <C>
                                                                            1998          1999
                                                                                     (Unaudited)
------------------------------------------------------------------------------------------------
Non-recourse notes payable, collateralized by Class B Certificates.  $ 3,185,050    $ 1,282,293
Convertible Senior Notes. . . . . . . . . . . . . . . . . . . . . .    3,000,000      3,000,000
Convertible Subordinated Notes. . . . . . . . . . . . . . . . . . .    7,500,000      7,500,000
Other notes payable . . . . . . . . . . . . . . . . . . . . . . . .       23,342          6,206
Discount on subordinated notes payable. . . . . . . . . . . . . . .     (356,373)      (230,073)
                                                                     ------------   ------------
                                                                     $13,352,019    $11,558,426
                                                                     ============   ============
</TABLE>



On  June  9,  1998,  the Company sold to Dynex at par $3 million of its 12%
Convertible  Senior Notes due 2003 (the "Senior Notes").  Interest on the Senior
Notes  is payable quarterly in arrears, with the principal amount due on June 9,
2003. The Company has made all interest payments due on the Senior Notes to date
but  is  uncertain whether it can continue to meet such obligations.  Dynex also
has  purported to accelerate the Senior Notes. The Company disputes the validity
of  such  acceleration.

     In  January 1998, the Company privately placed with BancBoston Investments,
Inc.  ("BancBoston")  $7,500,000 in aggregate principal amount of its 15% Senior
Subordinated Convertible Notes due 2001 (the "Subordinated Notes"). At September
30,  1999,  the  Company  did not meet certain of its financial covenants, which
constitutes  an  event of default on the Subordinated Notes.  The ability of the
Company  to meet such covenants is dependent upon future earnings. On August 20,
1999  BancBoston  demanded  immediate payment in full of all amounts outstanding
under  the  Subordinated  Notes. Thereafter BancBoston sued the Company for such
payment.  A  settlement  of  this  suit  is  currently  being  negotiated.

6.     Income  taxes

     Management  has reduced the deferred tax asset by a valuation allowance due
to  uncertainty  of realizing certain tax loss carry-forwards and other deferred
tax  assets.  The  increase  in  net  deferred tax assets during the three month
period  ended  September  30, 1999 was offset by a corresponding increase in the
valuation allowance. Accordingly no tax benefit was recognized for the net loss.

7.     Stockholders'  Equity

Preferred  Stock

     Because  the  Company  is  not  in compliance with certain of the financial
covenants  of  its  Subordinated  Notes,  the  Company did not pay the quarterly
dividend  on  its  Preferred Stock, otherwise payable on each of March 31, 1999,
June  30, 1999 and September 30, 1999.  Because dividends on the Preferred Stock
are  in  arrears  for three quarterly dividend periods, holders of the Preferred
Stock  have  exercised  their  right  to call a special meeting of the Preferred
Stock  holders  for the purpose of electing two additional directors to serve on
the  Company's  Board  of Directors until such dividend arrearage is eliminated.
Such meeting was held on October 1, 1999; however, because a quorum of preferred
shareholders  did  not  attend or provide proxies for the meeting, no additional
directors  were elected. See Part II, Item 3 "Submission of Matters to a Vote of
Security Holders." In addition, certain changes that could materially affect the
holders  of  Preferred  Stock,  such  as a merger of the Company, cannot be made
without  the  affirmative  vote  of  the  holders of two-thirds of the shares of
Preferred Stock, voting as a separate class. The Preferred Stock ranks senior to
the  common  stock  with  respect  to  the payment of dividends and amounts upon
liquidation,  dissolution  or  winding  up.

                                    -- 7 --
<PAGE>

8.     Commitments  and  Contingencies

     On  February 8, 1999, the Company, AutoBond Master Funding Corporation V, a
wholly-owned  subsidiary  of  the  Company  ("Master  Funding  V"),  William  O.
Winsauer,  the  Chairman  and  Chief  Executive  Officer of the Company, John S.
Winsauer,  a  Director  and  the  Secretary of the Company, and Adrian Katz, the
Vice-Chairman,  Chief  Financial  Officer  and  Chief  Operating  Officer of the
Company  (collectively,  the  "Plaintiffs")  commenced an action in the District
Court  of Travis County, Texas (250th Judicial District) against Dynex and James
Dolph  (collectively,  the "Defendants"). This action is hereinafter referred to
as  the "Texas Action". The Company and the other Plaintiffs assert in the Texas
Action  that  Dynex  breached  the terms of the Funding Agreement. Such breaches
include delays and shortfalls in funding the advances required under the Funding
Agreement and ultimately the refusal by Dynex to fund any further advances under
the Funding Agreement. Plaintiffs also allege that Dynex and Mr. Dolph conspired
to  misrepresent  and mischaracterize the Company's credit underwriting criteria
and its compliance with such criteria with the intention of interfering with and
causing  actual  damage  to  the  Company's  business,  prospective business and
contracts.  The Plaintiffs assert that Dynex' funding delays and ultimate breach
of  the  Funding  Agreement were intended to force the Plaintiffs to renegotiate
the  terms  of  their  various  agreements  with  Dynex  and  related  entities.
Specifically,  the Plaintiffs assert that Dynex intended to force the Company to
accept  something less than Dynex' full performance of its obligations under the
Funding Agreement. Further, Dynex intended to force the controlling shareholders
of  the  Company  to  agree  to  sell  their stock in the Company to Dynex or an
affiliate  at  a  share price substantially lower than the $6.00 per share price
specified  in the Stock Option Agreement, dated as of June 9, 1998, by and among
Messrs. William O. Winsauer, John S. Winsauer and Adrian Katz (collectively, the
"Shareholders")  and Dynex Holding, Inc.  Plaintiffs in the Texas Action request
declaratory  judgement  that  (i)  Dynex  has  breached  and is in breach of its
various  agreements  and contracts with the Plaintiffs, (ii) Plaintiffs have not
and are not in breach of their various agreements and contracts with Defendants,
(iii)  neither  the Company nor Master Funding V has substantially or materially
violated or breached any representation or warranty made to Dynex, including but
not  limited  to  the  representation and warranty that all or substantially all
finance  contracts funded or to be funded by Dynex comply in full with, and have
been  acquired  by  the  Company  in  accordance  with,  the Company's customary
underwriting  guidelines and procedures, and (iv) Dynex is obligated to fund the
Company  in  a  prompt  and  timely  manner  as required by the parties' various
agreements.  In  addition  to actual, punitive and exemplary damages.  The Texas
Action  has  been  set  for trial in January 2000. Dynex's motion to dismiss the
Texas  Action  was  denied  by  the  court.

     On  March  1, 1999, the Plaintiffs filed an application in the Texas Action
for  a  temporary  injunction  enjoining Dynex (i) from continuing to suspend or
withhold  funding  pursuant  to  the  Funding  Agreement,  (ii) from removing or
attempting  to remove the Company as servicer, and (iii) from making any further
false  or  defamatory  public statements regarding the Plaintiffs. On August 26,
1999,  the  court denied the Company's application on points (i), (ii) and (iii)
while  granting  Dynex's request for a temporary injunction removing the Company
as  servicer.  Following  the  posting  by  Dynex  of  a  bond  in the amount of
$1,000,000,  the  Company  surrendered  servicing on those contracts financed by
Dynex. The Company did receive servicing fees on the loans through September 30,
1999.  Discovery  is  ongoing  and  trial  is  set  for  January  24,  2000.

     On  February  9, 1999, Dynex commenced an action against the Company in the
United  States  District  Court  for  the Eastern District of Virginia (Richmond
District)  (the  "Virginia Action") seeking declaratory relief that Dynex is (i)
not  obligated  to advance funds to Master Funding V under the Funding Agreement
because  the  conditions  to funding set forth in the Funding Agreement have not
been  met, and (ii) entitled to access to all books, records and other documents
of  Master  Funding V, including all finance contract files. Specifically, Dynex
alleges  that  as  a  result of a partial inspection of certain finance contract
files  by  Mr.  Dolph  and  Virgil  Baker  &  Associates  in January 1999, Dynex
concluded  that  a  significant  number  of  such  contracts  contained material
deviations  from  the  applicable  credit  criteria  and procedures, an apparent
breach  of  the  Funding Agreement. Dynex also alleges that on February 8, 1999,
the Company refused to permit Mr. Dolph and representatives from Dynex access to
the  books,  records  and finance contract files of the Company. Dynex concludes
that  as  a  result  of  such  alleged  breaches, it is not obligated to provide
advances  under  the  Funding  Agreement.  Dynex  also  seeks to recover damages
resulting  from the Company's alleged breach of the parties' various agreements,
which alleged breach the Company vigorously denies. The Company, Messrs. William
O.  Winsauer,  John  S.  Winsauer  and  Adrian  Katz  filed  a

                                    -- 8 --
<PAGE>
responsive  pleading  on  March  25,  1999.  The  Virginia Action (including the
matters  transferred  in  the  New  York Action (discussed below)), by a judge's
order  dated  May  17,  1999,  was  transferred  to  Texas  federal  court.

     On  February  22,  1999,  the same day that Dynex notified the Company of a
purported  servicing termination, Dynex filed another action against the Company
in  the  United States District Court for the Southern District of New York (the
"New  York  Action"),  seeking  damages  and injunctive relief for the Company's
alleged  breaches  under  the  servicing  agreement among the Company, Dynex and
Master  Funding  V.  The  Company  was not notified of the New York Action until
March  1,  1999,  when  Dynex  sought  a temporary restraining order against the
Company.  After  hearing  argument  from  counsel  for both sides, the temporary
restraining  order  was  denied.  On  March  23, 1999, the court issued an order
transferring the action to the Federal District Court in the Eastern District of
Virginia  without  prejudice.

     Dynex  has  purportedly  accelerated  all amounts due under the Senior Note
Agreement  dated June 9, 1998, by and between Dynex and the Company. The Company
disputes  such  purported  acceleration.

     In  connection  with the 1997-B and 1997-C securitizations, $5.8 million in
Class  B  Notes are exchangeable (at a rate of 117.5% of the principal amount of
Class  B  Notes  exchanged) for the Company's 17% Convertible Notes, solely upon
the occurrence of a delinquency ratio trigger relating to the securitized pools.
As  of  September  30,  1999,  such  trigger  event  has  not  occurred.

     In  March  1998,  after  Progressive  Northern  Insurance  ("Progressive")
purported  to cancel the vendor's single interest ("VSI") and deficiency balance
insurance  policies  issued  in  favor  of  the  Company  (collectively,  the
"Policies"),  the  Company  sued  Progressive,  its  affiliate  United Financial
Casualty  Co.  and  their  agent in Texas, Technical Risks, Inc. in the District
Court  of  Harris  County, Texas. The action seeks declaratory relief confirming
the Company's interpretation of the Policies as well as claims for damages based
upon  breach  of  contract,  bad  faith  and fraud. The Company has received the
defendants'  answers, denying the Company's claims, and discovery is proceeding.
Progressive stopped paying claims during the second quarter of 1998. As a result
of the attempt by Progressive to cancel its obligations and its refusal to honor
claims  after  March  1998,  the  Company  has  suffered  a  variety of damages,
including  impairment  of its retained interests in securitizations. The Company
is  vigorously  contesting  the  legitimacy  of  Progressive's  actions  through
litigation.  Although  a  favorable  outcome  cannot  be assured, success in the
litigation  could  restore at least some of the value of the Company's interests
in  such securitizations.  Conversely, if the court were to uphold Progressive's
position,  further  impairment of the Company's interests could occur, resulting
in  an adverse effect on the Company's financial position, results of operations
and  cash  flows.  This  matter  is  currently set for trial during the month of
November,  1999.

     Also  in  March  1998,  the  Company  commenced an action in Travis County,
Texas,  against  Loan  Servicing  Enterprise ("LSE"), alleging LSE's contractual
breach  of its servicing obligations on a continuing basis. LSE has commenced an
action  against  the  Company  in  Texas  state  court seeking recovery from the
Company  of  putative  termination fees in connection with termination of LSE as
servicer. The Company expects the two actions to be consolidated. If the Company
prevails  against  LSE, some of the value of the Company's retained interests in
securitizations  could  be  restored. Both suits have been voluntarily suspended
pursuant  to  an  agreement  negotiated  by  the  parties.

     As  a  consequence of the Company's efforts to reduce expenses, the Company
contacted Norwest Bank, National Association, ("Norwest") and initiated dialogue
to voluntarily transfer servicing on several of its outstanding securitizations.
As  part  of its voluntary process the Company wanted to receive all appropriate
fees  and  expenses  due to it in its capacity as servicer. Negotiations to that
end  were  underway when on October 21, 1999, Norwest in its capacity as trustee
of  the  four  securitization  trusts  sponsored by the Company during 1996 (the
"1996 Trusts"), commenced an action against the Company in the District Court of
Travis  County, Texas (126th Judicial District) (the "Norwest Action"). Norwest,
as  trustee,  alleged  that  the  Company  had breached the terms of its various
agreements  among  the  Company, each of the 1996 Trusts and Norwest relating to
the  Company's  role  as  servicer,  administrator  and  collection  agent.
Specifically,  Norwest alleged that the Company failed to cooperate fully in the
transfer  of  servicing,  administration,  and  collection responsibilities to a
successor  servicer.  Norwest  sought injunctive relief requiring the Company to
(i)  cease  all servicing, administration and collection activities with respect
to  the  1996  Trusts, (ii) turn over all records and files relating to the 1996
Trusts  and  the finance contracts pledged thereto to the successor servicer and
(iii)  notify  all  obligors  under  the  individual  finance  contracts pledged

                                    -- 9 --
<PAGE>
to  the  1996  Trusts  that  effective  immediately,  all payments and inquiries
regarding the finance contracts should be directed to the successor servicer and
not to the Company. Thereafter, the Company reached agreement with Norwest as to
the voluntary transfer of servicing under the 1996 Trusts, and an agreement with
respect  to  the  appropriate  payment  of  fees  and expenses to the Company by
Norwest.

     The  Company is the plaintiff or the defendant in several legal proceedings
that  its  management  considers  to  be the normal kinds of actions to which an
enterprise  of  its  size and nature might be subject, and not to be material to
the  Company's overall business or financial condition, results of operations or
cash  flows.

                                    -- 10 --
<PAGE>


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


     The following analysis of the financial condition and results of operations
of  the  Company  should  be read in conjunction with the Company's Consolidated
Financial  Statements  and  Notes  thereto and the other financial data included
herein. Certain of the financial information set forth below has been rounded in
order  to  simplify  its  presentation.  However, the ratios and percentages set
forth below are calculated using the detailed financial information contained in
the  Financial Statements and the Notes thereto, and the financial data included
elsewhere  in  this  Form  10-Q.  For  further information, refer to the audited
consolidated  financial  statements  and  footnotes  thereto  included  in  the
Company's  Form  10-K  for  the  year  ended  December 31, 1998 (SEC File Number
000-21673).

     The  Company  is  a  specialty  consumer finance company. Until funding was
terminated  by  Dynex,  the  Company  was  engaged  in  underwriting, acquiring,
servicing  and  securitizing  retail installment contracts ("finance contracts")
originated  by franchised automobile dealers in connection with the sale of used
and,  to a lesser extent, new vehicles to selected consumers with limited access
to  traditional  sources  of credit ("sub-prime consumers"). Sub-prime consumers
generally  are  borrowers unable to qualify for traditional financing due to one
or  more  of  the  following reasons: negative credit history (which may include
late  payments,  charge-offs,  bankruptcies, repossessions or unpaid judgments);
insufficient  credit;  sporadic  employment  or  residence  histories;  or  high
debt-to-income  or  payment-to-income  ratios  (which  may  indicate  payment or
economic  risk).

     Prior  to  its  decision  to  cease  origination efforts early in the third
quarter,  the  Company  acquired  finance  contracts  generally  from franchised
automobile  dealers, made credit decisions using its own underwriting guidelines
and credit personnel and performed the collection function for finance contracts
using  its  own  collections  department.  The  Company  also  acquired  finance
contracts  from  third  parties  other  than  dealers,  for  which  the  Company
reunderwrote  and  collected  such  finance  contracts  in  accordance  with the
Company's  standard  guidelines. The Company had securitized portfolios of these
finance  contracts  to  efficiently  utilize  limited capital to allow continued
growth and to achieve sufficient finance contract volume to allow profitability.

     The  acquisition  and  servicing  of  sub-prime  finance  contracts  by  an
independent  finance company under past and current market conditions was and is
a  capital  and  labor  intensive  enterprise.  Capital  is  needed  to fund the
acquisition  of  finance  contracts  and  to effectively securitize them so that
additional  capital  is made available for acquisition activity. While a portion
of  the  Company's  financing has been obtained with investment grade ratings at
relatively low interest rates, the remainder is difficult to obtain and requires
the  Company  to  pay  high  coupons,  fees  and other issuance expenses, with a
negative  impact  on  earnings.  The  underwriting  and servicing of a sub-prime
finance contract portfolio requires a higher level of experienced personnel than
that  required  for  a  portfolio  of  higher  credit-quality  consumer  loans.

     In  view  of  the Dynex situation and the high cost of capital, the Company
does  not  expect  to see profitability until alternate funding is obtained. The
Company  has  ceased  to  originate or acquire additional finance contracts. The
Company  has  reduced  staff  in  order  to  conserve  capital.

     The  Company  has  transferred  servicing of its securitized loans to third
party  servicers.

REVENUES

     The  Company's  primary  sources  of  revenues consist of three components:
interest  income,  gain  on  sale of finance contracts and servicing fee income.

     Interest  Income.  Interest  income  consists  of  the  sum  of two primary
components: (i) interest income earned on finance contracts held for sale by the
Company  and  (ii)  interest  income  earned  on  retained  interests  in
securitizations.  Other  factors  influencing  interest  income  during  a given
fiscal  period  include  (i) the annual percentage rate of the finance contracts
acquired, (ii) the aggregate principal balance of finance contracts acquired and
funded  through  the  Company's  warehouse  and other credit facilities prior to
securitization,  and  (iii)  the length of time such contracts are funded by the
warehouse  and  other  credit  facilities.

                                    -- 11 --
<PAGE>

     Gain  on  Sale of Finance Contracts. For transfers of financial assets that
result  in  the  recognition  of  a  sale, the newly created assets obtained and
liabilities  incurred  by  the  transferor  as a part of a transfer of financial
assets  are  initially  measured  at fair value. Interest in the assets that are
retained  are  measured by allocating the previous carrying amount of the assets
(e.g.,  finance  contracts)  between  the  interest  sold  (e.g.,  investor
certificates)  and  interest retained based on their relative fair values at the
date  of  the  transfer.  The  amounts  initially  assigned  to  these financial
components  are  a  determinant  of  the  gain  or  loss  from  a securitization
transaction.

     The retained interests in securitizations available for sale are carried at
estimated  fair  value  with unrealized gains (losses) recorded in stockholders'
equity as part of accumulated other comprehensive income and those classified as
trading  are  carried  at  estimated  fair  value  with unrealized gain (losses)
recorded  currently  in  income.  The  fair  value  of the retained interests in
securitizations is determined by discounting expected cash flows at a rate based
on  assumptions  that  market  participants  would  use  for  similar  financial
instruments  subject  to prepayment, default, collateral value and interest rate
risks.  The  Company's  retained  interests  are  subordinated  to  other  trust
securities,  consequently  cash  flows are paid by the securitization trustee to
the  investor  security holders until such time as all accrued interest together
with  principal  have  been paid in full. Subsequently, all remaining cash flows
are  paid  to  the  Company.

     An  impairment  review  of  the  retained  interests  in securitizations is
performed  quarterly by calculating the net present value of the expected future
excess  spread  cash  flows after giving effect to changes in assumptions due to
market  and  economic  changes  and  the  performance  of the loan pool to date.
Impairment  is  determined  on  a  disaggregated  basis consistent with the risk
characteristics  of  the underlying finance contracts as well as the performance
of  the  pool  to  date.  To  the  extent that the Company deems the asset to be
permanently  impaired,  the  Company  would record a charge against earnings and
write  down  the  asset  accordingly. The Company recorded a charge to income of
$4,672,698  during  the  nine months ended September 30, 1999 as a result of the
impairment  review.  See  Note  4  to  the  Consolidated  Financial  Statements.

     The  Company's  cost  basis  in  finance  contracts  sold  has  varied from
approximately  92% to 103% of the value of the principal balance of such finance
contracts. This portion of recognized gain on sale varies based on the Company's
cost  of insurance covering the finance contracts and the discount obtained upon
acquisition  of  the  finance  contracts.  Generally,  the  Company has acquired
finance contracts from dealers at a greater discount than with finance contracts
acquired  from  third parties. Additionally, costs of sale reduce the total gain
recognized.

     Further,  the retained interest component of recognized gain is affected by
various factors, including most significantly, the coupon on the senior investor
securities  and  the  age  of  the  finance contracts in the pool, as the excess
spread  cash  flow  from a pool of aged, as opposed to new, finance contracts is
less.  The  aging (capture of excess spread prior to securitization) necessarily
results  in  less  available  excess  spread  cash flow from the securitization.

     The Company is relying on information provided by a third party servicer to
assess  the  value  of  the  retained  interest  in  its  securitizations.

                                    -- 12 --
<PAGE>

The  gain  on  sale  of  finance  contracts  is  affected  by the aggregate
principal  balance  of  contracts  securitized  and the gross interest spread on
those  contracts.  The following table illustrates the gross interest spread for
each  of  the  Company's  securitizations:

<TABLE>
<CAPTION>


                                Finance Contracts(1)     Senior Investor Certificates
                                --------------------     ----------------------------

                             Principal    Weighted      Balance
                               Amount      Average   September 30,              Gross
Securitization              Securitized     Rate          1999        Rate    Spread(2)
--------------------------  ------------  ---------  --------------  -------  ---------
<S>                         <C>           <C>        <C>             <C>      <C>
AutoBond Receivables
  Trust 1995-A . . . . . .  $ 26,261,009      18.9%  $    2,847,497     7.2%      11.7%

  Trust 1996-A . . . . . .    16,563,366      19.7%       2,496,105     7.2%      12.5%

  Trust 1996-B . . . . . .    17,832,885      19.7%       3,204,126     7.7%      12.0%

  Trust 1996-C . . . . . .    22,296,719      19.7%       5,354,429     7.5%      12.2%

  Trust 1996-D . . . . . .    25,000,000      19.5%       6,326,456     7.4%      12.1%

  Trust 1997-A (4) . . . .    28,037,167      20.8%       7,140,855     7.8%      13.0%

  Trust 1997-B . . . . . .    34,725,196      19.9%      16,570,197     7.7%      12.2%

  Trust 1997-C . . . . . .    34,430,079      20.0%      17,402,411     7.6%      12.4%
AutoBond Master Funding
  Corporation V (Dynex)(3)   153,092,410      20.0%     109,449,869  7.4%(3)      12.6%
                            ------------             --------------
        Total. . . . . . .  $358,238,831             $  170,791,945
                            ============             ==============
--------------------------------------------------------------------------------------
<FN>
1  Refers  only  to  balances  on  senior  investor  certificates.
2  Difference  between  weighted  average  contract rate and investor certificate rate.
3  Includes  $26  million  of finance contracts from securitizations previously retired
4  Weighted  average  of  senior  investor  coupon  rates.
</TABLE>




Servicing  Income. The Company earns substantially all of its servicing fee
income  on  the  contracts  it  services  on  behalf  of  securitization trusts.
Servicing  fee  income consists of: (i) contractual administrative fees received
through  securitizations, equal to $7.00 per month per contract included in each
trust  (excluding  amounts  paid  to  third-party  servicers by the trust); (ii)
contractual  servicing fees received through securitizations, equal to $8.00 per
month  per  contract  included  in  each  trust;  and (iii) fee income earned as
servicer for such items as late charges and documentation fees, which are earned
whether  or  not  a  securitization  has  occurred.

     In  May  1999,  the  Company  agreed to transfer servicing of the Company's
1997-B  and  1997-C  securitizations  to  a  successor  servicer. In return, the
Company  received  approximately  $800,000 in past due servicing fees previously
withheld  from the Company. The Company transferred servicing to the third party
servicer.

          In  August  1999,  the  Company  transferred  servicing  of  its Dynex
portfolio of loans to a successor servicer.  By agreement, the company continued
to  receive  servicing  fees  on  this  portfolio  through  September,  1999.

     In  August  1999,  the  Company  reached agreement with the trustee and the
investors  in  the  Company's  1996  securitization  transactions  to  amend the
relevant  documents  to  provide  for,  among other things, the appointment of a
back-up  servicer.  The Company transferred servicing to the back-up servicer in
October,  1999.

                                    -- 13 --
<PAGE>
          As  a  consequence  of  the  Company's efforts to reduce expenses, the
Company  contacted Norwest Bank, National Association, ("Norwest") and initiated
dialogue  to  voluntarily  transfer  servicing  on  several  of  its outstanding
securitizations.  As part of its voluntary process the Company wanted to receive
all  appropriate  fees  and  expenses  due  to  it  in its capacity as servicer.
Negotiations  to that end were underway when on October 21, 1999, Norwest in its
capacity  as  trustee of the four securitization trusts sponsored by the Company
during  1996 (the "1996 Trusts"), commenced an action against the Company in the
District  Court  of Travis County, Texas (126th Judicial District) (the "Norwest
Action").  Norwest,  as trustee, alleged that the Company had breached the terms
of its various agreements among the Company, each of the 1996 Trusts and Norwest
relating  to the Company's role as servicer, administrator and collection agent.
Specifically,  Norwest alleged that the Company failed to cooperate fully in the
transfer  of  servicing,  administration,  and  collection responsibilities to a
successor  servicer.  Norwest  sought injunctive relief requiring the Company to
(i)  cease  all servicing, administration and collection activities with respect
to  the  1996  Trusts, (ii) turn over all records and files relating to the 1996
Trusts  and  the finance contracts pledged thereto to the successor servicer and
(iii)  notify all obligors under the individual finance contracts pledged to the
1996 Trusts that effective immediately, all payments and inquiries regarding the
finance  contracts  should  be directed to the successor servicer and not to the
Company.  Thereafter,  the  Company  reached  agreement  with  Norwest as to the
voluntary  transfer  of  servicing  under the 1996 Trusts, and an agreement with
respect  to  the  appropriate  payment  of  fees  and expenses to the Company by
Norwest.


FINANCE  CONTRACT  ACQUISITION  ACTIVITY


<TABLE>
<CAPTION>

The  following table sets forth information about the Company's finance contract
acquisition  activity:

                                                      Nine Months Ended
                                                        September  30,
<S>                                               <C>          <C>
                                                         1998         1999
                                                  -----------  -----------

Number of finance contracts acquired(1). . . . .        6,723        1,586
Principal balance of finance contracts acquired.  $76,330,699  $20,336,852
Number of active dealerships (2) . . . . . . . .          840          466
Number of enrolled dealerships . . . . . . . . .        1,797        2,332
--------------------------------------------------------------------------------
<FN>
(1)  There  have  been  no finance contracts acquired since the first quarter of
1999.
(2)  Dealers  who  have sold at least one finance contract to the Company during
the  period.

</TABLE>


RESULTS  OF  OPERATIONS

     Period-to-period  comparisons  of  operating results may not be meaningful,
and  results  of  operations  from prior periods may not be indicative of future
results.  The  following  discussion  and analysis should be read in conjunction
with  the  Company's  Consolidated  Financial  Statements and the Notes thereto.



THREE  MONTHS  ENDED SEPTEMBER 30, 1999 COMPARED TO THREE MONTHS ENDED SEPTEMBER
30,  1998

NET  LOSS

     In  the  three months ended September 30, 1999, the net loss was $6,649,686
which represents an increase of $4,598,210 over the three months ended September
30,  1998  net loss of $2,051,476.  The increase in net loss was precipitated by
the  cessation  of funding by Dynex under the Funding Agreement which forced the
Company  to discontinue acquisition of finance contracts as of February 9, 1999.
In  addition, there is an impairment to the retained interests in securitization
of  $2,100,491  for  the  three  months  ended  September  30,  1999.

                                    -- 14 --
<PAGE>
Total  Revenues

     Total  revenues for the three months ended September 30, 1999 of $1,211,762
represent  a  decrease  of  $3,511,635 from the three months ended September 30,
1998 revenues of $4,723,397.  The decrease was due primarily to the reduction in
volume  of  finance  contract  sales  activity  for  the  third  quarter.

     Interest  Income.  Interest income for the three months ended September 30,
1999  of  $414,552  represents a decrease of $54,174 from the three months ended
September  30,  1998  interest  income  of $468,726 due to the timing of finance
contract  acquisitions  and  the  period  held  before  sale.

     Gain  on  Sale  of  Finance  Contracts.  The Company realized loss on sales
totaling $50,066 during the three months ended September 30, 1999.  The loss was
the  result  of  additional  costs  related  to  the  finance contract sale. The
decrease  of  $3,506,069 was due to the reduction in volume of sales as a result
Dynex'  refusal  to  perform  under  the  Funding  Agreement.

     Servicing  Fee  Income.  The Company reports servicing fee income only with
respect  to finance contracts that are securitized or sold. For the three months
ended  September  30,  1999  servicing  fee  income  was $802,473, consisting of
contractual  administrative  fees  and  servicer  fees.  Servicing  fee  income
increased by $4,105 from the three months ended September 30, 1998 servicing fee
income  of  $798,368.

     Other  Income.  For the three months ended September 30, 1999, other income
amounted  to  $44,803  compared  with  $-0-  for  the  comparable  1998  period.

Total  Expenses

     Total  expenses for the three months ended September 30, 1999 of $7,861,448
represent  an increase of $38,614 from the three months ended September 30, 1998
total  expenses of $7,822,834. Impairment of the Company's retained interests in
securitizations  during  the third quarter of 1999 was $463,300 greater than the
third  quarter  of  1998.

Provision  for  Credit  Losses  The  provision  for  credit losses for the three
months  ended  September  30,  1999  of  $243,377  represents  the charge-off of
advances  that  are  not  collectible  from  the  various  trusts.  There was no
provision  for  credit  losses  for  the  three months ended September 30, 1998.

     Interest Expense. Interest expense for the three months ended September 30,
1999  of  $810,274 represents a decrease of $205,520 from the three months ended
September  30,  1998  interest expense of $1,015,794. The decrease resulted from
the  elimination  of  borrowings  under  the  revolving  credit  facilities.

     Salaries  and  Benefits.  Salaries  and benefits for the three months ended
September 30, 1999 of $1,716,209 represent a decrease of $885,656 from the three
months  ended  September  30,  1998  salaries  and  benefits of $2,601,865.  The
Company continued strategic layoffs during the third quarter of 1999 compared to
increasing staff during the third quarter of 1998.  Staff has been reduced to 40
full  time  personnel  as  of  September  30,  1999.

     General  and  Administrative  Expenses. General and administrative expenses
for  the  three  months  ended  September  30,  1999  of $2,611,664 represent an
increase  of  $1,088,532  from the three months ended September 30, 1998 general
and  administrative  expense  of  $1,523,132.  Despite  the Company's continuing
efforts  to  reduce  costs, general and administrative expenses increased due to
higher  professional  expenses  relating  to  the  Company's  retention of legal
counsel  to  protect  its interest in its litigation with Dynex and Progressive.

     Impairment  of  Retained  Interests  in  Securitizations.  The  Company
periodically  reviews  the  carrying  value  of  the  retained  interests  in
securitizations.  The  Company recorded a charge against earnings for impairment
of  these  assets of $2,100,491 for the three months ended September 30, 1999 as
compared  with  an impairment of $1,637,191 for the three months ended September
30,  1998.  This  impairment  reflects  the  revaluation of expected future cash
flows  to  the  Company  from  securitizations.  See  Note 4 to the Consolidated
Financial  Statements.

                                    -- 15 --
<PAGE>
     Other  Operating Expenses. Other operating expenses (consisting principally
of  servicer  fees, credit bureau reports, communications and insurance) for the
three  months  ended  September  30,  1999  of  $379,433 represent a decrease of
$665,419 from the three months ended September 30, 1998 other operating expenses
of  $1,044,852.  The decrease was mainly due to reimbursement of trust expenses,
a  reduction  in  loan  insurance  premium,  and  the  reduction in the level of
operations.

     Income  Tax.  No  Income  tax expense or benefit for the three months ended
September  30,  1999 was recorded which  represents a change of $ 1,047,961 from
the  three  months ended September 30, 1998 income tax benefit of $1,047,961 due
to  the  establishment  of  a valuation allowance for the Company's deferred tax
assets.



NINE MONTHS ENDED SEPTEMBER 30, 1999 COMPARED TO NINE MONTHS ENDED SEPTEMBER 30,
1998

NET  INCOME
     In  the  nine months ended September 30, 1999, the net loss was $16,399,052
which  represents  an  increase in loss of $8,992,650 over the nine months ended
September  30,  1998  net  loss  of  $7,406,402.  The  increase  in net loss was
precipitated  by  the  cessation of funding by Dynex under the Funding Agreement
which  forced  the Company to discontinue acquisition of finance contracts as of
February  9,  1999  and  the  impairment  of  the Company's retained interest in
securitization  of  $4,672,698.

Total  Revenues

     Total  revenues  for the nine months ended September 30, 1999 of $6,885,359
represent a decrease of $7,378,867 from the nine months ended September 30, 1998
revenues  of  $14,264,226.  The  decrease  was due primarily to the reduction in
volume  of  finance  contract  sales  activity.

     Interest  Income.  Interest  income for the nine months ended September 30,
1999  of $1,494,929 represents a decrease of $639,580 from the nine months ended
September  30,  1998  interest income of $2,134,509 due to the timing of finance
contract  acquisitions  and  the  period  held  before  securitization  or sale.

     Gain  on  Sale  of  Finance  Contracts.  The  Company realized gain on sale
totaling  $1,704,219  during  the  nine  months  ended  September  30, 1999. The
decrease  of  $8,388,904  from  the nine months ended September 30, 1998 gain on
sale  of  $10,093,123 was primarily due to the reduction in volume of sales as a
result  of  the  termination  of  the  Dynex  Funding  Agreement.

     Servicing  Fee  Income.  The Company reports servicing fee income only with
respect  to  finance contracts that are securitized or sold. For the nine months
ended  September  30,  1999  servicing  fee  income was $2,787,613 consisting of
contractual  administrative  fees  and  servicer  fees.  Servicing  fee  income
increased  by  $671,303  from the nine months ended September 30, 1998 servicing
fee  income of $2,116,310 as a result of the increased volume of contracts being
serviced. The Company's surrender of nearly all servicing functions in the third
quarter  of  1999  can  be  expected  to  reduce  future  servicing  fee income.

     Other  Income.  For  the nine months ended September 30, 1999, other income
amounted  to  $898,598  compared  with a loss of $79,716 for the comparable 1998
period.  The  increase  was mainly attributable to settlement of litigation with
Charlie  Thomas  Ford,  Inc.  on  favorable  terms.  See  Part II, Item 1-"Legal
Proceedings".

Total  Expenses

     Total  expenses for the nine months ended September 30, 1999 of $23,386,211
represent a decrease of $2,060,340 from the nine months ended September 30, 1998
total  expenses  of  $25,446,551. Impairment of the Company's retained interests
in  securitizations  for the nine months ended September 30, 1999 was $2,842,317
less  than  the  nine  months  ended  September  30,  1998.

     Provision  for  Credit Losses  The provision for credit losses for the nine
months  ended  September  30,  1999  of  $303,842  represents  the charge off of
advances  that are not collectible from the various trusts. There was a $100,000
provision  for  credit  losses  for  the  nine  months ended September 30, 1998.

                                    -- 16 --
<PAGE>
     Interest  Expense. Interest expense for the nine months ended September 30,
1999  of  $2,328,394  represents  a  decrease of $1,063,206 from the nine months
ended  September  30, 1998 interest expense of $3,391,600. The decrease resulted
from  elimination  of  borrowing  under  the  revolving  credit  facilities.

     Salaries  and  Benefits.  Salaries  and  benefits for the nine months ended
September  30, 1999 of $7,529,900 represent an increase of $61,703 from the nine
months ended September 30, 1998 salaries and benefits of $7,468,197. The Company
began strategic layoffs during the second quarter of 1999 compared to increasing
staff  during  the  second  quarter  of  1998.  Despite  such  strategic  staff
reductions,  salaries  and benefits increased due mainly to the increased health
claims  by  employees  from  the Company's employee benefit program. The Company
continued  layoffs  during  the  third  quarter  and began to realize associated
savings.

     General  and  Administrative  Expenses. General and administrative expenses
for the nine months ended September 30, 1999 of $6,298,051 represent an increase
of  $1,900,035  from  the  nine  months  ended  September  30,  1998 general and
administrative  expense  of $4,398,016. Despite the Company's continuing efforts
to  reduce  costs,  general  and administrative expenses increased due to higher
professional  expenses  relating  to the Company's retention of legal counsel to
protect its interests in its litigations with Dynex and Progressive. The Company
relocated  its  headquarters  to  a  larger  facility  June  15,  1998 and had a
corresponding  higher  facilities  expense.

     Impairment  of  Retained  Interest  in  Securitizations.  The  Company
periodically  reviews  the  carrying  value  of  the  retained  interest  in
securitizations.  The  Company recorded a charge against earnings for impairment
of  these  assets  of $4,672,698 for the nine months ended September 30, 1999 as
compared  with  an  impairment of $7,515,015 for the nine months ended September
30,  1998.  This  impairment  reflects  the  revaluation of expected future cash
flows  to  the  Company  from  securitizations.  See  Note 4 to the Consolidated
Financial  Statements.

     Other  Operating Expenses. Other operating expenses (consisting principally
of  servicer  fees, credit bureau reports, communications and insurance) for the
nine  months  ended  September  30,  1999  of $2,253,326 represent a decrease of
$320,397  from the nine months ended September 30, 1998 other operating expenses
of  $2,573,723.  The  decrease  was  mainly  due  to  the  Company  reducing its
operations  as  a  result  of  the  termination  of the Dynex Funding Agreement.

     Income  Tax.  Income  tax  benefit for the nine months ending September 30,
1999  was $101,800 which represents a decrease of $3,674,123 from the income tax
benefit  of  $3,775,923  for the nine months ended September 30, 1998 due to the
establishment  of a valuation allowance for the Company's deferred tax assets of
$3,050,776.

FINANCIAL  CONDITION

     Cash  and  Cash Equivalents. Cash and cash equivalents decreased $4,068,652
to  $1,102,317  at  September 30, 1999 from $5,170,969 at December 31, 1998. The
decrease  in  cash  and  cash equivalents was largely the result of an operating
loss  of $15,071,797 primarily caused by the termination by Dynex of the Funding
Agreement.  These declines were partially offset by the receipt of $6,573,107 in
the first quarter of 1999 from Dynex, which was outstanding at December 31, 1998
and  $4,956,623  in  the  third  quarter  from  the  sale of  finance contracts.

     Finance  Contracts  Held  for Sale. Finance contracts held for sale, net of
allowance  for losses, decreased $548,830 to $318,280 at September 30, 1999 from
$867,070  at  December  31,  1998. The number and principal balance of contracts
held  for  sale  was largely dependent upon the timing and size of the Company's
securitizations.  The  Company  securitized finance contracts on a regular basis
through  the  Dynex  Funding  Agreement  until  February 9, 1999. The balance in
finance  contracts  held for sale outstanding at September 30, 1999 consisted of
loans  originated  with  intent  to  sell  to Dynex. In July 1999, $5,960,346 in
outstanding  finance  contracts  were  sold  for  proceeds of $5,006,690. Future
acquisitions  of  finance  contracts  for securitization and sale are uncertain.

     The Company maintains an allowance for, and reports a provision for, losses
on  finance  contracts held for sale. Management evaluates the reasonableness of
the  assumptions  employed  by  reviewing credit loss experience, delinquencies,
repossession  trends,  the  size  of  the finance contract portfolio and general

                                    -- 17 --
<PAGE>
economic conditions and trends. If necessary, assumptions will be changed in the
future  to  reflect  historical  experience to the extent it deviates materially
from  that  which  was  assumed.

     Other  Assets.  Other  assets decreased $136,271 to $1,326,775 at September
30,  1999  from  $1,463,046  at  December  31,  1998.  The  Company  received
approximately  $0.8 million of withheld administrator fees and expenses. Certain
trustees  have  continued  to  withhold  administrator  fees and expenses and to
deposit  same  into  a  separate bank account earning interest. The total amount
withheld  and  deposited into a separate account is approximately  $ 0.5 million
as  of  September  30,  1999,  due  to  the  Company.

     Retained Interests in Securitizations. An impairment review of the retained
interests  in  securitizations  is  performed  quarterly  by  estimating the net
present  value  of the expected future cash flows after giving effect to changes
in  assumptions  due  to  market and economic changes and the performance of the
loan pool to date. The discount rate used is an estimated market rate, currently
15%  to  17%.  To  the extent that the Company deems the asset to be permanently
impaired,  the Company records a charge against earnings. The Company recorded a
charge against earnings of $4,672,698 during the nine months ended September 30,
1999  as  a  result  of  the  impairment  review  of  the  retained interests in
securitizations.

                                    -- 18 --
<PAGE>

     The Company is relying on information provided by a third party servicer to
assess  the  value  of  the  retained  interest  in  its  securitizations.


Notes  Payable  and  Non-Recourse  Debt

<TABLE>
<CAPTION>

     The  following  amounts  are  included  in  notes  payable and non-recourse debt as of:

                                                               December 31,     September 30,
                                                                       1998         1999
                                                                    -----------  -----------
<S>                                                                 <C>          <C>
Non-recourse notes payable, collateralized by Class B Certificates  $ 3,185,050  $ 1,282,293
Convertible Senior Notes . . . . . . . . . . . . . . . . . . . . .    3,000,000    3,000,000
Convertible Subordinated Notes, net of discount. . . . . . . . . .    7,143,627    7,269,927
Other notes payable. . . . . . . . . . . . . . . . . . . . . . . .       23,342        6,206
                                                                    -----------  -----------
                                                                    $13,352,019  $11,558,426
                                                                    ===========  ===========
</TABLE>



DELINQUENCY  EXPERIENCE

<TABLE>
<CAPTION>

     The  following  table  reflects  the delinquency experience of the Company's finance contract
portfolio:

                                                     December 31, 1998      September 30, 1999
                                                     -----------------      ------------------
<S>                                                 <C>           <C>     <C>         <C>
Principal balance of finance contracts outstanding      $210,947,939              $22,170,034
Delinquent finance contracts (1):
Two payments past due. . . . . . . . . . . . . . .  $ 20,689,671   9.81%  $3,415,392    15.41%
Three payments past due. . . . . . . . . . . . . .     7,901,166   3.75%     898,650     4.05%
Four or more payments past due . . . . . . . . . .     5,214,162   2.47%     919,440     4.15%
                                                    ------------  ------  ----------  --------
Total. . . . . . . . . . . . . . . . . . . . . . .  $ 33,804,999  16.03%   5,233,482    23.61%
                                                    ============  ======  ==========  ========
-----------------------------------------------------------------------------------------------
<FN>

(1)  Percentage  based upon outstanding balance. Delinquency balances outstanding excludes finance
contracts  where  the  underlying  vehicle  is  repossessed,  where  a  dealer (seller) buyback is
expected,  where  a  skip  claim  is  paid  and  where  a  primary  insurance  claim  is  filed.
</TABLE>




CREDIT  LOSS  EXPERIENCE


     If  a  delinquency  exists  and  a  default  is  deemed  inevitable  or the
collateral  is  in  jeopardy,  and  in  no  event  later  than  the  90th day of
delinquency, the Company's Collections Department will initiate the repossession
of  the financed vehicle. Bonded, insured outside repossession agencies are used
to  secure  involuntary  repossessions.  In  most  jurisdictions,  notice to the
borrower of the Company's intention to sell the repossessed vehicle is required,
whereupon  the  borrower  may  exercise  certain  rights to cure the default and
redeem  the  automobile. Following the expiration of the legally required notice
                                    -- 19 --
<PAGE>
period,  the  repossessed  vehicle  is  sold  at a wholesale auto auction (or in
limited  circumstances,  through  dealers),  usually  within  60  days  of  the
repossession.  The  Company  closely  monitors the condition of vehicles set for
auction,  and procures an appraisal under the relevant VSI policy prior to sale.
Liquidation  proceeds are applied to the borrower's outstanding obligation under
the  finance  contract  and  insurance  claims  under  the  VSI  policy  and, if
applicable,  the  deficiency  balance  is  then  filed.

     Because  of  the  Company's limited operating history, its finance contract
portfolio  is somewhat unseasoned. This effect on the delinquency statistics can
be  observed  in  the  comparison  of  1999 versus 1998 delinquency percentages.
Accordingly,  delinquency  and  charge-off  rates in the portfolio may not fully
reflect  the  rates  that  may apply when the average holding period for finance
contracts  in  the  portfolio  is  longer.  Increases  in the delinquency and/or
charge-off  rates  in the portfolio would adversely affect the Company's ability
to  obtain  credit  or  securitize  its  receivables.


REPOSSESSION  EXPERIENCE  -  STATIC  POOL  ANALYSIS

     Because  the Company's finance contract portfolio is unseasoned, management
does  not  manage  losses  on the basis of a percentage of the Company's finance
contract  portfolio,  because  percentages  can  be  favorably affected by large
balances  of  recently  acquired  finance  contracts. Management monitors actual
dollar  levels  of  delinquencies  and  charge-offs  and  analyzes the data on a
"static  pool"  basis.

     The following tables provide static pool repossession frequency analysis in
dollars  of  the  Company's portfolio from inception through September 30, 1999.
All  finance  contracts  have  been  segregated  by  quarter of acquisition. All
repossessions  have  been  segregated  by  the  quarter in which the repossessed
contract was originally acquired by the Company. Cumulative repossessions equals
the  ratio  of  repossessions  as a percentage of finance contracts acquired for
each segregated quarter. Annualized repossessions equals an annual equivalent of
the  cumulative  repossession  ratio  for  each  segregated  quarter. This table
provides  information regarding the Company's repossession experience over time.
For  example,  recently  acquired  finance  contracts  demonstrate  very  few
repossessions  because  properly  underwritten  finance  contracts  to sub-prime
consumers  generally  do  not  normally  default  during the initial term of the
contract.  Between  approximately one year and 18 months of seasoning, frequency
of  repossessions  on  an  annualized basis appears to reach a plateau. Based on
industry  statistics  and  the  performance  experience of the Company's finance
contract  portfolio,  the  Company  believes  that finance contracts seasoned in
excess  of  approximately  18  months  will  start  to  demonstrate  declining
repossession  frequency.  The  Company believes this may be due to the fact that
the  borrower  perceives  that  he or she has equity in the vehicle. The Company
also  believes  that  the finance contracts generally amortize more quickly than
the  collateral  depreciates,  and  therefore  losses  and/or repossessions will
decline  over  time.

                                    -- 20 --
<PAGE>


<TABLE>
<CAPTION>

ALL  INCLUSIVE  (3)
                                              Repossession Frequency
                                              ----------------------


                             Principal Balance at
                               Default of Failed                                    Original Principal
     Year and                      Loans by           Cumulative      Annualized        Balance of
     Quarter of Acquisition    Quarter Acquired     Percentage (1)  Percentage (2)  Contracts Acquired
     ----------------------  ---------------------  --------------  --------------  -------------------
<C>  <S>                     <C>                    <C>             <C>             <C>
     1994
  1  Q3 . . . . . . . . . .  $              22,046          21.79%           4.15%  $           101,161
  2  Q4 . . . . . . . . . .                636,413          26.11%           5.22%            2,437,674
     1995
  3  Q1 . . . . . . . . . .              1,936,858          30.69%           6.46%            6,310,421
  4  Q2 . . . . . . . . . .              1,887,469          30.49%           6.78%            6,190,596
  5  Q3 . . . . . . . . . .              2,270,295          31.36%           7.38%            7,239,813
  6  Q4 . . . . . . . . . .              4,347,902          35.67%           8.92%           12,188,863
     1996
  7  Q1 . . . . . . . . . .              5,447,885          35.24%           9.40%           15,460,823
  8  Q2 . . . . . . . . . .              7,116,534          38.43%          10.98%           18,520,410
  9  Q3 . . . . . . . . . .              8,113,827          28.88%           8.88%           28,098,899
 10  Q4 . . . . . . . . . .              9,165,788          37.50%          12.50%           24,442,500
     1997
 11  Q1 . . . . . . . . . .             13,205,109          37.86%          13.77%           34,875,869
 12  Q2 . . . . . . . . . .             12,581,784          35.64%          14.25%           35,305,817
 13  Q3 . . . . . . . . . .             10,788,201          31.15%          13.85%           34,629,616
 14  Q4 . . . . . . . . . .             10,756,033          24.38%          12.19%           44,120,029
     1998
 15  Q1 . . . . . . . . . .              6,551,828          22.10%          12.63%           29,650,808
 16  Q2 . . . . . . . . . .              4,555,499          19.88%          13.26%           22,911,290
 17  Q3 . . . . . . . . . .              2,983,294          12.68%          10.14%           23,528,924
 18  Q4 . . . . . . . . . .              4,087,894           9.51%           9.51%           43,006,049
     1999
 19  Q1 . . . . . . . . . .              1,317,196           6.48%           8.64%           20,336,852
-------------------------------------------------------------------------------------------------------
<FN>
(1)     For  each  quarter,  cumulative  loss  frequency equals the gross principal loss divided by the
gross  amount  financed  of  the  contracts  acquired  during  that  quarter.
(2)     Annualized  loss  frequency converts cumulative loss frequency into an annual equivalent (e.g.,
for  Q4  1997,  principal balance of $10,756,033 in losses divided by $44,120,029 in amount financed of
the  contracts  acquired,  divided by 8 quarters outstanding times 4 equals an annual loss frequency of
12.19%).
(3)     Included  are  the  loans  that were repossessed, paid by customers' primary insurance, paid by
skip  claim,  paid  by  dealer  and  charged  off  due  to  certain  reasons.
</TABLE>


                                    -- 21 --
<PAGE>
<TABLE>
<CAPTION>

REPO  AND  SKIP  (3)

                                       Repossession Frequency
                                       ----------------------


     Year and       Principal Balance at      Cumulative      Annualized    Original Principal
     Quarter of   Default of Failed Loans   Percentage (1)  Percentage (2)      Balance of
     Acquisition    by Quarter Acquired                                     Contracts Acquired
     -----------  ------------------------  --------------  --------------  -------------------
<C>  <S>          <C>                       <C>             <C>             <C>
     1994
  1    Q3 . . .   $                 22,046          21.79%           4.15%  $           101,161
  2    Q4. . . .                   628,707          25.79%           5.16%            2,437,674
     1995
  3    Q1. . . .                 1,727,566          27.38%           5.76%            6,310,421
  4    Q2. . . .                 1,723,444          27.84%           6.19%            6,190,596
  5    Q3. . . .                 2,016,888          27.86%           6.55%            7,239,813
  6    Q4. . . .                 3,930,527          32.25%           8.06%           12,188,863
     1996
  7    Q1. . . .                 5,057,256          32.71%           8.72%           15,460,823
  8    Q2. . . .                 6,376,630          34.43%           9.84%           18,520,410
  9    Q3. . . .                 7,159,992          25.48%           7.84%           28,098,899
 10    Q4. . . .                 8,261,982          33.80%          11.27%           24,442,500
     1997
 11    Q1. . . .                11,814,159          33.87%          12.32%           34,875,869
 12    Q2. . . .                11,551,374          32.72%          13.09%           35,305,817
 13    Q3. . . .                 9,812,973          28.34%          12.59%           34,629,616
 14    Q4. . . .                 9,483,352          21.49%          10.75%           44,120,029
     1998
 15    Q1. . . .                 5,857,550          19.76%          11.29%           29,650,808
 16    Q2. . . .                 4,077,032          17.79%          11.86%           22,911,290
 17    Q3. . . .                 2,640,322          11.22%           8.98%           23,528,924
 18    Q4. . . .                 3,544,650           8.24%           8.24%           43,006,049
     1999
 19    Q1. . . .                 1,158,944           5.70%           7.60%           20,336,852
-----------------------------------------------------------------------------------------------
<FN>
(1)     For  each quarter, cumulative loss frequency equals the gross principal loss divided by
the  gross  amount  financed  of  the  contracts  acquired  during  that  quarter.
(2)     Annualized  loss frequency converts cumulative loss frequency into an annual equivalent
(e.g.,  for Q4 1997, principal balance of $9,483,352 in losses divided by $44,120,029 in amount
financed  of the contracts acquired, divided by 8 quarters outstanding times 4 equals an annual
loss  frequency  of  10.75%).
(3)     Included  are  the  loans  that  were  repossessed,  and  paid  by  skip  claim.
</TABLE>


NET  LOSS  PER  REPOSSESSION

     Upon  initiation of the repossession process, it is the Company's intent to
complete  the  liquidation  process  as  quickly  as  possible.  The majority of
repossessed  vehicles  are sold at wholesale auction. The Company is responsible
for  the  costs  of  repossession, transportation and storage. The Company's net
charge-off  per repossession equals the unpaid balance less the auction proceeds
(net  of  associated  costs) and less proceeds from insurance claims. As less of
the  Company's  finance contracts are acquired with credit deficiency insurance,
the  Company  expects  its  net  loss  per  repossession  to  increase.

                                    -- 22 --
<PAGE>
The  following  table demonstrates the net charge-off per repossessed automobile
since  inception:



<TABLE>
<CAPTION>



From August 1, 1994 (Inception) to September 30, 1999                Loans with        Loans        All Loans
                                                                       Default        Without
                                                                      Insurance       Default
                                                                                     Insurance
                                                                    -------------  -------------  -------------
<S>                                                                 <C>            <C>            <C>
Number of finance contracts acquired                                                                    34,967
Number of vehicles repossessed . . . . . . . . . . . . . . . . . .         7,058          4,177         11,235
Repossessed units disposed of. . . . . . . . . . . . . . . . . . .         4,458          2,823          7,281
Repossessed units awaiting disposition (1) . . . . . . . . . . . .         2,600          1,354          3,954
Cumulative gross charge-offs . . . . . . . . . . . . . . . . . . .  $ 43,858,580   $ 29,455,155   $ 73,313,736
Costs of repossession. . . . . . . . . . . . . . . . . . . . . . .     2,052,457      1,327,429      3,379,886
Recoveries:
  Proceeds from auction, physical damage insurance and refunds (2)   (23,914,490)   (16,238,446)   (40,152,936)
  Deficiency insurance settlement received . . . . . . . . . . . .   (11,555,297)             0    (11,555,297)
                                                                    -------------  -------------  -------------
Net charge-offs. . . . . . . . . . . . . . . . . . . . . . . . . .  $ 10,441,250   $ 14,544,138   $ 24,985,388
                                                                    =============  =============  =============
Net charge-offs per unit disposed. . . . . . . . . . . . . . . . .  $      2,342   $      5,152   $      3,432
Net charge-offs as a percentage of cumulative gross charge-offs. .         23.81%         49.38%         34.08%
Recoveries as a percentage of cumulative gross charge-offs . . . .         80.87%         55.13%         70.53%
                                                                    -------------  -------------  -------------
<FN>

(1)  The  vehicles  may  have  been  sold at auction; however the Company might not have received all insurance
proceeds  as  of  September  30,  1999.
(2)  Amounts  are based on actual liquidation and repossession proceeds (including insurance proceeds) received
on  units  for  which  the  repossession  process  had  been  completed  as  of  September  30,  1999.
</TABLE>



LIQUIDITY  AND  CAPITAL  RESOURCES

     Since  early February 1999, the Company's management has been attempting to
procure  alternative  sources  of  funding  and other strategic alternatives, in
order  to  mitigate  the  situation  with  Dynex.  The  Company  is currently in
discussions  with  several  investment bankers and direct sources regarding such
alternatives,  which  may  include  joint ventures, or changes in control of the
Company.  While  management  hopes  that  an  alternative  opportunity  will  be
consummated,  the  Company  has suspended origination of finance contracts until
alternative  funding  sources  are  obtained. However, there can be no assurance
that such funding will be obtained. In addition, due to adverse court rulings in
the  Dynex  matter,  the  Company  has,  at least temporarily, lost the right to
service  (and  thus  earn  fees related to such servicing) contracts financed by
Dynex. The Company is reporting a loss for the third quarter of 1999 and did not
pay  the  quarterly dividend on its Preferred Stock otherwise payable on each of
March  31, 1999 , June 30, 1999 and September 30, 1999. Until financing or other
strategic  alternatives  are  consummated, the Company is taking steps to reduce
its  personnel  and operating expenses associated with origination and servicing
activities.

     Management  believes  the  Company  has  sufficient  liquidity  to meet its
current  obligations  through  year-end.  Subsequent  liquidity  will need to be
obtained  through  alternative  funding  sources  or  favorable  results  in the
Company's  litigations  with  Dynex  and  Progressive.

     Cash  Flows.  Significant  cash  flows  related  to the Company's operating
activities included the use of cash for purchases of finance contracts, and cash
provided by payments on finance contracts, collections on retained interests and
sales  of  finance contracts. Net cash used by operating activities totaled $3.9
million during the nine months ended September 30, 1999.  Significant activities
comprising  cash  flows  used  by investing activities consisted of purchases of
property,  plant  and  equipment.  There  were  no  significant  cash flows from
financing  activities  during  the  nine  months  ended  September  30,  1999.

     Revolving  Credit  Facilities.  The  Company  historically  obtained  a
substantial  portion  of  its  working  capital  for  the acquisition of finance
contracts  through  revolving credit facilities. Under a warehouse facility, the
lender generally advances amounts requested by the borrower on a periodic basis,
up to an aggregate maximum credit limit for the facility, for the acquisition of
finance  contracts  or  other  similar

                                    -- 23 --
<PAGE>
assets.  Until  proceeds  from a securitization transaction are used to pay down
outstanding  advances,  as  principal  payments  are  received  on  the  finance
contracts the principal amount of the advances may be paid down incrementally or
reinvested  in  additional  finance  contracts  on  a  revolving  basis.

     Term  Financing  Facilities.  In January 1998, the Company privately placed
with  BancBoston  Investments,  Inc.  ("BancBoston")  $7,500,000  in  aggregate
principal  amount of its 15% Senior Subordinated Convertible Notes due 2001 (the
"Subordinated Notes"). At September 30, 1999 the Company did not meet certain of
its financial covenants on the Subordinated Notes, which constitutes an event of
default  on  the  Subordinated  Notes.  The  ability of the Company to meet such
covenants  is  dependent  upon  future  earnings.  The  Company did not make the
interest  payment  due  on its Subordinated Notes on November 1, 1999. On August
20,  1999  BancBoston  demanded  immediate  payment  in  full  of  all  amounts
outstanding under the Subordinated Notes. Thereafter BancBoston sued the Company
for  such  payment.  A  settlement  of this suit  is currently being negotiated.

     On  June  9,  1998,  the Company sold to Dynex at par $3 million of its 12%
Convertible  Senior  Notes  due 2003 (the "Senior Notes"). Dynex claims that the
Senior  Notes  are  now in default due, among other things, to the impairment of
the Stock Option, an assertion which the Company disputes.  To date, the Company
has  made  all  interest  payments  due  on  the  Senior  Notes.

     On  June 9, 1998, William O. Winsauer, Chief Executive Officer and Chairman
of  the  Board  of  Directors  of  the Company (the "Board"), Adrian Katz, Chief
Operating  Officer,  Chief  Financial Officer and Vice Chairman of the Board and
John  S.  Winsauer,  Secretary  and  a  member  or  the Board (collectively, the
"Shareholders"),  entered  into  a  Stock  Option  Agreement  (the "Stock Option
Agreement")  with Dynex Holding, Inc. ("Dynex Holding") wherein the Shareholders
granted  to Dynex Holding an option (the "Option") to purchase all of the shares
of  the  Company's  common stock owned by the Shareholders (approximately 85% of
the  Company's  current outstanding common stock) at a price of $6.00 per share.
As  a  result  of  the termination by Dynex of its obligations under the Funding
Agreement,  the  Shareholders have terminated the Option granted under the Stock
Option  Agreement.  See  Part  II,  Item  1-"Legal  Proceedings".


     Securitization  Program.

     In  June 1999, Moody's reaffirmed its ratings on the senior certificates in
the  Company's  outstanding  rated  securitizations  as  follows:
<TABLE>
<CAPTION>
------------------------------------------------------  ------
                       SECURITY                         RATING
------------------------------------------------------  ------
<C>                                                     <S>

26,261,009  7.23% Class A Certificates, Series 1995-A  B3

16,563,366  7.15% Class A Certificates, Series 1996-A  Caa2
17,832,885  7.73% Class A Certificates, Series 1996-B  Caa2
22,296,719  7.45% Class A Certificates, Series 1996-C  Caa2
25,000,000  7.37% Class A Certificates, Series 1996-D  Caa2

25,794,194  7.78% Class A Certificates, Series 1997-A  B3
</TABLE>


     Whole  Loan  Sales.  On  July  16,  1999, the Company sold 490 loans with a
principal  balance  of  $5,960,346  to  Crescent  Bank at 84% of the outstanding
principal  balance.  Such  loans were written down to market value prior to June
30,  1999  by  a  charge  to  other  operating  expenses. The purchase price was
$5,006,690.  The  Company  received  proceeds of $4,956,624 after deducting a 1%
commission  of  $50,066.

     The  Company  expects  to sell additional loans with a principal balance of
approximately  $450,000  at 70% of the outstanding principal balance. Such loans
were  written  down  to  market value prior to September 30, 1999 by a charge to
other  operating  expenses.

     Preferred  Stock.  Because the Company is not in compliance with certain of
the  financial covenants relating to its Subordinated Notes, the Company did not
pay  the  quarterly  dividend  on  its  Preferred  Stock

                                    -- 24 --
<PAGE>
otherwise  payable  on  each  of March 31, 1999, June 30, 1999 and September 30,
1999.  As  dividends  on  the  Preferred  Stock are in arrears for two quarterly
dividend  periods,  holders of the Preferred Stock have exercised their right to
call  a  special  meeting  of  the  Preferred  Stock  holders for the purpose of
electing  two  additional  directors  to serve on the Company's Board until such
dividend  arrearage  is  eliminated.  Such  meeting was held on October 1, 1999;
however,  because  a  quorum of preferred shareholders did not attend or provide
proxies for the meeting, no additional directors were elected. See Part II, Item
3-"Submission  of  Matters  to a Vote of Security Holders". In addition, certain
changes  that  could materially affect the holders of Preferred Stock, such as a
merger  of  the  Company,  cannot  be  made  without the affirmative vote of the
holders  of  two-thirds  of  the shares of Preferred Stock, voting as a separate
class.  The Preferred Stock ranks senior to the Common Stock with respect to the
payment  of  dividends  and amounts upon liquidation, dissolution or winding up.

IMPACT  OF  INFLATION  AND  CHANGING  PRICES

     Because  the  Company  is  not  currently  originating or selling loans and
because  the  Company's  finance  contracts  and  borrowing  are  fixed  rate
instruments, the Company does not believe that inflation and changing prices has
a  material  effect  on  its  financial  condition  or  results  of  operations.

IMPACT  OF  NEW  ACCOUNTING  PRONOUNCEMENTS

     In June 1998, the Financial Accounting Standards Board ("FASB") issued SFAS
No.  133,  "Accounting for Derivative Instruments and Hedging Activities" ("SFAS
No.  133").  SFAS  No.  133 requires than an entity recognize all derivatives as
either  assets  or  liabilities  in  its balance sheet and that it measure those
instruments  at  fair  value.  The accounting for changes in the fair value of a
derivative (that is, gains and losses) is dependent upon the intended use of the
derivative  and  the resulting designation.  SFAS No. 133 generally provides for
matching  the  timing of gain or loss recognition on the hedging instrument with
the  recognition  of  (i)  the  changes in the fair value of the hedged asset or
liability  that  are attributable to the hedged risk or (ii) the earnings effect
of  the  hedged  forecast transaction.  SFAS No. 133 is effective for all fiscal
quarters  of  fiscal  years  beginning after June 15, 2000, as amended, although
earlier  application  is  encouraged.  The  Company  plans  to  comply  with the
provisions  of  SFAS No. 133 upon its initial use of derivative instruments.  As
of  September  30, 1999, no such instruments were being utilized by the Company.
The  Company  does  not  believe  the implementation of SFAS No. 133 will have a
material  effect  on  its  consolidated  financial  statements.

YEAR  2000  COMPLIANCE

     The  Year 2000 issue is the result of computer programs being written using
two  digits  rather  than  four to define the applicable year. Computer programs
containing  date-sensitive  code  could  recognize a date ending with the digits
"00"  as  the year 1900 instead of the year 2000.  This could result in a system
failure  or  in  miscalculations  causing  disruptions of operations, including,
among  other  things,  a  temporary  inability  to  process  transactions,  send
invoices,  or  engage  in  similar  normal  activities.

     As  a specialty consumer finance company, the Company substantially depends
on  its  computer systems and proprietary software applications in underwriting,
acquiring,  servicing  and  securitizing  finance  contracts.  As  a  result  of
initiatives  undertaken  in the development of its proprietary software systems,
all of the Company's systems and software applications have been designed around
a  'pivot'  year,  which  effectively renders the transition to the year 2000 as
innocuous  as  any year change. The efficacy of certain of the Company's systems
and  software  applications  in  handling Year 2000 issues has been demonstrated
repeatedly  in  the system's ability to calculate payments streams accurately on
finance  contracts  with  maturity  dates  that extend beyond December 31, 1999.
Based  on  its review of the likely impact of the Year 2000 on its business, the
Company  believes  that  it is working constructively toward making its critical
and  operational  applications  Year  2000  compliant.

     Nevertheless,  the  Company  may  be exposed to the risk that other service
providers may not be in compliance.  While the Company does not foresee that the
Year  2000  will  pose  significant  operational  problems,  the  failure of its
vendors, customers or financial institutions to become Year 2000 compliant could
have  a  material  adverse effect on the Company's business, financial condition
and  results  of  operations.  To  date,  the  Company  has  not  formulated any
contingency  plans  to  address  such  consequences.

                                    -- 25 --
<PAGE>

QUANTITATIVE  AND  QUALITATIVE  DISCLOSURES  ABOUT  MARKET  RISK

     Market  risk generally represents the risk of loss that may result from the
potential  change  in  the  value  of  a  financial  instrument  as  a result of
fluctuations in interest and currency exchange rates and in equity and commodity
prices.  Market risk is inherent to both derivative and non-derivative financial
instruments.  The Company's market risk management procedures include all market
risk  sensitive  financial instruments.  The Company has no derivative financial
instruments,  exposure  to  currency  exchange  rates  or  commodity  prices.

     All of the Company's debt is fixed rate and the Company's earnings and cash
flows from retained interests in securitization and finance contracts, which are
at fixed rates, are not impacted by changes in market interest rates. Changes in
the market value of its finance contracts and retained interests may increase or
decrease  due  to  pre-payments  and  defaults  influenced  by changes in market
conditions  and  the  borrowers'  financial  condition.

RISKS  ASSOCIATED  WITH  FORWARD  LOOKING  STATEMENTS

     The statements contained in this document that are not historical facts are
forward  looking  statements.  Actual results may differ from those projected in
the  forward  looking statements. These forward looking statements involve risks
and  uncertainties,  including  but  not  limited  to  the  following  risks and
uncertainties:  changes  in  the  performance  of  the financial markets, in the
demand  for and market acceptance of the Company's loan products, and in general
economic  conditions, including interest rates, the presence of competitors with
greater  financial resources and the impact of competitive products and pricing;
the  effect  of  the  Company's  policies; and the continued availability to the
Company  of adequate funding sources. Investors also are directed to other risks
discussed  in  documents  filed  by  the  Company  with  the  SEC.

                                    -- 26 --
<PAGE>


                         PART II.  OTHER INFORMATION


ITEM  1.  LEGAL  PROCEEDINGS

     In the normal course of its business, the Company is from time to time made
a  party  to  litigation  involving consumer-law claims.  These claims typically
allege  improprieties on the part of the originating dealer and name the Company
and/or  its  assignees as subsequent holders of the finance contracts.  To date,
none  of  these actions have resulted in the payment of damages or any judgments
therefor,  by  the Company or its assignees, nor have any actions been certified
as  eligible  for  class-action  status.

     On  February 8, 1999, the Company, AutoBond Master Funding Corporation V, a
wholly-owned  subsidiary  of  the  Company  ("Master  Funding  V"),  William  O.
Winsauer,  the  Chairman  and  Chief  Executive  Officer of the Company, John S.
Winsauer,  a  Director  and  the  Secretary of the Company, and Adrian Katz, the
Vice-Chairman,  Chief  Financial  Officer  and  Chief  Operating  Officer of the
Company  (collectively,  the  "Plaintiffs")  commenced an action in the District
Court  of Travis County, Texas (250th Judicial District) against Dynex and James
Dolph  (collectively, the "Defendants").  This action is hereinafter referred to
as the "Texas Action".  The Company and the other Plaintiffs assert in the Texas
Action  that  Dynex  breached  the terms of the Funding Agreement. Such breaches
include delays and shortfalls in funding the advances required under the Funding
Agreement and ultimately the refusal by Dynex to fund any further advances under
the  Funding  Agreement.  Plaintiffs  also  allege  that  Dynex  and  Mr.  Dolph
conspired  to misrepresent and mischaracterize the Company's credit underwriting
criteria and its compliance with such criteria with the intention of interfering
with  and  causing actual damage to the Company's business, prospective business
and  contracts.  The  Plaintiffs  assert that Dynex' funding delays and ultimate
breach  of  the  Funding  Agreement  were  intended  to  force the Plaintiffs to
renegotiate  the  terms  of  their  various  agreements  with  Dynex and related
entities.  Specifically,  the Plaintiffs assert that Dynex intended to force the
Company to accept something less than Dynex' full performance of its obligations
under  the  Funding Agreement.  Further, Dynex intended to force the controlling
shareholders of the Company to agree to sell their stock in the Company to Dynex
or  an  affiliate  at a share price substantially lower than the $6.00 per share
price  specified in the Stock Option Agreement, dated as of June 9, 1998, by and
among  Messrs.  William  O.  Winsauer,  John  S.  Winsauer  and  Adrian  Katz
(collectively,  the  "Shareholders")  and Dynex Holding, Inc.  Plaintiffs in the
Texas Action request declaratory judgement that (i) Dynex has breached and is in
breach  of  its  various  agreements  and  contracts  with  the Plaintiffs, (ii)
Plaintiffs  have  not  and  are  not  in  breach of their various agreements and
contracts  with  Defendants,  (iii) neither the Company nor Master Funding V has
substantially  or materially violated or breached any representation or warranty
made to Dynex, including but not limited to the representation and warranty that
all  or  substantially  all  finance  contracts  funded or to be funded by Dynex
comply  in  full with, and have been acquired by the Company in accordance with,
the  Company's  customary underwriting guidelines and procedures; and (iv) Dynex
is  obligated  to  fund the Company in a prompt and timely manner as required by
the  parties' various agreements.  In addition to actual, punitive and exemplary
damages.  The  Texas  Action  has been set for trial on January 24, 2000. Dynex'
motion  to  dismiss  the  Texas  Action  was  denied  by  the  court.

     On  March  1, 1999, the Plaintiffs filed an application in the Texas Action
for  a  temporary  injunction  enjoining Dynex (i) from continuing to suspend or
withhold  funding  pursuant  to  the  Funding  Agreement,  (ii) from removing or
attempting  to remove the Company as servicer, and (iii) from making any further
false  or  defamatory  public statements regarding the Plaintiffs. On August 26,
1999  the  court denied the Company's application on points (i) , (ii) and (iii)
while granting Dynex' request for a temporary injunction removing the Company as
servicer.  Following the posting by Dynex of a bond in the amount of $1,000,000,
the  Company  surrendered  servicing  on  those  contracts  financed  by  Dynex.

     On  February  9, 1999, Dynex commenced an action against the Company in the
United  States  District  Court  for  the Eastern District of Virginia (Richmond
District)  (the  "Virginia Action") seeking declaratory relief that Dynex is (i)
not  obligated  to advance funds to Master Funding V under the Funding Agreement
because  the  conditions  to funding set forth in the Funding Agreement have not
been  met, and (ii) entitled to access to all books, records and other documents
of  Master Funding V, including all finance contract files.  Specifically, Dynex
alleges  that  as  a  result of a partial inspection of certain finance contract
files  by  Mr.  Dolph  and  Virgil  Baker  &  Associates  in January 1999, Dynex
concluded  that  a  significant  number  of  such  contracts  contained material
deviations  from  the  applicable  credit  criteria  and procedures, an apparent

                                    -- 27 --
<PAGE>
breach  of  the Funding Agreement.  Dynex also alleges that on February 8, 1999,
the Company refused to permit Mr. Dolph and representatives from Dynex access to
the  books,  records and finance contract files of the Company.  Dynex concludes
that  as  a  result  of  such  alleged  breaches, it is not obligated to provide
advances  under  the  Funding  Agreement.  Dynex  also  seeks to recover damages
resulting  from the Company's alleged breach of the parties' various agreements,
which  alleged  breach  the  Company  vigorously  denies.  The  Company, Messrs.
William  O.  Winsauer,  John  S.  Winsauer  and  Adrian  Katz filed a responsive
pleading  on  March  25,  1999.  The  Virginia  Action  (including  the  matters
transferred  in the New York Action (discussed below)), by a judge's order dated
May  19,  1999,  was  transferred  to  Texas  federal  court.

     On  February  22,  1999,  the same day that Dynex notified the Company of a
purported  servicing termination, Dynex filed another action against the Company
in  the  United States District Court for the Southern District of New York (the
"New  York  Action"),  seeking  damages  and injunctive relief for the Company's
alleged  breaches  under  the  servicing  agreement among the Company, Dynex and
Master  Funding  V.  The  Company  was not notified of the New York Action until
March  1,  1999,  when  Dynex  sought  a temporary restraining order against the
Company.  After  hearing  argument  from  counsel  for both sides, the temporary
restraining  order  was  denied.  On  March  23, 1999, the court issued an order
transferring the action to the Federal District Court in the Eastern District of
Virginia  without  prejudice.

     On  August  31, 1999 the court ordered servicing to be transferred from the
Company  to  a  third  party  servicer.  The  Company  will  continue to receive
servicing fees on the loans through September 30, 1999. Discovery is ongoing and
trial  is  set  for  January  24,  2000.

     In  March  1998,  after  Progressive  Northern  Insurance  ("Progressive")
purported  to cancel the vendor's single interest ("VSI") and deficiency balance
insurance  policies  issued  in  favor  of  the  Company  (collectively,  the
"Policies"),  the  Company  sued  Progressive,  its  affiliate  United Financial
Casualty  Co.  and  their  agent in Texas, Technical Risks, Inc. in the District
Court  of  Harris  County, Texas. The action seeks declaratory relief confirming
the Company's interpretation of the Policies as well as claims for damages based
upon  breach  of  contract,  bad  faith  and fraud. The Company has received the
defendants'  answers, denying the Company's claims, and discovery is proceeding.
Progressive stopped paying claims during the second quarter of 1998. As a result
of the attempt by Progressive to cancel its obligations and its refusal to honor
claims  after  March  1998,  the  Company  has  suffered  a  variety of damages,
including  impairment  of its retained interests in securitizations. The Company
is  vigorously  contesting  the  legitimacy  of  Progressive's  actions  through
litigation.  Although  a  favorable  outcome  cannot  be assured, success in the
litigation  could  restore at least some of the value of the Company's interests
in  such securitizations.  Conversely, if the court were to uphold Progressive's
position,  further  impairment of the Company's interests could occur, resulting
in  an adverse effect on the Company's financial position, results of operations
and  cash  flows.  This  matter  is  currently set for trial during the month of
November,  1999.

     Also  in  March  1998,  the  Company  commenced an action in Travis County,
Texas,  against  Loan  Servicing  Enterprise ("LSE"), alleging LSE's contractual
breach of its servicing obligations on a continuing basis.  LSE has commenced an
action  against  the  Company  in  Texas  state  court seeking recovery from the
Company  of  putative  termination fees in connection with termination of LSE as
servicer.  The  Company  expects  the  two  actions  to be consolidated.  If the
Company  prevails  against  LSE,  some  of  the  value of the Company's retained
interests in securitizations could be restored. Both suits have been voluntarily
suspended  pursuant  to  an  agreement  negotiated  by  the  parties.

     As  a  consequence of the Company's efforts to reduce expenses, the Company
contacted Norwest Bank, National Association, ("Norwest") and initiated dialogue
to voluntarily transfer servicing on several of its outstanding securitizations.
As  part  of its voluntary process the Company wanted to receive all appropriate
fees  and  expenses  due to it in its capacity as servicer. Negotiations to that
end  were  underway when on October 21, 1999, Norwest in its capacity as trustee
of  the  four  securitization  trusts  sponsored by the Company during 1996 (the
"1996 Trusts"), commenced an action against the Company in the District Court of
Travis  County, Texas (126th Judicial District) (the "Norwest Action"). Norwest,
as  trustee,  alleged  that  the  Company  had breached the terms of its various
agreements  among  the  Company, each of the 1996 Trusts and Norwest relating to
the  Company's  role  as  servicer,  administrator  and  collection  agent.
Specifically,  Norwest alleged that the Company failed to cooperate fully in the
transfer  of  servicing,  administration,  and  collection responsibilities to a
successor  servicer.  Norwest  sought  injunctive  relief

                                    -- 28 --
<PAGE>
requiring  the Company to (i) cease all servicing, administration and collection
activities with respect to the 1996 Trusts, (ii) turn over all records and files
relating  to  the  1996  Trusts and the finance contracts pledged thereto to the
successor  servicer  and  (iii) notify all obligors under the individual finance
contracts  pledged  to  the 1996 Trusts that effective immediately, all payments
and  inquiries  regarding  the  finance  contracts  should  be  directed  to the
successor  servicer  and  not  to  the  Company. Thereafter, the Company reached
agreement  with Norwest as to the voluntary transfer of servicing under the 1996
Trusts,  and  an  agreement  with respect to the appropriate payment of fees and
expenses  to  the  Company  by  Norwest.

     A  suit naming the Company and William O. Winsauer, Adrian Katz and John S.
Winsauer  (in  their  capacities  as controlling shareholders of the Company) as
defendants  (the "Defendants") was filed in the United States District Court for
the  Western  District  of  Texas  (Austin  Division)  by  Bruce  Willis  (the
"Plaintiff"),  a  holder  of  the  Company's Preferred Stock.  The suit alleged,
among other things, that the Defendants violated Section 10(b) of the Securities
and  Exchange  Act of 1934 (and Rule 10b-5 promulgated thereunder) in failing to
disclose  adequately  and  in  causing  misstatements  concerning the nature and
condition  of  the Company's financing sources.  The suit also alleged that such
actions  constituted  statutory  fraud under the Texas Business Corporation Act,
common law fraud and negligent misrepresentation.  On August 17, 1999, the court
dismissed  the  federal  securities  laws  claims  with  prejudice and dismissed
certain  state  law  claims  without  prejudice  to  refile  in  state  court.

                                    -- 29 --
<PAGE>


ITEM  2.  CHANGES  IN  SECURITIES  AND  USE  OF  PROCEEDS

     None

ITEM  3.  DEFAULTS  UPON  SENIOR  SECURITIES

     At  September  30,  1999  the Company did not meet certain of its financial
covenants,  which  failure  constitutes  an event of default on the Subordinated
Notes.  The  ability  of  the  company  to meet such covenants is dependent upon
future  earnings.  The  Company did not make the interest  payments due November
1,  1999  on its Subordinated Notes. BancBoston has not formally accelerated the
Subordinated  Notes,  however  if  such acceleration were made, BancBoston could
declare  such  amounts  immediately  due.

     Dynex  has  purportedly  accelerated  all amounts due under the Senior Note
Agreement dated June 9, 1998, by and between Dynex and the Company.  The Company
disputes  such  purported  acceleration.

      Because  the  Company  is  not in compliance with certain of the financial
covenants  relating  to  its  Subordinated  Notes,  the  Company did not pay the
quarterly dividend on its Preferred Stock otherwise payable on each of March 31,
1999,  June 30, 1999 and September 30, 1999.  Because dividends on the Preferred
Stock  are  in  arrears  for  two  quarterly  dividend  periods,  holders of the
Preferred Stock exercised their right to call a special meeting of the Preferred
Stock  holders  for the purpose of electing two additional directors to serve on
the  Company's  Board  until such dividend arrearage is eliminated. Such meeting
was held on October 1, 1999; however, because a quorum of preferred shareholders
did  not attend or provide proxies for the meeting, no additional directors were
elected.  See  Part  II,  Item  3-  "Submission of Matters to a Vote of Security
Holders".  In addition, certain changes that could materially affect the holders
of  Preferred Stock, such as a merger of the Company, cannot be made without the
affirmative  vote of the holders of two-thirds of the shares of Preferred Stock,
voting  as  a  separate  class.  The  Preferred Stock ranks senior to the Common
Stock  with  respect  to  the payment of dividends and amounts upon liquidation,
dissolution  or  winding  up.

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

On  July 13, 1999, the Company's Board of Directors approved an amendment to the
Company's  by-laws, increasing the maximum number of directors to nine, in order
to  accommodate  the  right  of  the holders of the Company's Preferred Stock to
designate  two  additional  directors,  for  so  long  as two quarterly dividend
payments  on  such  Preferred Stock remain unpaid. As of September 30, 1999, the
Company had not paid quarterly dividends due on each of March 31, 1999, June 30,
1999  and  September  30,  1999.

A special meeting of the Company's preferred shareholders was held on October 1,
1999  at the Company's headquarters in Austin, Texas. Of the 1,125,000 shares of
preferred stock outstanding, less than 50% of such shares were present in person
in  the  meeting.  Because  the  number  of  shares  voted  was  insufficient to
constitute a quorum, no additional directors were elected to the Company's Board
at  the  Special  Meeting.

ITEM  5.  OTHER  INFORMATION

     On  August  10, 1999, the Company received notice from NASDAQ-AMEX that the
Company may have fallen below certain of the AMEX' continued listing guidelines.
Thereafter,  NASDAQ-AMEX took steps to delist the Company's common and preferred
shares.  The last day that the Company's common and preferred shares were traded
on  NASDAQ-AMEX  was  October  5,  1999.

     On  September  3, 1999, the Company announced that Adrian Katz had informed
the  Company  of  his intent to resign as Vice-Chairman, Chief Operating Officer
and  Chief  Financial  Officer  on  or  before  December  31,  1999.

                                    -- 30 --
<PAGE>


ITEM  6.  EXHIBITS  AND  REPORTS  ON  FORM  8-K

<TABLE>
<CAPTION>


(A)     EXHIBITS


                                EXHIBIT NO.     DESCRIPTION OF EXHIBIT
                                -----------     ----------------------

<C>        <S>

  3.1 (1)  Restated Articles of Incorporation of the Company
  3.2 (1)  Amended and Restated Bylaws of the Company
  4.1 (1)  Specimen Common Stock Certificate
 10.1 (1)  Amended and Restated Loan Origination, Sale and Contribution Agreement dated as of
           December 15, 1995 by and between the Company and AutoBond Funding Corporation I
 10.2 (1)  Security Agreement dated as of May 21, 1996 among AutoBond Funding Corporation II,
           the Company and Norwest Bank Minnesota, National Association
 10.3 (1)  Credit Agreement and Side Agreement, dated as of May 21, 1996 among AutoBond
           Funding Corporation II, the Company and Peoples Life Insurance Company
 10.4 (1)  Servicing  Agreement dated as of May 21, 1996 among AutoBond Funding Corporation II,
           CSC Logic/MSA L.L.P., doing business  as "Loan  Servicing  Enterprise", the Company
           and Norwest Bank Minnesota, National Association
 10.5 (1)  Loan Acquisition Sale and Contribution Agreement dated as of May 21, 1996 by and
           between the Company and AutoBond Funding Corporation II
 10.6 (1)  Second Amended and Restated Secured Revolving Credit Agreement dated as of July 31,
           1995 between Sentry Financial Corporation and the Company
 10.7 (1)  Management Administration and Services Agreement dated as of January 1, 1996 between
           the Company and AutoBond, Inc.
 10.8 (1)  Employment Agreement dated November 15, 1995 between Adrian Katz and the Company
 10.9 (1)  Employment Agreement effective as of May 1, 1996 between William O. Winsauer and the
           Company
10.10 (1)  Vendor's Comprehensive Single Interest Insurance Policy and Endorsements, issued by
           Interstate Fire & Casualty Company
10.11 (1)  Warrant to Purchase Common Stock of the Company dated March 12, 1996
10.12 (1)  Employee Stock Option Plan
10.13 (1)  Dealer Agreement dated November 9, 1994, between the Company and Charlie Thomas
           Ford, Inc.
10.14 (1)  Automobile Loan Sale Agreement, dated as of September 30, 1996, among the Company,
           First Fidelity Acceptance Corp., and Greenwich Capital Financial Products, Inc.
10.15 (2)  Servicing Agreement, dated as of January 29, 1997, between CSC LOGIC/MSA L.L.P.,
           doing business as "Loan Servicing Enterprise" and the Company
10.16 (2)  Credit Agreement, dated as of February 1, 1997, among AutoBond Funding Corporation II,
           the Company and Daiwa Finance Corporation
10.17 (2)  Security Agreement, dated as of February 1, 1997, by and among AutoBond Funding
           Corporation II, the Company and Norwest Bank Minnesota, National Association
10.18 (2)  Automobile Loan Sale Agreement, dated as of March 19, 1997, by and between Credit
           Suisse First Boston Mortgage Capital L.L.C., a Delaware limited liability company, and the
           Company
10.19 (3)  Automobile Loan Sale Agreement, dated as of March 26, 1997, by and between Credit
           Suisse First Boston Mortgage Capital L.L.C., a Delaware limited liability company, and the
           Company
10.20 (4)  Credit Agreement, dated as of June 30, 1997, by and among AutoBond Master Funding
           Corporation, the Company and Daiwa Finance Corporation
10.21 (4)  Amended and Restated Trust Indenture, dated as of June 30, 1997, among AutoBond
           Master Funding Corporation, the Company and Norwest Bank
           Minnesota, National Association.
10.22 (4)  Securities Purchase Agreement, dated as of June 30, 1997, by and among the Company,
           Lion Capital Partners, L.P. and Infinity Emerging Opportunities Limited.
10.23 (6)  Credit Agreement, dated as of December 31, 1997, by and among AutoBond Master Funding
           Corporation II, the Company and Credit Suisse First Boston Mortgage Capital  L.L.P
10.24 (6)  Trust Indenture, dated as of December 31, 1997, among AutoBond Master Funding
           Corporation II, the Company and Manufacturers and Traders Trust Company
10.25 (6)  Receivables Purchase Agreement, dated as of December 31, 1997, between Credit Suisse
           First Boston Mortgage Capital L.L.P and the Company
10.26 (6)  Servicing Agreement, dated as of December 31, 1997, among the Company, AutoBond
           Master Funding Corporation II and Manufacturers and Traders Trust Company
10.27 (6)  Indenture and Note, dated January 30, 1998, between the Company and BankBoston, N.A.
10.28 (6)  Warrant, dated January 30, 1998, issued to BancBoston Investments, Inc.
10.29 (6)  Purchase Agreement, dated January 30, 1998, between the Company and BancBoston
           Investments, Inc.
10.30 (5)  Warrant, dated February 2, 1998, issued to Dresner Investments Services, Inc.
10.31 (5)  Warrant Agreement, dated February 2, 1998, issued to Tejas Securities Group, Inc.
10.32 (5)  Consulting and Employment Agreement, dated as of January 1, 1998 between Manuel A.
           Gonzalez and the Company
10.33 (5)  Severance Agreement, dated as of February 1, 1998 between Manuel A. Gonzalez and the
           Company
10.34 (7)  1998 Stock Option Plan
10.35 (7)  Third Amendment to the Secured Revolving Credit Agreement dated May 5, 1998 between
           Sentry Financial Corporation and the Company
10.36 (7)  Warrant, dated March 31, 1998, issued to Infinity Investors Limited
10.37 (7)  Credit Agreement, dated as of June 9, 1998, by and among AutoBond Master Funding
           Corporation V, the Company, and Dynex Capital, Inc.
10.38 (8)  Servicing Agreement, dated as of June 9, 1998, by and among AutoBond Master Funding
           Corporation V, the Company, and Dynex Capital, Inc.
10.39 (8)  Trust Indenture, dated as of June 9, 1998, by and among AutoBond Master Funding
           Corporation V, the Company and Dynex Capital, Inc.
10.40 (9)  Letter Agreement, dated June 30, 1998 by and between the Company and Dynex Capital,
           Inc.
10.41 (9)  Letter Agreement dated October 20, 1998 by and between the Company and Dynex Capital,
           Inc.
10.42 (9)  Letter Agreement dated October 28, 1998 by and between the Company, Dynex Holding,
           Inc., and Dynex Capital, Inc.
 21.1 (4)  Subsidiaries of the Company
 21.2 (6)  Additional Subsidiaries of the Company
21.3 (10)  Additional Subsidiaries of the Company
    27.1   Financial Data Schedule
---------
<FN>

1  Incorporated  by  reference  to the Company's Registration Statement on Form S-1 (Registration No.
   333-05359).
2  Incorporated  by  reference  to  the  Company's 1996 annual report on Form 10-K for the year ended
   December  31,  1996.
3  Incorporated  by  reference  to  the Company's quarterly report on Form 10-Q for the quarter ended
   March  31,  1997.
4  Incorporated by reference to the Company's quarterly report on Form 10-Q for the quarter ended June
   30,  1997.
5  Incorporated  by  reference  to  the  Company's 1997 annual report on Form 10-K for the year ended
   December  31,  1997.
6  Incorporated  by reference from the Company's Registration Statement on Form S-1 (Registration No.
   333-41257).
7  Incorporated  by  reference  to  the Company's quarterly report on Form 10-Q for the quarter ended
   March  31,  1998.
8  Incorporated  by  reference  to  the  Company's  report  on  Form  8-K  filed  on  June  24, 1998.
9  Incorporated  by  reference  to  the Company's quarterly report on form 10-Q for the quarter ended
   September  30,  1998.
10 Incorporated  by  reference  to  the Company's 1998 annual report on Form 10-K for the year ended
   December  31,  1998.
-----------------------------------------------------------------------------------------------------
</TABLE>



(B)     Reports  of  Form  8-K

     None.


                                    -- 31 --
<PAGE>


SIGNATURES


Pursuant  to  the  requirements  of  the  Securities  Exchange  Act of 1934, the
registrant  has  duly  caused  this  report  to  be  signed on its behalf by the
undersigned  thereunto  duly  authorized  on  November  12,  1999.


                         AUTOBOND ACCEPTANCE CORPORATION
                         -------------------------------


                                          BY:__/S/ WILLIAM O. WINSAUER
                                            ------------------------------------

                                      WILLIAM O. WINSAUER, CHAIRMAN OF THE BOARD
                                                     AND CHIEF EXECUTIVE OFFICER

                                    BY:__/S/ ADRIAN KATZ
                                      ------------------------------------------

                                        ADRIAN KATZ, VICE CHAIRMAN OF THE BOARD,
                                                     CHIEF OPERATING OFFICER AND
                                                         CHIEF FINANCIAL OFFICER

                                    -- 32 --
<PAGE>