EMPLOYMENT AGREEMENT





      EMPLOYMENT AGREEMENT, dated as of October 9, 1999 (the "Original Agreement

Date"), amended as of May 19, 2000 and again as of July 27, 2000, and

subsequently amended and restated as of October 1, 2000, by and between Wilshire

Real Estate Investment Inc. and Wilshire Real Estate Partnership L.P.

(collectively and individually, the "Company"), with its principal office at

1631 SW Columbia Street, Portland, Oregon 97201 and Robert G. Rosen, residing at

3 Vetere Place, Mt. Kisco, New York 10549 (the "Executive").



                              W I T N E S S E T H:

                              - - - - - - - - - --



      WHEREAS, Executive is currently employed as an executive of the Company;

and



                  WHEREAS, the Company and Executive desire to enter into this

agreement (the "Agreement") to set forth terms of Executive's employment by the

Company, as such terms are amended as of the amendment and restatement date set

forth above.



                  NOW, THEREFORE, in consideration of the premises and mutual

covenants contained herein and for other good and valuable consideration, the

parties agree as follows:



                  1. TERM OF EMPLOYMENT. Executive's employment under this

Agreement (prior to its Amendment and restatement) commenced on October 9, 1999.

Except for earlier termination as provided in Section 7 hereof, Executive's

employment under this Agreement (as amended and restated) shall be for a three

(3) year term (the "Employment Term") commencing on October 1, 2000 (the

"Commencement Date"). Subject to Section 7 hereof, the Employment Term shall be

automatically extended for additional terms of successive two (2) year periods

unless the Company or Executive gives written notice of the termination of

Executive's employment hereunder at least thirty (30) days prior to the

expiration of the then current Employment Term.



                  2. POSITION. (a) Executive shall serve as an Executive Vice

President of the Company.



                  (b) Executive shall report directly to the Chief Executive

Officer of the Company and shall have such duties and authority, consistent with

his position as shall be determined from time to time by the Chief Executive

Officer.



                  (c) During the Employment Term, Executive shall devote

substantially all of his business time ("Business Time"), energy, skill and

efforts to the performance of his duties and responsibilities hereunder;

provided, however, that Executive shall be allowed to (i) engage in charitable

activities and (ii) manage his personal financial and legal affairs. As of May

19, 2000, Executive shall perform his duties hereunder at the Company's

Portland, Oregon office (the "Portland Office") or the New York Area Office (as

defined below), at the Executive's discretion; provided, however, that Executive

shall spend at least fifty percent (50%) of his Business Time in





<PAGE>



the Portland Office unless otherwise agreed to in writing by the Company. So

long as the Company maintains its current Greenwich, Connecticut office (the

"New York Area Office"), the Company shall provide Executive with private office

space in such office to be used by Executive when working from the New York Area

Office. Such office shall be provided to Executive, beginning not later than

July 1, 2000, as is, with existing furniture, telephone and data setup and shall

remain on a month-to-month lease. Notwithstanding the foregoing, Executive, with

the Company's prior written authorization (which authorization shall be at the

sole and absolute discretion of the Company), may move the New York Area Office

to the New York City area; provided, that, the total monthly cost for operating

such office (including, but not limited to, rent and utilities, but excluding,

Bloomberg and other similar systems to which Executive has access to in the

Portland Office and which are readily transportable) shall not exceed $4,000."



                  3. SIGNING BONUS AND BASE SALARY. (a) As of the Original

Agreement Date, and subject to the execution of a release and settlement

agreement between Wilshire Financial Services Group Inc. ("WFSG") and Executive

acceptable to WFSG, the Company agreed to immediately pay to Executive a signing

bonus of $300,000, net of any withholding taxes. In addition, in the event that

the Company, through any material efforts of Executive, sells, or receives bona

fide bids for, the mortgage-backed securities set forth on Exhibit 1 hereto (the

"Mortgage-Backed Securities") by December 31, 1999 for a price which results, or

would have resulted, in a net pre-tax profit of $1.5 million, the Company agreed

to pay to Executive an additional signing bonus of $200,000, net of any

withholding taxes, immediately upon completion of such sales or receipt of such

bids (the "Additional Signing Bonus"). In the event such sales result in (or

such bids would have resulted in) a net pre-tax profit of less than $1.5

million, such additional signing bonus shall be pro-rated accordingly. The net

pre-tax profit referred to above will be calculated using the following

methodology: The net pre-tax profit shall be the sales price (net of expenses)

received by the Company for the Mortgage-Backed Securities (or if the Company

decides not to sell, the sales price it would have received for the

Mortgage-Backed Securities based on the bona fide bids received by the Company)

less the lower of (a) $16 million less (i) any cash received by the Company in

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