SECURITIES AND EXCHANGE COMMISSION

                              Washington, DC 20549
                             ----------------------

                                    FORM 8-K

                                 CURRENT REPORT
                     PURSUANT TO SECTION 13 OR 15(D) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported) December 13, 1999.

                  Wilshire Real Estate Investment Inc.
         (Exact name of registrant as specified in its charter)


        Maryland                   0-23911               52-2081138
State or other jurisdiction        (Commission           (IRS Employer
       of incorporation)           File Number)          Identification No.)

                     1310 SW 17th Street, Portland, OR 97201
              (Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code (503) 721-6500








Item 5.  Other Events.

    Wilshire Real Estate Investment Inc. (the "Company"), on behalf of itself
and all of its subsidiaries and affiliates, Andrew A. Wiederhorn and Lawrence A.
Mendelsohn entered into a partial settlement agreement, dated as of December 10,
1999 with Wilshire Financial Services Group ("WFSG"), on behalf of all of its
subsidiaries and affiliates, other than First Bank of Beverly Hills, F.S.B. (the
"Agreement"). Under the terms of the Agreement, the Company repurchased 992,587
shares of its common stock (the "Shares"), representing approximately 8.7% of
shares outstanding, in a non-cash transaction from WFSG. The Shares, as well as
1,112,500 of options and cumulative dividends payable on the Shares, were
received in exchange for a reduction in value of a pay-in-kind ("PIK") note owed
by WFSG to the Company. The Shares and options represented WFSG's entire
position in the Company.

Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.

(c) Exhibits

    The following exhibits are filed as part of this report:

        99.1 Settlement Agreement, dated as of December 10, 1999 by and between
Wilshire Real Estate Investment Inc., on behalf of itself and all of its
subsidiaries and affiliates, Andrew A. Wiederhorn, and Lawrence A. Mendelsohn,
and Wilshire Financial Services Group Inc., on behalf of itself and all of its
subsidiaries and affiliates, other than First Bank of Beverly Hills, F.S.B.











                               SIGNATURES


      Pursuant to the requirements of the Securities Exchange Act of 1934,
Wilshire Real Estate Investment Inc. has duly caused this report to be signed on
its behalf by the undersigned hereunto duly authorized.

Date:  December 15, 1999

                                    WILSHIRE REAL ESTATE
                                       INVESTMENT INC.

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


                                    By: /s/ Chris Tassos
                                        ------------------------------------
                                          Chris Tassos
                                          Executive Vice President and Chief
                                            Financial Officer










                                                            Exhibit 99.1


                          SETTLEMENT AGREEMENT
                          --------------------

      This Settlement Agreement (this "Agreement") is made as of December 10,
1999 by and between Wilshire Real Estate Investment Inc., a Maryland
corporation, on behalf of itself and all of its subsidiaries and affiliates
("WREI"), Andrew A. Wiederhorn, Lawrence A. Mendelsohn, on the one hand, and
Wilshire Financial Services Group Inc., a Delaware corporation, on behalf of
itself and all of its subsidiaries and affiliates, other than First Bank of
Beverly Hills, F.S.B. ("WFSG"), on the other hand.

                                RECITALS
                                --------

A.      WFSG, by itself and through its subsidiaries, and WREI, by itself and
through its subsidiaries, are and/or have been parties to various agreements
(the interpretation, enforceability or validity of some of which are disputed by
one or more of the parties to this Agreement), including the following:

1.  A Management Agreement (the "Management Agreement") dated as of April 6,
    1998 by and between Wilshire Realty Services Corporation ("WRSC"), a WFSG
    entity, and Wilshire Real Estate Partnership L.P. ("WREP"), a WREI entity (a
    copy of which is attached hereto as Exhibit 1).

2.  A convertible pay-in-kind note (the "Original PIK Note") (a copy of which
    is attached hereto as Exhibit 2) dated June 10, 1999. The Original PIK Note,
    all of the subsequently issued notes issued in discharge of the interest
    obligations thereupon and all accrued but unpaid interest on the Original
    PIK Note and any of such subsequently issued notes are collectively
    hereinafter referred to as the "PIK Notes."

3.  An Agreement dated October 19, 1999 (a copy of which is attached hereto
    as Exhibit 3), as supplemented by a letter dated November 29, 1999 (a copy
    of which is attached hereto as Exhibit 4), providing for the transfer of
    certain mortgage backed securities from WFSG to WREI.

4.  An Agreement dated October 14, 1999 (the "October 14th Agreement") relating
    to the transfer of employees, leasehold interests and certain assets and a
    limited waiver of certain nonsolicitation obligations (a copy of which is
    attached hereto as Exhibit 5).

B.      WFSG currently holds 992,587 shares of the common stock of WREI, and
options to acquire an additional 1,112,500 shares (including options to acquire
35,000 shares held by certain current employees of WFSG) of WREI common stock.

C.      In February of 1999, WREI made a payment in the amount of 34,000 British
Pounds to a WFSG entity in discharge of an obligation which had previously been
paid and satisfied by WREI (the "Overpayment").

D.      WFSG has asserted certain claims for reimbursement against WREI (the
"WREI Reimbursement Claims") and against Messrs. Andrew A. Wiederhorn and
Lawrence A. Mendelsohn (the "Wiederhorn and Mendelsohn Reimbursement Claims")
which are set forth on Exhibit 6 attached hereto. The claims set forth in such
exhibit have been disputed in whole or in part.

E.      WREI and WFSG intend by this Agreement to eliminate certain interests
which each of them has or may have in or against the other, as more fully set
forth below in this Agreement.

NOW, THEREFORE, the parties agree as follows:

1.      WFSG hereby assigns and surrenders to WREI all of the right, title and
interest in shares of WREI common stock held as of the date hereof by any WFSG
entity, including, but not limited to, 992,587 shares of WREI common stock and
options (including those held by current WFSG employees) to acquire 1,112,500







additional shares of WREI common stock. WFSG also hereby assigns any and all
rights to any declared but unpaid dividends with respect to such shares. WFSG
herewith delivers all stock certificates and other instruments in WFSG's
possession evidencing such common stock and options to acquire WREI common stock
properly endorsed in blank, together with any instruments heretofore reasonably
requested by WREI to evidence the cancellation or to effect the surrender of any
options hereinbefore described.

2.      WFSG hereby irrevocably releases WREI for any claim WFSG may have to a
management fee otherwise payable by WREI under Sections 9(a) and 9(b) of the
Management Agreement with respect to management services rendered by WFSG for
the benefit of WREI for the quarterly period ended September 30, 1999. Except as
otherwise specifically set forth in this Section 2 and Section 6(1) (to the
extent necessary to avoid duplicative recovery), this release shall not be
deemed to affect or otherwise prejudice either party's position with respect to
any other provision, including Section 14, of the Management Agreement.

3.      WFSG hereby accepts and acknowledges that the consideration owing to
WFSG as a result of the previous performance of its obligations under the
agreements attached as Exhibits 3 and 4 is applied against the Original PIK Note
as of the date of this Agreement and is discharged in consideration of the
performance by WREI of all its obligations pursuant to this Agreement.

4.      WREI hereby cancels all of WFSG's obligations under the PIK Notes and
the PIK Notes are hereby and hereafter considered satisfied and paid in full.
WREI herewith surrenders to WFSG the original of all such PIK Notes, and each of
which has been marked by WREI to have been "paid in full."

5.      WREI irrevocably releases WFSG from all liability and any and all
further obligations with respect to the Overpayment and the October 14th
Agreement.

6.      WFSG irrevocably releases (1) WREI from all liability and any and all
further obligations with respect to the WREI Reimbursement Claims and (2)
Messrs. Andrew Wiederhorn and Lawrence Mendelsohn from all liability and any and
all further obligations with respect to the Wiederhorn and Mendelsohn
Reimbursement Claims. The aforementioned releases in this Section 6 apply solely
with respect to the specific items scheduled on Exhibit 6 attached hereto.

7.      WFSG herewith issues to WREI an unsecured promissory note in the
principal amount of $275,000, bearing interest at 9% per annum, the entire
principal and interest of which are due and payable on June 12, 2000 (a copy of
which is attached hereto as Exhibit 7).

8.      Each of WFSG and WREI represents and warrants to the other that: (i)
it has the necessary corporate power and authority to enter into and perform its
obligations under this Agreement; (ii) this Agreement has been duly authorized
by and validly executed on behalf of such party; (iii) this Agreement is a valid
and binding obligation of such party, enforceable against the same in accordance
with its terms; and (iv) such party owns the assets or properties that it is
transferring pursuant to the terms of this Agreement free and clear of any and
all liens and encumbrances.

9.      Each of WFSG and WREI agrees that upon the request of the other party,
it shall, at its own expense, do, execute and deliver such further acts and
documents as the other party shall reasonably request from time to time for the
purpose of assuring and confirming the other party of the rights hereby created
or for the performance of the terms of this Agreement.

10.     This Agreement shall be governed by the laws of the State of Oregon
applicable to contracts performed entirely in that state, without giving effect
to the conflicts of law principles thereof.

11.     This Agreement may be executed in any number of counterparts and each of
such counterparts shall for all purposes be deemed to be an original, and all of
such counterparts shall together constitute but one and the same instrument.








12.     The parties hereto recognize that this is a partial settlement and that
additional disputes and obligations exist between the parties. Only the disputed
claims expressly mentioned are settled and released by the terms of this
Agreement. The parties acknowledge that no party admits any liability for any of
such settled and released claims.






IN WITNESS WHEREOF, the parties have executed this Agreement to be effective as
of the date first set forth above.



                              WILSHIRE REAL ESTATE INVESTMENT INC.


                              /s/ Andrew A. Wiederhorn
                              ------------------------------------
                              By: Andrew A. Wiederhorn
                              Its:  Chief Executive Officer

                              WILSHIRE FINANCIAL SERVICES GROUP INC.


                              /s/ Mark H. Peterman
                              ------------------------------------
                              By: Mark H. Peterman
                              Its:  Executive Vice President


                              ANDREW A. WIEDERHORN


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


                              LAWRENCE A. MENDELSOHN


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