Filed pursuant to Section 424(b)(3)
                                                        Prospectus Supplement to
                                               Prospectus dated October 28, 2002
                                                              File no: 333-90258

  SUPPLEMENT TO OFFER TO EXCHANGE EACH OUTSTANDING SHARE OF NEW PREFERRED STOCK
                                       OF
                         FIRSTCITY FINANCIAL CORPORATION
                       FOR, AT THE ELECTION OF THE SELLER,

        $10.00 NET TO THE SELLER IN CASH AND 2 SHARES OF COMMON STOCK, OR

          $8.00 NET TO THE SELLER IN CASH AND 3 SHARES OF COMMON STOCK

     THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON WEDNESDAY, DECEMBER 4, 2002 UNLESS THE OFFER IS EXTENDED.

         This prospectus supplement relates to the offer by FirstCity Financial
Corporation, upon the terms and subject to the conditions set forth in the
prospectus dated October 28, 2002 previously filed with the Securities and
Exchange Commission (which we refer to as the "original prospectus"), to acquire
each share of its New Preferred Stock, par value $0.01, held by you for, at your
election, either

         o        Cash of $10.00 and two shares of its common stock, par value
                  $0.01, or

         o        Cash of $8.00 and three shares of its Common Stock.

As of November 26, 2002, approximately 1,015,404 shares, or approximately 83.0%,
of New Preferred Stock have been deposited with the exchange agent.

         On November 26, 2002, FirstCity entered into a funding agreement and
reached agreement on definitive loan documentation with respect to the $16
million non-recourse loan by Bank of Scotland to FirstCity, secured by (among
other things) a 20% interest in Drive, which will provide the cash portion of
the consideration of the exchange offer. In accordance with the rules of the
SEC, the offer will remain open until 12:00 midnight on Wednesday, December 4,
2002, unless extended.

         Other than the fact that FirstCity and Bank of Scotland have executed
the Funding Agreement and reached agreement on definitive loan documentation for
the $16 million non-recourse loan and the change in the expiration date, all
other terms of the exchange offer remain the same. The most significant
conditions to the exchange offer include:

         (1)      the closing the $16 million non-recourse loan by Bank of
                  Scotland to FirstCity,

         (2)      the tender of at least 80% of the outstanding shares of New
                  Preferred Stock,

         (3)      the lack of any change or development involving a prospective
                  change in or affecting FirstCity's business or financial
                  affairs that, in the reasonable judgment of FirstCity's board
                  of directors, would or might prohibit, restrict or delay
                  consummation of the exchange offer or materially impair the
                  contemplated benefits to FirstCity of the exchange offer.

         This prospectus supplement modifies and supercedes certain information
included in the original prospectus to reflect agreement on definitive loan
documentation for the $16 million non-recourse loan and the change to the
expiration date. This prospectus supplement should be read in conjunction with
the original prospectus and related letter of transmittal.

         Stockholders who have already tendered their shares of New Preferred
Stock pursuant to the exchange offer and who have not withdrawn such shares do
not need to take any further action to receive the exchange offer consideration
if their shares are accepted for exchange pursuant to the offer. Stockholders
who wish to tender but have not done so, should follow the instructions included
in the prospectus and letter of transmittal previously mailed to them.

         NEITHER THE SEC NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR
DISAPPROVED THIS TRANSACTION OR THE SECURITIES TO BE ISSUED UNDER THIS
PROSPECTUS, DETERMINED THE FAIRNESS OR MERITS OF THIS TRANSACTION OR PROSPECTUS,
OR DETERMINED IF THIS TRANSACTION OR PROSPECTUS IS ACCURATE OR ADEQUATE. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

                                   ----------

                                 EXCHANGE AGENT

         American Stock Transfer and Trust Company has agreed to provide
services as exchange agent for the exchange offer. All deliveries and
correspondence sent to the exchange agent should be directed to 59 Maiden Lane -
Plaza Level, New York, New York 10038.

                             ADDITIONAL INFORMATION

         Requests for assistance or additional copies of this document or the
related letter of transmittal should be delivered to Georgeson Shareholder, 17
State Street, 10th Floor, New York, N.Y. 10004. Banks and brokers call collect:
(212) 440-9800. All others call toll free: (866) 233-9045 or contact Suzy W.
Taylor at (866) 652-1810.

          The date of this Prospectus Supplement is November 27, 2002.

                                 SPECIAL FACTORS

BACKGROUND OF THE RECAPITALIZATION

         The discussion set forth in the original prospectus under "Special
Factors - Background of the Recapitalization" is amended and supplemented as
follows:

         Funding Agreement Concerning $16 Million Non-Recourse Loan. On November
26, 2002, FirstCity and Bank of Scotland executed a letter agreement (the
"Funding Agreement") that provides that Bank of Scotland will lend FirstCity
Consumer Lending Corporation, a wholly-owned subsidiary of FirstCity, $16
million on the terms and conditions set forth in a promissory note attached to
the Funding Agreement if and when the conditions set forth in the Funding
Agreement are fulfilled or waived by Bank of Scotland. FirstCity will use this
$16 million loan to provide the cash portion for the exchange offer, pay certain
fees with respect to the recapitalization, and to reduce indebtedness owed to
the Senior Lenders.

DESCRIPTION OF THE TERMS OF THE RECAPITALIZATION

         The discussion set forth in the original prospectus under "Special
Factors - Description of the Terms of the Recapitalization" is hereby amended
and supplemented as follows:

         On November 26, 2002, FirstCity and Bank of Scotland executed a letter
agreement (the "Funding Agreement") that provides that Bank of Scotland will
lend FirstCity Consumer Lending Corporation, a wholly-owned subsidiary of
FirstCity, $16 million on the terms and conditions set forth in a promissory
note attached to the Funding Agreement if and when the conditions set forth in
the Funding Agreement are fulfilled or waived by Bank of Scotland. FirstCity
will use this loan to provide the cash portion for the exchange offer, pay
certain fees with respect to the recapitalization, and to reduce indebtedness
owed to the Senior Lenders. The Funding Agreement provides that if the $16
million loan is not closed by December 31, 2002 (or any later date consented to
by Bank of Scotland), the provisions of the Funding Agreement will be void. The
terms of the Funding Agreement and the promissory note were obtained pursuant to
arms-length negotiations with Bank of Scotland.

         The obligation of Bank of Scotland to make the $16 million loan is
subject to the following conditions being fulfilled to the satisfaction of Bank
of Scotland or waived by Bank of Scotland by the closing date of the $16 million
loan:

         o        there exist no defaults under the Funding Agreement, the
                  promissory note and other documents between FirstCity and the
                  Senior Lenders, and all representations and warranties made by
                  FirstCity and its affiliates in those documents are true and
                  correct in all material respects,

         o        if requested by Bank of Scotland, FirstCity has delivered to
                  Bank of Scotland a duly completed Form U-1 of the Board of
                  Governors of the Federal Reserve System,

         o        FirstCity has delivered to Bank of Scotland certain officers'
                  certificates and charter documents,

         o        the general partner of Drive and the required voting
                  percentage of the members of the general partner of Drive have
                  consented to the pledge of FirstCity's partnership interests
                  in Drive, and all other conditions required by the charter
                  documents of the entities in which FirstCity is pledging an
                  interest to secure the loan have been fulfilled,

         o        the promissory note, the Guarantee Agreement, the Stock Pledge
                  Agreement, the Collateral Assignment, and the Fee Letter (as
                  described below) have been executed and delivered, and any
                  disclosure letter delivered by FirstCity in connection with
                  the promissory note is satisfactory to Bank of Scotland,

         o        all financing statements with respect to the loan are
                  satisfactory to Bank of Scotland and have been filed, Bank of
                  Scotland has received evidence as to the absence of liens on
                  any collateral with respect to the loan, and certain other
                  actions with respect to perfection of the security interest of
                  Bank of Scotland have been taken,

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         o        with respect to the exchange offer,

                  o        holders of no fewer than 80% of the outstanding
                           shares of New Preferred Stock shall have accepted the
                           exchange offer, tendered their shares to the exchange
                           agent for exchange in accordance with the terms the
                           exchange offer and not withdrawn their shares, and
                           Bank of Scotland has received a certificate from the
                           exchange agent on the closing date to that effect,

                  o        (1) the registration statement registering the shares
                           of Common Stock offered in the exchange offer has
                           become effective and is not the subject of any "stop
                           order, " and (2) no legal action is pending or
                           threatened before or by any government authority
                           seeking to withdraw any shares tendered pursuant to
                           the exchange offer if the result of such legal action
                           (if adversely determined) would cause the aggregate
                           number of outstanding shares tendered and not
                           withdrawn or sought to be withdrawn to be fewer than
                           80% of the outstanding shares of New Preferred Stock,

                  o        the opinions of counsel delivered to FirstCity or its
                           subsidiaries by counsel for such entity in connection
                           with the exchange offer or any matter related to the
                           exchange offer have been delivered to Bank of
                           Scotland, together with a letter from each such
                           counsel stating that Bank of Scotland may rely upon
                           the opinions with the same effect as if the opinions
                           were addressed to Bank of Scotland,

         o        FirstCity has delivered a written notice to Bank of Scotland
                  requesting that it make the loan, along with a notice of
                  conversion described in the promissory note,

         o        all orders, permissions, consents, approvals, licenses,
                  authorizations and validations of, and filings, recordings and
                  registrations with, and exemptions by, any government
                  authority, or any other person, required to authorize or
                  required in connection with the execution, delivery and
                  performance of the Funding Agreement and the other documents
                  executed in connection with the Funding Agreement and the
                  transactions contemplated thereby (including the exchange
                  offer) by any party to such agreements have been obtained,

         o        none of certain members of management of Drive have resigned
                  as an officer or employee of Drive or advised any of the
                  parties of his intention to do so,

         o        documentation refinancing FirstCity's existing debt facilities
                  with the Senior Lenders has been executed and delivered and
                  become effective,

         o        documentation with respect to the new financing to FirstCity
                  by Bank of Scotland has been executed, delivered and closed,

         o        neither FirstCity Funding L.P. nor Drive has declared or paid
                  any dividend, or agreed to do so, other than certain dividends
                  required pursuant to the Shareholders Agreement with respect
                  to Drive and for dividends consented to by Bank of Scotland in
                  writing,

         o        an intercreditor agreement among Bank of Scotland and certain
                  of its affiliates has been executed,

         o        Bank of Scotland has received, and is satisfied with, the
                  year-to date financial statements of FirstCity, certain of its
                  subsidiaries, and Drive,

         o        FirstCity has purchased the 20% interest in FirstCity Holdings
                  Corporation from the FCHC Group, on terms satisfactory to all
                  parties,

         o        in the opinion of Bank of Scotland, there has been no material
                  adverse change since December 31, 2001 with respect to Drive
                  and certain of its affiliates taken as a whole or any member
                  thereof or with respect to FirstCity and certain of its
                  affiliates taken as a whole, or any the primary obligors under
                  the current credit facility of FirstCity with the Senior
                  Lenders. Bank of Scotland has not become aware of any
                  previously

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                  undisclosed information with respect to FirstCity, Drive, the
                  management group of Drive, and certain of their respective
                  affiliates that, in the opinion of Bank of Scotland, would
                  have such a material adverse effect,

         o        none of FirstCity, Drive, the Senior Lenders or certain of
                  their respective affiliates have been (in the opinion of Bank
                  of Scotland) the subject of ridicule, contempt or disgrace, or
                  had its business, operations or reputation adversely affected,
                  by virtue of any act (or omission to act) by any of FirstCity,
                  Drive, the management group of Drive, or their respective
                  affiliates. Bank of Scotland has not become aware of any
                  previously undisclosed information with respect to any such
                  entities which, in the opinion of Bank of Scotland, would (if
                  publicly disclosed) subject any of FirstCity, Drive, the
                  Senior Lenders or certain of their respective affiliates to
                  ridicule, contempt or disgrace or adversely affect the
                  business, operations or reputation of FirstCity, Drive, the
                  Senior Lenders or certain of their respective affiliates,

         o        Bank of Scotland has received certain legal opinions,

         o        (1) no provision of applicable law or the interpretation of
                  such law by any government authority, in the opinion of Bank
                  of Scotland, has made it illegal for Bank of Scotland or any
                  parent of Bank of Scotland to effect the transactions
                  contemplated by the Funding Agreement or related documents,
                  (2) no legal action is pending or threatened before or by any
                  government authority seeking to restrain, prohibit, make
                  illegal or delay materially, or seeking damages from any of
                  FirstCity and its affiliates that are parties to the loan
                  documentation or any of Bank of Scotland and certain of its
                  affiliates in connection with, or to impose any materially
                  adverse conditions on such parties in connection with, the
                  consummation of the transactions contemplated by the Funding
                  Agreement, the exchange offer or any other document executed
                  in connection with the Funding Agreement, and (3) no legal
                  action is pending or threatened before or by any government
                  authority against certain parties that, in the opinion of Bank
                  of Scotland, could (if adversely determined) have a material
                  adverse effect on any of the foregoing Entities or which
                  challenges the legality or propriety of any past or present
                  business practice of any of Drive or certain of its affiliates
                  or would adversely affect the reputation of any FirstCity,
                  Drive, Bank of Scotland or certain of their respective
                  affiliates,

         o        all corporate, partnership, limited liability company and
                  other legal matters and all instruments in connection with the
                  transactions contemplated by the Funding Agreement and the
                  other documents referred to in the Funding Agreement are
                  reasonably satisfactory in form and substance to Bank of
                  Scotland, and Bank of Scotland has received all information
                  and copies of all documents which it may reasonably have
                  requested to be certified by proper company officials or
                  government authorities, and

         o        FirstCity has paid certain fees and expenses of counsel for
                  Bank of Scotland and certain of its affiliates.

         The Funding Agreement also provides that the obligation of Bank of
Scotland to purchase the 20% interest in Drive pursuant to the Securities
Purchase Agreement has expired. The Funding Agreement further provides for
certain indemnification obligations of FirstCity with respect to Bank of
Scotland and its affiliates.

         The promissory note provides that the annual interest rate for the loan
will be (a) if it is a loan that bears interest with respect to the LIBOR, 1% in
excess of LIBOR for the Eurodollar interest period selected by FirstCity or (b)
if it is a loan that bears interest with respect to a base rate, the higher of
(i) the federal funds rate plus 1/2% or (ii) the Bank of Scotland prime rate.
The loan will initially bear interest at the base rate, and will convert to a
loan that bears interest with respect to LIBOR upon a notice of conversion by
FirstCity. Interest on the promissory note is payable at the expiration of the
applicable Eurodollar interest period (with this period not to be longer than
one month) or on the last business day of each month, depending on the interest
rate election. The promissory note matures on the fifth anniversary of the
promissory note.

         The promissory note provides that FirstCity will, within two business
days of the receipt by FirstCity and certain of its affiliates of any net
proceeds from any transfer of any interest in Drive owned by FirstCity, prepay
the promissory note by an amount equal to the Specified Percentage of the amount
of net proceeds received. In addition, FirstCity will, within two business days
of the receipt by FirstCity and certain of its affiliates of any Distributable
Dividend (as defined in the promissory note) by Drive to FirstCity, prepay the
promissory note by an amount equal to the Specified Percentage of the amount of
the Distributable Dividend, and within two business days

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of the receipt by FirstCity and certain of its affiliates of a Debt Distribution
(as defined in the promissory note), prepay the promissory note by an amount
equal to the Specified Percentage of the amount of such Debt Distribution. The
"Specified Percentage" is a percentage equal to 20% divided by the percentage of
all outstanding general partnership interests in Drive owned by FirstCity and
certain of its affiliates.

         The promissory note provides that, except in certain circumstances
described in the promissory note, the promissory note will be a non-recourse
obligation of FirstCity and FirstCity Consumer Lending Corporation. The
promissory note contains customary representations, warranties and covenants,
along with customary events of default, including for breaches of these
representations, warranties and covenants and for a default under certain other
indebtedness, including indebtedness of FirstCity and its affiliates to the
Senior Lenders.

         FirstCity will execute a Guarantee Agreement in which it will guarantee
the obligations of its subsidiary, FirstCity Consumer Lending Corporation, who
is the borrower pursuant to the promissory note.

         In connection with the closing of the Funding Agreement and the
promissory note, FirstCity Consumer Lending Corporation and FirstCity Funding
L.P., two subsidiaries of FirstCity, will execute a Collateral Assignment of
Partnership and LLC Interests, pursuant to which Bank of Scotland will be
granted a security interest in (1) 20% of all general partner and limited
partner membership interests in Drive held by FirstCity, the right of FirstCity
to receive the net proceeds from any transfer of such collateral, (2) such net
proceeds, (3) 20% of Distributable Dividends (other than certain tax
distributions), and (4) 20% of any indebtedness of Drive incurred after closing
payable to such entities. In addition, FirstCity and FirstCity Funding GP Corp.
will execute a Stock Pledge Agreement pursuant to which such companies will
pledge to Bank of Scotland shares in FirstCity Consumer Lending Corporation and
FirstCity Funding GP Corp., along with 20/31 of certain indebtedness of Drive
owed to FirstCity and FirstCity Funding GP Corp. The rights of Bank of Scotland
in the collateral are limited so that under no circumstances will Bank of
Scotland realize upon collateral that represents a record or beneficial interest
in more than 20% of all outstanding Drive Partnership Interests (as defined in
the Stock Pledge Agreement).

         Also in connection with the closing of the Funding Agreement,
FirstCity, FirstCity Consumer Lending Corporation and Bank of Scotland will
enter into a Fee Letter. The Fee Letter provides that whenever (x) a Disposition
(as defined in the Fee Agreement) or Distributable Dividend (as defined in the
promissory note) occurs with respect to Drive or certain debt of Drive and (y)
the aggregate amount of the proceeds from (i) all previous Dispositions or
Distributable Dividends occurring after the date of the Fee Letter and (ii) all
other Dispositions and Distributable Dividends occurring at the same time as the
Disposition or Distributable Dividend in question, exceeds $16 million, then
FirstCity and FirstCity Consumer Lending Corporation will pay Bank of Scotland
4% of the amount equal to (1) the aggregate proceeds received by FirstCity and
its affiliates since December 1, 2002 (after giving effect to such Disposition
or Distributable Dividend) less (2) $16 million less (3) the aggregate amount of
the proceeds from Dispositions and Distributable Dividends previously paid to
Bank of Scotland pursuant to the Fee Letter. The obligation of FirstCity
Consumer Lending Corporation to pay Bank of Scotland pursuant to the terms of
the Fee Letter survives payment in full of the $16 million loan.

                                    THE OFFER

AMENDED TERMS OF THE OFFER

         The discussion set forth in the original prospectus regarding the terms
of the offer is hereby amended and supplemented as follows:

         The term "Expiration Date" means 12:00 midnight, New York City time, on
December 4, 2002, unless and until FirstCity extends the period of time for
which the exchange offer is open, in which event the term "Expiration Date"
means the latest time and date at which the exchange offer, as so extended by
FirstCity, expires.

         Other than the fact that FirstCity and Bank of Scotland have executed
the Funding Agreement and reached agreement on definitive loan documentation
with respect to the $16 million non-recourse loan, as described above, and the
change in the expiration date, all other terms of the exchange offer remain the
same.

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CONDITIONS TO THE OFFER

         The offer is subject to the conditions set forth in the original
prospectus under "Certain Conditions of the Exchange Offer."

         The discussion set forth under " - Effective Registration Statement" in
that section is hereby amended and supplemented as follows:

         On October 22, 2002, the registration statement on Form S-4 of which
the original prospectus is a part was declared effective under the Securities
Act of 1933, as amended.

PROCEDURE FOR TENDERING SHARES

         Stockholders who have already tendered their shares of New Preferred
Stock pursuant to the exchange offer and who have not withdrawn such shares do
not need to take any further action to receive the exchange offer consideration
if their shares are accepted for exchange pursuant to the offer.

         Stockholders who wish to tender but have not done so, should follow the
instructions included in the prospectus and letter of transmittal previously
mailed to them. As a result of the extension of the offer, tendering
stockholders are entitled to withdraw tendered shares until 12:00 midnight, New
York City time, on Wednesday, December 4, 2002.

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                  The Exchange Agent for the exchange offer is:

                     AMERICAN STOCK TRANSFER & TRUST COMPANY

          By mail:                           By hand/overnight courier:
        American Stock                              American Stock
   Transfer & Trust Company                   Transfer & Trust Company
 59 Maiden Lane - Plaza Level               59 Maiden Lane - Plaza Level
   New York, New York 10038                   New York, New York 10038

         For requests for assistance or for additional copies, contact:

                              GEORGESON SHAREHOLDER

                           17 State Street, 10th Floor
                               New York, NY 10004

                 Banks and Brokers call collect: (212) 440-9800
                    All others call toll free: (866) 233-9045



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