UNITED STATES                
SECURITIES AND EXCHANGE COMMISSION  
WASHINGTON, D.C. 20549
FORM 10-K

Annual Report pursuant to Section 13 or 15 (d)              
of the Securities Exchange Act of 1934

For the fiscal year ended   		December 31, 1998

Commission file number     	 33-2-8491

THE MORTGAGE BANCFUND OF America II, L.P., a California Limited Partnership
(exact name of registrant as specified in its charter)

California								33-0369995 
(State or other jurisdiction of            					I.R.S. Employer    
Incorporation or organization )              					Identification No.

2402 Michelson Drive, Suite 255, Irvine, CA  92612-1323            
(address of principal executive office)

(714) 253-2900
(registrant's telephone number, including area code)

N/A
(Former name, former address and former fiscal year, if changed since last 
report.)

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class:	N/A

Name of Each Exchange on Which Registered:	N/A

Securities registered pursuant to Section 12(g) of the Act:

Title of Class:	N/A

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 reports), and (2) has been subject to such filing 
requirements for the past 90 days.

         YES    X								NO_______
Partnership units outstanding: 	71,307


The Mortgage Bancfund of America II, L.P. 
(a California Limited Partnership)

Index to Form 10-K 
        
December 31, 1998

Part I

Item 1 - Business
Item 2 - Properties
Item 3 - Legal Proceedings
Item 4 - Submission of matters to a vote of security holders (partners)

Part II

Item 5 - Market for the registrant's Partnership units and related security 
         holder matters
Item 6 - Selected financial data
Item 7 - Management's discussion and analysis of financial condition and 
         results of operations
Item 8 - Financial statements and supplementary data
Item 9 - Disagreements with accountants on accounting and financial disclosure

Part III

Item 10 - Directors and executive officers of the registrant
Item 11 - Executive compensation
Item 12 - Security ownership of certain beneficial owners and management
Item 13 - Certain relationships and related transactions

Part IV

Item - 14 Exhibits, financial statement schedules and reports on Form 8-K

Signatures


PART 1

Item 1: Business

General
THE MORTGAGE BANCFUND OF AMERICA II, L.P. is a California Limited Partnership
(the "Partnership") of which the general partners are Robert Y. Strom and the 
Mortgage BancFund Corporation (the Corporation), a California Corporation 
wholly owned by Mr. Strom. The  Partnership was organized to make first and 
second trust deed commercial real estate loans in the southern California area.

State of the Economy

The southern California economy continues to be the most important factor 
which affects the operations of the Partnership. Throughout 1994 and 1995 
large industries announced large employee layoffs, plant closings and 
relocation efforts to other states. All of this has depressed real estate 
values in the local area. Management is of the opinion that the economy has
stopped this decline, however, the effects will be felt for at least the next
several years.

Employees

The Partnership does not directly employ personnel. The Corporate general 
partner handles all the business affairs of the partnership with its 
remaining full-time staff of one employee.

Item 2: Properties:

The Partnership does not own any real property other than foreclosed 
properties acquired during the normal course of business which was disposed of 
during 1996.   Assets consist of unsecured notes receivable.

Item 3: Legal Proceedings

At December 31, 1998 the Partnership was not involved in any adverse legal 
proceedings.

Item 4: Submission of Matters to a Vote of Security Holders 

No matters have been submitted to a vote of the Partnership.


Part II

Item 5: Market for the Registrant's Partnership Units and Related Security 
Holder Matters

a) There is no established trading market for these securities and no known 
sales of the securities have taken place during fiscal 1998.
b) At December 31, 1998 there were 71,307 limited partnership units outstanding
which had been sold in prior years to approximately 512 limited partners.
c) No distributions were paid in fiscal 1998.

Item 6:          Selected Financial Data

                                   1996         1997       1998

Total Income               $    682,629   $   68,002  $   34,856

Net Income(Loss)                (70,278)    (338,022)   (127,049)

Net Income(loss) per LP Unit       (.99)       (4.74)      (1.78)

Total Assets                    597,121      239,149     112,101

Total Liabilities           $    63,641  $    43,891  $   43,891

Distributions paid                    0            0           0

Item 7: Management's Discussion and Analysis of Financial Condition  and 
Results of Operations

General Overview:
The Partnership's management continues to collect the accounts receivable on 
the Partnership books. The Partnership's interest in real estate will be
marketed in 1999.  In 1996 the Partnership concluded a development of single
family housing addition acquired through foreclosure.  Projection of 
additional cash generated were not realized due to mismanagement of the budget
by the development partner in the joint venture.  

Liquidity and Capital Resources:
Liquidity continues to be a problem for the Partnership.  There are no 
plans to seek additional capital from outside sources, either debt nor equity.

The capital account has eroded by over 96% of the original cost of $100.00 per
limited Partnership unit to a value of $.96 per Partnership unit outstanding.
This is due to losses experienced over the past several years.

Results of Operations:
The partnership continues to report poor operating results for
December 31, 1998.  As discussed above, book value per Partnership unit 
outstanding is down to $.96; a 99% decline in value. Management is operating 
in a liquidation mode to sell all remaining assets and return whatever 
investment remains to the limited partners.

Item 8: Financial Statements and Supplementary Data

Information required by this item is included under Item 14: Exhibits, 
financial statement schedules and reports on Form 8-K and is incorporated herein
by reference.

Item 9: Disagreements with Accountants on Accounting and Financial Disclosure


None.


Part III

Item 10: Directors and Executive Officers of the Registrant.

The Partnership is managed by the general partner, Robert Y. Strom and by the 
corporate general partner, Mortgage BancFund Corp.   Mr. Strom is the  
managing officer for the corporation.  Sharon Wilhelm is Vice President and 
Manager of Investor Services.

Item 11: Executive Compensation
Although the original prospectus allows the general partners to collect fees 
under certain conditions, management has elected not to collect any of those 
fees and has not for the past four years.
The corporate general partner does continue to be reimbursed for actual out of
expenses incurred to manage the partnership.
  
Item 12: Security ownership of Certain Beneficial Owners and Management

The general partners are to own a combined total of 1% of the Partnership 
including a 1% portion of income and losses.


Item 13: Certain Relationships and Related Transactions

The Partnership does not make mortgage investments with any of the general 
partners or affiliates of the general partners. Other related transactions are
referred to in Item 11 above.


Part IV

Item: 14:  Exhibits, Financial Statement Schedules and Reports on Form 8-K

(a)  The following documents are filed as a part of the report

	1.	Unaudited financial statements
		a.  Balance Sheets
		b.  Income Statements
		c.  Statements of Partner's Equity
		d.  Statements of Cash Flows
	2.	Financial statement schedules:
		None.

(b)  Reports on Form 8-K

	None



SIGNATURES


Pursuant to the requirements of Section 13 or 15(d) 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.

The Mortgage BancFund of America II, L.P. 
(a California Limited Partnership)

______________________________
Robert Y./Strom
General Partner 
Date:____________

Pursuant to the requirements of the Securities Exchange Act of 1934, this 
report has been signed below by the following persons on behalf of the 
registrant and in the capacities and on the dates indicated.

By:	Mortgage BancFund Corporation,
a California Corporation
General Partner of the Registrant

	By:____________________________
		Robert Y. Strom, President
	Date:___________________________

By:	_______________________________
	Robert Y. Strom, General Partner,
	Chief Executive Officer, Chief Financial 
	Officer and Chief Accounting Officer of 
	Registrant, and President and Director of
	Mortgage BancFund Corporation

	Date:___________________________

THE MORTGAGE BANCFUND OF AMERICA II, L.P.
(a California Limited Partnership)
CONSOLIDATED BALANCE SHEETS
(Unaudited)

ASSETS                             Dec 31, 1997         Dec 31, 1998
Cash                                    174,169                6,601
Loans receivable (Note 1)                     0                    0
Accounts receivable (Note 2)             64,980              105,500
Investments (Note 3), net of allowance        0                    0
   Total Assets                         239,149              112,101

LIABILITIES & PARTNER'S EQUITY
Liabilities           
 Accounts payable                             0                    0
 Due to affiliates                       43,891               43,891
   Total liabilities                     43,891               43,891
Partner's equity                        195,258               68,210
Total liabilities & partner's equity    239,149              112,101

Book value per limited partner
unit outstanding                           2.73                  .96


CONSOLIDATED INCOME STATEMENTS
For the Twelve Months Ended

                             12/31/95   12/31/96   12/31/97   12/31/98
                            Unaudited  Unaudited  Unaudited  Unaudited
REVENUES:
Interest - Loans
  & Investments                63,012    462,204     37,507     25,051
Loan Fees                           0          0          0          0
Other Income                        0    220,425     30,495      9,805
Total Income                   63,012    682,629     68,002     34,856


COSTS & EXPENSES:
Cost of loans                  41,050    225,941     16,856     22,772
Real estate owned expenses     28,162          0          0          0
General & Admin costs          85,512    126,966    127,150    139,132
Provision for loan Losses     804,693          0    262,018          
Loss on Disposal of Assets          0    400,000          0          0
Total costs & expenses        959,417    752,907    406,024    161,904
Net Loss                     (896,405)   (70,278)  (338,022)  (127,048)
Net loss per partnership
unit outstanding               (12.57)      (.99)     (4.74)     (1.78)
Partnership units outstanding  71,307     71,307     71,307     71,307



THE MORTGAGE BANCFUND OF AMERICA II, L.P.
(a California Limited Partnership)
CONSOLIDATED STATEMENTS OF PARTNER'S EQUITY
(Unaudited)

                                         General     Limited
                                         Partner     Partner       Total

Balance, December 31, 1995              (169,656)    773,214     603,558
Allocation of net loss                    (3,514)    (66,764)    (70,278)
Balance, December 31, 1996              (173,170)    706,450     533,280
Allocation of net loss                   (16,901)   (321,121)   (338,022)
Balance, December 31, 1997              (190,071)    385,329     195,258
Allocation of net loss                    (6,352)   (120,696)   (127,048)
Balance, December 31, 1998              (196,423)    264,633      68,210

STATEMENTS OF CASH FLOW
For the Twelve Months Ended

CASH FLOWS FROM OPERATING ACTIVITIES:       Dec.31,96   Dec.31,97   Dec.31,98
Net (loss)                                    (70,278)   (338,022)   (127,048)
Loss on Disposal of Assets                    400,000           0           0
Adjustments to reconcile net income to cash
provided by operating activities:
 Decrease (increase) in accrued int. receiv.   13,084           0           0
 (Decrease) increase in accounts payable     (123,517)          0           0
 (Increase) in accounts receivable            102,041     (46,001)    (40,520)
 (Increase) Dec. in due to general partner    (91,480)    (19,950)          0
 Increase in provision for loan losses              0           0           0
NET CASH PROVIDED (USED) IN OPR.ACTIVITIES    229,850    (403,973)   (167,568)

CASH FLOW FROM INVESTING ACTIVITIES:
Net change in loan receivable                (303,893)     552,018            0
Proceeds from Disposal of real estate owned   100,000           0           0
Net change in other real estate owned               0           0           0
NET CASH PROVIDED BY INVESTING ACTIVITIES    (203,893)    552,018           0

CASH FLOWS FROM FINANCING ACTIVITIES:
  Increase (Decrease) in notes payable              0           0           0
NET CASH PROVIDED (USED) BY FINANCING ACTIVITIES    0           0           0

NET INCREASE (DECREASE) IN CASH                25,957     148,045    (167,568)
Cash, Beginning of period                         167      26,124     174,169
Cash, End of period                            26,124     174,169       6,601

MORTGAGE BANCFUND OF AMERICA II, L.P.
(a California Limited Partnership)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

Note 1 - Loans Receivable
Loans receivable are carried at the unpaid principal balance net of unearned 
loan fees.  Points and other loan fees are deferred over the life of the loan.  
In management's opinion the book value of these loans is  equal to 
the estimated net realizable value.

Note 2 - Accounts Receivable
This account represents funds owed to the Partnership from affiliate 
partnerships, projects which were acquired through foreclosure and on unsecured
loans made to unrelated third parties.

Note 3 - Investments in Partnerships
A prior loan receivable secured by a deed of trust has been converted to an
equity interest in a limited liability company which continues to own the
property.  An allowance of $262,018 offsets the carrying value of the
investment.


Accounting Policy
All adjustments made to the financial statements are of normal recurring nature 
necessary to present fairly the financial condition of the partnership.

Supplemental Disclosure of Cash Flows
                                           Dec, 31, 1996
Proceeds from disposal of real estate owned      100,000
Change in Note Payable                           902,877
Change in other real estate owned             (1,402,877)
  Net loss on disposal of real estate           (400,000)