PROSPECTUS
METROPOLITAN MORTGAGE & SECURITIES CO., INC.
$100,000,000 Investment Debentures, Series III
A holder of Investment Debentures, Series III of Metropolitan Mortgage &
Securities Co., Inc. ("Metropolitan") may elect to receive interest monthly,
quarterly, semi-annually or annually without compounding; or at the election
of the Debentureholder, if interest is left with Metropolitan it will compound
semi-annually until maturity; or at the election of the Debentureholder, the
Debentures will pay equal monthly installments of principal and interest until
maturity according to an amortization schedule selected by the owner.
The Debentures are unsecured debt instruments, senior in liquidation to
outstanding equity securities of Metropolitan, subordinate to collateralized
debt of the Consolidated Group (Metropolitan and its subsidiaries),
subordinate to all debt of the subsidiaries included in the Consolidated
Group, on parity with unsecured accounts payable and accrued liabilities of
Summit and on parity with all previously issued and outstanding debentures.
At September 30, 1997, the Consolidated Group had approximately $868,226,000
of debt senior to and approximately $4,837,000 of debt in parity with
approximately $185,214,000 of outstanding debentures.
Metropolitan reserves the right to change prospectively, by way of a
supplement to this Prospectus, the interest rates, maturities, and minimum
investment amounts on unsold Debentures. The current provisions are set forth
below. See "DESCRIPTION OF DEBENTURES."
<TABLE>
<CAPTION>
MINIMUM ANNUAL
INVESTMENT TERM TO MATURITY INTEREST RATE
__________ ________________ ______________
<S> <C> <C>
$100 120 MONTHS 8.875%
$100 96 to 119 MONTHS 8.500%
$100 72 to 95 MONTHS 8.250%
$100 60 to 71 MONTHS 8.000%
$100 48 to 59 MONTHS 7.000%
$100 36 to 47 MONTHS 6.750%
$100 24 to 35 MONTHS 6.500%
$100 12 TO 23 MONTHS 6.350%
$250,000 120 MONTHS 9.000%
$250,000 96 to 119 MONTHS 8.875%
$250,000 72 to 95 MONTHS 8.750%
$250,000 60 to 71 MONTHS 8.625%
Installment Payment Option
$2,000 60 to 120 MONTHS 6.500%
</TABLE>
There is no trading market for the Debentures and none is expected to be
established in the future. See "RISK FACTORS."
This offering of Debentures is subject to withdrawal or cancellation by
Metropolitan without notice.
FOR A DISCUSSION OF MATERIAL RISKS ASSOCIATED WITH THE DEBENTURES
OFFERED HEREBY, SEE "RISK FACTORS" ON PAGE ___ OF THIS PROSPECTUS.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS OR ANY PRICING SUPPLEMENT
THERETO. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
UNDERWRITING
PRICE TO DISCOUNTS AND PROCEEDS TO ISSUER
PUBLIC COMMISSIONS(1) OR OTHER PERSONS(2)
____________ _________________ ________________________
<S> <C> <C> <C>
Per Debenture 100% 0% to 6% 100% to 94%
Total: $100,000,000 None-$6,000,000 $100,000,000-$94,000,000
</TABLE>
(1) There is no direct sales charge to the investor. Debentures earn
interest, without deduction for underwriting discounts or commissions.
Metropolitan will reimburse its underwriters for commissions paid to licensed
securities sales representatives. Sales commission rates on the sale of
Debentures depend upon the terms of the sale and upon whether the sales are
reinvestments or new purchases. See "PLAN OF DISTRIBUTION."
(2) Before deducting other expenses estimated at $205,000.
The Debentures are being offered for sale on a continuous, best efforts
basis. There are no minimum amounts of securities that must be sold. The
offering is subject to NASD Rule 2720. See "PLAN OF DISTRIBUTION." No
offering will be made pursuant to this prospectus subsequent to January 31,
1999.
METROPOLITAN INVESTMENT SECURITIES, INC.
The date of this Prospectus is February 26, 1998.
