EXHIBIT (10)(k)
                                                        Composite Conformed Copy
 

                                AMENDMENT NO. 3
                                      TO
                   THE FIRST AMERICAN FINANCIAL CORPORATION
                            1996 STOCK OPTION PLAN



     This Amendment No. 3 to The First American Financial Corporation 1996 Stock
Option Plan (the "Plan") was adopted by the board of directors of The First
American Financial Corporation (the "Company") on June 25, 1998, and is
effective as of July 7, 1998.

     Section 5.1 of the Plan is amended to read in full as follows:

     "Number.  Subject to the provisions of Section 5.3, the number of shares of
     Stock subject to Options under the Plan may not exceed 8,625,000 shares.
     The shares to be delivered under the Plan may consist, in whole or in part,
     of treasury Stock or authorized but unissued Stock, not reserved for any
     other purpose."

     IN WITNESS WHEREOF, the Company's duly authorized officers have executed
this amendment at Santa Ana, California, on July 7, 1998.


                         THE FIRST AMERICAN FINANCIAL CORPORATION



                         By: /s/ Parker S. Kennedy
                            ----------------------------------------  
                                 Parker S. Kennedy, President



                         By: /s/ Mark R Arnesen
                            ----------------------------------------
                              Mark R Arnesen, Secretary