<PAGE>
The  registrant  is  filing  restated  1994-1997  financial  statements.   These
restatements  reflect changes discussed in Note 7 to the consolidated  financial
statements.
<PAGE>

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

                                  FORM 10 K-SB
                                   (Mark One)

[X]      Annual  report  pursuant  to  Section  13 or 15 (d)  of the  Securities
         Exchange Act of 1934 (Fee Required). For the fiscal year ended December
         31, 1996

[ ]      Transition report pursuant to Section 13 or 15 (d) of the Securities
         Exchange act of 1934 (No Fee Required).
         For the transition from _________to____________

                                -----------------

                           COMMISSION FILE NO. 33-39238

                      TMP INLAND LAND MORTGAGE FUND, LTD.,
                        A CALIFORNIA LIMITED PARTNERSHIP
             (Exact name of registrant as specified in its charter)

        CALIFORNIA                                     33-0451040
(State or other jurisdiction of          (I.R.S. Employer Identification No.)
incorporation or organization)

801 N. PARKCENTER DRIVE, SUITE 235                          92705
SANTA ANA, CALIFORNIA                                    (Zip Code)
(Address of principal executive office)

                                 (714) 836-5503
              (Registrant's telephone number, including area code)

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

Title of each class                          Name of each exchange on which
to be so registered                          each class is to be registered
-------------------                          ------------------------------
N/A                                                  N/A

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

UNITS OF LIMITED PARTNERSHIP INTEREST
-------------------------------------
(Title of Class)

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 such  reports),  and (2) has been  subject to such filing
requirements for the past 90 days Yes [X] No [ ]


<PAGE>




                                                 Table of Contents



Report of Independent Auditors                             1

Consolidated Balance Sheets                                2

Consolidated Statements of Operations                      3

Consolidated Statements of Partners' Capital               4

Consolidated Statements of Cash Flows                      5

Notes to Consolidated Financial Statements              6-12

Supplementary Information                              13-21





<PAGE>

                         Report of Independent Auditor's

To the Partners
TMP Land Mortgage Fund, Ltd.
(A California Limited Partnership)


We have  audited  the  accompanying  consolidated  balance  sheets  of TMP  Land
Mortgage Fund, Ltd. (A California  Limited  Partnership) as of December 31, 1996
and 1995,  and the related  consolidated  statements  of  operations,  partners'
capital,  and cash flows for the years ended December 31, 1996,  1995, and 1994.
These   consolidated   financial   statements  are  the  responsibility  of  the
Partnership's  management.  Our responsibility is to express an opinion on these
consolidated financial statements based on our audit.

We conducted our audit in accordance with generally accepted auditing standards.
Those standards  require that we plan and perform the audit to obtain reasonable
assurance  about  whether  the  consolidated  financial  statements  are free of
material  misstatement.  An audit includes examining,  on a test basis, evidence
supporting the amounts and disclosures in the consolidated financial statements.
An audit also includes assessing the accounting  principles used and significant
estimates  made by management,  as well as evaluating  the overall  consolidated
financial  statement  presentation.   We  believe  that  our  audit  provides  a
reasonable basis for our opinion.

In our opinion, the consolidated  financial statements referred to above present
fairly, in all material  respects,  the consolidated  financial  position of TMP
Land Mortgage Fund, Ltd. (A California  Limited  Partnership) as of December 31,
1996 and 1995,  and the  results  of its  operations  and its cash flows for the
years ended  December 31, 1996,  1995 and 1994,  in  conformity  with  generally
accepted accounting principles.

Our  audit  was  made  for the  purpose  of  forming  an  opinion  on the  basic
consolidated   financial   statements  taken  as  a  whole.  The   supplementary
information  contained  in  Schedules  I and II is  presented  for  purposes  of
additional  analysis  and is not a  required  part  of  the  basic  consolidated
financial  statements.  Such  information  has been  subjected  to the  auditing
procedures  applied in the audit of the basic  financial  statements and, in our
opinion,  is stated  fairly in all  material  respects  in relation to the basic
consolidated financial statements taken as a whole.

Balser, Horowitz, Frank & Wakeling
BALSER, HOROWITZ, FRANK & WAKELING
An Accountancy Corporation

Santa Ana, California
February 3, 1997, except for note 7, as to which the date is May 15, 1999

                                      -1-
<PAGE>
<TABLE>
<CAPTION>

                          TMP Land Mortgage Fund, LTD.
                       (A California Limited Partnership)
                           Consolidated Balance Sheets
                           December 31, 1996 and 1995


                                     Assets
                                     ------

                                                         1996               1995
                                                         ----               ----
<S>                                            <C>               <C>

Cash                                           $      361,515    $       162,491
Other Receivable                                       18,507            157,966
Due from Affiliates (net of unamortized
      discount of $123,688) Note 2                    162,051                  0
Mortgage Loans on Real Estate                               0          3,320,000
Investments                                         1,610,019          1,155,867
Investment in Unimproved Land (net of
 valuation allowance of $3,978,272 and
 $3,882,530, respectively)                         10,575,184          7,481,697
                                                   ----------          ---------

         Total Assets                          $   12,727,276    $    12,278,021
                                               ==============    ===============


                        Liabilities and Partners' Capital
                        ---------------------------------

Accounts Payable                               $        4,754    $        33,422
Due to Affiliates                                      23,885            166,875
Property Taxes Payable                              3,251,916          2,026,071
Accrued Expenses                                          800                800
                                                   ----------          ---------
         Total Liabilities                          3,281,355          2,227,168

Minority Interest                                     216,173             35,136

Partners' Capital (Note 3)

  General Partners                                   (64,906)           (57,046)
  Limited Partners; 20,000 Equity Units
    Authorized, 15,715 Outstanding at
    December 31, 1996 and 1995, respectively        9,294,654         10,072,763
                                                   ----------          ---------
Total Partners Capital                              9,229,748         10,015,717
                                                   ----------          ---------

Total Liabilities and Partners' Capital        $   12,727,276    $    12,278,021
                                               ==============    ===============
</TABLE>

          See Accompanying Notes to Consolidated Financial Statements
                                       -2-
<PAGE>
<TABLE>
<CAPTION>

                          TMP Land Mortgage Fund, LTD.
                       (A California Limited Partnership)
                      Consolidated Statements of Operations
              For the Years Ended December 31, 1996, 1995 and 1994


                                                 1996        1995       1994
Income
------
<S>                                           <C>          <C>      <C>

  Mortgage Loan Interest Income               $  152,733    97,431   1,216,528
  Other Interest Income                           13,585    19,740      37,103
  Loss on Investments                           (192,224)   64,417)          0
  Investment Income                              146,011    11,662           0
  Other Income                                     4,600     3,600       4,528
                                                 --------    ------- ----------

         Total Income                            124,705    68,016   1,258,159
                                                 --------    ------- ----------
Expenses

  Loss on Decline in Market Value of Property     95,742    46,306   3,836,224
  Discount on Due from Affiliates                126,881         0           0
  Accounting and Legal                             1,820    18,352      24,059
  Advertising                                          0       642           0
  California Franchise Tax                         2,400       800         800
  Foreclosure Costs                                    0         0      40,061
  Loan Administration                                151         0          35
  Office Expenses                                      0     3,150       3,210
  Interest Expense                                     0       598
  Postage and Printing                                 0     5,502       6,677
  Secretarial and Bookkeeping Support                  0     9,460      11,651
                                                 --------    ------- ----------
         Total Expense                           226,994    84,810   3,922,717
                                                 --------    ------- ----------

Net Income (Loss) before Minority Interest      (102,289)   583,206 (2,664,558)
                                                --------    ------- ----------

Minority Interest in Income or Loss of
 Subsidiary                                       (1,110)        27          0
                                                --------    ------- ----------
Net Income (Loss)                             $ (103,399) $ 583,233 $(2,664,558)
                                              ==========  ========= ===========
Allocation of Net Income or (Loss)

  General Partners, in the Aggregate          $   (1,034) $   5,832 $   (26,646)
                                              ==========  ========= ===========

  Limited Partners, in the Aggregate          $ (102,365) $ 577,401 $(2,637,912)
                                              ==========  ========= ===========

  Limited Partners, per Equity Unit           $       (7) $      37 $      (168)
                                              ==========  ========= ===========
</TABLE>




          See Accompanying Notes to Consolidated Financial Statements
                                       -3-
<PAGE>
<TABLE>
<CAPTION>

                          TMP Land Mortgage Fund, LTD.
                       (A California Limited Partnership)
                  Consolidated Statements of Partners' Capital
              For the Years Ended December 31, 1996, 1995 and 1994


                                          General        Limited
                                         Partners       Partners         Total
                                         --------       --------         -----

<S>                                     <C>        <C>            <C>

Partners' Capital, December 31, 1993        1,408     14,605,314    14,606,722

Capital Contributed in 1994                     0      1,254,000     1,254,000

Net Loss for 1994                        (26,646)    (2,637,912)   (2,664,558)

Distribution to Partners in 1994         (12,244)    (1,211,972)   (1,224,216)
                                          ------      ---------     ---------

PartnerS' Capital (deficit),
   December 31, 1994                     (37,482)     12,009,430    11,971,948

Net Income for 1995                         5,832        577,401       583,233

Distribution to Partners in 1995         (25,396)    (2,514,068)   (2,539,464)
                                          ------      ---------     ---------

Partners' Capital (deficit),
   December 31, 1995                     (57,046)     10,072,763    10,015,717

Net Loss for 1996                         (1,034)      (102,365)     (103,399)

Distribution to Partners in 1996          (6,826)      (675,744)     (682,570)
                                          ------      ---------     ---------

Partners' Capital (deficit),
 December 31, 1996                      $(64,906)  $   9,294,654  $  9,229,748
          === ====                      ========   =============  ============

</TABLE>

Distributions to limited partners, per equity unit, for 1996, 1995 and 1994 were
$43, $160, and $77, respectively,  as determined by dividing the distribution to
limited  partners for the year by number of units  outstanding at the end of the
year.



          See Accompanying Notes to Consolidated Financial Statements
                                       -4-
<PAGE>

<TABLE>
<CAPTION>


                          TMP Land Mortgage Fund, LTD.
                       (A California Limited Partnership)
                      Consolidated Statements of Cash Flows
                For Years Ended December 31, 1996, 1995 and 1994

                                           1996          1995          1994
<S>                                      <C>        <C>           <C>

Cash Flows From Operating Activities
 Net Income (Loss)                       $ (103,399)$   583,233   $  (2,664,558)
 Adjustments to Reconcile Net Income
 (Loss) to
  Net Cash Provided by (Used in)
  Operating Activities:
   Loss on Decline in Market Value
   of Property                               95,742      46,306       3,836,224
   Discount on Due from Affiliates          126,881           0               0
   Loss on Investments                      192,224      64,523               0
   Minority Interest in Income Loss of
   Subsidiary                                 1,110        (27)               0
   Amortization of Discount on Due from
   Affiliates                                (3,193)          0               0
   Changes in assets and liabilities:
   Decrease in Accrued Interest
   Receivable                                     0      91,902          42,415
   (Increase) Decrease in Other
   Receivables                              139,459    (157,966)              0
   Increase (Decrease) in Accounts
   Payable                                  (28,668)     17,245          12,612
   (Increase) Decrease in Mortgage Loans  2,000,000   2,825,000      (2,125,000)
   Increase (Decrease) in Due to
   Affiliates                              (142,990)    166,006          (2,476)
                                           ---------  ---------        --------
  Net Cash Provided by (Used in)
   Operating Activities                    2,277,166  3,636,222        (900,783)
                                           ---------  ---------        --------

Cash Flows From Investing Activities:
  Increase in Investments                  (932,115) (1,220,363)              0
  Increase in Minority Interest                         179,927          35,136
  Payment for Development and
    Carrying Costs                         (643,384)   (192,627)       (275,529)
                                           ---------  ---------        --------
    Net Cash Used In
         Investing Activities            (1,395,572) (1,377,854)       (275,529)
                                          ---------  ---------        --------

Cash Flows From Financing Activities:
  Capital Contributions                           0           0       1,254,000
  Distributions to Partners                (682,570) (2,539,464)     (1,224,216)
                                           ---------  ---------        --------
    Net Cash Provided by (Used in)
     Financing Activities                  (682,570) (2,539,464)         29,784
                                           ---------  ---------        --------

Net Increase or (Decrease) in Cash          199,024    (281,096)     (1,146,528)
Cash, Beginning                             162,491     443,587       1,590,115
                                           ---------  ---------        --------
Cash, Ending                             $  361,515 $   162,491   $     443,587
                                         ========== ===========   =============

Cash paid for income taxes               $      800 $       800   $         800

</TABLE>

Supplemental Schedule of Non-Cash Investing and Financing Activities:
---------------------------------------------------------------------
Non-cash investing and financing  activities during the years ended December 31,
1996, 1995 and 1994 consist of the following:

During  the years  ended  December  31,  1996,  1995 and 1994,  the  Partnership
recorded an increase in the carrying costs of properties  held for sale equal to
additional  property tax liabilities  incurred during those years of $1,225,845,
$1,046,875 and $979,196, respectively.

During  the years  ended  December  31,  1996,  1995 and 1994,  the  Partnership
foreclosed on two, two and four mortgage loans  receivable  with unpaid balances
of  $1,320,000,  $2,125,000  and  $6,745,000,  respectively,  and  recorded  the
acquisition of the properties at their fair values on the dates of  foreclosure,
net of a valuation allowance. At December 31, 1996, 1995 and 1994, the valuation
allowance totaled $3,978,272, $3,882,530 and $3,836,224, respectively.


           See Accompanying Notes to Consolidated Financial Statements
                                       -5-
<PAGE>


                          TMP Land Mortgage Fund, LTD.
                       (A California Limited Partnership)
                   Notes to Consolidated Financial Statements
                           December 31, 1996 and 1995

Note 1 -  Organization and Summary of Significant Accounting Policies

General - TMP Land Mortgage Fund,  Ltd., A California  Limited  Partnership (the
-------
"Partnership"),  was organized in 1991 in accordance  with the provisions of the
California Uniform Limited Partnership Act. The purpose of the Partnership is to
make  short-term  (generally one to three-year)  loans to  unaffiliated  parties
secured by first trust deeds  (mortgages) on unimproved real property  primarily
in  the  Inland  Empire  area  of  Southern   California  and  to  provide  cash
distributions  on a  current  basis  to the  limited  partners,  primarily  from
interest earned on the mortgage loans.

Principles of Consolidation - The consolidated  financial statements include the
---------------------------
accounts  of the  Partnership  and its  majority-owned  investments,  TMP  Homes
Remington,  LLC (Remington) and TMP Homes  Flowerfield-Sun City, LLC (Sun City).
All significant  intercompany  accounts and transactions have been eliminated in
consolidation. (See Note 7.)

Investment in Unimproved  Land - Investment in unimproved  land is stated at the
------------------------------
balance of the  foreclosed  loan plus carrying and  improvement  costs  incurred
subsequent to foreclosure,  net of a valuation allowance, as necessary, to state
the properties at their fair value.  All costs  associated  with the acquisition
and  improvement  of a property are  capitalized  including all direct  carrying
costs; such as interest expense and property taxes.

Syndication Costs - Syndication costs (such as commissions,  printing, and legal
----------------
fees) were paid by an affiliate of the Partnership,  TMP Realty, Inc. (See Notes
2 and 6.)

Income  Taxes - No  provision  for  federal  income  taxes  has been made in the
-------------
accompanying  consolidated  financial  statements as all profits and losses flow
through to the respective partners and are recognized on their individual income
tax  returns.  However,  the  minimum  California  franchise  tax  paid  by  the
Partnership  and it's  consolidated  entities at December  31, 1998 and 1997 was
$2,400 per year.

Cash and Cash Equivalents - For purposes of the Consolidated  Statements of Cash
-------------------------
Flows, the Partnership  considers all highly liquid  investments with a maturity
of three months or less to be cash equivalents.  During the normal course of its
business,  the Partnership  accumulates  cash and maintains  deposits at various
banks.  Occasionally,  the cash  deposit  at a  particular  bank may  exceed the
federally insured limit. Any accounting loss or cash requirement  resulting from
the failure of a bank would be limited to such excess amounts.

Use of Estimates - In the preparation of financial statements in conformity with
----------------
generally  accepted  accounting  principles,  management  is  required  to  make
estimates  and  assumptions  that  affect  the  reported  amounts  of assets and
liabilities  and the disclosure of contingent  assets and  liabilities as of the
date of the financial  statements and revenues and expenses during the reporting
period. Actual results could differ from these estimates.

                                      -6-
<PAGE>

                          TMP Land Mortgage Fund, LTD.
                       (A California Limited Partnership)
                   Notes to Consolidated Financial Statements
                           December 31, 1996 and 1995

Note 1 -  General and Summary of Significant Accounting Policies, continued:

Concentration  - All  unimproved  land  parcels held for sale are located in the
-------------
Inland  Empire  area of Southern  California.  The  eventual  sales price of all
parcels  is  highly  dependent  on  the  real  estate  market  conditions.   The
Partnership  attempts to mitigate any potential  risk by  monitoring  the market
condition and holding the land parcels until the real estate market recovers.

New Accounting Standards - In June 1998 the Financial Accounting Standards Board
-----------------------
issued  Statement of Financial  Accounting  Standards No. 133,  "Accounting  for
Derivative  Instruments and hedging Activities".  The new statement requires all
derivatives  to be recorded on the balance  sheet at fair value and  establishes
new accounting rules for hedging instruments. This statement will have no effect
on the consolidated financial statements of the Partnership.

Note 2 - Organization of the Partnership

TMP Properties (A California General  Partnership) and TMP Investments,  Inc. (A
California  Corporation)  originally formed the Partnership on November 15, 1991
as the general  partners.  The partners of TMP  Properties are William O. Passo,
Anthony W.  Thompson  and Scott E.  McDaniel.  William  O. Passo and  Anthony W.
Thompson were the shareholders of TMP  Investments,  Inc. until October 1, 1995,
when they sold their shares to TMP Group,  Inc. and then became the shareholders
of TMP Group, Inc.

The  general  partners  manage  and  control  the  affairs  of the  Partnership,
including  final  approval  of all  loans  and  investments,  and have  ultimate
authority  for  matters   affecting  the  interests  of  the  Partnership.   All
organization  and offering  expenses of the Partnership were paid by TMP Realty,
an affiliate of the general  partners,  in exchange for loan fees (or points) on
each mortgage loan.

The  partnership  agreement  provides for two types of  investments:  Individual
Retirement  Accounts (IRA) and others. The IRA minimum purchase  requirement was
$2,000 and all others were a minimum purchase requirement of $5,000. The maximum
liability of the limited partners is the amount of their capital contribution.

Note 3 - Partners' Contributions

The Partnership  raised capital through a public offering of units at $1,000 per
unit.  The  minimum  offering  size was 1,000 units or  $1,000,000.  The maximum
offering  size was 20,000 units or  $20,000,000.  As of April 21,  1994,  15,715
units were sold for total capital  contributions of $15,715,000 and the offering
was closed.

Note 4 - Allocation of Profits and Losses and Cash Distributions

Profit,  losses, and cash distributions are allocated ninety-nine percent to the
limited  partners  and one  percent to the  general  partners  until the limited
partners  have  received an amount equal to their  capital  contributions plus a
cumulative,  non-compounded  return of eight  percent  per annum  based on their
adjusted capital account balances, at which time, remaining profits,  losses and


                                      -7-
<PAGE>

                          TMP Land Mortgage Fund, LTD.
                       (A California Limited Partnership)
                   Notes to Consolidated Financial Statements
                           December 31, 1996 and 1995

Note 4 - Allocation of Profits and Losses and Cash Distributions, continued:

cash distributions are allocated seventy-six percent to the limited partners and
twenty-four  percent  to  the  general  partners.  Distributions  of  cash  from
operations,  if any, are made monthly within 30 days after the end of the month.
No distributions were made during 1998. Distributions made during 1997 are shown
on the accompanying consolidated statements of partners' capital.

Note 5 - Related Party Transactions

Unaffiliated  borrowers paid broker loan placement fees to TMP Realty,  Inc., an
affiliate of the General Partners,  of $40,000,  $88,000,  and $258,750,  during
1996, 1995 and 1994, respectively, for assistance in negotiating loan terms with
the Partnership.  TMP Realty,  Inc. pays all organization and offering expenses,
including all legal,  accounting,  printing,  registration  and other costs.  In
addition,  the borrowers paid loan servicing  fees to TMP  Investments,  Inc., a
General Partner of the Partnership, of $10,000 $33,000, and $69,375 during 1996,
1995 and 1994,  respectively.  At December 31, 1995,  the  Partnership  owed TMP
Investments, Inc. $22,000 for loan servicing fees.

Under the terms of the Agreement,  if the General  Partners or their  affiliates
provide  a  substantial  amount of  services  in  connection  with the sale of a
property,  or a portion of it, acquired through  foreclosure or otherwise,  they
shall be paid a commission not to exceed the lesser of 1) one-half of the normal
and competitive  percentage of gross sales price charged for similar services by
an unaffiliated partner; or 2) 3% of the gross sales price of the property.  The
payment shall be subordinate to a return of all of the limited partners' capital
contributions  and the  payment  to the  limited  partners  of their  cumulative
returns.

Units were offered to the public through TMP Capital Corp. ("TMP  Capital"),  an
affiliate of the General Partners,  as managing  broker-dealer.  As the managing
broker-dealer, TMP Capital received a sales commission of up to 10% of the gross
proceeds,  up to 8% of which was reallocated to soliciting dealers on units sold
by them. These sales commissions were paid by TMP Realty, Inc.

During 1996, 1995 and 1994,  respectively,  the Partnership was charged $21,421,
$17,624, and $21,381,  respectively, (of which $105, $0, and $869 is included in
the due to  affiliates  balance at year-end) by TMP  Investments,  Inc. for cost
reimbursements for office and secretarial expenses.

In  November,  1996,  the  Partnership  sold a  parcel  of land  (including  the
capitalized  interest  costs  and the  related  property  taxes  payable)  to an
affiliated  partnership,  TMP Mortgage  Income Plus,  LTD (MIP) for $286,000 and
recorded a note  receivable for a five year period  without  interest with a 12%
discount (imputed interest). The total sales price represented the Partnerships'
original  interest  of  $100,000,  as well as  $186,000  of other  advances  and
capitalized costs for the development of the land. The Partnership  recognized a
$126,881  discount  on the note as a charge  to  operations  for the  difference
between  the  total  value  of the land and the  face  value  of the  note.  The
amortization into income for 1996 was $3,193.


                                      -8-
<PAGE>


                          TMP Land Mortgage Fund, LTD.
                       (A California Limited Partnership)
                   Notes to Consolidated Financial Statements
                           December 31, 1996 and 1995

Note 6 - Mortgage loans on real estate

The  mortgage  loan  agreements  require  borrowers to place funds from the loan
proceeds in a restricted bank account equal to the total interest  payments over
the term of the loan.

The Partnership receives a first security interest in said account as additional
collateral for the payment of the note.  The borrowers  instruct the bank to pay
to the Partnership the amount of the monthly loan payment.  In view of this, the
only  accrual of interest on the loans is for the portion of each month the loan
is earning  interest  until the first of the following  month when the funds are
released from the restricted account.

The loan agreements require borrowers to place funds from the loan proceeds in a
restricted  bank account equal to the total  interest  payments over the term of
the loan.

The Partnership receives a first security interest in said account as additional
collateral for the payment of the note.  The borrowers  instruct the bank to pay
to the Partnership the amount of the monthly loan payment.  In view of this, the
only  accrual of interest on the loans is for the portion of each month the loan
is earning  interest  until the first of the following  month when the funds are
released from the restricted account.

In the event of foreclosure,  the collateral would be recorded at its fair value
at the time of  foreclosure,  less any costs of  disposal.  Fair value  would be
considered to be the lower of (a) appraised  value  determined by an independent
real estate appraiser,  or (b) the General Partners'  determination of the value
of the property based on their analysis.

The Partnership would consider collateral for a loan in substance  foreclosed if
all of the following criteria are met:

1. The  borrower  has  little or no equity in the  collateral,  considering  the
   current fair value of the collateral; and

2.  Proceeds  for  repayment  of the loan can be  expected to come only from the
    operation or sale of the collateral; and

3.  The borrower has either:
    a) formally or effectively abandoned control of the collateral to the
       Partnership, or

    b) retained control of the collateral but, because of the current financial
       condition of of the  borrower, or the economic prospects for the borrower
       and/or the collateral in the foreseeable future, it is doubtful that  the
       borrower will be able to rebuild equity in the  collateral or   otherwise
       repay the loan in the foreseeable future.

                                      -9-
<PAGE>

                          TMP Land Mortgage Fund, LTD.
                       (A California Limited Partnership)
                   Notes to Consolidated Financial Statements
                           December 31, 1996 and 1995

Note 6 - Mortgage loans on real estate, Continued

If this  occurred,  the collateral  would be considered  foreclosed and would be
recorded at its fair value, less any costs of disposal.

The PR Equities loans for $2,400,000 and $1,150,000 matured January 14, 1994 and
May 30, 1994,  went into default and were  foreclosed on June 2, 1994 and August
11, 1994,  respectively.  The collateral  (land) was recorded in the accounts of
the Partnership at the gross loan amounts, less a valuation allowance, to record
the net book value of the land at its fair value at the date of foreclosure.

The Sunset  Crossing  loan for  $1,875,000  matured  August 27, 1994,  went into
default and was foreclosed December 21, 1994. The collateral (land) was recorded
in the  accounts  at the loan  amount and unpaid  property  taxes at the time of
foreclosure, which approximated the fair value of the land.

The Olson loan for $1,320,000  matured June 24, 1994,  went into default and was
foreclosed  November 2, 1994. The collateral (land) was recorded in the accounts
at the loan amount that approximated the fair value of the land.

The Olson #2 note for  $500,000  matured  December  17,  1994 and then went into
default and was foreclosed on April 26, 1995. The collateral (land) was recorded
in the accounts at the loan amount that approximated the fair value of the land.

The Environmental Development loan for $1,625,000 matured October 15, 1994, went
into default and was foreclosed on August 23, 1995.  The  collateral  (land) was
recorded in the accounts at the loan amount that  approximated the fair value of
the land.

During the year ended December 31, 1995 the  Singletary  loan for $2,200,000 and
the Lansing loan for $625,000 were paid in full.

The LaMonte loan for  $1,220,000  defaulted on April 26, 1995 and was foreclosed
January 17, 1996. The collateral (land) was recorded in the accounts at the loan
amount which approximated the fair value of the land.

The  Rockfield  Development  loan for  $100,000  defaulted on April 13, 1995 and
foreclosure  was  completed on January 17, 1996.  The  Partnership  acquired the
collateral  (land) and  transferred  it to TMP  Mortgage  Income  Plus,  Ltd. in
exchange for an interest in a project.

The Peppertree  loan for $2,000,000  matured June 28, 1995 and was paid July 30,
199
6. $1,500,000 was received in cash and $500,000 was received in the form of a
20% interest in a 163.33 acre project named Village One.


                                      -10-
<PAGE>

                          TMP Land Mortgage Fund, LTD.
                       (A California Limited Partnership)
                   Notes to Consolidated Financial Statements
                           December 31, 1996 and 1995

Note 7 - Restatements and reissuances of 1994 - 1996 Financial Statements

In 1992,  the  Partnership  made two loans  totaling  $3,500,000 to PR Equities,
Ltd., a California  Limited  Partnership.  The loans were secured by first trust
deeds on residential property located in San Jacinto,  California.  In 1994, the
Partnership  foreclosed on the properties  securing these loans and continues to
own  these  properties.   In  accordance  with  generally  accepted   accounting
principles,  assets acquired through foreclosure should be recorded at the lower
of cost or fair value less costs of  disposal  at the date of  foreclosure.  The
1994-1996 financial  statements  originally issued reported this property at the
amount of the  outstanding  mortgage  balances due on these loans at the time of
foreclosure,  which did not  represent  their fair value less costs of disposal.
Management  has  subsequently  determined  that a valuation  allowance for these
properties  should have been established for  approximately  $3.8 million at the
date of foreclosure in 1994. The valuation  allowance  should have been adjusted
each year  thereafter  such that the only  value  for  these  properties  is the
capitalized direct carrying costs that represent the total accumulated  property
taxes and Mello-Roos bond  assessments.  Therefore,  the consolidated  financial
statements  for 1994  through  1996 have been  restated to record the  valuation
allowance and to adjust these properties to their fair value for those years.

In addition, management has determined that the amount of property taxes payable
as recorded in June,  1994, and subsequent  periods  through  December 31, 1996,
were understated by a total of $556,000. Accordingly, the consolidated financial
statements  for those  periods  have been  restated for this  understatement  by
adjusting the carrying  value of the land and the property  taxes payable in the
appropriate fiscal years.

In accordance  with  generally  accepted  accounting  principles,  the financial
statements of  majority-owned  investments are required to be consolidated.  The
1995 and 1996 financial  statements  originally  issued did not properly account
for the consolidation of all significant majority-owned investments.  Therefore,
the financial  statements of these  material  majority  owned entities have been
consolidated  with the financial  statements of the  Partnership's and have been
restated for fiscal years 1995 and 1996 to reflect the consolidation and related
minority  interests  of $216,000 for  Remington  and Sun City as of December 31,
1996.

In November,  1996, the Partnership entered into a non-interest bearing note for
$286,000. In accordance with generally accepted accounting principles,  the note
should have been discounted at the date of execution and interest  accreted over
the period of the note for $127,000.  The consolidated financial statements have
been restated for this discount and accretion of interest.


                                      -11-
<PAGE>

                          TMP Land Mortgage Fund, LTD.
                       (A California Limited Partnership)
                   Notes to Consolidated Financial Statements
                           December 31, 1996 and 1995

Note 8 - Investments
<TABLE>
<CAPTION>

Following is a summary of the investments of the Partnership as of December 31,
1996 and 1995:

                                                1996               1995
<S>                                     <C>               <C>

         TMP Flowerfield, LLC           $      103,811    $        86,293

         Steadfast HSC, LLC                  1,006,206          1,069,574

         Peppertree Park, LLC                  500,000                  0
                                         -------------     --------------

                                        $    1,610,019    $     1,155,867
                                        ==============    ===============
</TABLE>
The  Partnership  has  a 75%  membership  interest  in  Flowerfield,  which  was
organized for the purpose of acquiring, owning and developing certain parcels of
land into single family home developments in San Jacinto, California. The equity
method is used to account for the Partnership's share of Flowerfield's  earnings
or losses  which is not  materially  different  than the  consolidation  of this
majority owned investment.

The  Partnership  has a 20% interest in Peppertree,  which was formed to acquire
and develop certain property in San Diego,  California.  The  Partnership's  20%
interest is stated at its cost of $500,000.


                                      -12-
<PAGE>
















                            Supplementary Information



                                      -13-
<PAGE>

<TABLE>
<CAPTION>



                                            TMP LAND MORTGAGE FUND, LTD
                                        (A California Limited Partnership)
                                    Schedule I - Mortgage Loans on Real Estate
                               (Schedule XII, Rule 12-29, for SEC Reporting Purposes
                                                 December 31, 1996


COLUMN   A                   B           C          D          E               F                    G                     H
------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                     Principal
                                                                                                                     Amount of
                                                                                                                     Loans Subject
                                      Final       Periodic                 Face                  Carrying            to Delinquent
  Description              Interest   Maturity    Payment    Prior         Amount of             Amount of           Principal or
  of Loans (A)             Rate       Date        Term       Liens         Mortgages             Mortgages           Interest
------------------------------------------------------------------------------------------------------------------------------------
<S>                        <C>       <C>          <C>        <C>          <C>                 <C>                    <C>

None              n/a         n/a               n/a              n/a          $             0     $             0      $           0

                              Beginning Balance                               $   3,320,000
                                Additions during period:
                                  New mortgage loans                                    -0-
                                Reduction during period:
                                  Loans paid off                                 (2,000,000)
                                  Loans foreclosed                               (1,320,000)
                                                                                 ----------

                              Ending Balance                                  $           0
                                                                              =============

</TABLE>


                                                                -14-
<PAGE>
<TABLE>
<CAPTION>


                                                     TMP LAND MORTGAGE FUND, LTD
                                                 (A California Limited Partnership)
                                             Schedule I - Mortgage Loans on Real Estate
                                        (Schedule XII, Rule 12-29, for SEC Reporting Purposes
                                                          December 31, 1995


COLUMN   A                   B           C          D          E               F                    G                     H
------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                     Principal
                                                                                                                     Amount of
                                                                                                                     Loans Subject
                                      Final       Periodic                 Face                  Carrying            to Delinquent
  Description              Interest   Maturity    Payment    Prior         Amount of             Amount of           Principal or
  of Loans (A)             Rate       Date        Term       Liens         Mortgages             Mortgages           Interest
------------------------------------------------------------------------------------------------------------------------------------
<S>                        <C>       <C>          <C>        <C>          <C>                 <C>                    <C>

1. Rockfield Development
   (Note3)                 12.5%     03/01/95     (B)        None                  100,000             100,000       $       100,000
4. La Monte (Note 3)       12.5%     04/25/95     (B)        None                1,220,000           1,220,000             1,220,000
6. Peppertree Land
   Company (Note 3)        12.5%     06/28/95     (B)        None                2,000,000           2,000,000                None
                                                                               -----------       -------------        --------------
                                                                           $     3,320,000     $     3,320,000       $     1,320,000

                                     Beginning Balance                     $     8,270,000
                                       Additions during period:
                                         New mortgage loans                            -0-
                                       Reduction during period:
                                         Loans paid off                         (2,825,000)
                                         Loans foreclosed                       (2,125,000)
                                                                               -----------

                                     Ending Balance                        $     3,320,000
                                                                           ===============

<FN>

(A)  All loans are first mortgage on unimproved property in the Southern California area.
(B)  All loans provide for level monthly payments of interest only with the entire face amount of the mortgage due at maturity.
(C)  This loan was originally due on June 28, 1995 and was extended up to December 28, 1995.  Currently under another agreement it
     is on a month-to-month basis.
</FN>
</TABLE>


                                                                -15-
<PAGE>
<TABLE>
<CAPTION>


                                                     TMP LAND MORTGAGE FUND, LTD
                                                 (A California Limited Partnership)
                                             Schedule I - Mortgage Loans on Real Estate
                                        (Schedule XII, Rule 12-29, for SEC Reporting Purposes
                                                          December 31, 1994


COLUMN   A                   B           C          D          E               F                    G                     H
------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                     Principal
                                                                                                                     Amount of
                                                                                                                     Loans Subject
                                      Final       Periodic                 Face                  Carrying            to Delinquent
  Description              Interest   Maturity    Payment    Prior         Amount of             Amount of           Principal or
  of Loans (A)             Rate       Date        Term       Liens         Mortgages             Mortgages           Interest
------------------------------------------------------------------------------------------------------------------------------------
<S>                        <C>       <C>          <C>        <C>          <C>                 <C>                    <C>

1. Olson #2 (Note 3)       12.5%     12/17/94     (B)         None        $       500,000       $       500.000       $     500,000
2. Rockfield Development   12.5%     03/01/95     (B)         None                100,000               100,000              None
3. Singletary              12.5%     04/12/95     (B)         None              2,200,000             2,200,000              None
4. La Monte                12.5%     04/25/95     (B)         None              1,220,000             1,220,000              None
5. Environmental
   Development             12.5%     05/15/95     (B)         None              1,625,000             1,625,000              None
6. Peppertree Land Company 12.5%     06/28/95     (B)         None              2,000,000             2,000,000              None
7. Gregg Lansing           12.5%     09/23/95     (B)         None                625,000               625,000              None
                                                                           --------------        --------------         -----------
                                                                          $     8,270,000       $     8,270,000       $     500,000

                                     Beginning Balance                    $  12,890,000
                                       Additions during period:
                                         New mortgage loans                   2,725,000
                                       Reduction during period:
                                         Loans paid off                        (600,000)
                                         Loans foreclosed                    (6,745,000)
                                                                             ----------

                                     Ending Balance                       $  8,270,000
                                                                          ============
<FN>

(A)  All loans are first mortgage on unimproved property in the Southern California area.
(B)  All loans provide for level monthly payments of interest only with the entire face amount of the mortgage due at maturity.
</FN>
</TABLE>
                                                                -16-
<PAGE>
<TABLE>
<CAPTION>

                                            TMP LAND MORTGAGE FUND, LTD
                                        (A California Limited Partnership)
                                    Schedule I - Mortgage Loans on Real Estate
                               (Schedule XII, Rule 12-29, for SEC Reporting Purposes
                                                 December 31, 1993


COLUMN   A                   B           C          D          E               F                    G                     H
------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                     Principal
                                                                                                                     Amount of
                                                                                                                     Loans Subject
                                      Final       Periodic                 Face                  Carrying            to Delinquent
  Description              Interest   Maturity    Payment    Prior         Amount of             Amount of           Principal or
  of Loans (A)             Rate       Date        Term       Liens         Mortgages             Mortgages           Interest
------------------------------------------------------------------------------------------------------------------------------------
<S>                        <C>       <C>          <C>        <C>          <C>                 <C>                    <C>
1. PR Equities (Note 3)     12.5%    01/14/94     (B)        None         $     2,400,000      $     2,400,000         None
2. Toman Company (Note 3)   12.5%    07/28/94     (B)        None                 600,000              600,000         None
3. Sunset Crossing
   (Note 3)                 12.5%    08/27/94     (B)        None               1,875,000            1,875,000         None
4. PR Equities              12.5%    05/30/94     (B)        None               1,150,000            1,150,000         None
5. Olson                    12.5%    06/24/94     (B)        None               1,320,000            1,320,000         None
6. Environmental
   Development              12.5%    10/15/94     (B)        None               1,625,000            1,625,000         None
7. Olson #2                 12.5%    12/17/94     (B)        None                 500,000              500,000         None
8. Singletary               12.5%    04/12/95     (B)        None               2,200,000            2,200,000         None
9. La Monte                 12.5%    04/25/95     (B)        None               1,220,000            1,220,000         None
                                                                                ---------            ---------
                                                                          $     12,890,000      $   12,890,000

                                     Beginning Balance                    $      7,345,000
                                       Additions during period:
                                         New mortgage loans                      5,545,000
                                                                            --------------

                                     Ending Balance                       $     12,890,000
                                                                           ===============
<FN>

(A)  All loans are first mortgage on unimproved property in the Southern California area.
(B)  All loans provide for level monthly payments of interest only with the entire face amount of the mortgage due at maturity.
</FN>
</TABLE>


                                                                -17-
<PAGE>
<TABLE>
<CAPTION>

                                                     TMP LAND MORTGAGE FUND, LTD
                                                 (A California Limited Partnership)
                                             Schedule I - Mortgage Loans on Real Estate
                                        (Schedule XII, Rule 12-29, for SEC Reporting Purposes
                                                          December 31, 1992


COLUMN   A                   B           C          D          E               F                    G                     H
------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                     Principal
                                                                                                                     Amount of
                                                                                                                     Loans Subject
                                      Final       Periodic                 Face                  Carrying            to Delinquent
  Description              Interest   Maturity    Payment    Prior         Amount of             Amount of           Principal or
  of Loans (A)             Rate       Date        Term       Liens         Mortgages             Mortgages           Interest
------------------------------------------------------------------------------------------------------------------------------------
<S>                        <C>       <C>          <C>        <C>          <C>                 <C>                    <C>
1. PR Equities             12.5%     01/13/94      (B)       None         $   2,400,000       $     2,400,000         None
2. Frame                   12.5%     01/28/94      (B)       None               600,000               600,000         None
3. Sunset Crossing         12.5%     08/27/94      (B)       None             1,875,000             1,875,000         None
4. PR Equities             12.5%     05/30/94      (B)       None             1,150,000             1,150,000         None
5. Olson                   12.5%     06/24/94      (B)       None             1,320,000             1,320,000         None
                                                                              ---------             ---------
                                                                          $   7,345,000       $     7,345,000

<FN>

(A) All loans are first mortgage on unimproved property in the Southern California area.
(B) All loans provide for level monthly payments of interest only with the entire face amount of the mortgage due at maturity.
</FN>
</TABLE>

                                                                -18-
<PAGE>

<TABLE>
<CAPTION>

                                                     TMP LAND MORTGAGE FUND, LTD
                                                 (A California Limited Partnership)
                                       Schedule II - Real Estate and Accumulated Depreciation
                                        (Schedule XI, Rule 12-28, for SEC Reporting Purposes
                                                For the Year Ended December 31, 1996


COLUMN    A                  B           C                  D            E               F             G           H           I
-----------------------------------------------------------------------------------------------------------------------------------
                                                   COSTS CAPITALIZED
                                                      SUBSEQUENT       Gross
                                                    TO ACQUISITION   amount at                                             Estimated
                                   Initial                  Carrying which Carried   Accumulated     Date of       Date  Depreciable
Description of Assets Encumbrances  Cost      Improvement     Cost   at Year-End   Depreciation  Construction   Acquired     Life
------------------------------------------------------------------------------------------------------------------------------------
<S>                   <C>          <C>         <C>        <C>         <C>              <C>          <C>        <C>             <C>

Unimproved land -
 San Jacinto, CA      $3,023,458   $ 3,550,000  $ 63,737   $3,387,993 $ 7,001,730        -0-         n/a       06/02/94&
                                                                                                               08/11/94         n/a
Unimproved land -
 Sun City, CA              -0-       1,320,000    96,096       47,147   1,463,243        -0-         n/a        11/02/94        n/a
Unimproved land -
 Banning, CA               -0-       1,875,000     1,500       70,109   1,946,609        -0-         n/a        12/21/94        n/a
Unimproved land -
 San Diego                 -0-       1,658,000   540,777       85,398   2,284,175        -0-         n/a        08/23/95        n/a
Unimproved land -
 Sun City                  -0-         500,000     4,780        5,162     509,942        -0-         n/a        04/26/95        n/a
Unimproved land -
 Simi Valley               -0-       1,220,000    72,794       54,963   1,347,757        -0-         n/a        04/22/96        n/a
                                     --------    ------
Combined encum-
 brances of other prop. 163,874
                       --------
                      $3,187,332   $10,123,000  $779,684   $3,650,772 $14,553,456        -0-
                      ==========   ===========  ========   ========== ===========        ===

Less valuation allowance:                                               3,978,272
                                                                        ---------

Net Carrying value:                                                   $10,575,184
                                                                      ===========

Reconciliation of carrying amount
---------------------------------

Beginning balance                  $ 7,481,697

Additions
  Initial Costs        1,220,000
  Improvements           645,724
  Carrying Cost        1,323,505
                       ---------
  Total Additions                    3,189,229
                                     ---------
Less: Increase in
   valuation allowance:                 95,742
                                     ---------
Ending balance                     $ 10,575,184
                                   ============
</TABLE>

                                                                -19-
<PAGE>
<TABLE>
<CAPTION>

                                                     TMP LAND MORTGAGE FUND, LTD
                                                 (A California Limited Partnership)
                                       Schedule II- Real Estate and Accumulated Depreciation
                                        (Schedule XI, Rule 12-28, for SEC Reporting Purposes
                                                For the Year Ended December 31, 1995

COLUMN    A                  B           C                  D            E               F             G           H           I
-----------------------------------------------------------------------------------------------------------------------------------
                                                   COSTS CAPITALIZED
                                                      SUBSEQUENT       Gross
                                                    TO ACQUISITION   amount at                                             Estimated
                                   Initial                  Carrying which Carried   Accumulated     Date of       Date  Depreciable
Description of Assets Encumbrances  Cost      Improvement     Cost   at Year-End   Depreciation  Construction   Acquired     Life
------------------------------------------------------------------------------------------------------------------------------------
<S>                   <C>          <C>         <C>        <C>         <C>              <C>          <C>        <C>             <C>
nimproved land -
 San Jacinto, CA      $2,026,071   $3,550,000  $ 63,737    $2,254,803 $    5,868,540    -0-           n/a      06/02/94 &
                                                                                                                08/11/94       n/a
Unimproved land -
 Sun City, CA                -0-    1,320,000       637        11,377      1,332,014    -0-           n/a        11/02/94      n/a
Unimproved land -
 Banning, CA                 -0-    1,875,000       -0-        25,739      1,900,739    -0-           n/a        12/21/94      n/a
Unimproved land -
 San Diego                   -0-    1,658,000    56,212        33,299      1,747,571    -0-           n/a         8/23/95      n/a
Unimproved land-
 Sun City                    -0-      500,000     4,780         2,049        506,829    -0-           n/a        04/26/95      n/a
Unimproved land-
 Simi Valley                 -0-          -0-     8,534 (A)       -0-          8,534    -0-           n/a             (A)      n/a
                       ---------    --------    -------     ---------  -------------
                      $2,026,071   $ 8,903,000 $133,960    $2,327,267 $   11,364,227    -0-
                      ==========   =========== ========    ========== ==============    ===

Less valuation allowance:                                                  3,882,530
                                                                           ---------

Net Carrying Value:                                                   $    7,481,697
                                                                      ==============

Reconciliation of carrying amount
---------------------------------

Beginning balance                  $ 4,163,501

Additions
  Initial Costs       $2,158,000
  Improvements            84,569
  Capitalized
     Carrying Costs    1,121,933
                       ---------

  Total Additions                    3,364,502
Less: Increase in
 Valuation Allowance                    46,306
                                    ----------
Ending balance                     $ 7,481,697
                                   ===========
<FN>
(A) Costs incurred for defaulted loan.  The property is in foreclosure as of December 31, 1995.  (See Note 3)
</FN>
</TABLE>
                                                                -20-
<PAGE>
<TABLE>
<CAPTION>


                                                     TMP LAND MORTGAGE FUND, LTD
                                                 (A California Limited Partnership)
                                       Schedule II - Real Estate and Accumulated Depreciation
                                        (Schedule XI, Rule 12-28, for SEC Reporting Purposes
                                                For the Year Ended December 31, 1994


COLUMN    A                  B           C                  D            E               F             G           H           I
-----------------------------------------------------------------------------------------------------------------------------------
                                                   COSTS CAPITALIZED
                                                      SUBSEQUENT       Gross
                                                    TO ACQUISITION   amount at                                             Estimated
                                   Initial                  Carrying which Carried   Accumulated     Date of       Date  Depreciable
Description of Assets Encumbrances  Cost      Improvement     Cost   at Year-End   Depreciation  Construction   Acquired     Life
------------------------------------------------------------------------------------------------------------------------------------
<S>                   <C>          <C>         <C>        <C>         <C>              <C>          <C>        <C>             <C>

Unimproved land -
San Jacinto, CA       $979,196     $2,400,000  $ 49,170   $1,198,263  $3,647,433        -0-          n/a        06/02/94        n/a
Unimproved land -
San Jacinto, CA            -0-      1,150,000       221          -0-   1,150,221        -0-          n/a        08/11/94        n/a
Unimproved land -
Sun City, CA               -0-      1,320,000       -0-          -0-   1,320,000        -0-          n/a        11/02/94        n/a
Unimproved land -
Banning, CA                -0-      1,882,071       -0-          -0-   1,882,071        -0-          n/a        12/21/94        n/a
                       ------       ---------    ------    ---------   --------
                      $979,196     $6,752,071  $ 49,391   $1,198,263  $7,999,725        -0-
                      ========     ==========  ========   ==========  ==========        ===

Less: Valuation
 Allowance:                                             3,836,224
                                                                       ---------

Net Carrying Value:                                                   $4,163,501
                                                                      ==========

Reconciliation of
 carrying amount

Beginning balance                  $      -0-

Additions
  Initial Costs       $6,752,071
  Capitalized
Carrying Costs         1,198,263
  Improvements            49,391
                       ---------
  Total Additions                   7,999,725
Less: Valuation Allowance:          3,836,224
                                    ---------

Ending balance                     $4,163,501
                                   ==========
</TABLE>

                                                                -21-
<PAGE>