<PAGE>   1
                         SECURITIES EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q



   X     Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Act
  ---    of 1934 for the quarterly period ended March 31, 1999.

         Transition Report Pursuant to Section 13 or 15(d) of the Securities
  ---    Exchange Act of 1934.

                          Commission file No. 333-3954
                                          ------------


                              IMC MORTGAGE COMPANY
               (Exact name of issuer as specified in its Charter)



                Florida                                    59-3350574
     ----------------------------------------------------------------------
     (State or other jurisdiction of                     (I.R.S. Employer
     incorporation or organization)                   identification number)

                              5901 E. FOWLER AVENUE
                              TAMPA, FLORIDA 33617
                    (Address of Principal Executive Offices)

         Issuer's telephone number, including area code: (813) 984-8801


Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing for the past 90 days. Yes  X   No
                                                 ---     ---

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date:

Title of each Class:                                Outstanding at May 14, 1999
---------------------------------------             ---------------------------
Common Stock, par value $.01 per share              34,221,718




<PAGE>   2


                      IMC MORTGAGE COMPANY AND SUBSIDIARIES

                                      INDEX



<TABLE>
<CAPTION>
PART I.  FINANCIAL INFORMATION                                     Page
<S>      <C>                                                       <C>

Item 1.  Financial Statements

         Consolidated Balance Sheets as of
          March 31, 1999 and December 31, 1998                       1

         Consolidated Statements of Operations
          for the three months ended
          March 31, 1999 and March 31, 1998                          2

         Consolidated Statements of Cash Flows
          for the three months ended March 31, 1999
          and March 31, 1998                                         3

         Notes to Consolidated Financial Statements                  4

Item 2. Management's Discussion and Analysis of
          Financial Condition and Results of Operations             15


PART II. OTHER INFORMATION

Item 1.  Legal Proceedings                                          32

Item 2.  Changes in Securities                                      32

Item 3.  Defaults Upon Senior Securities                            32

Item 4.  Submission of Matters to a Vote of Security Holders        32

Item 5.  Other Information                                          32

Item 6.  Exhibits and Reports on Form 8-K                           32
</TABLE>




<PAGE>   3


                      IMC MORTGAGE COMPANY AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                    (DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)


<TABLE>
<CAPTION>
                                                           March 31,        December 31,
                           ASSETS                             1999              1998
                                                          -----------       -----------
                                                          (Unaudited)

<S>                                                       <C>               <C>
Cash and cash equivalents                                 $    19,479       $    15,454
Accrued interest receivable                                     9,528            10,695
Accounts receivable                                            48,875            44,661
Mortgage loans held for sale, net                             748,456           946,446
Interest-only and residual certificates                       445,833           468,841
Property, furniture, fixtures and equipment, net               16,467            17,119
Mortgage servicing rights                                      47,209            52,388
Income tax receivable                                           8,770            12,914
Goodwill                                                       88,801            89,621
Other assets                                                   27,539            25,500
                                                          -----------       -----------
        Total assets                                      $ 1,460,957       $ 1,683,639
                                                          ===========       ===========

    LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
  Warehouse finance facilities                            $   793,701       $   984,571
  Term debt                                                   412,357           415,331
  Notes payable                                                17,281            17,406
  Accounts payable and accrued liabilities                     12,732            15,302
  Accrued interest payable                                      5,457             3,086
                                                          -----------       -----------
     Total liabilities                                      1,241,528         1,435,696
                                                          -----------       -----------

Commitments and contingencies

Redeemable preferred stock (redeemable at
   maturity at $100 per share and, under certain
   circumstances, upon a change in control)                    38,070            37,333
                                                          -----------       -----------

Stockholders' equity:
  Common stock, par value $.01 per share; 50,000,000
    authorized; and 34,201,380 and 34,139,790 shares
    issued and outstanding                                        342               341
  Additional paid-in capital                                  251,860           251,633
  Accumulated deficit                                         (70,843)          (41,364)
                                                          -----------       -----------
     Total stockholders' equity                               181,359           210,610
                                                          -----------       -----------
     Total                                                $ 1,460,957       $ 1,683,639
                                                          ===========       ===========
</TABLE>

           See accompanying notes to Consolidated Financial Statements


                                       1


<PAGE>   4



                      IMC MORTGAGE COMPANY AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                    (DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)
                                   (UNAUDITED)



<TABLE>
<CAPTION>
                                                            For the Three Months
                                                                Ended March 31,
                                                      -------------------------------
                                                           1999               1998
<S>                                                   <C>                <C>
Revenues:
 Gain on sales of loans                               $     18,111       $     59,980
                                                      ------------       ------------

 Warehouse interest income                                  20,629             41,235
 Warehouse interest expense                                (14,474)           (33,494)
                                                      ------------       ------------
     Net warehouse interest income                           6,155              7,741
                                                      ------------       ------------

 Servicing fees                                             13,172              9,011
 Other                                                       7,645              7,139
                                                      ------------       ------------
    Total servicing fees and other                          20,817             16,150
                                                      ------------       ------------

    Total revenues                                          45,083             83,871
                                                      ------------       ------------

Expenses:
 Compensation and benefits                                  29,350             28,438
 Selling, general and administrative                        23,425             24,940
 Other interest expense                                      8,884              4,889
 Interest expense - Greenwich Funds                          7,880                 --
                                                      ------------       ------------
   Total expenses                                           69,539             58,267
                                                      ------------       ------------

 Income (loss) before provision for income taxes           (24,456)            25,604
 Provision for income taxes                                  4,286             10,500
                                                      ------------       ------------

   Net income (loss)                                  $    (28,742)      $     15,104
                                                      ============       ============

Net income (loss) per common share:
 Basic                                                $      (0.86)      $       0.49
                                                      ============       ============
 Diluted                                              $      (0.86)      $       0.44
                                                      ============       ============

Weighted average number of shares outstanding:
 Basic                                                  34,221,718         30,750,870
 Diluted                                                34,221,718         34,695,591
</TABLE>


           See accompanying notes to Consolidated Financial Statements


                                       2
<PAGE>   5


                      IMC MORTGAGE COMPANY AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                             (DOLLARS IN THOUSANDS)
                                   (UNAUDITED)





<TABLE>
<CAPTION>
                                                                           For the Three Months
                                                                              Ended March 31,
                                                                         -------------------------
                                                                            1999            1998
                                                                         ---------       ---------
<S>                                                                      <C>             <C>
Cash flows from operating activities:
 Net income (loss)                                                       $ (28,742)      $  15,104
 Adjustments to reconcile net income (loss) to net cash provided by
  (used in) operating activities:
  Interest expense - Greenwich Funds                                         5,500              --
  Depreciation and amortization                                              7,220           5,131
  Deferred taxes                                                                --           4,768
  Mortgage servicing rights                                                     --         (11,128)
  Net loss on joint venture                                                     63             704
  Net change in operating assets and liabilities:
    Decrease (increase) in mortgages loans held for sale, net              197,990         (89,570)
    Increase in securities purchased under agreements
       to resell and securities sold but not yet purchased                      --          (4,267)
    Decrease in accrued interest receivable                                  1,167           5,818
    Decrease (increase) in interest-only and residual certificates          23,008        (104,449)
    Decrease (increase) in other assets                                     (1,550)          3,997
    Decrease (increase) in accounts receivable                              (4,214)          1,915
    Decrease in income tax receivable                                        4,144           5,641
    Increase in accrued interest payable                                     2,371           2,678
    Increase (decrease) in accounts payable and accrued liabilities         (2,570)          5,476
                                                                         ---------       ---------
        Net cash provided by (used in) operating activities                204,387        (158,182)
                                                                         ---------       ---------
Investing activities:
  Investment in joint venture                                                 (556)         (1,393)
  Purchase of property, furniture, fixtures, and equipment                    (336)         (1,322)
  Other                                                                         --            (376)
                                                                         ---------       ---------
  Net cash used in investing activities                                       (892)         (3,091)
                                                                         ---------       ---------

Financing activities:
 Net borrowings (repayments) on warehouse facilities                      (190,870)         85,453
 Term debt and notes payable borrowings                                      4,126         138,750
 Term debt and notes payable repayments                                    (12,726)        (72,803)
                                                                         ---------       ---------
 Net cash provided by (used in) financing activities                      (199,470)        151,400
                                                                         ---------       ---------
Net increase (decrease) in cash and cash equivalents                         4,025          (9,873)
Cash and cash equivalents, beginning of period                              15,454          26,750
                                                                         ---------       ---------
Cash and cash equivalents, end of period                                 $  19,479       $  16,877
                                                                         =========       =========

Supplemental disclosure cash flow information:
      Cash paid during the period for interest                           $  22,817       $  35,705
                                                                         =========       =========
      Cash paid during the period for taxes                              $     142       $     312
                                                                         =========       =========
</TABLE>


           See accompanying notes to Consolidated Financial Statements


                                       3

<PAGE>   6


                      IMC MORTGAGE COMPANY AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
               FOR THE THREE MONTHS ENDED MARCH 31, 1999 AND 1998
                                   (UNAUDITED)


1.       ORGANIZATION AND BASIS OF PRESENTATION:

         IMC Mortgage Company and its wholly-owned subsidiaries (the "Company"
         or "IMC") purchase and originate mortgage loans made to borrowers who
         may not otherwise qualify for conventional loans for the purpose of
         securitization and sale. The Company typically securitizes these
         mortgages into the form of a Real Estate Mortgage Investment Conduit
         ("REMIC") or an owner trust. The mortgages are sold on a servicing
         retained (whereby the Company keeps the contractual right to service
         the mortgage) or a servicing released basis.

         The accompanying consolidated financial statements include the accounts
         of the Company and its wholly owned subsidiaries. All intercompany
         transactions have been eliminated in the accompanying consolidated
         financial statements.

         The accompanying unaudited condensed consolidated financial statements
         have been prepared in accordance with generally accepted accounting
         principles for interim financial information and with the instructions
         to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not
         include all of the information and footnotes required by generally
         accepted accounting principles for complete financial statements. In
         the opinion of management, all adjustments (consisting of normal
         recurring accruals) considered necessary for a fair presentation have
         been included. Operating results for the interim periods are not
         necessarily indicative of financial results for the full year. These
         unaudited condensed consolidated financial statements should be read in
         conjunction with the audited consolidated financial statements and
         notes thereto included in the Company's Annual Report on Form 10-K for
         the fiscal year ended December 31, 1998 and reports filed on Forms 8-K
         dated March 3, 1999, February 26, 1999, February 23, 1999, November 27,
         1998 and October 21, 1998. The year-end balance sheet data was derived
         from audited financial statements, but does not include all disclosures
         required by generally accepted accounting principles.

         Certain reclassifications have been made to the presentations to
         conform to current period presentations.

         CONSUMMATION OF STOCK PURCHASE BY THE GREENWICH FUNDS

         As described in the Company's Annual Report on Form 10-K for the fiscal
         year ended December 31, 1998, the Company, like several companies in
         the subprime mortgage industry, is being materially and adversely
         affected by significant and adverse conditions in the equity, debt and
         asset-backed capital markets. IMC's ability to access equity, debt and
         asset-backed capital markets has become severely restricted. These
         market conditions resulted in several other companies in the subprime
         mortgage industry filing for bankruptcy protection, such as Southern
         Pacific Funding (October 1, 1998), Wilshire Financial Services Group,
         Inc. (March 3, 1999), MCA Financial Corp. (February 11, 1999), United
         Companies (March 2, 1999) and certain subsidiaries of First Plus
         Financial (March 6, 1999).



                                       4
<PAGE>   7
                     IMC MORTGAGE COMPANY AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
               FOR THE THREE MONTHS ENDED MARCH 31, 1999 AND 1998
                                  (UNAUDITED)


         The Company's revolving credit facility with BankBoston, N.A. matured
         in mid-October 1998 and BankBoston was unwilling to extend the
         facility. In addition, beginning in September 1998, the Company's
         residual lenders, which had advanced approximately $276 million to the
         Company collateralized by its interest-only and residual certificates,
         proposed to reduce their exposure by making cash margin calls. Certain
         of the Company's warehouse lenders holding more than $2 billion in
         mortgage loans also threatened to make margin calls on their credit
         lines during September and October 1998. During this period, the
         Company's traditional strategy of minimizing the risks of interest rate
         fluctuations through a program of short selling United States Treasury
         securities subjected the Company to margin calls of approximately $47.5
         million in cash as a "flight to quality" following the devaluation of
         the Russian ruble and concerns over economic conditions in the emerging
         markets generally disrupted the Company's anticipated hedging strategy.

         As a consequence, in October 1998, the Company, faced with the prospect
         of a forced liquidation of its assets or bankruptcy and the absence of
         other alternative sources of capital, entered into a $33 million
         standby revolving credit facility with Greenwich Street Capital
         Partners II, L.P. ("GSCP") and certain of the other Greenwich Funds.
         The facility provided IMC with interim financing for a period of 90
         days, which enabled the Company to continue to operate while it sought
         a substantial source of capital which would either invest funds in the
         Company or acquire the Company. In return for providing the facility,
         the Greenwich Funds received a $3.3 million commitment fee and
         non-voting Class C exchangeable preferred stock representing the
         equivalent of 40% of the common equity of the Company. The Class C
         exchangeable preferred stock is exchangeable after March 31, 1999 for
         Class D preferred stock, which has voting rights equivalent to 40% of
         the voting power of the Company. Under the loan facility, the Greenwich
         Funds may exchange the loans for additional shares of Class C
         exchangeable preferred stock or shares of Class D preferred stock in an
         amount up to the equivalent of 50% of the common equity of the Company
         (in addition to the preferred stock received for providing the
         facility) (the "Exchange Option"). In addition, upon certain changes in
         control of the Company, the Greenwich Funds could elect either to (i)
         receive payment of the facility, plus accrued interest and a take-out
         premium of up to 200% of the average principal amount of the loans
         outstanding or (ii) exercise the Exchange Option. The Company and the
         Greenwich Funds also entered into intercreditor agreements with the
         Company's significant creditors requiring such creditors to
         "standstill" for up to 90 days.

         On February 19, 1999, the Company entered into a merger agreement with
         the Greenwich Funds pursuant to which the Greenwich Funds would
         acquire 93.5% of the Company's common stock. On March 31, 1999, the 
         merger agreement was terminated and recast as an acquisition agreement
         with the Greenwich Funds on substantially the same economic terms. The
         Company's execution of the merger agreement and the acquisition 
         agreement were unanimously approved by the Board of Directors of the 
         Company, acting on the unanimous recommendation of a special committee
         of the Board consisting solely of disinterested directors. Under the 
         acquisition agreement, the Company agreed to issue common stock to the
         Greenwich Funds representing approximately 93.5% of the outstanding 
         common stock of the Company following such issuance. In return for 
         such common stock 



                                       5
<PAGE>   8

                     IMC MORTGAGE COMPANY AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
               FOR THE THREE MONTHS ENDED MARCH 31, 1999 AND 1998
                                  (UNAUDITED)


         issuance, the Greenwich Funds agreed to surrender their Class C
         exchangeable preferred stock and amend the loan agreement (i) to
         provide for an additional $35 million of working capital loans to the
         Company, (ii) to forego the Exchange Option, (iii) to reduce the
         takeout premium payable in certain events from 200% of the average
         principal amount outstanding from October 1998 to the prepayment date,
         to 10% of the average principal amount outstanding from the closing of
         the acquisition to the prepayment date and (iv) to extend the maturity
         of the loans thereunder until the third anniversary of the acquisition.
         The Company also entered into amended intercreditor agreements with
         certain of its creditors in February 1999 which provide an additional
         standstill period through the consummation of the acquisition by the
         Greenwich Funds and for 12 months thereafter, provided the acquisition
         occurs within five months, and subject to earlier termination in
         certain events as provided in the intercreditor agreements. The closing
         of the acquisition by the Greenwich Funds is subject to a number of
         conditions, including obtaining the approval of the shareholders of the
         Company for the transaction.

         The Company is in the process of preparing to call a special meeting of
         its shareholders to approve the acquisition and the issuance of 93.5% 
         of the common stock of IMC to the Greenwich Funds. In the event the 
         acquisition agreement is terminated or the acquisition is not 
         consummated within five months, the lenders subject to the 
         requirements of the amended and restated intercreditor agreements would
         no longer be required to refrain from exercising remedies. The
         financial statements do not include any adjustments that might result
         from the outcome of this uncertainty.

2.       RECENT ACCOUNTING PRONOUNCEMENTS:

         In June 1998, the Financial Accounting Standards Board ("FASB") issued
         Statement of Financial Accounting Standards ("SFAS") No. 133
         "Accounting for Derivative Instruments and Hedging Activities" ("SFAS
         133"). SFAS 133 is effective for fiscal quarters of fiscal years
         beginning after June 15, 1999 (January 1, 2000 for the Company). SFAS
         133 requires that all derivative instruments be recorded on the balance
         sheet at their fair value. Changes in the fair value of derivatives are
         recorded each period in current earnings or other comprehensive income,
         depending on whether a derivative was designated as part of a hedge
         transaction and, if it is, the type of hedge transaction. For
         fair-value hedge transactions in which the Company hedges changes in
         the fair value of an asset, liability or firm commitment, changes in
         the fair value of the derivative instrument will generally be offset in
         the income statement by changes in the hedged item's fair value. The
         ineffective portion of hedges will be recognized in current-period
         earnings.

         SFAS 133 precludes designation of a nonderivative financial instrument
         as a hedge of an asset or liability. The Company, prior to September
         30, 1998, hedged its interest rate risk on loan purchases by selling 
         short United States Treasury Securities which match the duration of the



                                       6
<PAGE>   9

                     IMC MORTGAGE COMPANY AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
               FOR THE THREE MONTHS ENDED MARCH 31, 1999 AND 1998
                                  (UNAUDITED) 


         fixed rate mortgage loans held for sale and borrowing the securities
         under agreements to resell. Prior to September 30, 1998 the unrealized
         gain or loss resulting from the change in fair value of these
         instruments had been deferred and recognized upon securitization as an
         adjustment to the carrying value of the hedged mortgage loans. SFAS 133
         requires the gain or loss on these nonderivative financial instruments
         to be recognized in earnings in the period of changes in fair value
         without a corresponding adjustment of the carrying amount of mortgage
         loans held for sale. Management anticipates that if the Company uses
         derivative financial instruments to hedge the Company's interest rate
         risk on loan purchases the Company will use derivative financial
         instruments which qualify for hedge accounting under the provisions of
         SFAS 133.

         The actual effect implementation of SFAS 133 will have on the Company's
         statements will depend on various factors determined at the period of
         adoption, including whether the Company is hedging its interest rate
         risk on loan purchases, the type of financial instrument used to hedge
         the Company's interest rate risk on loan purchases, whether such
         instruments qualify for hedge accounting treatment, the effectiveness
         of the hedging instrument, the amount of mortgage loans held for sale
         which the Company intends to hedge, and the level of interest rates.
         Accordingly, the Company can not determine at the present time the
         impact adoption of SFAS 133 will have on its statements of operations
         or balance sheets.

         Effective January 1, 1999, the Company adopted SFAS No. 134,
         "Accounting for Mortgage-Backed Securities Retained after the
         Securitization of Mortgage Loans Held for Sale by a Mortgage Banking
         Enterprise" ("SFAS 134"). SFAS 134 amends SFAS No. 65, "Accounting for
         Certain Mortgage-Backed Securities" ("SFAS 65") to require that after
         an entity that is engaged in mortgage banking activities has
         securitized mortgage loans that are held for sale, it must classify the
         resulting retained mortgage-backed securities or other retained
         interests based on its ability and intent to sell or hold those
         investments. However, a mortgage banking enterprise must classify as
         trading any retained mortgage-backed securities that it commits to sell
         before or during the securitization process. Previously, SFAS 65
         required that after an entity that is engaged in mortgage banking
         activities has securitized a mortgage loan that is held for sale, it
         must classify the resulting retained mortgage-backed securities or
         other retained interests as trading, regardless of the entity's intent
         to sell or hold the securities or retained interest. The application of
         the provisions of SFAS 134 did not have an impact on the Company's
         financial position or results of operations.






                                       7
<PAGE>   10


                     IMC Mortgage Company and Subsidiaries
                   Notes to Consolidated Financial Statements
               for the three months ended March 31, 1999 and 1998
                                  (Unaudited) 


3.       EARNINGS PER SHARE:

         In February 1997, the Financial Accounting Standards Board issued SFAS
         No. 128 "Earnings per Share" ("SFAS 128"), which became effective for
         the Company for reporting periods ending after December 15, 1997. Under
         the provisions of SFAS 128, basic earnings per share is determined by
         dividing net income (loss), adjusted for preferred stock dividends, by
         the weighted average number of shares outstanding. Diluted earnings 
         per share, as defined by SFAS No. 128, is computed assuming all 
         dilutive potential common shares were issued. All prior period 
         earnings per share data has been restated in accordance with the 
         provisions of SFAS 128.

         Amounts used in the determination of basic and diluted earnings per
         share are shown in the table below:

<TABLE>
<CAPTION>
                                                                    For the Three Months Ended
                                                                           March 31,
                                                                 -------------------------------
                                                                    1999               1998
                                                                    ----               ----

                                                               (in thousands, except share data)

         <S>                                                     <C>                <C>
         Net income (loss) ................................      $    (28,742)      $    15,104
         Less accretion of preferred stocks ...............              (737)               --
                                                                 ------------       -----------
         Income (loss) available to common stockholders-
            basic .........................................      $    (29,479)      $    15,104
                                                                 ============       ===========
         Weighted average common shares outstanding .......        34,221,718        30,750,870
         Adjustments for dilutive securities:
            Stock warrants ................................                --         2,160,000
            Stock options .................................                --           940,920
            Contingent shares .............................                --           843,801
                                                                 ------------       -----------
         Diluted common shares ............................        34,221,718        34,695,591
                                                                 ============       ===========
</TABLE>


         For the three months ended March 31, 1999, there were no adjustments
         for stock warrants, stock options, contingently issuable shares and
         convertible preferred stock in computing the diluted weighted average
         number of shares outstanding as their effect was antidilutive.

4.       WAREHOUSE FINANCE FACILITIES, TERM DEBT AND NOTES PAYABLE:

         WAREHOUSE FINANCE FACILITIES

         In October 1998, as a result of volatility in equity, debt and
         asset-backed markets, among other things, the Company entered into
         intercreditor arrangements with Paine Webber Real Estate Securities,
         Inc. ("Paine Webber"), Bear Stearns Home Equity Trust 1996-1 ("Bear
         Stearns"), and Aspen Funding Corp. and German American Capital
         Corporation, subsidiaries of Deutsche Bank of North America Holding
         Corp ("DMG") (collectively, the "Significant Lenders"). The
         intercreditor arrangements provided for the Significant Lenders to
         "standstill" and keep outstanding balances under their facilities in
         place, subject



                                       8
<PAGE>   11


                     IMC MORTGAGE COMPANY AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
               FOR THE THREE MONTHS ENDED MARCH 31, 1999 AND 1998
                                  (UNAUDITED) 


         to certain conditions, for up to 90 days (which expired mid-January
         1999) in order for the Company to explore its financial alternatives.
         The intercreditor agreements also provided, subject to certain
         conditions, that the lenders would not issue any margin calls
         requesting that additional collateral be delivered to the lenders. To 
         induce DMG to enter the intercreditor agreement, the Company was 
         required to permit DMG's committed warehouse and interest-only and 
         residual credit facilities to become uncommitted and issued to DMG 
         warrants exercisable at $1.72 per share to purchase 2.5% of the common
         stock of the Company on a diluted basis.

         In mid-January 1999, the intercreditor agreements expired; however, on
         February 19, 1999, concurrent with the execution of the Acquisition
         Agreement (see the Company's Annual Report on Form 10-K for the fiscal
         year ended December 31, 1998 and Note 17 of Notes to Consolidated
         Financial Statements "Significant Events and Events Subsequent to
         December 31, 1998" included therein), the Company entered into amended
         and restated intercreditor agreements with the Significant Lenders.
         Under the amended and restated intercreditor agreements, the
         Significant Lenders agreed to keep their respective facilities in place
         until the closing of the acquisition and for twelve months thereafter
         provided that the closing of the acquisition occurs within five months,
         subject to earlier termination in certain events. If the acquisition is
         not consummated within a five-month period, after that period, the
         Significant Lenders would not be subject to the requirements of the
         amended and restated intercreditor agreements.

         The Acquisition Agreement is subject to a number of conditions,
         including approval by the Company's shareholders. There can be no
         assurance that the acquisition will be consummated. If the acquisition
         by the Greenwich Funds is not consummated within five months from the
         signing of amended and restated intercreditor agreements, the
         standstill period thereunder would expire and the Significant Lenders
         could exercise remedies. In such an event, it is likely that the
         Company would be unable to continue its business.

         None of the three Significant Lenders has formally reduced the amount
         available under its facilities, but each has informally indicated its
         desire that the Company keep the average amount outstanding on the
         warehouse facilities well below the amount available. There can be no
         assurance that the Significant Lenders will continue to fund the
         Company under their uncommitted facilities. The intercreditor
         agreements also require the Company to make various amortization
         payments on the underlying debt before, upon and after the closing of
         the acquisition. Failure to make the required payments would permit the
         Significant Lenders to terminate the standstill period under the
         intercreditor agreements and to exercise remedies. In such an event, it
         is likely the Company would be unable to continue its business.

         At March 31, 1999, the Company had a $1.25 billion uncommitted credit
         facility with Paine Webber. Outstanding warehouse borrowings bear 
         interest at rates ranging from LIBOR (5.06% at March 31, 1999) plus 
         0.65% to LIBOR plus 0.90%. Approximately $80 million was outstanding 
         under this facility at March 31, 1999. The



                                       9
<PAGE>   12
                     IMC MORTGAGE COMPANY AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
               FOR THE THREE MONTHS ENDED MARCH 31, 1999 AND 1998
                                  (UNAUDITED)


         Company has informally requested that Paine Webber permit funding of an
         additional $200 million under its warehouse facilities, but has not yet
         been notified if the request has been approved.

         At March 31, 1999, the Company had a $1.0 billion uncommitted credit
         facility with DMG which includes a $100.0 million credit facility
         collateralized by interest-only and residual certificates. At March 31,
         1999, approximately $232 million was outstanding under this facility.
         DMG has indicated to the Company that additional funding will be on an
         "as-requested" basis.

         At March 31, 1999, the Company had a $1.0 billion uncommitted warehouse
         facility with Bear Stearns. This facility bears interest at LIBOR plus
         0.75%. At March 31, 1999, approximately $385 million was outstanding
         under this facility. Bear Stearns has requested that the Company
         maintain outstanding amounts under this warehouse facility at no more
         than $500 million.

         Additionally, at March 31, 1999, the Company had other outstanding
         warehouse lines of credit of approximately $97 million. Interest rates
         ranged from LIBOR plus 0.65% to LIBOR plus 1.50% as of March 31, 1999,
         and all borrowings mature within one year.

         Outstanding borrowings under the Company's warehouse financing
         facilities are collateralized by mortgage loans held for sale,
         and servicing rights on approximately $250 million of mortgage loans. 
         Upon the sale of these loans the borrowings under these lines will be 
         repaid.

         The Company is attempting to enter into arrangements to obtain
         warehouse facilities from lenders that are not currently providing
         warehouse facilities to IMC, but has not yet been successful.

         As a result of the DMG warehouse facility becoming uncommitted and the
         adverse market conditions currently being experienced by the Company
         and other mortgage companies in the industry, the Company's ability to
         continue to operate is dependent upon the Significant Lenders'
         discretion to provide warehouse funding to the Company. There can be no
         assurance the Significant Lenders will approve the Company's warehouse
         funding requests.

         TERM DEBT

         At March 31, 1999, outstanding interest-only and residual financing
         borrowings were $148.5 million under the Company's credit facility with
         Paine Webber. Outstanding borrowings bear interest at LIBOR plus 2.0%
         and are collateralized by the Company's interest in certain
         interest-only and residual certificates.


                                       10
<PAGE>   13

                     IMC MORTGAGE COMPANY AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
               FOR THE THREE MONTHS ENDED MARCH 31, 1999 AND 1998
                                  (UNAUDITED) 


         Bear, Stearns & Co. Inc. and its affiliates, Bear Stearns Mortgage
         Capital Corporation and Bear, Stearns International Limited, provide
         the Company with a $100 million credit facility which is 
         collateralized by the Company's interest in certain interest-only and
         residual certificates. At March 31, 1999, $90.9 million was outstanding
         under this credit facility, which bears interest at 1.75% per annum in
         excess of LIBOR.

         At March 31, 1999, outstanding interest-only and residual financing
         borrowings under the Company's credit facility with DMG were $42.7
         million. Outstanding borrowings bear interest at LIBOR plus 2.0% and
         are collateralized by the Company's interest in certain interest-only
         and residual certificates.

         The interest-only and residual financing facilities described above are
         subject to the intercreditor agreements and amended and restated
         intercreditor agreements described under "Warehouse Finance Facilities"
         above.

         At March 31, 1999, the Company had borrowed $2.1 million under an
         agreement which matured in August 1998, bears interest at 2.0% per
         annum in excess of LIBOR and is collateralized by the Company's
         interest in certain interest-only and residual certificates. The
         Company has informally agreed to allow approximately 1/3 of the cash
         from the interest-only and residual certificates to be used to reduce
         the amount outstanding under this facility on a monthly basis and the
         lender has informally agreed to keep the facility in place. There can
         be no assurance the informal agreement will provide for any further
         extension of the maturity.

         At March 31, 1999, the Company also has outstanding a $5.9 million
         credit facility with an affiliate of the Company which bears interest
         at 10% per annum. The credit facility provides for repayment of
         principal and interest over 36 months, and based on certain
         circumstances, a partial prepayment of principal may be required on
         July 31, 1999.

         BankBoston provided the Company with a revolving credit facility which
         matured in October 1998, bore interest at LIBOR plus 2.75% and provided
         for borrowings up to $50.0 million to be used to finance interest-only
         and residual certificates or for acquisitions or bridge financing. On
         February 19, 1999, $42.5 million was outstanding under this credit
         facility. BankBoston, with participation from another financial
         institution, also provided the Company with a $45.0 million working
         capital facility, which bore interest at LIBOR plus 2.75% and matured
         in October 1998. On February 19, 1999, $45.0 million was outstanding
         under this facility. The Company was unable to repay either of these
         BankBoston facilities when they matured.

         In October 1998, the Company entered into a forbearance and
         intercreditor agreement with BankBoston with respect to its combined
         $95.0 million facilities. That agreement provided that the bank would
         take no collection action, subject to certain conditions, for up to 90
         days (which expired in mid-January 1999) in order for the Company to
         explore its financial alternatives.



                                       11
<PAGE>   14


                     IMC MORTGAGE COMPANY AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
               FOR THE THREE MONTHS ENDED MARCH 31, 1999 AND 1998
                                  (UNAUDITED)


         In mid-January, 1999 the forbearance and intercreditor agreement with
         BankBoston expired. On February 19, 1999 the Greenwich Funds purchased,
         at a discount, from BankBoston its interest in the credit facilities,
         and entered into an amended intercreditor agreement with the Company
         relating to the combined $95.0 million facilities. Under the amended
         intercreditor agreement, the Greenwich Funds have agreed to keep its
         facilities in place for a period of 12 months thereafter, if the
         acquisition described in the Acquisition Agreement, discussed below, is
         consummated within five months, subject to earlier termination in
         certain events as provided in the intercreditor agreements. If the
         acquisition by the Greenwich Funds is not consummated within a five
         month period, after that, the Greenwich Funds would no longer be
         required to standstill.

         On October 15, 1998, the Company entered into an agreement for a $33.0
         million standby revolving credit facility with certain of the Greenwich
         Funds (the "Greenwich Loan Agreement"). The facility was available to
         provide working capital for a period of up to 90 days. The terms of the
         facility resulted in substantial dilution of existing common
         stockholders' equity equal to a minimum of 40%, up to a maximum of 90%,
         on a diluted basis, depending on (among other things) when, or whether
         the Company entered into a definitive agreement for a transaction which
         could result in a change of control. In mid-January 1999, the $33.0
         million standby revolving credit facility matured. On February 16,
         1999, the Greenwich Funds made additional loans available totaling $5.0
         million under the facility. At March 31, 1999, $34.8 was outstanding
         under the Greenwich Loan Agreement.

         On February 19, 1999, the Company entered into a merger agreement with
         the Greenwich Funds that was terminated and recast as an acquisition
         agreement on March 31, 1999. Under the Acquisition Agreement, the
         Greenwich Funds will receive newly issued common stock of the Company
         equal to 93.5% of the common stock outstanding after such issuance,
         leaving the existing common shareholders of the Company with 6.5% of
         the common stock outstanding. No payment will be made to the Company's
         common shareholders in this transaction. Upon the consummation of the
         acquisition, the Greenwich Funds will surrender for cancellation their
         Class C exchangeable preferred stock and enter into an amendment and
         restatement of its existing loan agreement with the Company, pursuant
         to which the Greenwich Funds will, among other things, make available 
         to the Company an additional $35 million in working capital loans, 
         extend the maturity of the loans to three years from such consummation
         and forego their right to exchange their loans for additional 
         preferred stock.

         The terms of the Greenwich Loan Agreement resulted in significant
         expense and stockholder dilution. Interest expense-Greenwich Funds of
         $7.9 million was recognized for the three months ended March 31, 1999
         with respect to the Greenwich Loan Agreement which includes accrued
         interest at 10% and amortization of the $3.3 million commitment fee and
         the value attributable to the Class C preferred stock issued and the
         additional preferred stock issuable to the Greenwich Funds in exchange
         for its loan under the terms of the agreement. (See the Company's
         Annual Report on Form 10-K for the fiscal year ended December 31, 1998
         and Note 4 of Notes to Consolidated Financial Statements "Preferred 
         Stock" included therein). Interest expense-Greenwich Funds also 
         includes interest



                                       12
<PAGE>   15

                     IMC Mortgage Company and Subsidiaries
                   Notes to Consolidated Financial Statements
               for the three months ended March 31, 1999 and 1998
                                  (Unaudited) 


         expense of $1.0 million related to the $95.0 million credit facilities
         that the Greenwich Funds purchased from BankBoston on February 19,
         1999.

         The Acquisition Agreement is subject to a number of conditions,
         including approval by the Company's shareholders. There can be no
         assurance that the Acquisition Agreement will be consummated. If the
         acquisition is not consummated within five months from the signing of
         the amended and restated intercreditor agreements, the standstill
         thereunder would expire and Significant Lenders and the Greenwich Funds
         could exercise remedies.

         The warehouse notes and term debt have requirements that the Company
         maintain certain debt to equity ratios and certain agreements restrict
         the Company's ability to pay dividends on common stock. Capital
         expenditures are limited by certain agreements.

         NOTES PAYABLE

         At March 31, 1999, $4.4 million was outstanding under a mortgage note
         payable, which bears interest at 8.16% per annum and expires December
         2007. The note is collateralized by the Company's headquarters
         building.

         At March 31, 1999, $12.9 million was outstanding under notes payable to
         shareholders related to an acquisition completed in 1997. These notes
         bear interest at prime (7.75% at March 31, 1999) plus 2.0% and mature
         on July 1, 1999.

5.       INTEREST-ONLY AND RESIDUAL CERTIFICATES

         Activity in interest-only and residual certificates consisted of the
         following:

<TABLE>
<CAPTION>
                                                       For the three months ended
                                                                March 31,
                                                       --------------------------
                                                          1999            1998
                                                              (in thousands)
         <S>                                           <C>             <C>
         Balance, January 1 .....................      $ 468,841       $ 223,306
         Additions ..............................             --         105,125
         Cash receipts ..........................        (23,008)           (676)
                                                       ---------       ---------
         Balance, March 31 ......................      $ 445,833       $ 327,755
                                                       =========       =========
</TABLE>

         In 1998, the Company revised the loss curve assumption used to
         approximate the timing of losses over the life of the securitized loans
         and the discount rate used to present value the projected cash flows
         retained by the Company. Previously, the Company expected losses from
         defaults to increase from zero in the first six months of the loan to
         100 basis points after 36 months. During the fourth quarter of 1998, as
         a result of emerging trends in the Company's serviced loan portfolio
         and adverse market conditions (see the Company's Annual Report on Form
         10-K for the fiscal year ended December 31, 1998 and Note 3 "Warehouse
         Finance Facilities, Term Debt, and Notes Payable," Note 5 "Hedge Loss"
         and Note 17 "Significant Events and Events Subsequent to December 31, 
         1998" of Notes to Consolidated Financial Statements included therein),
         the Company revised its loss curve



                                       13
<PAGE>   16
                     IMC MORTGAGE COMPANY AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
               FOR THE THREE MONTHS ENDED MARCH 31, 1999 AND 1998
                                  (UNAUDITED) 

         so that expected defaults gradually increase from zero in the first six
         months of the loan to 175 basis points after 36 months. The Company
         believes the adverse market conditions affecting the non-conforming
         mortgage industry may limit the Company's borrowers' ability to
         refinance existing delinquent loans serviced by IMC with other
         non-conforming mortgage lenders that traditionally had offerred loans 
         to borrowers that are less creditworthy, which IMC believes may 
         increase the frequency of defaults. There can be no assurance that the
         loss curve assumption presently being used by the Company, based on 
         the adverse market conditions, will prove to be sufficient. 
         Previously, the Company discounted the present value of projected cash
         flows retained by the Company at discount rates ranging from 11% to 
         14.5%. During the fourth quarter of 1998, as a result of adverse 
         market conditions, the Company adjusted to 16% the discount rate used 
         to present value the projected cash flow retained by the Company.

6.       COMMITMENTS AND CONTINGENCIES

         Certain members of management entered into employment agreements
         expiring through 2001 which, among other things, provide for aggregate
         annual compensation of approximately $1.4 million plus bonuses ranging
         from 5% to 15% of base salary in the relevant year for each one percent
         by which the increase in net earnings per share of the Company over the
         prior year exceeds 10%, up to a maximum of 300% of annual compensation.
         No bonuses under these contracts were paid for the fiscal year 1998 and
         no bonuses are anticipated for the fiscal year 1999. Each employment
         agreement contains a restrictive covenant, which prohibits the
         executive from competing with the Company for a period of 18 months
         after termination, and certain deferred compensation upon a "change of
         control" as defined in the employment agreements. The Acquisition
         Agreement, described in Note 1, is contingent upon future employment
         agreements with certain members of management acceptable to the
         Greenwich Funds. There can be no assurance employment agreements
         acceptable to certain members of management and Greenwich Funds can be
         achieved.

         LEGAL PROCEEDINGS

         The Company is party to various legal proceedings arising in the
         ordinary course of its business. Management believes that none of these
         matters, individually or in the aggregate, will have a material adverse
         effect on the consolidated financial condition or results of operations
         of the Company.

         On December 23, 1998, certain former shareholders of Corewest sued the
         Company in Superior Court of the State of California for the County of
         Los Angeles claiming the Company agreed to pay them $23.8 million in
         cancellation of the contingent "earn out" payment, if any, payable by
         the Company in connection with the Company's purchase of all of the
         outstanding shares of Corewest. The case is in the early stages of
         pleading; however, the Company's management, based on consultation
         with legal counsel, believes there is no merit in the plaintiffs' 
         claim.


                                       14
<PAGE>   17




ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS

The following information should be read in conjunction with the consolidated
financial statements and notes included in Item 1 of this Quarterly Report, and
the financial statements and the notes thereto and Management's Discussion and
Analysis of Financial Condition and Results of Operations included in the
Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1998
and reports filed on Forms 8-K dated March 3, 1999, February 26, 1999, February
23, 1999, November 27, 1998 and October 21, 1998. The following management's
discussion and analysis of the Company's financial condition and results of
operations contains "forward-looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1995, which involve risks and
uncertainties. You can identify forward looking statements by the use of such
words as "expect", "estimate", "intend", "project", "budget", "forecast",
"anticipate", "plan", "in the process of" and similar expressions. Forward
looking statements include all statements regarding IMC's expected financial
position, results of operations, cash flows, financing plans, business
strategies, budgets, capital and other expenditures, competitive positions,
plans and objectives of management and markets for stock. All forward looking
statements involve risks and uncertainties. In particular, any statements
contained herein regarding the consummation and benefits of the proposed
transaction with Greenwich Street Capital Partners II, L.P. and certain related
funds (the "Greenwich Funds"), as well as expectations with respect to future
sales, operating efficiencies and product and product expansion, are subject to
known and unknown risks, uncertainties and contingencies, many of which are
beyond the control of IMC, which may cause actual results, performance or
achievements to differ materially from anticipated results, performance or
achievements. Factors that might affect such forward looking statements include,
among other things, overall economic and business conditions, the demand for
IMC's services, competitive factors in the industry in which IMC competes,
changes in government regulation, continuing tightening of credit availability
to the subprime mortgage industry, early termination of the amended and restated
intercreditor agreements or the standstill periods relating to certain of IMC's
creditors increased yield requirements by asset-backed investors, lack of
continued availability of IMC's credit facilities, reduction in real estate
values, reduced demand for non-conforming loans, changes in underwriting
criteria applicable to such loans, prepayment speeds, delinquency and default
rates of mortgage loans owned or serviced by IMC, rapid fluctuation in interest
rates, risks related to not hedging against loss of value of IMC's mortgage loan
inventory, changes which influence the loan securitization and the net interest
margin securities (excess cashflow trust) markets generally, lower than expected
performance of companies acquired by IMC, market forces affecting the price of
IMC's common stock and other uncertainties associated with IMC's current
financial difficulties and the proposed transaction with the Greenwich Funds,
and other risks identified in IMC Mortgage Company's Securities and Exchange
Commission filings.

GENERAL

IMC is a specialized consumer finance company engaged in purchasing,
originating, servicing and selling home equity loans secured primarily by first
liens on one- to four-family residential properties. The Company focuses on
lending to individuals whose borrowing needs are generally not being served by
traditional financial institutions due to such individuals' impaired credit
profiles and other factors. Loan proceeds typically are used by such individuals
to consolidate debt, to refinance debt, to finance home improvements, to pay
educational expenses and for a variety of other uses. By focusing on individuals
with impaired credit profiles and providing prompt responses to their borrowing
requests,



                                       15
<PAGE>   18

the Company has been able to charge higher interest rates for its loan products
than typically are charged by conventional mortgage lenders.

RESULTS OF OPERATIONS

Three Months Ended March 31, 1999 Compared to Three Months Ended March 31, 1998.

Net loss for the three months ended March 31, 1999 was $28.7 million
representing a decrease of $43.8 million or 290.3% from net income of $15.1
million for the three months ended March 31, 1998. The decrease in net income
resulted principally from a decrease in gain on sale of loans of $41.9 million
or 69.8% to $18.1 million for the three months ended March 31, 1999 from $60.0
million for the three months ended March 31, 1998 and $7.9 million of interest
expense associated with the transaction with the Greenwich Funds. Also
contributing to the decrease in net income was a $1.6 million or 20.5% decrease
in net warehouse interest income to $6.2 million for the three months ended
March 31, 1999 from $7.7 million for the three months ended March 31, 1998. The
decrease in net income was partially offset by a $4.2 million or 46.2% increase
in servicing fees to $13.2 million for the three months ended March 31, 1999
from $9.0 million for the three months ended March 31, 1998, and a $0.5 million
or 7.1% increase in other revenues to $7.6 million for the three months ended
March 31, 1999 from $7.1 million for the three months ended March 31, 1998.

The decrease in income was also attributed to a $0.9 million or 3.2% increase in
compensation and benefits to $29.4 million for the three months ended March 31,
1999 from $28.4 million for the three months ended March 31, 1998. The decrease
in income is also attributable to a $4.0 million or 81.7% increase in other
interest expense to $8.9 million for the three months ended March 31, 1999 from
$4.9 million for the three months ended March 31, 1998. The decrease in income
was partially offset by a $1.5 million or 6.1% decrease in selling, general and
administrative expenses to $23.4 million for the three months ended March 31,
1999 from $24.9 million for the three months ended March 31, 1998.

Net loss before taxes was increased by a provision for income taxes of $4.3
million for the three months ended March 31, 1999 compared to a provision for
income taxes of $10.5 million for the three months ended March 31, 1998. No
income tax benefit has been applied to the net loss for the three months ended
March 31, 1999, as the Company determined it cannot be assured that the income
tax benefit could be realized in the future.











                                       16
<PAGE>   19





REVENUES

The following table sets forth information regarding components of the Company's
revenues for the three months ended March 31, 1999 and 1998:

<TABLE>
<CAPTION>
                                                For the Three Months
                                                   Ended March 31,
                                            -----------------------------
                                              1999  (in thousands) 1998
                                            --------             --------
<S>                                         <C>                  <C>
Gain on sales of loans                      $ 18,111             $ 59,980
                                            --------             --------
Warehouse interest income                     20,629               41,235
Warehouse interest expense                   (14,474)             (33,494)
                                            --------             --------
   Net warehouse interest income               6,155                7,741
                                            --------             --------
Servicing fees                                13,172                9,011
Other                                          7,645                7,139
                                            --------             --------
    Total revenues                          $ 45,083             $ 83,871
                                            ========             ========
</TABLE>


Gain on Sales of Loans. For the three months ended March 31, 1999, gain on sales
of loans decreased to $18.1 million from $60.0 million for the three months
ended March 31, 1998, a decrease of 69.8%, due primarily to a decrease in loans
sold through securitizations. The total volume of loans produced decreased by 
79.2% to approximately $353 million for the three months ended March 31, 1999 
as compared with a total volume of approximately $1.7 billion for the three 
months ended March 31, 1998. Originations by the Company's correspondent 
network decreased 99.2% to approximately $9 million for the three months ended 
March 31, 1999 from approximately $1.2 billion for the three months ended March
31, 1998, while production from the Company's broker network and direct lending
operations decreased by 36.0% to approximately $344 million for the three 
months ended March 31, 1999 from approximately $537 million for the three 
months ended March 31, 1998.

The Company sells the loans it purchases or originates through one of two
methods: (i) securitization, which involves the private placement or public
offering of pass-through mortgage-backed securities, or (ii) whole loan sales,
which involve selling blocks of loans to single purchasers. During the three
months ended March 31, 1999, the Company did not sell any loans through the 
securitization market in order to better manage its cash flow. Mortgage loans 
delivered to securitization trusts decreased by $1.4 billion, a decrease of 
100% to $0 for the three months ended March 31, 1999 from $1.4 billion for the 
three months ended March 31, 1998. Mortgage loans sold in the whole loan market
increased by approximately $413 million, an increase of approximately 413%, to 
approximately $513 million for the three months ended March 31, 1999 from 
approximately $100 million for the three months ended March 31, 1998.

Net Warehouse Interest Income. Net warehouse interest income decreased to $6.2
million for the three months ended March 31, 1999 from $7.7 million for the
three months ended March 31, 1998, a decrease of 20.5%. The decrease in the
three month period ended March 31, 1999 reflected decreased mortgage loan
production and mortgage loans held for sale.

Net warehouse interest income for the three months ended March 31, 1998 was
partially offset by a decrease in the securitization of adjustable rate mortgage
loans. In a fixed rate mortgage loan securitization transaction, the Company
receives the pass-through rate of interest on the loans conveyed to the
securitization trust for the period between the cut-off date (generally the
first day of the month a securitization transaction occurs) and the closing date
of the securitization transaction (typically



                                       17
<PAGE>   20

during the third or fourth week of the month). The cut-off date represents the
date after which interest on the mortgage loans accrues to the securitization 
trust rather than the Company. The pass-through rate, which is less than the 
weighted average interest rate on the mortgage loans, represents the interest 
rate to be received by investors who purchase pass-through certificates in the
securitization trust on the closing date. The Company continues to incur
interest expense on its warehouse financings related to loans conveyed to the
trust until the closing date, at which time the warehouse line is repaid. In an
adjustable rate mortgage loan securitization, the Company receives no interest
on mortgage loans conveyed to the securitization trust for the period between
the cut-off date and the closing date of the securitization. For the three
months ended March 31, 1999 and 1998, the Company incurred warehouse interest
expense of $0 and approximately $2.9 million, respectively, related to the
period between the cut-off date and the closing date of adjustable rate mortgage
rate mortgage loan securitizations for which no corresponding interest income
was recognized.

Servicing Fees. Servicing fees increased to $13.2 million for the three months
ended March 31, 1999 from $9.0 million for the three months ended March 31,
1998, an increase of 46.2%. Servicing fees for the three months ended March 31,
1999 were positively affected by an increase in mortgage loans serviced for
others over the prior period. The Company increased its average portfolio of
mortgage loans serviced for others by $2.1 billion or 42.4% to $7.5 billion for
the three months ended March 31, 1999 from $5.4 billion for the three months
ended March 31, 1998.

Other. Other revenues, consisting principally of the recognition of the increase
or accretion of the discounted value of interest-only and residual certificates
over time and prepayment penalties from borrowers who prepay the outstanding
balance of their mortgage, increased to $7.6 million or 7.1% for the three
months ended March 31, 1999 from $7.1 million in three months ended March 31,
1998.

EXPENSES

The following table sets forth information regarding components of the Company's
expenses for the three months ended March 31, 1999 and 1998:

<TABLE>
<CAPTION>
                                                  For the Three Months
                                                     Ended March 31,
                                               --------------------------
                                                1999 (in thousands) 1998
                                               -------            -------
<S>                                            <C>                <C>
Compensation and benefits                      $29,350            $28,438
Selling, general and administrative             23,425             24,940
Other interest expense                           8,884              4,889
Interest expense - Greenwich Funds               7,880                  0
                                               -------            -------
         Total expenses                        $69,539            $58,267
                                               =======            =======
</TABLE>


Compensation and benefits increased by $0.9 million or 3.2% to $29.4 million for
the three months ended March 31, 1999 from $28.4 million for the three months
ended March 31, 1998, principally due to an increase in the number of employees
related to additions of personnel to service the Company's loan servicing
portfolio, offset by a reduction of personnel to originate mortgage loans and a
$2.7 million decrease in executive and management incentive compensation to $0
for the three months ended March 31, 1999 from $2.7 million for the three months
ended March 31, 1998. The amount of executive bonuses is directly related to
increases in the Company's earnings per share. Although executive bonuses of
$2.7 million were accrued in the three months ended March 31, 1998, no executive
bonuses were actually paid during 1998 and none are anticipated for 1999.



                                       18
<PAGE>   21

Selling, general and administrative expenses decreased by $1.5 million or 6.1%
to $23.4 million for the three months ended March 31, 1999 from $24.9 million
for the three months ended March 31, 1998 principally due to a decrease in
underwriting and originating costs as a result of a decrease in the volume of
mortgage loan production.

Other interest expense increased by $4.0 million or 81.7% to $8.9 million for
the three months ended March 31, 1999 from $4.9 million for the three months
ended March 31, 1998 principally as a result of increased interest expense due
to increased interest-only and residual borrowings.

Interest expense - Greenwich Funds includes costs associated with a $38 million
standby revolving credit facility entered into by Greenwich Funds and the 
Company on October 15, 1998. Interest expense related to the transaction with 
the Greenwich Funds includes accrued interest at 10%, amortization of a $3.3 
million commitment fee, amortization of the value attributable to the Class C 
exchangeable preferred stock issued, and amortization of the value assigned to 
the beneficial conversion feature associated with the Exchange Option in favor 
of the Greenwich Funds under the terms of the standby revolving credit 
facility. Interest expense - Greenwich Funds also includes accrued interest on 
the $95.0 million credit facilities the Greenwich Funds purchased from 
BankBoston on February 18, 1999. See Note 4 of Notes to Consolidated Financial 
Statements for the three months ended March 31, 1999 and 1998 "Warehouse 
Finance Facilities, Term Debt and Notes Payable".

Income Taxes. The provision for income taxes for the three months ended March
31, 1999 was approximately $4.3 million which differed from the federal tax rate
of 35% primarily due to state income taxes, the non-deductibility for tax
purposes of a portion of interest expense - Greenwich Funds, amortization
expenses related to goodwill and a full valuation allowance established against
the deferred tax asset.

FINANCIAL CONDITION

March 31, 1999 Compared to December 31, 1998

Mortgage loans held for sale, net, at March 31, 1999 were $748.5 million, a
decrease of $198.0 million or 20.9% from mortgage loans held for sale of $946.4
million at December 31, 1998. Included in mortgages held for sale, net, at March
31, 1999 and December 31, 1998 were $83.8 million and $84.6 million,
respectively, of mortgage loans which were not eligible for securitization due
to delinquency and other factors (loans under review). The amount by which cost
exceeds market value on loans under review is accounted for as a valuation
allowance. The valuation allowances at March 31, 1999 and December 31, 1998 were
$21.5 million and $24.0 million, respectively.

Accounts receivable increased $4.2 million or 9.4% from $44.7 million at
December 31, 1998 to $48.9 million at March 31, 1999, primarily due to an
increase in servicing advances outstanding. As the servicer for the
securitization trusts, the Company is required to advance certain principal,
interest and escrow amounts to the securitization trust for delinquent
mortgagors and to pay expenses related to foreclosure activities. The Company
then collects the amounts from the mortgagors or from the proceeds from
liquidation of foreclosed properties. The Company expects the total dollar
amount of delinquencies to increase in future periods as the servicing portfolio
increases and securitization pools continue to mature.



                                       19
<PAGE>   22

Interest-only and residual certificates at March 31, 1999 were $445.8 million,
representing a decrease of $23.0 million or 4.9% from interest-only and residual
certificates of $468.8 million at December 31, 1998. Mortgage servicing rights
decreased $5.2 million or 9.9% from $52.4 million at December 31, 1998 to $47.2
million March 31, 1999. The decrease in mortgage servicing rights consists of
amortization of $5.2 million. The decrease in interest-only and residual
certificates and mortgage servicing rights resulted primarily from the receipt
of cash on the interest-only and residual certificates in the three months ended
March 31, 1999.

Goodwill decreased $0.8 million from $89.6 million at December 31, 1998 to $88.8
million at March 31, 1999 due to amortization of goodwill. Goodwill is being
amortized on a straight-line basis over periods from five to thirty years. The
Company reviews the potential impairment of goodwill on a non-discounted cash
flow basis to assess recoverability. The Company determined that there was no
impairment of goodwill at March 31, 1999 based on the projected cash flows of
the acquired companies. However, potential impairment in future periods may
result from several factors, including the proposed transaction with the
Greenwich Funds, the discontinuation of operations or sale of certain acquired
companies, or other factors including turmoil in the financial markets in which
the acquired companies and the Company operate.

Borrowings under warehouse financing facilities at March 31, 1999 were $793.7
million, a decrease of $190.9 million or 19.4% from borrowings under warehouse
financing facilities of $984.6 million at December 31, 1998. This decrease was a
result of decreased mortgage loans held for sale, caused by IMC's significant
lenders imposing restrictions on loans to IMC. See "-Liquidity and Capital 
Resources" included herein and the Company's Annual Report on Form 10-K
for the year ended December 31, 1998 and Note 3 of Notes to the Consolidated
Financial Statements "Warehouse Finance Facilities, Term Debt and Notes Payable"
included therein.

Term debt and notes payable at March 31, 1999 was $429.6 million, representing a
decrease of $3.1 million or 0.7% from term debt and notes payable of $432.7
million at December 31, 1998. This decrease was primarily a result of repayment
of certain amounts under term debt from cash flows received from interest-only
and residual certificates as provided in the intercreditor agreements.

The Company's net deferred tax asset of $42.2 million at March 31, 1999 was
offset by a full valuation allowance and, after the offset, represented no 
change from a deferred tax asset, after valuation allowance, of $0 at December 
31, 1998. The deferred tax asset is primarily due to temporary differences in 
the recognition of market valuation adjustments, income related to the Company's
interest-only and residual certificates for income tax purposes and a full
valuation allowance on the deferred tax asset.

Redeemable preferred stock, consisting of Class A ($19.8 million) and Class C
($18.3 million), increased $0.7 million to $38.1 million at March 31, 1999 from
$37.3 million at December 31, 1998, due to accretion of the preferred stock
discount. In July 1998, the Company sold $50 million of Class A redeemable
preferred stock to certain of the Greenwich Funds and Travelers. The Class A
redeemable preferred stock was convertible into non-registered common stock at
$10.44 per share. As described in Note 4 "Preferred Stock" of Notes to the
December 31, 1998 Consolidated Financial Statements, the conversion feature was
eliminated in October 1998. The elimination of the conversion feature resulted
in a discount to the Class A redeemable preferred stock of approximately $32
million, which was charged to paid in capital in 1998 and is being accreted to
preferred stock until the mandatory redemption dates beginning in 2008.



                                       20
<PAGE>   23

In October 1998, the Company issued 23,760.758 shares of Class C exchangeable
preferred stock to certain of the Greenwich Funds in conjunction with a $33
million credit facility provided by certain of the Greenwich Funds as described
in Note 4 "Preferred Stock" of Notes to the December 31, 1998 Consolidated
Financial Statements. The preferred stock was recorded at $18.3 million based on
an allocation of the proceeds from the $33 million credit facility.

Stockholders' equity as of March 31, 1999 was $181.4 million, a decrease of
$29.3 million over stockholders' equity of $210.6 million at December 31, 1998.
Stockholders equity decreased for the three months ended March 31, 1999
primarily as a result of a net loss of $28.7 million.

LIQUIDITY AND CAPITAL RESOURCES

During the three months ended March 31, 1999, the Company used its cash flow
from the sale of loans through whole loan sales, loan origination fees,
processing fees, net interest income, servicing fees and borrowings under its
warehouse and term debt facilities to meet its working capital needs. The
Company's cash requirements during the three months ended March 31, 1999
included the funding of loan purchases and originations, payment of principal
and interest costs on borrowings, operating expenses, income taxes and capital 
expenditures.

The Company has an ongoing need for substantial amounts of capital. Adequate
credit facilities and other sources of funding are essential to the continuation
of the Company's ability to purchase and originate loans. The Company typically
has operated, and expects to continue to operate, on a negative operating cash
flow basis. During the three months ended March 31, 1999, the Company received
cash flows from operating activities of $204.4 million, an increase of $362.6
million, or 229.2%, from cash flows used in operating activities of $158.2
million during the three months ended March 31, 1998. During the three months
ended March 31, 1999, cash flows used by the Company in financing activities
were $199.5 million, a decrease of $350.9 million or 231.8% from cash flows
received from financing activities of $151.4 million during the three months
ended March 31, 1998. The cash flows received from operating activities relate
primarily to the sale of mortgage loans held for sale and cash flows used in
financing activities related primarily to the repayment of warehouse finance
facilities borrowings.

Significant cash outflows are incurred upon the closing of a securitization
transaction; however, the Company does not receive a significant portion of the
cash representing the gain until later periods when the related loans are repaid
or otherwise collected. The Company borrows funds on a short-term basis to
support the accumulation of loans prior to sale. These short-term borrowings are
made under warehouse lines of credit with various lenders.

During the year ended December 31, 1998, debt, equity and asset-backed markets
were extremely volatile, effectively denying the Company access to publicly
traded debt and equity markets to fund cash needs. Additionally, the spread over
treasury securities demanded by investors to acquire newly issued asset-backed
securities widened, resulting in less profitable gain on sales of loans sold
through securitization. The Company has responded by reducing the premium the
Company pays to correspondents and brokers to acquire loans, but the reduction
of premiums in the future may not offset the wider spreads demanded by
investors. Investors may not continue to invest in asset-backed securities at
all.



                                       21
<PAGE>   24

As a result of these adverse market conditions, among other things, in October
1998 the Company entered into intercreditor arrangements with Paine Webber Real
Estate Securities, Inc. (Paine Webber), Bear Stearns Home Equity Trust 1996-1
(Bear Stearns) and Aspen Funding Corp. and German American Capital Corporation,
subsidiaries of Deutsche Bank of North America Holding Corp. (DMG)
(collectively, the "Significant Lenders"), which held $3.25 billion of the
Company's available warehouse lines and approximately $282 of the Company's
interest-only and residual financing at March 31, 1999. The intercreditor
arrangements provided for the Significant Lenders to "standstill" and keep
outstanding balances under their facilities in place, subject to certain
conditions, for up to 90 days (which expired mid-January 1999) in order for the
Company to explore its financial alternatives. The intercreditor agreements also
provided, subject to certain conditions, that the lenders would not issue any
margin calls requesting additional collateral be delivered to the lenders. See
the Company's Annual Report on Form 10-K for the fiscal year ended December 31,
1998 and Note 3 of Notes to the Consolidated Financial Statements "Warehouse
Finance Facilities, Term Debt and Notes Payable" included therein.

In mid-January 1999, the original intercreditor agreements expired; however, on
February 19, 1999, concurrent with the execution of the Acquisition Agreement
described in the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1998 and Note 17 of Notes to Consolidated Financial Statements
"Significant Events and Events Subsequent to December 31, 1998" included
therein, the Company entered into amended and restated intercreditor agreements
with the Significant Lenders. Under the amended and restated intercreditor
agreements, the Significant Lenders agreed to keep their respective facilities
in place through the closing under the Acquisition Agreement if the closing
occurs within five months, and for twelve months thereafter, subject to earlier
termination in certain events. If the acquisition is not consummated within a
five month period, after that period, those lenders would not be required to
refrain from exercising remedies. The intercreditor agreements require the
Company to make various amortization payments on the underlying debt before,
upon and after the closing of the acquisition. Failure to make the required
payments would permit the Significant Lenders to terminate the standstill period
under the intercreditor agreements and to exercise remedies. There can be no
assurance the Company will be able to make all the required payments. The 
Company anticipates using the proceeds of the additional loans to be made under
the Greenwich Funds facility upon closing of the acquisition to fund certain of
these payments.

None of the three Significant Lenders has formally reduced the amount available
under its facilities, but each has informally indicated its desire that the
Company keep the average amount outstanding on the warehouse facilities well
below the amount available. There can be no assurance that the Significant
Lenders will continue to fund the Company under their uncommitted facilities.
See the Company's Annual Report on Form 10-K for the fiscal year ended December
31, 1998 and Note 3 "Warehouse Finance Facilities, Term Debt and Notes Payable"
and Note 17 "Significant Events and Events Subsequent to December 31, 1998" of
Notes to Consolidated Financial Statements included therein.

At March 31, 1999, the Company had a $1.25 billion uncommitted warehouse and
residual financing facility with Paine Webber. This Warehouse facility bears
interest rates at rates ranging from LIBOR plus 0.65% to LIBOR plus 0.90%.
Approximately $80 million was outstanding under this warehouse facility as of
March 31, 1999. The Company had informally requested that Paine Webber permit
funding of an additional $200 million under its warehouse facilities, but has
not yet been notified if the request has been approved.



                                       22
<PAGE>   25

At March 31, 1999, the Company also had a $1.0 billion uncommitted warehouse
facility with Bear Stearns. This facility bears interest at LIBOR plus 0.75%.
Approximately $385 million was outstanding under this facility at March 31,
1999. Bear Stearns has requested that the Company maintain outstanding amounts
under this warehouse facility at no more that $500 million.

At March 31, 1999, the Company had a $1.0 billion credit facility with DMG,
which includes a $100 million credit facility collateralized by interest-only
and residual certificates. Approximately $232 million was outstanding under this
warehouse and residual financing facility at March 31, 1999. DMG has indicated
to the Company that additional fundings will be on an "as requested" basis. To
induce DMG to enter the intercreditor agreement in October 1998, the Company
consented to convert DMG's committed warehouse and residual facility to an
uncommitted facility. See the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 1998 and Note 3 "Warehouse Finance Facilities,
Term Debt and Notes Payable" of Notes to Consolidated Financial Statements
included therein.

Additionally, at March 31, 1999, the Company had other warehouse lines of credit
outstanding which totaled approximately $97 million. Interest rates ranged from
LIBOR plus 0.65% to LIBOR plus 1.50% and all borrowings mature within one year.

Outstanding borrowings under the Company's warehouse financing facilities are
collateralized by mortgage loans held for sale and servicing rights on 
approximately $250 million of mortgage loans. Upon the sale of these loans, the 
borrowings under these lines are repaid.

The Company is attempting to enter into arrangements to obtain warehouse
facilities from lenders that are not currently providing warehouse financing to
IMC, but has not yet been successful.

As a result of the DMG warehouse facility becoming uncommitted and the adverse
market conditions currently being experienced by the Company and other mortgage
companies in the industry, the Company's ability to continue to operate is
almost entirely dependent upon the Significant Lenders discretion to provide
warehouse funding to the Company. The Significant Lenders may not approve the
Company's warehouse funding requests.

At March 31, 1999, the Company had borrowed $148.5 million under its residual
financing credit facility with Paine Webber. Outstanding borrowings bear
interest at LIBOR plus 2.0% and are collateralized by the Company's interest in
certain interest-only and residual certificates.

Bear, Stearns & Co. Inc. and its affiliates, Bear, Stearns Mortgage Capital
Corporation and Bear, Stearns International Limited, provide the Company with a
residual financing credit facility which is collateralized by the Company's
interest in certain interest-only and residual certificates. At March 31, 1999,
$90.9 million was outstanding under this credit facility, which bears interest
at 1.75% per annum in excess of LIBOR.

At March 31, 1999, outstanding interest-only and residual financing borrowings
under the Company's credit facility with DMG were $42.7 million. Outstanding
borrowings bear interest at LIBOR plus 2% and are collateralized by the
Company's interest in certain interest-only and residual certificates.



                                       23
<PAGE>   26

At March 31, 1999, the Company had borrowed $2.2 million under a residual
financing credit facility which matured in August 1998, bears interest at 2.0%
per annum in excess of LIBOR and is collateralized by the Company's interest in
certain interest-only and residual certificates. The Company has informally
agreed to allow approximately 1/3 of the cash from the interest-only and
residual certificates to be used to reduce the amounts outstanding under this
facility on a monthly basis and the Lender has informally agreed to keep the
facility in place.

At December 31, 1998 the Company also has outstanding $5.9 million under a
credit facility with an affiliate of a shareholder of the Company which bears
interest at 10% per annum. That credit facility provides for repayment of
principal and interest over 36 months and, based on certain circumstances, a
partial prepayment of principal may be required on July 31, 1999.

BankBoston provided the Company with a revolving credit facility which matured
in October 1998, bore interest at LIBOR plus 2.75% and provided for borrowings
up to $50 million to be used to finance interest-only and residual certificates,
or for acquisitions or bridge financing. BankBoston with participation from
another financial institution also provided the Company with a $45 million
working capital facility, which bore interest at LIBOR plus 2.75% and matured in
October 1998. The Company was unable to repay these credit facilities when they
matured and in October 1998, the Company entered into a forbearance and
intercreditor agreement with BankBoston with respect to these credit facilities.
The forbearance and intercreditor agreement provided that the bank would take no
collection action, subject to certain conditions, for up to 90 days (which
expired mid-January 1999) in order for the Company to explore its financial
alternatives.

In mid-January 1999, the forbearance and intercreditor agreement with BankBoston
expired. On February 19, 1999, $87.5 million was outstanding under these credit
facilities. On February 19, 1999, the Greenwich Funds purchased, at a discount,
from BankBoston its interest in the credit facilities and entered into an
amended intercreditor agreement relating to these facilities with the Company.
Under the amended intercreditor agreement, the Greenwich Funds agreed to keep
these facilities in place for a period of twelve months after the acquisition of
IMC common stock described in the Acquisition Agreement is consummated if the
consummation occurs within a five month period, subject to earlier termination
in certain events provided in the amended intercreditor agreement.

The Company's current warehouse lines generally are subject to one-year terms.
The Company's current creditors may not renew their facilities as they expire
and the Company may not be able to obtain additional credit lines.

On July 14, 1998, Travelers Casualty and Surety Company and certain of the
Greenwich Funds (together, the "Purchasers") purchased $50 million of the
Company's Class A preferred stock. The Class A preferred stock was convertible
into common stock at $10.44 per share. The Class A preferred stock bears no
dividend and is redeemable by the Company over a three-year period commencing in
July 2008. As part of the preferred stock purchase agreement, the Company agreed
to use its best efforts to cause two persons designated by the Purchasers to be
elected to the Company's board of directors. The Purchasers were also granted an
option to purchase, within the next three years, an additional $30 million of
Series B redeemable preferred stock at par. The Class B preferred stock was
convertible into common stock at $22.50 per share. In October 1998, the terms of
the $50 million Class A preferred stock and the terms of the Class B preferred
stock were amended to eliminate the right to convert into common stock. See Note
4 "Preferred Stock" of Notes to the December 31, 1998 Consolidated Financial
Statements.


                                       24
<PAGE>   27

On October 15, 1998 the Company reached an agreement for a $33 million standby
revolving credit facility with certain of the Greenwich Funds. The facility was
available to provide working capital for a period of up to 90 days, or until
mid-January 1999. The terms of the standby revolving credit facility resulted in
substantial dilution of existing common stockholders' equity equal to a minimum
of 40%, up to a maximum of 90%, on a diluted basis, depending on (among other
things) when, or whether, a change of control transaction occurs. In mid-January
1999, the $33 million standby revolving credit facility matured. On February 16,
1999, the Greenwich Funds provided an additional $5 million of loans under the
facility. On February 19, 1999, the Company and the Greenwich Funds entered into
an amended and restated intercreditor agreement, whereby the Greenwich Funds
agreed to keep the facility in place for a period through the closing under the
Acquisition Agreement if the closing occurs within a five month period and for
twelve months thereafter, subject to earlier termination in certain events as
provided in the amended and restated intercreditor agreement. At March 31, 1999,
$34.8 million was outstanding under this facility.

On February 19, 1999, the Company entered into a merger agreement with the
Greenwich Funds which was terminated and recast as an acquisition agreement on
March 31, 1999. Under the Acquisition Agreement, the Greenwich Funds will
receive newly issued common stock of the Company equal to 93.5% of the
outstanding common stock after each issuance, leaving the existing common
shareholders of the Company with 6.5% of the common stock outstanding. No
payment will be made to the Company's common shareholders in this transaction.
Upon the closing, certain of the Greenwich Funds will surrender all of the
outstanding Class C exchangeable preferred stock for cancellation and enter into
an amendment and restatement of their existing loan agreement with IMC, pursuant
to which the Greenwich Funds will make available to IMC an additional $35
million in working capital loans.

The acquisition by the Greenwich Funds is subject to a number of conditions,
including approval by the Company's shareholders. There can be no assurance that
the acquisition will be consummated. If the Acquisition Agreement is terminated
or the acquisition is not consummated within five months from the signing of the
amended and restated intercreditor agreements, the standstills would expire or
could be terminated and the Significant Lenders could exercise remedies. In such
an event, the Company most likely would be unable to continue its business.

The Company has substantial capital requirements and it anticipates that it will
need to arrange for additional external cash resources through either the sale
or securitization of interest-only and residual certificates, increased credit
facilities or the sale or placement of debt, preferred stock or equity
securities. Also, there can be no assurance that existing warehouse and
interest-only and residual certificate lenders will continue to fund the Company
under their uncommitted facilities, that existing credit facilities can be
increased, extended or refinanced, that the Company will be able to arrange for
the sale or securitization of interest-only and residual certificates in the
future on terms the Company would consider favorable, if at all, that the
Company will be able to sell debt, preferred stock or equity securities at any
given time or on terms the Company would consider favorable, or at all, or that
funds generated from operations will be sufficient to repay the Company's
existing debt obligations or meet its operating and capital requirements. To the
extent that the Company is not successful in increasing, maintaining or
replacing existing credit facilities, in selling or securitizing interest-only
and residual certificates or in selling debt, preferred stock or other equity
securities, the Company would not be able to hold a large volume of loans
pending securitization or whole loan sale and therefore would have to curtail
its loan production activities to attempt to sustain operations. The Company may
not be successful in sustaining operations.



                                       25
<PAGE>   28

RISK MANAGEMENT

The Company purchases and originates mortgage loans and then sells them through
securitizations and whole loan sales. At the time of securitization of the
loans, the Company recognizes gain on sale based on a number of factors
including the difference, or "spread", between the interest rate on the loans
and interest rate paid to investors (which typically is priced based on the
United States Treasury security with a maturity corresponding to the anticipated
life of the loans). Historically, when interest rates rise between the time the
Company originates or purchases the loans and the time the loans are priced at
securitization, the spread narrows, resulting in a loss in value of the loans.
To protect against such losses, in quarters ended prior to October 1998, the
Company hedged a portion of the value of the loans through the short sale of
United States Treasury securities. Prior to hedging, the Company performed an
analysis of its loans taking into account, among other things, interest rates
and maturities to determine the amount, type, duration and proportion of each
United States Treasury security to sell short so that the risk to value of the
loans would be effectively hedged. The Company executed the sale of the United
States Treasury securities with large, reputable securities firms and used the
proceeds received to acquire United States Treasury securities under repurchase
agreements. These securities were designated as hedges in the Company's records
and were closed out when the loans were sold.

Historically, when the value of the hedges decreased, generally largely
offsetting an increase in the value of the loans, the Company, upon settlement
with its counterparty, would pay the hedge loss in cash and realize the
generally corresponding increase in the value of the loans as part of its
interest-only and residual certificates. Conversely, if the value of the hedges
increased, generally largely offsetting a decrease in the value of the loans,
the Company, upon settlement with its counterparty, would receive the hedge gain
in cash and realize the generally corresponding decrease in the value of the
loans through a reduction in the value of the related interest-only and residual
certificates.

The Company believes that its hedging activities using United States Treasury
securities were substantially similar in purpose, scope and execution to
customary hedging activities using United States Treasury securities engaged in
by several of its competitors.

In September 1998, the Company believes that, primarily due to significant
volatility in debt, equity and asset-backed markets, investors demanded wider
spreads over United States Treasury securities to acquire newly issued
asset-backed securities. The effect of the increased demand for the United
States Treasury Securities resulted in a devaluation of the Company's hedge
position that was not offset by an equivalent increase in the gain on sale of
loans at the time of securitization because investors demanded wider spreads
over the United States Treasury securities to acquire the Company's asset-backed
securities. In September 1998, the Company stopped hedging its interest rate
risk on loan purchases and in October 1998 the Company closed all of its open
hedge positions.

The Company uses a discount rate of 16% to present value the difference (spread)
between (i) interest earned on the portion of the loans sold and (ii) interest
paid to investors with related costs over the expected life of the loans,
including expected losses, foreclosure expenses and a servicing fee. Based on
market volatility in the asset-backed markets and the widening of the spreads
recently demanded by asset-backed investors to acquire newly issued asset-backed
securities, there can be no assurance that discount rates utilized by the
Company to present value the spread described above will not change in the
future, particularly if the spreads demanded by asset-backed investors to
acquire newly issued asset-backed securities increases. An increase in the 
discount rates used to present value



                                       26
<PAGE>   29

the spread described above of plus 1%, 3% or 5% would result in a corresponding
decrease in the value of the interest-only and residual certificates at March 
31, 1999 of approximately 2%, 6% and 10%, respectively. A decrease in the
discount rates used to present value the spread described above of minus 1%, 3%
or 5% would result in an increase in the value of the interest-only and
residual certificates at March 31, 1999 of approximately 2%, 7% and 13%,
respectively.

INFLATION

Inflation historically has had no material effect on the Company's results of
operations. Inflation affects the Company most in the area of loan originations
and can have an effect on interest rates. Interest rates normally increase
during periods of high inflation and decrease during periods of low inflation.

Profitability may be directly affected by the level and fluctuation in interest
rates which affect the Company's ability to earn a spread between interest
received on its loans and the costs of its borrowings. The profitability of the
Company is likely to be adversely affected during any period of unexpected or
rapid changes in interest rates. A substantial and sustained increase in
interest rates could adversely affect the ability of the Company to purchase and
originate loans and affect the mix of first and second mortgage loan products.
Generally, first mortgage production increases relative to second mortgage
production in response to low interest rates and second mortgage production
increases relative to first mortgage production during periods of high interest
rates. A significant decline in interest rates could decrease the size of the
Company's loan servicing portfolio by increasing the level of loan prepayments.
Additionally, to the extent servicing rights and interest-only and residual
certificates have been capitalized on the books of the Company, higher than
anticipated rates of loan prepayments or losses could require the Company to
write down the value of such servicing rights and interest-only and residual
certificates which could have a material adverse effect on the Company's results
of operations and financial condition. Conversely, lower than anticipated rates
of loan prepayments or lower losses could allow the Company to increase the
value of interest-only and residual certificates which could have a favorable
effect on the Company's results of operations and financial condition.
Fluctuating interest rates also may affect the net interest income earned by the
Company from the difference between the yield to the Company on loans held
pending sales and the interest paid by the Company for funds borrowed under the
Company's warehouse facilities. In addition, inverse or flattened interest yield
curves could have an adverse impact on the profitability of the Company because
the loans pooled and sold by the Company have long-term rates, while the senior
interests in the related securitization trusts are priced on the basis of
intermediate term rates.

RECENT ACCOUNTING PRONOUNCEMENTS

In June 1998, the Financial Accounting Standards Board ("FASB") issued Statement
of Financial Accounting Standards ("SFAS") No. 133 "Accounting for Derivative
Instruments and Hedging Activities" ("SFAS 133"). SFAS 133 is effective for
fiscal quarters of fiscal years beginning after June 15, 1999 (January 1, 2000
for the Company). SFAS 133 requires that all derivative instruments be recorded
on the balance sheet at their fair value. Changes in the fair value of
derivatives are recorded each period in current earnings or other comprehensive
income, depending on whether a derivative was designated as part of a hedge
transaction and, if it is, the type of hedge transaction. For fair-value hedge
transactions in which the Company hedges changes in the fair value of an asset,
liability or firm commitment, changes in the fair value of the derivative
instrument will generally be offset in the income statement by changes in the
hedged item's fair value. The ineffective portion of hedges will be recognized
in current-period earnings.



                                       27
<PAGE>   30

SFAS 133 precludes designation of a nonderivative financial instrument as a
hedge of an asset or liability. The Company has historically hedged its interest
rate risk on loan purchases by selling short United States Treasury Securities
which match the duration of the fixed rate mortgage loans held for sale and
borrowing the securities under agreements to resell. Prior to September 30, 1998
the unrealized gain or loss resulting from the change in fair value of these
instruments had been deferred and recognized upon securitization as an
adjustment to the carrying value of the hedged mortgage loans. SFAS 133 requires
the gain or loss on these nonderivative financial instruments to be recognized
in earnings in the period of changes in fair value without a corresponding
adjustment of the carrying amount of mortgage loans held for sale. Management
anticipates that if the Company uses derivative financial instruments to hedge
the Company's interest rate risk on loan purchases the Company will use
derivative financial instruments which qualify for hedge accounting under the
provisions of SFAS 133.

The actual effect implementation of SFAS 133 will have on the Company's
statements will depend on various factors determined at the period of adoption,
including whether the Company is hedging its interest rate risk on loan
purchases, the type of financial instrument used to hedge the Company's interest
rate risk on loan purchases, whether such instruments qualify for hedge
accounting treatment, the effectiveness of the hedging instrument, the amount of
mortgage loans held for sale which the Company intends to hedge, and the level
of interest rates. Accordingly, the Company can not determine at the present
time the impact adoption of SFAS 133 will have on its statements of operations
or balance sheets.

Effective January 1, 1999, the Company adopted SFAS No. 134, "Accounting for
Mortgage-Backed Securities Retained after the Securitization of Mortgage Loans
Held for Sale by a Mortgage Banking Enterprise" ("SFAS 134"). SFAS 134 amends
SFAS No. 65, "Accounting for Certain Mortgage-Backed Securities" ("SFAS 65") to
require that after an entity that is engaged in mortgage banking activities has
securitized mortgage loans that are held for sale, it must classify the
resulting retained mortgage-backed securities or other retained interests based
on its ability and intent to sell or hold those investments. However, a mortgage
banking enterprise must classify as trading any retained mortgage-backed
securities that it commits to sell before or during the securitization process.
Previously, SFAS 65 required that after an entity that is engaged in mortgage
banking activities has securitized a mortgage loan that is held for sale, it
must classify the resulting retained mortgage-backed securities or other
retained interests as trading, regardless of the entity's intent to sell or hold
the securities or retained interest. The application of the provisions of SFAS
134 did not have an impact on the Company's financial position or results of
operations.

YEAR 2000

The year 2000 (Y2K) problem is the result of computer programs being written
using two digits rather than four to define the applicable year. Thus year 1998
is represented by the number "98" in many software applications. Consequently,
on January 1, 2000, the year will revert to "00" in accordance with many non-Y2K
compliant applications. To systems that are non-Y2K compliant, the time will
seem to have reverted back 100 years. So, when computing basic lengths of time,
the Company's computer programs, certain building infrastructure components
(including, elevators, alarm systems, telephone networks, sprinkler systems and
security access systems) and many additional time-sensitive software that are
non-Y2K compliant may recognize a date using "00" as the year 1900. This could
result in system failure or miscalculations which could cause personal injury,
property damage,



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<PAGE>   31

disruption of operations and/or delays in payments from borrowers, any or all of
which could materially adversely effect the Company's business, financial
condition or results of operations.

During 1998 the Company implemented an internal Y2K compliance task force. The
goal of the task force is to minimize the disruptions to the Company's business,
which could result from the Y2K problem, and to minimize other liabilities,
which the Company might incur in connection with the Y2K problem. The task force
consists of existing employees of the Company and an outside consultant hired
specifically to address the Company's internal Y2K issues.

The Company has conducted a company-wide assessment of its computer systems and
operations infrastructure, and is currently testing its systems to determine
their Y2K compliance. The Company presently believes those business-critical
computer systems which are not presently Y2K-compliant will have been replaced,
upgraded or modified prior to 2000.

During 1998, the Company initiated communications with third parties whose
computer systems' functionality could impact the Company. These communications
will facilitate coordination of Y2K solutions and will permit the Company to
determine the extent to which the Company may be vulnerable to failures of the
third parties to address their own Y2K issues. However, as to the systems of the
third parties that are linked to the Company, there can be no guarantee that
such systems that are not now Y2K compliant will be timely converted to Y2K
compliance.

The costs of the Company's Y2K compliance efforts are being funded with cash
flows from operations. In total, these costs are not expected to be
substantially different from the normal, recurring costs that are incurred for
systems development, implementation and maintenance. As a result, these costs
are not expected to have a material adverse effect on the Company's financial
position, results of operations or cashflows. The Company anticipates that Y2K
expenses through December 31, 1999 will be less than $1.0 million.

The Company has currently identified two material potential risks related to its
Y2K issues. The first risk is that the Company's primary lenders, depository
institutions and collateral custodians do not become Y2K compliant before year
end 1999, which could materially impact the Company's ability to access funds
and collateral necessary to operate its businesses. The Company is currently
accessing the risks related to these and other Y2K risks, and has received some
assurances that the computer systems of its lenders, depository institutions and
collateral custodians, many of whom are among the largest financial institutions
in the country, will be Y2K compliant by the year end 1999.

The second risk is that the external servicing system on which the Company
relies to service mortgage loans does not become Y2K compliant before year-end
1999. Failure on the part of the servicing system could materially impact the
Company's servicing operations. As of February 5, 1999, the Company received
confirmation that the servicing system had achieved Y2K compliance.

The Company is developing contingency plans for all non-Y2K compliant internal
systems. Contingency plans include identifying alternative processing platforms
and alternative sources for services and businesses provided by critical non-Y2K
compliant financial depository institutions, vendors and collateral custodians.
However, there can be no assurance that the Company's lenders, depository
institutions, custodians and vendors will resolve their own Y2K compliance
issues in a timely manner. The failure by these other parties to resolve such
issues could have a significant effect on the Company's operations and financial
condition.



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The foregoing assessment of the impact of the Y2K problem on the Company is
based on management's best estimates at the present time could change
substantially. The assessment is based upon numerous assumptions as to future
events. There can be no guarantee that these estimates will prove accurate, and
the actual results could differ from those estimated if these assumptions prove
inaccurate. The disclosure in this Section, "Year 2000", contains
forward-looking statements, which involve risks and uncertainties. Reference is
made to the first paragraph of Item 2. "Management's Discussion and Analysis of
Financial Condition and Results of Operations on page 15 of this Report on Form
10-Q.























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PART II.      OTHER INFORMATION

Item 1.  Legal Proceedings -

         IMC is a party to various legal proceedings arising out of the ordinary
course of its business. Management believes that none of these actions,
individually or in the aggregate, will have a material adverse effect on the
results of operations or financial condition of IMC.

         On December 23, 1998, the former shareholders of Corewest sued IMC in
Superior Court of the State of California for the County of Los Angeles claiming
IMC agreed to pay them $23.8 million in cancellation of the contingent "earn
out" payment, if any, payable by IMC in connection with IMC's purchase of all
the outstanding shares of Corewest. The case is in the early stages of pleading;
however, IMC's management believes, based on consultation with legal counsel, 
there is no merit in the plaintiffs' claims.

Item 2.  Changes in Securities - None

Item 3.  Defaults Upon Senior Securities - None

Item 4.  Submission of Matters to a Vote of Security Holders - None

Item 5.  Other Information - None

Item 6.  Exhibits and Reports on Form 8-K -

A.       Exhibits

               27 - Financial Data Schedule  (for SEC use only)

               99 - Report of Independent Certified Public Accountants

          B.   Reports on Form 8-K

         On March 3, 1999, the Company filed a Current Report on Form 8-K to
report that the Company had entered into an Agreement and Plan of Merger with
Greenwich Funds.

         On February 26, 1999 the Company filed a Current Report on Form 8-K
with respect to the Current Report on Form 8-K filed February 23, 1999.

         On February 23, 1999, the Company filed a Current Report on Form 8-K to
report that the Company had appointed Grant Thornton L.L.P. as the independent
accounting firm to audit the financial statements of the Company for the year
ended December 31, 1998 and dismissed Pricewaterhouse Coopers L.L.P.







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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.



Date:    May 17, 1999        IMC MORTGAGE COMPANY




         By:  /s/ Thomas G. Middleton


         Thomas G. Middleton, President, Chief Operating Officer, Assistant
         Secretary and Director









         By:  /s/ Stuart D. Marvin


         Stuart D. Marvin, Chief Financial Officer






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