<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
-----    Exchange Act of 1934 for the quarterly period ended June 30, 2000.

 [ ]     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 August 11, 2000
--------------------------------------           ------------------------------
Common Stock, par value $.01 per share                     34,201,380




<PAGE>   2

                     IMC MORTGAGE COMPANY AND SUBSIDIARIES

                                     INDEX


                                                                           Page
                                                                           ----
PART I.  FINANCIAL INFORMATION

Item 1.  Financial Statements

         Consolidated Balance Sheets as of
           June 30, 2000 and December 31, 1999                               1

         Consolidated Statements of Operations
           for the three months and the six months ended
           June 30, 2000 and June 30, 1999                                   2

         Consolidated Statements of Cash Flows
           for the six months ended June 30, 2000
           and June 30, 1999                                                 3

         Notes to Consolidated Financial Statements                          4

Item 2.  Management's Discussion and Analysis of
           Results of Operations and Financial Condition                    12


PART II. OTHER INFORMATION

Item 1.  Legal Proceedings                                                  27

Item 2.  Changes in Securities                                              28

Item 3.  Defaults Upon Senior Securities                                    28

Item 4.  Submission of Matters to a Vote of Security Holders                28

Item 5.  Other Information                                                  29

Item 6.  Exhibits and Reports on Form 8-K                                   29



<PAGE>   3

























                         PART I.  FINANCIAL INFORMATION



<PAGE>   4

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


                                                          June 30,  December 31,
                                                            2000        1999
                                                        -----------   ---------
                                                        (Unaudited)

                      ASSETS

Cash and cash equivalents (See Note 1)                   $  23,660    $  54,318
Accrued interest receivable                                    615        5,798
Accounts receivable                                          5,472       30,884
Mortgage loans held for sale, net                            3,637      377,494
Interest-only and residual certificates                     84,870      161,372
Other assets                                                 6,935       11,560
                                                         ---------    ---------
  Total assets                                           $ 125,189    $ 641,426
                                                         =========    =========


         LIABILITIES AND STOCKHOLDERS' DEFICIT

Liabilities:
   Warehouse finance facilities                          $   7,004    $ 419,743
   Term debt                                               253,138      272,373
   Notes payable                                            13,282       12,974
   Accounts payable and accrued liabilities                 13,820       11,308
   Accrued interest payable                                 14,310       12,204
                                                         ---------    ---------
      Total liabilities                                    301,554      728,602
                                                         ---------    ---------

Commitments and contingencies (Note 6)

Redeemable preferred stock (redeemable at
  maturity at $100 per share and, under certain
  circumstances, upon a change in control)                  41,754       40,280
                                                         ---------    ---------

Stockholders' deficit:
Common stock, par value $.01 per share; 50,000,000
  authorized; 34,157,380 shares issued and outstanding         342          342
Additional paid-in capital                                 251,937      251,937
Accumulated deficit                                       (470,398)    (379,735)
                                                         ---------    ---------
  Total stockholders' deficit                             (218,119)    (127,456)
                                                         ---------    ---------
  Total liabilities and stockholders' deficit            $ 125,189    $ 641,426
                                                         =========    =========



          See accompanying notes to Consolidated Financial Statements



                                       1
<PAGE>   5

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

<TABLE>
<CAPTION>

                                                       For the Three Months              For the Six Months
                                                          Ended June 30,                    Ended June 30,
                                                  -----------------------------     -----------------------------
                                                      2000             1999             2000             1999
                                                  ------------     ------------     ------------     ------------
<S>                                               <C>              <C>              <C>              <C>

Revenues:
   Gain on sales of loans                         $         --     $     13,528     $      3,941     $     31,639
                                                  ------------     ------------     ------------     ------------
   Warehouse interest income                               559           14,536            4,127           35,165
   Warehouse interest expense                             (784)          (8,737)          (4,214)         (23,211)
                                                  ------------     ------------     ------------     ------------
       Net warehouse interest income (expense)            (225)           5,799              (87)          11,954
                                                  ------------     ------------     ------------     ------------

   Servicing fees                                           --           11,958               --           25,130
   Other                                                   789            7,175            1,505           14,820
                                                  ------------     ------------     ------------     ------------
      Total servicing fees and other                       789           19,133            1,505           39,950
                                                  ------------     ------------     ------------     ------------

      Total revenues                                       564           38,460            5,359           83,543
                                                  ------------     ------------     ------------     ------------

Expenses:
   Compensation and benefits                               759           23,747            1,228           53,097
   Selling, general and administrative                   4,960           26,052           12,742           49,477
   Other interest expense                                3,582            6,905            7,071           15,789
   Interest expense-Greenwich Funds (Note 4)             4,648            7,499            9,199           15,379
   Market valuation adjustment (Note 5)                 55,005           62,876           63,608           62,876
   Goodwill impairment charge                               --           77,446               --           77,446
   Other charges                                            --            5,179               --            5,179
                                                  ------------     ------------     ------------     ------------
      Total expenses                                    68,954          209,704           93,848          279,243
                                                  ------------     ------------     ------------     ------------

Loss before provision for
      income taxes                                     (68,390)        (171,244)         (88,489)        (195,700)
Provision for income taxes                                 350              361              700            4,647
                                                  ------------     ------------     ------------     ------------

Net loss                                          $    (68,740)    $   (171,605)    $    (89,189)    $   (200,347)
                                                  ============     ============     ============     ============

Net loss per common share:
      Basic                                       $      (2.03)    $      (5.04)    $      (2.65)    $      (5.90)
                                                  ============     ============     ============     ============
      Diluted                                     $      (2.03)    $      (5.04)    $      (2.65)    $      (5.90)
                                                  ============     ============     ============     ============

Weighted average number of shares outstanding:
      Basic                                         34,157,380       34,201,380       34,157,380       34,211,493
      Diluted                                       34,157,380       34,201,380       34,157,380       34,211,493

</TABLE>



          See Accompanying Notes to Consolidated Financial Statements




                                       2
<PAGE>   6

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

<TABLE>
<CAPTION>

                                                                       For the Six Months
                                                                         Ended June 30,
                                                                      2000          1999
                                                                   ---------     ---------
<S>                                                                <C>           <C>

Cash flows from operating activities:
   Net loss                                                        $ (89,189)    $(200,347)
   Adjustments to reconcile net loss to net cash provided by
       operating activities:
      Goodwill impairment charge                                          --        77,446
      Interest expense - Greenwich Funds                                  --         5,500
      Depreciation and amortization                                       --        13,864
      Other                                                              307           117
      Net loss on sale of joint venture                                   --         2,592
      Net loss on disposal of Rhode Island branch                         --         2,587
      Net change in operating assets and liabilities:
        Decrease in mortgages loans held for sale, net               373,857       336,265
        Decrease in accrued interest receivable                        5,183         2,531
        Decrease in interest-only and residual certificates           76,502       116,297
        Decrease in other assets                                       4,625           873
        Decrease (increase) in accounts receivable                    25,412        (8,089)
        Decrease in income tax receivable                                 --         4,360
        Increase in accrued interest payable                           2,106         3,567
Increase (decrease) in accounts payable and accrued liabilities        2,512        (3,969)
                                                                   ---------     ---------
                Net cash provided by operating activities            401,315       353,594
                                                                   ---------     ---------

Investing activities:
   Investment in joint venture                                            --          (638)
   Purchase of property, furniture, fixtures, and equipment               --          (899)
                                                                   ---------     ---------
                Net cash used in investing activities                     --        (1,537)
                                                                   ---------     ---------

Financing activities:
   Net decrease in warehouse finance facilities                     (412,738)     (351,123)
   Term debt borrowings                                                   --        91,338
   Term debt repayments                                              (19,235)      (92,880)
                                                                   ---------     ---------
                Net cash used in financing activities               (431,973)     (352,665)
                                                                   ---------     ---------

Net decrease in cash and cash equivalents                            (30,658)         (608)
Cash and cash equivalents, beginning of period                        54,318        15,454
                                                                   ---------     ---------
Cash and cash equivalents, end of period                           $  23,660     $  14,846
                                                                   =========     =========

Supplemental disclosure cash flow information:
        Cash paid during the period for interest                   $  18,378     $  45,315
                                                                   =========     =========
        Cash paid during the period for taxes                      $      --     $     391
                                                                   =========     =========

</TABLE>



          See accompanying Notes to Consolidated Financial Statements




                                       3
<PAGE>   7


                     IMC MORTGAGE COMPANY AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
           FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2000 AND 1999
                                  (UNAUDITED)


1.       ORGANIZATION AND BASIS OF PRESENTATION:

         Prior to November 15, 1999, IMC Mortgage Company and its wholly-owned
         subsidiaries (the "Company" or "IMC") purchased and originated
         mortgage loans made to borrowers who may not have otherwise qualified
         for conventional loans for the purpose of securitization and whole
         loan sale. Prior to 1999, the Company typically securitized these
         mortgages into the form of a Real Estate Mortgage Investment Conduit
         ("REMIC") or owner trust. During 1999 and the six months ended June
         30, 2000, the Company sold loans on a whole loan sale basis.

         The accompanying consolidated financial statements include the
         accounts of the Company and its wholly owned subsidiaries. All
         inter-company 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, 1999. The year-end balance sheet
         data was derived from audited financial statements, but does not
         include all disclosures required by generally accepted accounting
         principles.

         Substantially all the Company's cash and cash equivalents are
         restricted pursuant to the second amended and restated intercreditor
         agreements described in the Company's Annual Report on Form 10-K for
         the fiscal year ended December 31, 1999 and Note 3 of Notes to
         Consolidated Financial Statements included therein.

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

         SALE OF CERTAIN ASSETS TO CITIFINANCIAL MORTGAGE COMPANY

         As described in the Company's Annual Report on Form 10-K for the
         fiscal year ended December 31, 1999, on November 15, 1999 the Company
         sold its mortgage servicing rights related to mortgage loans which had
         been securitized, its mortgage loan origination business and real
         property consisting of its Tampa, Florida headquarters building and
         its leased facilities at its Ft. Washington, Pennsylvania, Cherry
         Hill, New Jersey and Cincinnati, Ohio office locations to
         CitiFinancial Mortgage Company ("CitiFinancial Mortgage"), an
         indirectly wholly-owned subsidiary of Citigroup Inc.




                                       4
<PAGE>   8

                     IMC MORTGAGE COMPANY AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
           FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2000 AND 1999
                                  (UNAUDITED)


         After the sale of assets to CitiFinancial Mortgage, the Company had
         and continues to have essentially no ongoing operating business, but
         will continue to own assets consisting primarily of cash, accounts
         receivable, mortgage loans held for sale, interest-only and residual
         certificates and other assets that are pledged as collateral for the
         warehouse finance facilities and term debt. The assets are being
         either held or sold by the Company to attempt to realize the maximum
         value for these assets and to repay its obligations, including the
         warehouse finance facilities and term debt.

         There can be no assurance that the Company will be able to maximize
         the value of its remaining assets and have adequate proceeds and
         resources to satisfy its creditors and provide any value to the
         Company's shareholders or that the Company will not seek bankruptcy
         protection in the future.


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"), which was amended by SFAS No. 137 "Accounting for Derivative
         Instruments and Hedging Activities - Deferral of the Effective Date of
         FASB Statement No. 133." SFAS 133, as amended, is effective for all
         fiscal quarters of all fiscal years beginning after June 15, 2000
         (January 1, 2001 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 designed to hedge 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. The Company has
         no present plans to engage in hedging activities and does not
         anticipate that the adoption of SFAS 133 will have a material impact
         on the Company's statement of operations or balance sheet.

3.       EARNINGS PER SHARE:

         In February 1997, the FASB 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 128, is computed assuming all dilutive potential
         common shares were issued.




                                       5
<PAGE>   9

                     IMC MORTGAGE COMPANY AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
           FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2000 AND 1999
                                  (UNAUDITED)


         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         For the Six Months Ended
                                                                 June 30,                         June 30,
                                                      ------------     ------------     ------------     ------------
                                                          2000             1999             2000             1999
                                                      ------------     ------------     ------------     ------------
                                                                           (dollars in thousands)
         <S>                                          <C>              <C>              <C>              <C>

         Net loss                                     $    (68,740)    $   (171,605)    $    (89,189)    $   (200,347)
         Less accretion of preferred stock                    (737)            (737)          (1,474)          (1,474)
                                                      ------------     ------------     ------------     ------------

         Net loss available to common stockholders    $    (69,477)    $   (172,342)    $    (90,663)    $   (201,821)
                                                      ============     ============     ============     ============

         Weighted average shares outstanding            34,157,380       34,201,380       34,157,380       34,211,493
                                                      ============     ============     ============     ============

</TABLE>


         For the three and six months ended June 30, 2000 and 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 and Term Debt

         As described in the Company's Annual Report on Form 10-K for the
         fiscal year ended December 31, 1999, on November 15, 1999 the Company
         consummated the sale of its mortgage loan servicing business,
         substantially all of its mortgage loan origination business and
         certain other assets to CitiFinancial Mortgage. Simultaneously, the
         Company entered into second amended and restated intercreditor
         agreements with Paine Webber Real Estate Securities, Inc. ("Paine
         Webber"), Bear Stearns Home Equity Trust ("Bear Stearns"), and Aspen
         Funding Corp. and German American Capital Corporation, subsidiaries of
         Deutsche Bank of North American Holding Corp ("DMG") (collectively,
         the "Significant Lenders") and Greenwich Street Capital Partners II,
         L.P. and certain of its affiliates (the "Greenwich Funds").

         Under these agreements, the lenders agreed to keep their respective
         facilities in place so long as the obligations owed to those lenders
         are repaid in accordance with the terms of these agreements and
         certain events of default as described in these agreements do not
         occur. Each of the Significant Lenders and the Greenwich Funds has
         indicated that they will not make any additional advances under their
         facilities.

         In addition, the second amended and restated intercreditor agreements
         described above provide a mechanism for the Company's principal
         secured creditors who are parties to the intercreditor agreements to
         release to the Company for its working capital needs a portion of the
         monthly receipts from the interest-only and residual certificates
         serving as collateral for those lenders' loans. As more fully
         described in Note 5 "Interest-Only and Residual Certificates," because
         the cash flow from various interest only and residual certificates has
         materially decreased in the three months ended June 30, 2000, there
         can be no assurance that this mechanism will provide sufficient cash
         flow to cover the Company's working capital needs.




                                       6
<PAGE>   10

                     IMC MORTGAGE COMPANY AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
           FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2000 AND 1999
                                  (UNAUDITED)


         At June 30, 2000, the Company had no available credit facilities from
         the Significant Lenders, the Greenwich Funds or any other source. At
         June 30, 2000, the amount of warehouse finance facilities which
         remained outstanding from previously available warehouse finance
         facilities was as follows:


         Warehouse Finance Facilities                 June 30, 2000
         ----------------------------                 -------------
                                                      (in thousands)

         Bear Stearns                                     $3,594
         DMG                                               1,268
         Paine Webber                                      2,142
                                                          ------
                                                          $7,004
                                                          ======

         Outstanding borrowings under the Company's warehouse financing
         facilities bear interest at rates ranging from LIBOR (6.64% at June
         30, 2000) plus 0.75% to LIBOR plus 2.00%, and are collateralized by,
         among other assets, mortgage loans held for sale. Upon the sale of
         these mortgage loans, the proceeds are used to pay down the borrowings
         under these warehouse finance facilities. The Company is currently
         paying interest related to these warehouse borrowings.

         At June 30, 2000, the amount of term debt which remained outstanding
         from previously available term debt credit facilities was as follows:


         Term Debt                                    June 30, 2000
         ----------------------------                 -------------
                                                      (in thousands)

         Paine Webber - residual credit facility          $107,493
         Greenwich Funds - credit facility acquired
              from BankBoston N.A.                          78,581
         Greenwich Funds - standby revolving
              credit facility                               38,000
         DMG - residual credit facility                     26,147
         Other                                               2,917
                                                          --------
                                                          $253,138


         Outstanding borrowings under the Company's residual credit facilities
         with Paine Webber and DMG bear interest at LIBOR plus 3.00%, and are
         collateralized by, among other assets, the Company's interest in
         certain interest-only and residual certificates. Upon receipt of cash
         from the interest-only and residual certificates, the proceeds are
         used for the Company's working capital needs, in accordance with the
         second amended and restated intercreditor agreements




                                       7
<PAGE>   11

                     IMC MORTGAGE COMPANY AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
           FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2000 AND 1999
                                  (UNAUDITED)


         and to pay down the residual credit facilities. The Company is
         currently paying interest related to these residual credit facilities.

         Credit facilities previously provided by BankBoston N.A.
         ("BankBoston") matured and the Company was unable to repay its
         outstanding borrowings under these facilities.The Greenwich Funds
         acquired, at a discount, from BankBoston its interest in the credit
         facilities. These credit facilities bear interest at 9.75%, and are
         collateralized by interest-only and residual certificates and certain
         other assets of the Company. The Company is currently paying interest
         under these credit facilities.

         The Company entered into an agreement for a $38.0 million standby
         revolving credit facility with certain of the Greenwich Funds (the
         "Greenwich Loan Agreement"). The facility was originally available to
         provide working capital for a period of up to 90 days and was not
         repaid when matured. The standby credit facility accrues interest at
         22% per annum, and is collateralized by interest-only and residual
         certificates and certain other assets of the Company. No interest has
         been paid to date related to the Greenwich Loan Agreement; accrued
         interest under the Greenwich Loan Agreement was $13.1 million at June
         30, 2000.

         At June 30, 2000, the Company also had outstanding a $2.9 million
         credit facility with a financial institution which bears interest at
         9% per annum. The credit facility provides for repayment of principal
         and interest in monthly installments through September 2001. The
         Company is currently paying interest under this credit facility.

         Interest expense - Greenwich Funds included in the accompanying
         Consolidated Statement of Operations of $4.6 million and $7.5 million
         for the three months ended June 30, 2000 and 1999, respectively, and
         $9.2 million and $15.4 million for the six months ended June 30, 2000
         and 1999, respectively, consists of interest charges related to the
         Greenwich Loan Agreement and the credit facilities that the Greenwich
         Funds purchased from BankBoston. Interest expense - Greenwich Funds
         for the six months ended June 30, 1999 also includes amortization of
         commitment fees 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
         Greenwich Loan Agreement. (See the Company's Annual Report on Form
         10-K for the fiscal year ended December 31, 1999 and Note 4
         "Redeemable Preferred Stock" of Notes to Consolidated Financial
         Statements included therein.)

         NOTES PAYABLE

         At June 30, 2000, $13.3 million was outstanding under notes payable to
         two individuals related to an acquisition of a company completed by
         IMC in 1997. These notes matured on July 10, 1999. Since maturity and
         until paid in full, these notes bear interest at prime (9.5% at June
         30, 2000) plus 5% per annum. On November 11, 1999, the Company and
         certain other parties entered into an intercreditor agreement with the
         individuals holding such notes. Under that agreement, the holders of
         those notes agreed to forebear any collection actions so long as the
         Company repays the obligations owed to these lenders according to an
         agreed-upon plan and




                                       8
<PAGE>   12

                     IMC MORTGAGE COMPANY AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
           FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2000 AND 1999
                                  (UNAUDITED)


         no event of default occurs. Interest under these notes payable is
         being paid monthly to the extent monthly receipts from the Company's
         interest-only and residual cash flows are available under the terms of
         the individuals' intercreditor agreement and the second amended and
         restated intercreditor agreements. All accrued and unpaid interest is
         paid in kind by delivery of additional notes payable.

5.       INTEREST-ONLY AND RESIDUAL CERTIFICATES

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

<TABLE>
<CAPTION>
                                      For the Three Months Ended   For the Six Months Ended
                                                June 30,                    June 30,
                                        ---------     ---------     ---------     ---------
                                           2000          1999          2000         1999
                                        ---------     ---------     ---------     ---------
                                                          (in thousands)
         <S>                            <C>           <C>           <C>           <C>

         Beginning balance              $ 145,798     $ 445,833     $ 161,372     $ 468,841
         Increases                             --            --         6,664            --
         Cash receipts                     (5,923)      (30,413)      (19,558)      (53,421)
         Market valuation adjustment      (55,005)      (62,876)      (63,608)      (62,876)
                                        ---------     ---------     ---------     ---------
         Balance, June 30               $  84,870     $ 352,544     $  84,870     $ 352,544
                                        =========     =========     =========     =========
</TABLE>

         As a result of adverse market conditions and continuing trends in the
         portfolio of underlying mortgages, the Company adjusted its loss curve
         assumptions during the second quarter of 2000. The loss curve
         assumption used by the Company at June 30, 2000 to approximate the
         timing of losses over the life of the securitized loans gradually
         increases from zero in the first six months to 520 basis points after
         55 months. The decrease in the estimated value of the interest-only
         and residual certificates is reflected as a market valuation
         adjustment in the accompanying Statement of Operations for the three
         and six months ended June 30, 2000.

         The loss curve assumption used by the Company at December 31, 1999 to
         approximate the timing of losses over the life of the securitized loans
         gradually increased from zero in the first six months to 375 basis
         points after 36 months. See the Company's Annual Report on Form 10-K
         for the fiscal year ended December 31, 1999 and Note 10 "Interest-Only
         and Residual Certificates" of Notes to Consolidated Financial
         Statements included therein.

         Cash receipts from interest-only and residual certificates have been
         significantly reduced due to delinquency and loss rates associated
         with the loans in the securitization trusts. Generally, the pooling
         and servicing agreements for the securitizations require that their
         related over-collateralization accounts be increased when the
         delinquency and the loss rates exceed various specified limits. These
         increases are funded primarily through the cash flow that would
         otherwise be distributed to the Company in respect to its residual
         certificates. There can be no assurance that the Company will receive
         sufficient cash receipts from the interest-only and residual
         certificates to repay the obligations owed to the Significant Lenders
         and the Greenwich Funds, whose loans are collateralized by the monthly
         cash receipts from the interest-only and residual certificates.
         Additionally, there can be no assurance that the Company will not seek
         bankruptcy protection in the future.

         On January 27, 2000, the Company sold mortgage loans with a principal
         balance of




                                       9
<PAGE>   13

                     IMC MORTGAGE COMPANY AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
           FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2000 AND 1999
                                  (UNAUDITED)


         approximately $265 million to EMC Mortgage Corporation ("EMC"), an
         affiliate of Bear Stearns. The loans, which were sold on a service
         released basis, were securitized by EMC. The Company received
         consideration in the form of cash and an interest-only and residual
         certificate, at an estimated fair value of $6.7 million, representing
         a subordinated interest in the proceeds of the securitization by EMC.


6.       COMMITMENTS AND CONTINGENCIES

         LEGAL PROCEEDINGS

         The Company is party to various legal proceedings arising out of the
         conduct of its business. The Company has accrued certain amounts to
         defend various legal proceedings and such amounts are included in
         accounts payable and accrued liabilities in the accompanying
         Consolidated Balance Sheet at June 30, 2000 and December 31, 1999.
         Management believes that amounts accrued for defense in connection
         with these matters are adequate and ultimate resolution of these
         matters will not have a material adverse effect on the consolidated
         financial condition or results of operations of the Company.

         The Company is a defendant in a lawsuit pending in the United States
         District Court, District of Maryland, brought by the two principals
         and sole shareholders of Central Money Mortgage, Inc. ("CMM"), the
         assets of which were acquired by the Company in August, 1997, pursuant
         to the terms of an Asset Purchase Agreement ("Agreement") for $11.0
         million in stock of the Company. Additionally, the plaintiffs were to
         be employed by Central Money Mortgage (IMC), Inc., a subsidiary formed
         to continue the business of CMM, for a term of five years. A
         Registration Rights Agreement, executed at the time of the closing,
         required the Company to prepare and file a Short Form Registration
         Statement within twenty days after the closing providing the
         plaintiffs with the ability to sell approximately half of the shares
         received pursuant to the Agreement. Promptly after the closing, the
         Company prepared a draft Registration Statement intending to fulfill
         that obligation, but it was subsequently advised by its outside
         securities counsel that doing so would create substantial difficulties
         and adversely affect the registration of a potential debt offering
         which was in progress.

         As it was not feasible for the Company to register the stock as
         agreed, the parties ultimately agreed that if the value of the shares
         which were to have been registered was less on August 19, 1998 (the
         date the stock could be sold under Rule 144 without being registered),
         than it was at the closing date one year earlier, the Company would
         give the plaintiffs sufficient additional shares so that the total
         value of shares which were to have been registered would, when added
         to the value of the additional shares (all valued twelve months after
         closing), be equal to the value of the shares which were to have been
         registered which they had received at closing. Therefore, on August
         20, 1998, the Company issued 96,790 additional shares to the
         plaintiffs.

         The Company's stock, which was selling at $12.87 per share on August
         20, 1998, fell dramatically thereafter. If the plaintiffs had sold
         their shares in August 1998 when they received the additional shares,
         they would have sustained no loss as a result of the Company's



                                      10
<PAGE>   14

                     IMC MORTGAGE COMPANY AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
           FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2000 AND 1999
                                  (UNAUDITED)


         inability to register the shares as originally agreed. However, they
         failed to do so and are now seeking damages in this action.

         The plaintiffs' multi-count complaint alleges federal securities fraud,
         Maryland securities fraud and common law fraud and contends that at the
         time of the execution of the Agreement and the Registration Rights
         Agreement the Company never intended to register the shares and only
         promised to do so in order to induce the plaintiffs to surrender their
         company. They claim both punitive and compensatory damages. In a
         separate count the plaintiffs allege that the failure to register the
         shares constituted a breach of contract. The plaintiffs' employment was
         terminated in July, 1999 (the Company contends, with cause), and in an
         additional count the plaintiffs are seeking to recover the balance of
         the payments which would be due under their employment contracts which
         amounts to approximately $1.2 million.

         The case is in discovery, but based on the facts that have been
         developed to date and consultation with legal counsel, management
         believes there is little or no evidence to support the plaintiffs'
         allegations of fraud and that it is probable those counts of the
         complaint can be successfully defended. Regarding the issue as to
         whether the Company's failure to register the shares was a breach of
         the Registration Rights Agreement, it is the Company's position that
         the subsequent agreement providing for the issuance of additional
         shares to the plaintiffs, which was consummated on August 20, 1998,
         constitutes an accord and satisfaction and any damages sustained by
         the plaintiffs were as a result of their decision to retain their
         stock rather than selling it. It appears this issue, as well as
         whether the plaintiffs were terminated with cause as contended by the
         Company or without cause as alleged by the plaintiffs, will ultimately
         be decided at trial. Management intends to defend such action
         vigorously.

         On November 12, 1999, the Company's shareholders approved the sale of
         certain assets to CitiFinancial Mortgage. While the majority of all
         votes entitled to be cast voted in favor of the transaction, there
         were a limited number of shareholders who exercised their dissenter's
         rights. Because it will be unclear for several years whether there are
         any assets available for distribution to holders of IMC common stock,
         the Company has taken the position that the fair value of the IMC
         common stock is negligible and that no material payment should be
         made. The Company had made an offer to purchase the IMC common stock
         of the dissenting shareholders based on the trading price of the
         Company's common stock at the time of the approval by the Company's
         shareholders of the sale of assets to CitiFinancial Mortgage, which in
         certain instances was rejected. The Company has filed an action in a
         court of competent jurisdiction in Florida requesting that the fair
         value of IMC common stock be determined. The Court shall also
         determine whether each dissenting shareholder, as to whom the Company
         requests the court to make such determination, is entitled to receive
         payment for their shares. The case is in the preliminary discovery
         stages and management of the Company remains comfortable that its
         prior offer was fair and reasonable as to the value of the Company's
         shares.




                                      11
<PAGE>   15

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,
1999. 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" and similar expressions.
Forward looking statements include all statements regarding IMC's expected
financial position, results of operations, cash flows, financing plans,
business strategies, capital and other expenditures, plans and objectives of
management and markets for stock. All forward looking statements involve risks
and uncertainties. Factors that might affect such forward looking statements
include, among other things, overall economic and business conditions, early
termination of the second amended and restated intercreditor agreements or the
standstill periods relating to certain of IMC's creditors, increase in
prepayment speeds, delinquency, loss and default rates of mortgage loans owned
by IMC or constituting a portion of a securitized pool of loans in which the
Company holds a residual or interest-only certificate, rapid fluctuation in
interest rates, risks related to not hedging against loss of value of IMC's
mortgage loan inventory, IMC's success in achieving value in selling its
remaining assets and in realizing the value of its interest-only and residual
certificates, effects of litigation, representation and warranty claims on
previous sales of loans, market forces affecting the price of IMC's common
stock and other uncertainties associated with IMC's financial difficulties and
other transactions described herein, and other risks identified in IMC Mortgage
Company's Securities and Exchange Commission filings.

SALE OF ASSETS TO CITIFINANCIAL MORTGAGE COMPANY

As described in the Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1999, on November 15, 1999 the Company sold its mortgage
servicing rights related to mortgage loans which had been securitized, its
mortgage loan origination business and real property consisting of its Tampa,
Florida headquarters building and its leased facilities at its Ft. Washington,
Pennsylvania, Cherry Hill, New Jersey and Cincinnati, Ohio office locations to
CitiFinancial Mortgage Company ("CitiFinancial Mortgage"), an indirectly
wholly-owned subsidiary of Citigroup Inc. for $96 million in cash and an
additional $4 million over the next two years if certain conditions are met.

After the sale of assets to CitiFinancial Mortgage, the Company had and
continues to have essentially no ongoing operating business, but continues to
own assets consisting primarily of cash, accounts receivable, mortgage loans
held for sale, interest-only and residual certificates and other assets that
are pledged as collateral for the warehouse finance facilities and term debt.
The assets are being either held or sold by the Company to attempt to realize
the maximum value for these assets and repay its obligations, including the
warehouse finance facilities and term debt.

There can be no assurance that the Company will be able to maximize the value
of its remaining




                                      12
<PAGE>   16

assets and have adequate proceeds and resources to satisfy its creditors and
provide any value to the Company's shareholders or that the Company will not
seek bankruptcy protection in the future.

GENERAL

The Company was 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 focused on
lending to individuals whose borrowings needs were generally not being served
by traditional financial institutions due to such individuals' impaired credit
profiles and other factors. Loan proceeds typically were 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, the Company was able to charge higher
interest rates for its loan products than typically were charged by
conventional mortgage lenders.


RESULTS OF OPERATIONS

Three Months Ended June 30, 2000 Compared to Three Months Ended June 30, 1999.

Net loss for the three months ended June 30, 2000 was $68.7 million,
representing a decrease of $102.9 million, or 60.0% from net loss of $171.6
million for the three months ended June 30, 1999. The decrease in net loss
resulted principally from a decrease in goodwill impairment charge of $77.4
million and a $7.9 million decrease in market valuation adjustment related to
the value of the Company's interest only and residual certificates, as well as
a $5.2 million decrease in other charges related to losses from the disposal of
investments in international operations and closing the Rhode Island branch
office location in 1999. The decrease in net loss was also due to a $23.0
million, or 96.8%, decrease in compensation and benefits to $0.8 million for
the three months ended June 30, 2000 from $23.7 million for the three months
ended June 30, 1999 and a $21.1 million, or 81.0% decrease in selling, general
and administrative expenses to $5.0 million for the three months ended June 30,
2000 from $26.1 million for the three months ended June 30, 1999. The decrease
in net loss was partially attributable to a $3.3 million, or 48.1%, decrease in
other interest expense to $3.6 million for the three months ended June 30, 2000
from $6.9 million for the three months ended June 30, 1999 and a $2.9 million
decrease in interest expense and commitment fees associated with the credit
facility provided by Greenwich Street Capital Partners II, L.P. and certain
related affiliates (the "Greenwich Funds").

The decrease in net loss was partially offset by a decrease in gain on sale of
loans of $13.5 million, or 100.0%, to $0 for the three months ended June 30,
2000 from $13.5 million for the three months ended June 30, 1999 and a $12.0
million, or 100.0%, decrease in servicing fees to $0 for the three months ended
June 30, 2000 from $12.0 million for the three months ended June 30, 1999. The
decrease in net loss was also partially offset by a $6.4 million, or 89.0%,
decrease in other revenues to $0.8 million for the three months ended June 30,
2000 from $7.2 million for the three months ended June 30, 1999 and a decrease
in net warehouse interest income of $6.0 million, or 103.9%, to net warehouse
interest expense of $225 thousand for the three months ended June 30, 2000 from
net warehouse interest income of $5.8 million for the three months ended June
30, 1999.

Net loss before taxes was increased by a provision for income taxes of $350
thousand for the three




                                      13
<PAGE>   17

months ended June 30, 2000 compared to a provision for income taxes of $361
thousand for the three months ended June 30, 1999. No income tax benefit has
been applied to the net loss for the three months ended June 30, 2000, as the
Company determined it cannot be assured that the income tax benefit could be
realized in the future.

REVENUES

The following table sets forth information regarding components of the
Company's revenues for the three months ended June 30, 2000 and 1999:

                                             For the Three Months
                                                Ended June 30,
                                             2000        1999
                                             -----     --------
                                               (in thousands)

         Gain on sales of loans              $  --     $ 13,528
                                             -----     --------
         Warehouse interest income             559       14,536
         Warehouse interest expense           (784)      (8,737)
                                             -----     --------
            Net warehouse interest income     (225)       5,799
                                             -----     --------
         Servicing fees                         --       11,958
         Other                                 789        7,175
                                             -----     --------
            Total revenues                   $ 564     $ 38,460
                                             =====     ========


Gain on Sales of Loans. For the three months ended June 30, 2000, gain on sales
of loans decreased to $0 from $13.5 million for the three months ended June 30,
1999, a 100% decrease. During the three months ended June 30, 2000 and June 30,
1999, no mortgage loans were securitized. Mortgage loans sold in the whole loan
market decreased by approximately $342 million, a decrease of approximately
78%, to approximately $98 million for the three months ended June 30, 2000 from
approximately $440 million for the three months ended June 30, 1999. The total
volume of loans produced decreased by 100.0% to $0 for the three months ended
June 30, 2000 as compared with a total volume of approximately $340 million for
the three months ended June 30, 1999. On November 15, 1999, the Company sold
substantially all of its mortgage loan origination business to CitiFinancial
Mortgage.

Net Warehouse Interest Income (Expense). Net warehouse interest income decreased
from $5.8 million for the three months ended June 30,1999 to net warehouse
interest expense of $225 thousand for the three months ended June 30, 2000. The
decrease in net warehouse interest income was primarily due to a decrease in the
average balance of mortgage loans held for sale, higher interest rates charged
by the Company's warehouse lenders and a greater percentage of the remaining
loans held for sale which are non-performing.

Servicing Fees. Servicing fees decreased to $0 for the three months ended June
30, 2000 from $12.0 million for the three months ended March 31, 1999, due to
the sale of the Company's servicing portfolio to CitiFinancial Mortgage on
November 15, 1999.

Other. Other revenues, consisting principally of prepayment penalties from
borrowers who prepay the outstanding balance of their mortgage, decreased to
$0.8 million for the three months ended June 30, 2000 from $7.2 million in
three months ended June 30, 1999, a decrease of 89.0%, due primarily to the
sale of the Company's servicing portfolio to CitiFinancial Mortgage on November
15, 1999. Subsequent to November 15, 1999, the Company collects prepayment
penalties only on mortgage loans held for sale.




                                      14
<PAGE>   18

EXPENSES

The following table sets forth information regarding components of the
Company's expenses for the three months ended June 30, 2000 and 1999:

                                                For the Three Months
                                                    Ended June 30,
                                                 2000        1999
                                                -------    --------
                                                   (in thousands)
         Compensation and benefits              $   759    $ 23,747
         Selling, general and administrative      4,960      26,052
         Other interest expense                   3,582       6,905
         Interest expense - Greenwich Funds       4,648       7,499
         Market valuation adjustment             55,005      62,876
         Goodwill impairment charge                  --      77,446
         Other charges                               --       5,179
                                                -------    --------
              Total expenses                    $68,954    $209,704
                                                =======    ========


Compensation and benefits decreased by $23.0 million, or 96.8%, to $0.8 million
for the three months ended June 30, 2000 from $23.7 million for the three
months ended June 30, 1999, due to the disposal of the Company's eight
operating subsidiaries during the third and fourth quarters of 1999 and the
sale of the Company's mortgage servicing rights and loan origination business
to CitiFinancial Mortgage on November 15, 1999, which resulted in the
elimination of substantially all remaining IMC employees on November 15, 1999.
(See the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1999 and Note 6 "Disposal of Assets" of Notes to Consolidated
Financial Statements included therein).

Selling, general and administrative expenses decreased by $21.1 million, or
81.0%, to $5.0 million for the three months ended June 30, 2000 from $26.1
million for the three months ended June 30, 1999 principally due to a decrease
in operating costs and amortization expense related to mortgage servicing
rights and goodwill as a result of the disposal of the Company's eight
operating subsidiaries during the third and fourth quarters of 1999 and the
sale of the Company's mortgage loan servicing business and substantially all
the Company's mortgage loan origination business to CitiFinancial Mortgage on
November 15, 1999.

Other interest expense decreased by $3.3 million, or 48.1%, to $3.6 million for
the three months ended June 30, 2000 from $6.9 million for the three months
ended June 30, 1999 principally as a result of decreased interest expense due
to decreased interest-only and residual borrowings.

Interest expense - Greenwich Funds decreased by $2.9 million, or 38.0%, to $4.6
million for the three months ended June 30, 2000 from $7.5 million for the
three months ended June 30, 1999. Interest expense - Greenwich Funds represents
interest charges associated with the Greenwich Loan and the credit facilities
the Greenwich Funds purchased from BankBoston.

Market valuation adjustment, which represents a decrease in the estimated fair
value of the Company's interest-only and residual certificates, decreased to
$55.0 million for the three months ended June 30,




                                      15
<PAGE>   19
2000 from $62.9 million for the three months ended June 30, 1999. During the
second quarter of 2000, as a result of adverse market conditions and continuing
trends in the portfolio of underlying mortgages, the Company adjusted its loss
curve assumptions. The loss curve assumption used by the Company at June 30,
2000 to approximate the timing of losses over the life of the securitized loans
gradually increases from zero in the first six months to 520 basis points after
55 months. See Note 5 "Interest-Only" and Residual Certificates" of Notes to
Consolidated Financial Statements included herein. During the second quarter of
1999, as a result of adverse market conditions and trends in the portfolio of
underlying mortgages, the Company revised its loss curve assumptions so that
expected losses gradually increased 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
borrowers' ability to refinance existing delinquent loans serviced by the
Company with other non-conforming mortgage lenders that market their products to
borrowers that are less credit worthy. As a result, the frequency of default may
increase.

Goodwill impairment charge represents the writedown of goodwill during the
three months ended June 30, 1999 resulting from the Company's evaluation of the
goodwill associated with the Company's eight operating subsidiaries at June 30,
1999. (See the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1999 and Note 6 "Goodwill Impairment and Loss on Disposal of
Subsidiaries" included therein).

Other charges represent losses incurred during the three months ended June 30,
1999 from the disposal of investments in international operations and closing
the Rhode Island branch location. (See the Company's Annual Report on Form 10-K
for the fiscal year ended December 31, 1999 and Note 6 "Goodwill Impairment and
Loss on Disposal of Subsidiaries" included therein).

Income Taxes. The provision for income taxes for the three months ended June
30, 2000 was approximately $350 thousand which differed from the federal tax
rate of 35% primarily due to state income taxes, the non-deductability for tax
purposes of a portion of interest expense - Greenwich Funds and a full
valuation allowance established against the deferred tax asset.

Six Months Ended June 30, 2000 Compared to Six Months Ended June 30, 1999.

Net loss for the six months ended June 30, 2000 was $89.2 million, representing
a decrease of $111.2 million, or 55.4%, from net loss of $200.3 million for the
six months ended June 30, 1999. The decrease in net loss resulted principally
from a decrease in goodwill impairment charge of $77.4 million and a $5.2
million decrease in other charges related to losses from the disposal of
investments in international operations and closing the Rhode Island branch
office location in 1999. The decrease in net loss was also due to a $51.9
million, or 97.7%, decrease in compensation and benefits to $1.2 million for the
six months ended June 30, 2000 from $53.1 million for the six months ended June
30, 1999 and a $36.7 million, or 74.2%, decrease in selling, general and
administrative expenses to $12.7 million for the six months ended June 30, 2000
from $49.5 million for the six months ended June 30, 1999. The decrease in net
loss was partially attributable to a $8.7 million, or 55.2%, decrease in other
interest expense to $7.1 million for the six months ended June 30, 2000 from
$15.8 million for the six months ended June 30, 1999 and a $6.2 million decrease
in interest expense and commitment fees associated with the credit facility
provided by Greenwich Street Capital Partners II, L.P. and certain related
affiliates (the "Greenwich Funds").




                                      16
<PAGE>   20

The decrease in net loss was partially offset by a decrease in gain on sale of
loans of $27.7 million, or 87.5%, to $3.9 million for the six months ended June
30, 2000 from $31.6 million for the six months ended June 30, 1999 and a $25.1
million, or 100.0%, decrease in servicing fees to $0 for the six months ended
June 30, 2000 from $25.1 million for the six months ended June 30, 1999. The
decrease in net loss was also partially offset by a $13.3 million, or 89.8%,
decrease in other revenues to $1.5 million for the six months ended June 30,
2000 from $14.8 million for the six months ended June 30, 1999 and a decrease
in net warehouse interest income of $12.0 million, or 100.7%, to net warehouse
interest expense of $87 thousand for the six months ended June 30, 2000 from
net warehouse interest income of $12.0 million for the six months ended June
30, 1999.

Net loss before taxes was increased by a provision for income taxes of $0.7
million for the six months ended June 30, 2000 compared to a provision for
income taxes of $4.6 million for the six months ended June 30, 1999. No income
tax benefit has been applied to the net loss for the six months ended June 30,
2000, as the Company determined it cannot be assured that the income tax
benefit could be realized in the future.

REVENUES

The following table sets forth information regarding components of the
Company's revenues for the six months ended June 30, 2000 and 1999:

                                                        For the Six Months
                                                          Ended June 30,
                                                         2000        1999
                                                       -------     --------
                                                          (in thousands)

         Gain on sales of loans                        $ 3,941     $ 31,639
                                                       -------     --------
         Warehouse interest income                       4,127       35,165
         Warehouse interest expense                     (4,214)     (23,211)
                                                       -------     --------
            Net warehouse interest income (expense)        (87)      11,954
                                                       -------     --------
         Servicing fees                                     --       25,130
         Other                                           1,505       14,820
                                                       -------     --------
            Total revenues                             $ 5,359     $ 83,543
                                                       =======     ========


Gain on Sales of Loans. For the six months ended June 30, 2000, gain on sales
of loans decreased to $3.9 million from $31.6 million for the six months ended
June 30, 1999, a decrease of 87.5%. During the six months ended June 30, 2000
and June 30, 1999, no mortgage loans were securitized. Mortgage loans sold in
the whole loan market decreased by approximately $245 million, a decrease of
approximately 38%, to approximately $400 million for the six months ended June
30, 2000 from approximately $645 million for the six months ended June 30,
1999. The total volume of loans produced decreased by 100.0% to $0 for the six
months ended June 30, 2000 as compared with a total volume of approximately
$695 million for the six months ended June 30, 1999. On November 15, 1999, the
Company sold substantially all of its mortgage loan origination business to
CitiFinancial Mortgage.

Net Warehouse Interest Income (Expense). Net warehouse interest income
decreased from net warehouse interest income of $12.0 million for the six
months ended June 30, 1999 to net warehouse interest expense of $87 thousand
for the six months ended June 30, 2000, a decrease of 100.7%. The




                                      17
<PAGE>   21

decrease in net warehouse interest income was primarily due to a decrease in
the average balance of mortgage loans held for sale, higher interest rates
charged by the Company's warehouse lenders and a greater percentage of the
remaining loans held for sale which are non-performing.

Servicing Fees. Servicing fees decreased to $0 for the six months ended June
30, 2000 from $25.0 million for the six months ended June 30, 1999, due to the
sale of the Company's servicing portfolio to CitiFinancial Mortgage on November
15, 1999.

Other. Other revenues, consisting principally of prepayment penalties from
borrowers who prepay the outstanding balance of their mortgage, decreased to
$1.5 million for the six months ended June 30, 2000 from $14.8 million in six
months ended June 30, 1999, a decrease of 89.8 %, due primarily to the sale of
the Company's servicing portfolio to CitiFinancial Mortgage on November 15,
1999. Subsequent to November 15, 1999, the Company collects prepayment
penalties only on mortgage loans held for sale.


EXPENSES

The following table sets forth information regarding components of the
Company's expenses for the six months ended June 30, 2000 and 1999:

                                                 For the Six Months
                                                   Ended June 30,
                                                  2000       1999
                                                -------    --------
                                                   (in thousands)

         Compensation and benefits              $ 1,228    $ 53,097
         Selling, general and administrative     12,742      49,477
         Other interest expense                   7,071      15,789
         Interest expense - Greenwich Funds       9,199      15,379
         Market valuation adjustment             63,608      62,876
         Goodwill impairment charge                  --      77,446
         Other charges                               --       5,179
                                                -------    --------
              Total expenses                    $93,848    $279,243
                                                =======    ========


Compensation and benefits decreased by $51.9 million, or 97.7%, to $1.2 million
for the six months ended June 30, 2000 from $53.1 million for the six months
ended June 30, 1999, due to the disposal of the Company's eight operating
subsidiaries during the third and fourth quarters of 1999 and the sale of the
Company's mortgage servicing rights and loan origination business to
CitiFinancial Mortgage on November 15, 1999, which resulted in the elimination
of substantially all remaining IMC employees on November 15, 1999. (See the
Company's Annual Report on Form 10-K for the fiscal year ended December 31,
1999 and Note 6 "Disposal of Assets" of Notes to Consolidated Financial
Statements included therein).

Selling, general and administrative expenses decreased by $36.7 million, or
74.2%, to $12.7 million for the six months ended June 30, 2000 from $49.5
million for the six months ended June 30, 1999 principally due to a decrease in
operating costs and amortization expense related to mortgage servicing rights
and goodwill as a result of the disposal of the Company's eight operating
subsidiaries during the third and fourth quarters of 1999 and the sale of the
Company's mortgage loan servicing business and substantially all the Company's
mortgage loan origination business to CitiFinancial Mortgage on




                                      18
<PAGE>   22

November 15, 1999, offset by an increase in the amount accrued to defend
various legal proceedings against the Company (see Note 6 "Commitments and
Contingencies" of Notes to Consolidated Financial Statements included herein).

Other interest expense decreased by $8.7 million, or 55.2%, to $7.1 million for
the six months ended June 30, 2000 from $15.8 million for the six months ended
June 30, 1999 principally as a result of decreased interest expense due to
decreased interest-only and residual borrowings.

Interest expense - Greenwich Funds decreased by $6.2 million or 40.2% to $9.2
million for the six months ended June 30, 2000 from $15.4 million for the six
months ended June 30, 1999. Interest expense - Greenwich Funds represents
interest charges associated with the Greenwich Loan and the credit facilities
the Greenwich Funds purchased from BankBoston. For the six months ended June
30, 1999, interest expense - Greenwich Funds also included amortization of
commitment fees and the value attributable to the Class C preferred stock
issued in connection with the Greenwich Loan Agreement and preferred stock
issuable to the Greenwich Funds under the terms of the Greenwich Loan
Agreement. See the Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1999 and Note 3 "Warehouse Finance Facilities, Term Debt and
Notes Payable" and Note 4 "Redeemable Preferred Stock" of Notes to Consolidated
Financial Statements included therein.

Market valuation adjustment, which represents a decrease in the estimated fair
value of the Company's interest-only and residual certificates, increased to
$63.6 million for the six months ended June 30, 2000 from $62.9 million for the
six months ended June 30, 1999. During the second quarter of 2000, as a result
of adverse market conditions and continuing trends in the portfolio of
underlying mortgages, the Company adjusted its loss curve assumptions. The loss
curve assumption used by the Company at June 30, 2000 to approximate the timing
of losses over the life of the securitized loans gradually increases from zero
in the first six months to 520 basis points after 55 months. See Note 5
"Interest-Only" and Residual Certificates" of Notes to Consolidated Financial
Statements included herein. During the second quarter of 1999, the Company, as
a result of adverse market conditions and trends in the portfolio of underlying
mortgages revised its loss curve assumptions so that expected losses gradually
increased 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 borrowers' ability to
refinance existing delinquent loans serviced by the Company with other
non-conforming mortgage lenders that market their products to borrowers that
are less credit worthy. As a result, the frequency of default may increase.

Goodwill impairment charge represents the writedown of goodwill during the six
months ended June 30, 1999 resulting from the Company's evaluation of the
goodwill associated with the Company's eight operating subsidiaries at June 30,
1999. (See the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1999 and Note 6 "Goodwill Impairment and Loss on Disposal of
Subsidiaries" included therein).

Other charges represent losses incurred during the six months ended June 30,
1999 from the disposal of investments in international operations and closing
the Rhode Island branch location. (See the Company's Annual Report on Form 10-K
for the fiscal year ended December 31, 1999 and Note 6 "Goodwill Impairment and
Loss on Disposal of Subsidiaries" included therein).

Income Taxes. The provision for income taxes for the six months ended June 30,
2000 was approximately $0.7 million which differed from the federal tax rate of
35% primarily due to state




                                      19
<PAGE>   23

income taxes, the non-deductability for tax purposes of a portion of interest
expense - Greenwich Funds and a full valuation allowance established against
the deferred tax asset.


FINANCIAL CONDITION

June 30, 2000 Compared to December 31, 1999

Mortgage loans held for sale, net, at June 30, 2000 were $3.6 million, a
decrease of $373.9 million, or 99.0%, from mortgage loans held for sale of
$377.5 million at December 31, 1999. This decrease resulted primarily from the
sale of mortgage loans as the Company attempts to sell its remaining mortgage
loans held for sale and pay down its warehouse finance facilities. Borrowings
under warehouse financing facilities at June 30, 2000 decreased $412.7 million,
or 98.3%, to $7.0 million from borrowings under warehouse financing facilities
of $419.7 million at December 31, 1999 due primarily to the repayment of
warehouse finance facilities as the mortgage loans are sold. Included in
mortgages held for sale, net, at June 30, 2000 and December 31, 1999 was a
valuation allowance of $8.5 million and $37.5 million, respectively,
representing the amount by which cost exceeds market value on mortgage loans
held for sale.

Accounts receivable decreased $25.4 million or 82.3% from $30.9 million at
December 31, 1999 to $5.5 million at June 30, 2000, primarily due to receipt of
principal and interest collections related to mortgage loans held for sale
remitted to the Company by the servicer of the loans.

Interest-only and residual certificates at June 30, 2000 were $84.9 million,
representing a decrease of $76.5 million, or 47.4%, from interest-only and
residual certificates of $161.4 million at December 31, 1999. The decrease in
interest-only and residual certificates resulted from the receipt of cash from
the interest-only and residual certificates and a $63.6 million market
valuation adjustment representing the decrease in the fair market value of the
interest-only and residual certificates. The decrease in interest-only and
residual certificates was partially offset by the receipt of a residual
certificate, with an estimated fair value of $6.7 million, representing a
subordinated interest in the proceeds from a sale of whole loans, which were
securitized (see Note 5 "Interest-Only and Residual Certificates" of Notes to
Consolidated Financial Statements included herein).

Term debt at June 30, 2000 was $253.1 million, representing a decrease of $19.2
million or 7.1 % from term debt of $272.4 million at December 31, 1999. This
decrease was primarily a result of repayment of certain amounts of term debt
from cash flows received from interest-only and residual certificates as
provided in the intercreditor agreements.

Accounts payable and accrued liabilities increased $2.2 million or 16.6% from
$11.3 million at December 31, 1999 to $13.5 million at June 30, 2000 primarily
due to an increase in the amount accrued to defend various legal proceedings
against the Company (see Note 6 "Commitments and Contingencies" of Notes to
Consolidated Financial Statements included herein).

Stockholders' deficit as of June 30, 2000 was $218.1 million, an increase of
$90.7 million over stockholders' deficit of $127.5 million at December 31,
1999. Stockholders' deficit increased for the six months ended June 30, 2000
primarily as a result of a net loss of $89.2 million.




                                      20
<PAGE>   24

LIQUIDITY AND CAPITAL RESOURCES

During the six months ended June 30, 2000, the Company used its cash flow from
the sale of loans through whole loan sales, net interest income and
interest-only and residual certificates to meet its working capital needs. The
Company's cash requirements during the six months ended June 30, 2000 included
payment of principal and interest costs on borrowings, and operating expenses.

Substantially all the Company's cash and cash equivalents are restricted
pursuant to the second amended and restated intercreditor agreements described
in the Company's Annual Report on Form 10-K for the fiscal year ended December
31, 1999 and Note 3 of Notes to Consolidated Financial Statements included
therein. In addition, these second amended and restated intercreditor
agreements provide a mechanism for the Company's principal secured creditors
who are parties to the intercreditor agreements to release to the Company for
its working capital needs a portion of the monthly receipts from the
interest-only and residual certificates serving as collateral for those
lenders' loans. As more fully described in Note 5 "Interest-Only and Residual
Certificates" of Notes to Consolidated Financial Statements included herein,
because the cash flow from various interest only and residual certificates has
materially decreased in the three months ended June 30, 2000, there can be no
assurance that this mechanism will provide sufficient cash flow to cover the
Company's working capital needs.

The Company typically has operated, and expects to continue to operate, on a
negative operating cash flow basis. During the six months ended June 30, 2000,
the Company received cash flows from operating activities of $401.3 million, an
increase of $47.7 million from cash flows provided by operating activities of
$353.6 million during the six months ended June 30, 1999. During the six months
ended June 30, 2000, cash flows used by the Company in financing activities
were $432.0 million, an increase of $79.3 million from cash flows used in
financing activities of $352.7 million during the six months ended June 30,
1999. The cash flows received from operating activities relate primarily to the
sale of mortgage loans held for sale. The cash flows used in financing
activities related primarily to the repayment of principal on finance
facilities borrowings.

Warehouse Finance Facilities and Term Debt

As described in the Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1999, on November 15, 1999 the Company consummated the sale
of its mortgage loan servicing business, substantially all of its mortgage loan
origination business and certain other assets to CitiFinancial Mortgage.
Simultaneously, the Company entered into second amended and restated
intercreditor agreements with Paine Webber Real Estate Securities, Inc. ("Paine
Webber"), Bear Stearns Home Equity Trust ("Bear Stearns"), and Aspen Funding
Corp. and German American Capital Corporation, subsidiaries of Deutsche Bank of
North American Holding Corp ("DMG") (collectively, the "Significant Lenders")
and Greenwich Street Capital Partners II, L.P. and certain of its affiliates
(the "Greenwich Funds").

Under these agreements, the lenders agreed to keep their respective facilities
in place so long as the obligations owed to those lenders are repaid in
accordance with the terms of these agreements and certain events of default as
described in these agreements do not occur. Each of the Significant Lenders and
the Greenwich Funds has indicated that they will not make any additional
advances under their facilities.




                                      21
<PAGE>   25

In addition, the second amended and restated intercreditor agreements described
above provide a mechanism for the Company's principal secured creditors who are
parties to the intercreditor agreements to release to the Company for its
working capital needs a portion of the monthly receipts from the interest-only
and residual certificates serving as collateral for those lenders' loans.

At June 30, 2000, the Company had no available credit facilities from the
Significant Lenders, the Greenwich Funds or any other source. At June 30, 2000,
the amount of warehouse finance facilities which remained outstanding from
previously available warehouse finance facilities was as follows:

         Warehouse Finance Facilities                       June 30, 2000
         ----------------------------                       -------------
                                                            (in thousands)

         Bear Stearns                                           $3,594
         DMG                                                     1,268
         Paine Webber                                            2,142
                                                                ------
                                                                $7,004

Outstanding borrowings under the Company's warehouse financing facilities bear
interest at rates ranging from LIBOR (6.64% at June 30, 2000) plus 0.75% to
LIBOR plus 2.00%, and are collateralized by, among other assets, mortgage loans
held for sale. Upon the sale of these mortgage loans, the proceeds are used to
pay down the borrowings under these warehouse finance facilities. The Company
is currently paying interest related to these warehouse borrowings.

At June 30, 2000, the amount of term debt which remained outstanding from
previously available term debt credit facilities was as follows:

         Term Debt                                         June 30, 2000
         ---------                                         -------------
                                                           (in thousands)

         Paine Webber- residual credit facility               $107,493
         Greenwich Funds- credit facility acquired
              from BankBoston N.A                               78,581
         Greenwich Funds-standby revolving
              credit facility                                   38,000
         DMG- residual credit facility                          26,147
         Other                                                   2,917
                                                              --------
                                                              $253,138

Outstanding borrowings under the Company's residual credit facilities with
Paine Webber and DMG bear interest at LIBOR plus 3.00%, and are collateralized
by, among other assets, the Company's interest in certain interest-only and
residual certificates. Upon receipt of cash from the interest-only and residual
certificates, the proceeds are used for the Company's working capital needs, in
accordance with the second amended and restated intercreditor agreements and to
pay down the residual credit facilities. The Company is currently paying
interest related to these residual credit facilities.

Credit facilities previously provided by BankBoston N.A. ("BankBoston") matured
and the Company was unable to repay its outstanding borrowings under these
facilities.The Greenwich




                                      22
<PAGE>   26

Funds acquired, at a discount, from BankBoston its interest in the credit
facilities. These credit facilities bear interest at 9.75%, and are
collateralized by interest-only and residual certificates and certain other
assets of the Company. The Company is currently paying interest related to
these credit facilities.

The Company entered into an agreement for a $38.0 million standby revolving
credit facility with certain of the Greenwich Funds (the "Greenwich Loan
Agreement"). The facility was originally available to provide working capital
for a period of up to 90 days and was not repaid when matured. The standby
credit facility accrues interest at 22% per annum, and is collaterialized by
interest-only and residual certificates and certain other assets of the
Company. No interest has been paid to date related to the Greenwich Loan
Agreement; accrued interest related to the Greenwich Loan Agreement was $13.1
million at June 30, 2000.

At June 30, 2000, the Company also had outstanding a $2.9 million credit
facility with a financial institution which bears interest at 9% per annum. The
credit facility provides for repayment of principal and interest in monthly
installments through September 2001. The Company is currently paying interest
related to this credit facility.

NOTES PAYABLE

At June 30, 2000, $13.3 million was outstanding under notes payable to two
individuals related to an acquisition of a company completed by IMC in 1997.
These notes matured on July 10, 1999. Since maturity and until paid in full,
these notes bear interest at prime (9.5% at June 30, 2000) plus 5% per annum.
On November 11, 1999, the Company and certain other parties entered into an
intercreditor agreement with the individuals holding such notes. Under that
agreement, the holders of those notes agreed to forebear any collection actions
so long as the Company repays the obligations owed to these lenders according
to an agreed-upon plan and no event of default occurs. Interest under these
notes payable is being paid monthly to the extent cash receipts from the
Company's interest-only and residual certificates are available under the terms
of the individuals' intercreditor agreement and the second amended and
restated intercreditor agreements. All accrued and unpaid interest is paid in
kind by delivery of additional notes payable.

RISK MANAGEMENT

Since October 1, 1998 the Company has used 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 normal servicing fee. Based on market volatility in the asset-backed markets
and the widening of the spreads demanded by asset-backed investors since
September 1998 to acquire newly issued asset-backed securities, there can be no
assurance that discount rates utilized by the Company in the future to present
value the spread described above will not change, particularly if the spreads
demanded by asset-backed investors to acquire newly issued asset-backed
securities continues to increase. An increase in the discount rates used to
present value the spread described above of 1%, 3% or 5% would result in a
corresponding decrease in the value of the interest-only and residual
certificates at June 30, 2000 of approximately 4%, 11% and 17% respectively. A
decrease in the discount rates used to present value the spread described above
of 1%, 3% or 5% would result in an increase in the value of the interest-only
and residual certificates at June 30, 2000 of approximately 4%, 14% and 24%,
respectively.




                                      23
<PAGE>   27

INFLATION

Inflation historically has had no material effect on the Company's results of
operations. Inflation can have an effect on interest rates, which 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 may impact interest expense related to the Company's residual
finance facility borrowings and may also affect the Company's ability to earn a
spread between interest received on its loans and the costs of its warehouse
borrowings. During the six months ended June 30, 2000, LIBOR increased from
5.8% to 6.6%, which resulted in increased interest costs related to the
Company's residual finance facilities and a decrease in the spread between
interest received on the Company's loans and the costs of its warehouse
borrowings. The results of operations of the Company will likely continue to be
adversely affected during any period of unexpected or rapid changes in interest
rates.

Additionally, to the extent 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
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 require 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. 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. The Company does not engage in hedging
activities, which could result in substantial losses in the value of the
Company's mortgage loans held for sale without an offsetting gain.


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"), which was amended
by SFAS No. 137 "Accounting for Derivative Instruments and Hedging Activities -
Deferral of the Effective Date of FASB Statement No. 133". SFAS 133, as
amended, is effective for all fiscal quarters of all fiscal years beginning
after June 15, 2000 (January 1, 2001 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 designed to hedge
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. The Company
has no present plans to engage in hedging activities and does not anticipate
that the adoption of SFAS 133 will have a material impact on the Company's
statement of operations or balance sheet.




                                      24
<PAGE>   28

YEAR 2000

The year 2000 (Y2K) problem was the result of computer programs being written
using two digits rather than four to define the applicable year. Thus year 1999
was represented by the number "99" in many software applications.

The Company to date has experienced no material Y2K compliance issues and does
not anticipate any material Y2K compliance issues in the future.

The foregoing assessment of the impact of the Y2K problem on the Company is
based on management's best estimates at the present time and, although not
expected to, could change substantially. The assessment is based upon several
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.

RECENT DEVELOPMENTS

In April 2000, the Company's employment agreement with Dennis J. Pitocco was
amended and restated to (i) change his position to Chairman, President, Chief
Executive Officer and Chief Financial Officer, (ii) provide for fixed quarterly
bonus compensation payments of $25,000, and (iii) provide that Mr. Pitocco would
receive his deferred compensation, in addition to the other trigger events
provided in the former employment agreement, upon the occurrence of any event
which would constitute a dissolution or bankruptcy of the Company, termination
of the then-current Intercreditor/Standstill Agreements other than as a result
of the payment in full of the creditors who are parties to such agreements or a
distribution of the assets of the Company in liquidation of the Company.  The
amended employment agreement is attached hereto as an exhibit and is
incorporated herein by reference in its entirety.


                                      25
<PAGE>   29

























                           PART II.  OTHER INFORMATION




























                                      26
<PAGE>   30

PART II. OTHER INFORMATION

Item 1.  Legal Proceedings -

The Company is party to various legal proceedings arising out of the conduct of
its business. The Company has accrued certain amounts to defend various legal
proceedings and such amounts are included in accrued liabilities in the
accompanying Consolidated Balance Sheet at June 30, 2000. Management believes
that amounts accrued for defense in connection with these matters are adequate
and ultimate resolution of these matters will not have a material adverse
effect on the consolidated financial condition or results of operations of the
Company.

The Company is a defendant in a lawsuit pending in the United States District
Court, District of Maryland, brought by the two principals and sole
shareholders of Central Money Mortgage, Inc. ("CMM"), the assets of which were
acquired by the Company in August, 1997, pursuant to the terms of an Asset
Purchase Agreement ("Agreement") for $11.0 million in stock of the Company.
Additionally, the plaintiffs were to be employed by Central Money Mortgage
(IMC), Inc., a subsidiary formed to continue the business of CMM for a tern of
five years. A Registration Rights Agreement, executed at the time of the
closing, required the Company to prepare and file a Short Form Registration
Statement within twenty days after the closing providing the plaintiffs with
the ability to sell approximately half of the shares received pursuant to the
Agreement. Promptly after the closing, the Company prepared a draft
Registration Statement intending to fulfill that obligation, but it was
subsequently advised by its outside securities counsel that doing so would
create substantial difficulties and adversely affect the registration of a
potential debt offering which was in progress.

As it was not feasible for the Company to register the stock as agreed, the
parties ultimately agreed that if the value of the shares which were to have
been registered was less on August 19, 1998 (the date the stock could be sold
under Rule 144 without being registered), than it was at the closing date one
year earlier, the Company would give the plaintiffs sufficient additional
shares so that the total value of shares which were to have been registered
would, when added to the value of the additional shares (all valued twelve
months after closing), be equal to the value of the shares which were to have
been registered which they had received at closing. Therefore, on August 20,
1998, the Company issued 96,790 additional shares to the plaintiffs.

The Company's stock, which was selling at $12.87 per share on August 20, 1998,
fell dramatically thereafter. If the plaintiffs had sold their shares in August
1998 when they received the additional shares, they would have sustained no
loss as a result of the Company's inability to register the shares as
originally agreed. However, they failed to do so and are now seeking damages in
this action.

The plaintiffs' multi-count complaint alleges federal securities fraud,
Maryland securities fraud and common law fraud and contends that at the time of
the execution of the Agreement and the Registration Rights Agreement the
Company never intended to register the shares and only promised to do so in
order to induce the plaintiffs to surrender their company. They claim both
punitive and compensatory damages. In a separate count the plaintiffs allege
that the failure to register the shares constituted a breach of contract. The
plaintiffs' employment was terminated in July, 1999 (the Company contends, with
cause), and in an additional count the plaintiffs are seeking to recover the
balance of the payments which would be due under their employment contracts
which amounts to approximately $1.2 million.




                                      27
<PAGE>   31

The case is in discovery but based on the facts that have been developed to
date, and consultation with legal counsel, management believes there is little
or no evidence to support the plaintiffs' allegations of fraud and it is
probable that those counts of the complaint can be successfully defended. The
Company conceded that the failure to register the shares is in fact a breach of
the Registration Rights Agreement; however, it is the Company's position that
the subsequest agreement providing for the issuance of additional shares to the
plaintiffs, which was consummated on August 20, 1998, constitutes an accord and
satisfaction and any damages sustained by the plaintiffs were as a result of
their decision to retain their stock rather than selling it. It appears this
issue, as well as whether the plaintiffs were terminated with cause as
contended by the Company, or without cause as alleged by the plaintiffs, will
ultimately be decided at trial. Management intends to defend such action
vigorously.

On November 12, 1999, the Company's shareholders approved the sale of certain
assets to CitiFinancial Mortgage. While the majority of all votes entitled to
be cast voted in favor of the transaction, there were a limited number of
shareholders who exercised their dissenter's rights. Because it will be unclear
for several years whether there are any assets available for distribution to
holders of IMC common stock, the Company has taken the position that the fair
value of the IMC common stock is negligible and that no material payment should
be made. The Company had made an offer to purchase the IMC common stock of the
dissenting shareholders based on the trading price of the Company's common
stock at the time of the approval by the Company's shareholders of the sale of
assets to CitiFinancial Mortgage, which in certain instances was rejected. The
Company has filed an action in a court of competent jurisdiction in Florida
requesting that the fair value of IMC common stock be determined. The Court
shall also determine whether each dissenting shareholder, as to whom the
Company requests the court to make such determination, is entitled to receive
payment for their shares. The case is in the preliminary discovery stages and
management of the Company remains comfortable that its prior offer was fair and
reasonable as to the value of the Company's shares.

Item 2.  Changes in Securities - None

Item 3.  Defaults Upon Senior Securities -

At June 2000, the Company was not in compliance with certain financial
covenants related to its credit facilities with Paine Webber Real Estate
Securities, Inc., Bear Stearns Home Equity Trust, and Aspen Funding Corp. and
German American Capital Corporation, subsidiaries of Deutsche Bank North
America Holding Corp. (collectively, the "Significant Lenders"). As described
in Note 4 "Warehouse Finance Facilities, Term Debt and Notes Payable" to the
Consolidated Financial Statements included herein, the Company entered into a
second amended and restated intercreditor agreements with the Significant
Lenders which provide for the Significant Lenders to "stand-still" and keep
outstanding balances under their facilities in place, subject to certain
conditions, as the Company repays the obligations owed to these lenders
according to an agreed upon plan.

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

The annual meeting of stockholders was held on June 28, 2000.

         Election of Directors - Mr. Dennis J. Pitocco was elected to the Board
for a term of three years.




                                      28
<PAGE>   32

There were 22,991,037 votes cast in favor of the resolution and 552,393 votes
cast against the resolution. Ms. Jean Schwindt was elected to the Board for a
term of two years. There were 22,993,292 votes cast in favor of the resolution
and 550,138 votes cast against the resolution. Mr. David Rosenthal was elected
to the Board for a term of one year. There were 22,991,037 votes cast in favor
of the resolution and 552,393 votes cast against the resolution.

         Ratification of the Appointment of Grant Thornton L.L.P. as
Independent Accountants for the Company for the fiscal year ending December 31,
2000 - The appointment of Grant Thornton L.L.P. as independent accountants for
the Company for the fiscal year ending December 31, 2000 was ratified. There
were 23,073,754 votes cast in favor of the ratification, 373,506 votes cast
against the ratification and 96,170 votes abstained.


Item 5.  Other Information - None

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

         A.       Exhibits

                  10.88 - First Amended and Restated Employment Agreement
                          between IMC Mortgage Company and Dennis J. Pitocco

                  27    - Financial Data Schedule  (for SEC use only)

                  99    - Report of Independent Certified Public Accountants

         B.       Reports on Form 8-K - None.




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: August 14, 2000                    IMC MORTGAGE COMPANY



                                         By: /s/ Dennis J. Pitocco
                                            ----------------------------------
                                                 Dennis J. Pitocco, Chief
                                                 Executive Officer, President,
                                                 Chief Operating Officer, Chief
                                                 Financial Officer and Director




                                      29