FORM 10-Q

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549
(Mark One)

    [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                   SECURITIES EXCHANGE ACT OF 1934

            For the quarterly period ended March 31, 1997

                                 OR

    [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                   SECURITIES EXCHANGE ACT OF 1934

For the transition period from               to
                                             
                        Commission file number: 1-11017

                         NORTH AMERICAN MORTGAGE COMPANY
             (Exact name of registrant as specified in its charter)

         Delaware                                    68-0267088
(State or other jurisdiction of                   (I.R.S. Employer
incorporation or organization)                   Identification No.)

              3883 Airway Drive, Santa Rosa, California, 95403-1699
               (Address of principal executive offices, zip code)

                                 (707) 523-5000
              (Registrant's telephone number, including area code)


              ----------------------------------------------------
                    (Former name, former address and former
                   fiscal year, if changed since last report)

     Indicate  by check mark  whether the  registrant  (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days. Yes X   No

     The  number of  shares of Common  Stock,  par value  $.01 per  share,  (the
"Common Stock") outstanding as of May 12, 1997 was 14,057,420.
<PAGE>

PART 1 - FINANCIAL INFORMATION

Item 1. Financial Statements.

                         NORTH AMERICAN MORTGAGE COMPANY
                           CONSOLIDATED BALANCE SHEETS
                             (Dollars in thousands)
<TABLE>
<CAPTION>

                                                                          March 31,        December 31,
                                                                            1997               1996
                                                                            ----               ----
                                                                         (Unaudited)
ASSETS

   <S>                                                                  <C>                <C>         
    Cash and cash equivalents....................................    $     13,849       $     22,005
    Advances and other receivables...............................          95,879             85,299
    Real estate loans held for sale to investors
        ---net of unearned discounts.............................         513,315            554,415
    Capitalized loan servicing...................................         132,799            133,778
    Other intangible assets......................................           9,164              9,391
    Property and equipment.......................................          38,704             38,541
    Other assets.................................................          14,630             10,228
                                                                           ------             ------
                                                                     $    818,340       $    853,657
                                                                     ============       ============
LIABILITIES AND STOCKHOLDERS' EQUITY

LIABILITIES

    Warehouse line of credit.....................................    $    118,545       $    158,584
    Notes payable................................................          75,741             75,724
    Commercial paper and other borrowings........................         335,171            340,115
    Subordinated debt............................................          10,070             10,070
    Accounts payable and other liabilities.......................          69,771             65,763
                                                                           ------             ------
                                                                          609,298            650,256
STOCKHOLDERS' EQUITY
    Convertible preferred stock (1,000,000 shares authorized,
        748,179 shares issued and outstanding)...................             ---               ---
    Common stock (50,000,000 shares authorized,
        16,415,037 and 16,394,544 shares issued at
        March 31, 1997 and December 31, 1996, respectively)......             164               164
    Additional paid-in capital...................................         112,783           112,492
    Retained earnings............................................         137,479           131,435
    Treasury stock, at cost - (2,358,016 and 2,322,916 shares
        at March 31, 1997 and December 31, 1996,
        respectively)............................................         (41,384)          (40,690)
                                                                          -------           ------- 
                                                                          209,042           203,401
                                                                          -------           -------
                                                                     $    818,340       $   853,657
                                                                     ============       ===========

          See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>

<TABLE>
                         NORTH AMERICAN MORTGAGE COMPANY
                CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
              Three Months Ended March 31, 1997, and March 31, 1996
                  (Amounts in thousands, except per share data)
<CAPTION>

                                                                          Three Months Ended
                                                                             March 31,
                                                                             ---------
                                                                       1997                 1996
                                                                       ----                 ----
INCOME:
    <S>                                                             <C>                 <C>       
    Loan administration fees..................................    $   11,570           $   11,644
    Loan origination fees.....................................        18,955               19,814
    Gain from sales of loans..................................        24,645               21,843
    Interest income, net of warehouse interest expense........         6,499                6,494
    Gain from sales of servicing..............................        13,361                7,440
    Other.....................................................         3,004                2,096
                                                                       -----                -----
                                                                      78,034               69,331
EXPENSES:
    Personnel.................................................        38,270               35,543
    Other operating expenses..................................        19,477               16,326
    Interest expense..........................................         2,482                2,344
    Depreciation and amortization of property and
        equipment.............................................         2,065                1,895
    Amortization of Capitalized Loan Servicing................         4,160                2,730
    Recovery for Impairment of
        Capitalized Loan Servicing............................          (267)              (2,052)
    Amortization of other intangibles.........................           287                  111
                                                                         ---                  ---
                                                                      66,474               56,897

    Income before income taxes................................        11,560               12,434
    Income tax expense........................................         4,672                4,974
                                                                       -----                -----

NET INCOME....................................................    $    6,888          $     7,460
                                                                  ==========          ===========

NET INCOME PER SHARE..........................................    $     0.49          $      0.50
                                                                  ==========          ===========

WEIGHTED AVERAGE SHARES OUTSTANDING                                   14,066               15,059
                                                                      ======               ======
 
          See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>

<TABLE>
                         NORTH AMERICAN MORTGAGE COMPANY
                CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
              Three Months Ended March 31, 1997, and March 31, 1996
                             (Dollars in thousands)

<CAPTION>
                                                                                      Three Months Ended
                                                                                           March 31,
                                                                                           ---------
                                                                                     1997             1996
                                                                                     ----             ----
OPERATING ACTIVITIES:
   <S>                                                                            <C>             <C>        
    Net income.............................................................    $     6,888     $     7,460
    Adjustments to reconcile net income to net cash
        provided by operating activities:
        Depreciation, amortization, and impairment.........................          6,245           2,684
        Excess servicing fee income........................................            ---         (11,527)
        Gain from sales of servicing rights................................        (13,361)         (7,440)

        Cash proceeds from sales of servicing rights.......................         38,994          42,900
    Net decrease in real estate loans held for sale,
        net of unearned discounts..........................................         41,100           4,662
    Increase in advances and other receivables.............................        (10,580)        (21,559)
    Increase/(decrease) in accounts payable and other liabilities..........          4,008            (127)
    Increase in other assets...............................................         (4,402)            (86)
                                                                                    ------             --- 
        NET CASH PROVIDED BY OPERATING ACTIVITIES..........................         68,892          16,967

INVESTING ACTIVITIES:
    Acquisition of assets of branches including
        purchase accounting adjustments....................................            (57)             12
    Acquisition of capitalized servicing rights............................        (28,550)        (33,936)
    Purchase of property and equipment.....................................         (2,228)         (1,744)
                                                                                    ------          ------ 
        NET CASH USED IN INVESTING ACTIVITIES..............................        (30,835)        (35,668)

FINANCING ACTIVITIES:
    Increases in long-term debt............................................             17              18
    Increase (decrease) in warehouse lines of credit, commercial
        paper, repurchase agreements, and other borrowings.................        (44,983)         34,585
    Purchases of Treasury Stock............................................           (694)         (6,824)
    Dividends..............................................................           (844)           (907)
    Stock issuance under Incentive Stock Option Plan.......................            291             198
                                                                                       ---             ---
        NET CASH PROVIDED BY (USED IN) FINANCING
        ACTIVITIES.........................................................        (46,213)         27,070
        (DECREASE) INCREASE IN CASH AND CASH
        EQUIVALENTS........................................................         (8,156)          8,369
    Cash and cash equivalents at beginning of year.........................         22,005          12,273
                                                                                    ------          ------
        CASH AND CASH EQUIVALENTS AT
        END OF PERIOD......................................................    $    13,849     $    20,642 
                                                                               ===========     =========== 

    Supplemental disclosure of cash flow information
        Cash paid during the period for:
        Interest...........................................................    $     8,879     $     7,017 
                                                                               ===========     =========== 
        Income Taxes.......................................................    $        52     $       417 
                                                                               ===========     =========== 

          See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>

                         North American Mortgage Company
             Notes to Consolidated Financial Statements (Unaudited)

Note 1 - Basis of Presentation

     The accompanying  unaudited financial statements of North American Mortgage
Company (the "Company") have been prepared in accordance with generally accepted
accounting  principles for interim financial  information and in accordance with
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  of the Company,  all  adjustments  (consisting  of normal  recurring
accruals)  considered  necessary  for a fair  presentation  have been  included.
Operating  results for the three month  period  ended  March 31,  1997,  are not
necessarily  indicative  of the results  that may be expected for the year ended
December 31, 1997. For further information,  refer to the consolidated financial
statements  and  footnotes  thereto  included  on Form  10-K for the year  ended
December 31, 1996.

Note 2 - Net Income Per Share Information

     Net income per  common  share is  computed  based on the  weighted  average
number of shares outstanding during the period. The potential dilutive effect of
common  stock  equivalents  has not been  included  because  that  amount is not
considered to be material. The weighted average number of shares outstanding for
net income per share was  14,066,000  and  15,059,000 for the three months ended
March 31, 1997 and 1996.

Note 3 - Capitalized Servicing Rights

     In June 1996, the Financial  Accounting  Standards  Board issued  Statement
Number 125,  "Accounting  for Transfers  and  Servicing of Financial  Assets and
Extinguishments of Liabilities" (FAS No. 125), which became effective on January
1, 1997.  FAS No. 125 resulted in the recording of  Capitalized  Loan  Servicing
Rights  (CLSRs)  on the date of the sale of a mortgage  loan,  as opposed to the
previous  practice  of  recording  CLSRs on the date that loans are  originated.
Additionally,  excess  servicing  fees are combined  with CLSR for balance sheet
presentation as well as for transactions  beginning in the first quarter of 1997
and in the table that follows.

     Capitalized loan servicing,  net of accumulated amortization and impairment
were as follows:
<TABLE>
<CAPTION>
                                                        Capitalized Loan
                                                         Servicing, Net
                                                          (in thousands) 
                                                          -------------- 
 
 <S>                                                       <C>        
  Balance at December 31, 1996.........................  $   133,778
  Additions............................................       28,550
  Scheduled Amortization...............................       (4,163)
  Impairment...........................................          267
  Servicing Sale Basis.................................      (25,633)
                                                             ------- 

  Balance at March 31, 1997............................  $   132,799(1)
                   === =====                             ============= 

_______________
(1)At March 31, 1997, the capitalized  loan servicing  impairment  allowance was
approximately $3.8 million.
</TABLE>

Note 4 - FAS No. 125

     In February 1997, the Financial Accounting Standards Board issued Statement
No. 128,  "Earnings  Per Share," which is required to be adopted on December 31,
1997. At that time, the Company will be required to change the method  currently
used to compute  earnings per share and to restate all prior periods.  Under the
new requirements for calculating primary earnings per share, the dilutive effect
of stock  options will be excluded.  The impact of Statement 128 is not expected
to have a material  effect on primary and fully  diluted  earnings per share for
the quarters ended March 31, 1997, and March 31, 1996, respectively.

Note 5 - Reclassification

     Certain  reclassifications  were made to the 1996  balances to conform with
the 1997 presentation.


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

Quarter Ended March 31, 1997, Compared with Quarter Ended March 31, 1996

Results of Operations

     General  Market  Conditions - Based on current  industry  estimates,  total
United States purchase and refinance origination levels decreased by 13% to $175
billion in the first  quarter of 1997 from $200  billion in the same period last
year.  While the level of new and existing home  purchases  increased  over last
year due to the  strength of the housing  market,  this  increase  was more than
offset by a lower level of refinancings (see table below).  Refinancings,  which
are  particularly  sensitive to interest rate levels,  were stronger  during the
first  quarter of 1996 due to the  relatively  lower level of interest  rates at
that time.
<TABLE>
<CAPTION>
                                                         1-4 Family U.S. Mortgage
                                                               Originations*
                                                               -------------
                                                               First Quarter
                                                               -------------
                                                            1997            1996
                                                             ----            ----
                                                           (Dollars in billions)

     
    <S>                                                     <C>          <C>   
     New and existing home purchases...................... $  123       $  111

     Refinancings.........................................     52           89
                                                               --           --
                                                           $  175       $  200
                                                           ======       ======

________________
*Sources:   Mortgage  Bankers  Association  (MBA),   Federal  National  Mortgage
Association (FNMA), and Federal Home Loan Mortgage  Corporation  (FHLMC).  (1997
market data based on current estimates.)
</TABLE>


     The Company's $2.0 billion in loan originations during the first quarter of
1997 were 18% lower than during the same  quarter  last year.  This  decrease in
loan origination volume (see table below) is primarily  reflective of a decrease
in total U.S. refinancing mortgage  originations for the same period, as well as
difficulties   originating  loans  in  the  wholesale  channel  due  to  pricing
pressures,  especially for  refinancing  loans  Refinancings  represented 41% of
total  originations  in the first quarter of 1997 compared with 51% in the first
quarter of 1996.
<TABLE>
<CAPTION>
                                                        Company Originations
                                                        --------------------
                                                            First Quarter
                                                            -------------       
                                                        1997             1996
                                                        ----             ----
                                                         (Dollars in billions)
                                                        ---------------------

       <S>                                             <C>             <C>      
        Retail..................................     $    778        $     813

        Wholesale...............................        1,104            1,466

        Telemarketing...........................          127              176
                                                          ---              ---
                                                     $  2,009        $   2,455
                                                     ========        =========
</TABLE>

     Summary  of  Results - Net  income  for the first  quarter of 1997 was $6.9
million,  or $0.49 per share,  as compared to $7.5 million,  or $0.50 per share,
for the first  quarter of 1996.  Loan  fundings for the quarter  ended March 31,
1997, were $2.01 billion, including $31 million of subprime production, compared
to $2.45  billion  during  the first  quarter  of 1996,  which  had no  subprime
production.  Production related income declined in the first quarter of 1997 due
to lower  originations and higher expense levels.  Expenses  increased over last
year due to the cost of maintaining the Company's expanded retail  distribution.
This expansion,  which occurred during the last three quarters of 1996, included
opening  offices and the addition of personnel.  Substantially  offsetting  this
decline in production  income were improved  hedging results and increased gains
on sales of servicing, primarily from the sale of pre-1995 servicing.

     Servicing  Rights - The  following  table  sets forth  certain  information
regarding the servicing portfolio of the Company for the periods indicated:

<TABLE>
<CAPTION>
                                                           Quarters Ended March 31,
                                                           ------------------------
                                                          1997               1996
                                                          ----               ----
                                                            (Dollars in millions,
                                                         except Average Loan Size)

       <S>                                              <C>               <C>
        Servicing Portfolio:                               
             Beginning Portfolio....................... $  13,293        $  14,109
                Add:
                   Loans Originated...................      2,009            2,455
                Deduct:
                   Sales of Servicing Rights               (2,250)          (2,382)
                   Run-off(1)                                (554)            (579)
                          --                                 ----             ---- 
            Ending Portfolio..........................  $  12,498        $  13,603
                                                        =========        =========

            Average Loan Size of Ending Portfolio.....  $  98,000        $  98,000

            Weighted Average Interest Rate............       7.78%            7.69%

                           
(1)Run-off  refers to dollar amount of the  amortization of loans,  prepayments,
and  foreclosures.  The  annualized  run-off  rate was 17% and 16% in the  first
quarter of 1997 and 1996, respectively.
</TABLE>

     Effective January 1, 1997, the Company adopted FAS No. 125, "Accounting for
Transfers and Servicing of Financial Assets and Extinguishments of Liabilities."
This statement  carried  forward the provisions of FAS No. 122,  "Accounting for
Mortgage  Servicing  Rights," which the Company  adopted on January 1, 1995, and
which was an amendment to FAS No. 65. The primary difference between FAS No. 125
and FAS No. 65, as it related to the Company,  is the  accounting  treatment for
the normal  servicing fee associated  with in-house  Capitalized  Loan Servicing
Rights  (CLSRs).  Virtually all of the additions to the servicing  portfolio are
CLSRs.  Generally,  under FAS No. 65, CLSRs were not recorded as an asset, while
under FAS No. 125, the full value of CLSRs are
capitalized.

     As a result of the  difference in accounting  treatment,  the balance sheet
carrying  value for servicing  rights is  significantly  different  depending on
whether the servicing was originated  before January 1, 1995 (pre-1995) or after
January 1, 1995  (post-1995).  Management  believes  that the total fair  market
value of its pre-1995  servicing rights is substantially  more than the carrying
value,   while  the  fair  market  value  of  post-1995   servicing   rights  is
approximately  equal to the total carrying  value. In the first quarter of 1997,
the Company sold $945 million of pre-1995  servicing  and recorded a net pre-tax
gain of $12.4  million.  The prices  received for sales in the first  quarter of
1997 may not  necessarily  be reflective of the value of the remaining  pre-1995
portfolio,  due to differences  in portfolio  characteristics  (i.e.,  servicing
fees, age, coupon,  interest rates) and changes in market  conditions.  At March
31, 1997, the net balance sheet carrying value and the principal  balance of the
Servicing Portfolio originated pre-1995 and post-1995 were as follows:
<TABLE>
<CAPTION>

                                              Pre-1995     Post-1995    Total at 3/31/97
                                              --------     ---------    ---------------
<S>                                            <C>           <C>            <C>
Balance sheet carrying value                 
    (In thousands)                           $  1,155      $  31,644      $  132,799
                                             --------      ---------      ----------

Servicing portfolio principal balance
    (In millions)                            $  4,586      $   7,912      $   12,498
                                             --------      ---------      ----------

Carrying value percentage                         0.3%          1.66%           1.06%
                                                  ---           ----            ---- 
</TABLE>


     Management  continually  evaluates  the  Company's  investment  in retained
servicing rights and periodically makes decisions to sell servicing rights after
considering  the  following  criteria:  cash  requirements,   market  value  for
servicing  rights  compared to their economic value to the Company,  exposure to
prepayment risk, and earnings  impact.  To the extent the Company elects to sell
pre-1995 servicing rights, virtually all of the net proceeds from such sales are
recognized  as a one-time  gain from sale of servicing due to their minimal book
value.  Of the  approximately  $4.6 billion of pre-1995  servicing  remaining at
March 31, 1997, the Company  estimates that it may be economically  advantageous
(i.e.,  where market value equals or exceeds the economic  value to the Company)
to sell only  approximately  $1.5 billion as part of its future servicing sales.
The Company's  results of operations have historically been and will continue to
be impacted by the amount and timing of sales of pre-1995 servicing rights.

     Historically, when interest rates decline, the incremental value created by
the Company's  production  organization  from higher refinance  originations has
more than offset the loss in value to its  servicing  portfolio  resulting  from
higher  prepayments.  Accordingly,  the Company has not  purchased any financial
prepayment  hedges, but it has relied on its ability to produce new servicing as
a macro-hedge.  Under FAS No. 125, however, if rates were to decline, the timing
of additional  production  revenues and any  servicing  impairment  charge,  for
financial  statement  purposes,  may not occur in the same  period.  The Company
could be required to recognize a servicing  impairment  charge in one  reporting
period,  while the  incremental  production  revenues  could be  generated  over
several periods.

     Revenues - Revenues for the first  quarter of 1997 were $78.0  million,  an
$8.7  million,  or 13%  increase,  as compared  with $69.3  million in the first
quarter of 1996.

     Loan  administration fees were $11.57 million in the first quarter of 1997,
a 1% decrease,  as compared to $11.64 million in the first quarter of 1996. This
decrease  resulted from the 5% decrease in the average size of the Company-owned
servicing  portfolio,  partially  offset by an increase in the weighted  average
servicing fee collected on loans serviced.

     Loan origination fees were $19.0 million in the first quarter of 1997, a 4%
decrease,  as compared  with $19.8  million in the first  quarter of 1996.  This
decrease resulted from an 18% decrease in loan originations, partially offset by
an increase in the average origination fees collected on each loan. The increase
in average  origination  fees  collected  resulted  from a higher  percentage of
retail  production  in the first  quarter of 1997 (39% as compared  to 33%),  on
which the Company  receives higher average  origination fees than it receives on
wholesale loans.

     The gain from sales of loans was $24.6 million  during the first quarter of
1997, as compared with $21.8 million  during the first quarter of 1996. In 1996,
gain from sales of loans was impacted by hedging activity,  price subsidies, and
the recognition of Capitalized  Loan Servicing  Rights under FAS No. 122 and FAS
No. 125. In 1997,  gain from sales of loans was  affected by the above  factors,
but also by the gain on sale of subprime  loans,  which is a new product offered
by the Company. A summary of these items for the first quarters of 1997 and 1996
follows:
<TABLE>
<CAPTION>
                                                           1997           1996
                                                           ----           ----
                                                          (Dollars in millions)

       <S>                                               <C>            <C>      
        Hedging Gains (Losses)......................   $   3.8        $  (2.4)

        Pricing Subsidies...........................      (6.6)          (8.9)

        Capitalized Loan Servicing Rights...........      26.5           33.1

        Gain on Sale of Subprime Loans..............       0.9            ---
                                                           ---            ---   

                                                       $  24.6        $   21.8
                                                       =======        ========

</TABLE>

     During the first quarter of 1997,  hedging results  benefited from low bond
market  volatility.  As a result,  the Company's hedging results produced strong
gains of 19 basis points on  originations  in the first quarter of 1997 compared
to a loss of 10 basis points on  originations  in the first  quarter of 1996. To
the extent that there is a significant change in the direction of interest rates
or an increase in bond market  volatility,  the Company's future hedging results
may be negatively affected.

     Pricing  subsidies  decreased to $6.6 million  during the first  quarter of
1997, or an average  subsidy of 33 basis points on loans  produced,  compared to
$8.9  million in the first  quarter of 1996,  or 36 basis  points.  The decrease
primarily was due to the increased percentage of retail originations, which have
a much lower price  subsidy.  The overall level of price subsidy  remained high,
reflecting the continuing  price  competition in the industry,  particularly  on
loans originated through the wholesale channel.

     Capitalized  Loan  Servicing  gains  decreased to $26.5 million  during the
first  quarter of 1997,  as compared  with $33.1 million in the first quarter of
1996, as a result of a decrease in the principal balance of loans sold.

     Gain on sale of subprime loans was $889,000 or 400 basis points on the sale
of $22.2 million of subprime loans,  during the first quarter of 1997. This is a
new product for the Company.

     Interest income, net of warehouse interest expense, was $6.5 million during
the first quarter of 1997 and 1996.  In the first  quarter of 1997,  the average
balance  of loans  held for sale  increased  by 14%,  which  had the  effect  of
increasing  interest  income.  The effect of this  increase  was offset by (i) a
decrease  in  working  capital  used by the  Company  to  reduce  its  warehouse
borrowing cost and (ii) a reduced amount of compensating balances used to reduce
borrowing costs.

     Gain from sales of servicing was $13.4 million  during the first quarter of
1997,  as  compared to $7.4  million  during the first  quarter of 1996,  an 80%
increase.  In the first quarter of 1997,  the Company sold $2.2 billion (or 112%
of originations) of servicing rights, compared with the sale of $2.4 billion (or
97% of originations) in the first quarter of 1996.

     The  following  table  summarizes  the  significant  factors  impacting the
quarterly gain from servicing sales:

<TABLE>
<CAPTION>
                                                          1997          1996
                                                          ----          ----
                                                        (Dollars in millions)

        
       <S>                                              <C>          <C>      
        Principal Balance of Servicing Sold..........  $  2,250     $   2,382
                                                       ========     =========

        Net Proceeds.................................  $   39.0     $    42.9

        Capitalized Loan Servicing Basis.............     (25.6)        (35.5)
                                                          -----         ----- 

             Gain on Sales of Servicing..............  $   13.4     $     7.4
                                                       ========     =========
</TABLE>


     As previously  discussed under "Servicing  Rights," the Company's servicing
originated before 1995 had virtually no accounting  basis.  Included in the gain
on servicing sold for the first quarter of 1997 was $12.4 million of gain on the
sale of pre-1995 originated  servicing rights (on $945 million principal balance
sold), as compared to a gain of $6.0 million (on $521 million  principal balance
sold) in the first quarter of 1996.

     Other  income  was $3.0  million  during the first  quarter of 1997,  a 43%
increase  from $2.1  million for the first  quarter of 1996.  This  increase was
largely due to a $773,000  increase in insurance  commission  revenues earned by
the Company's  insurance  agency  subsidiary  which purchased  certain assets of
Lomas Insurance Services during the fourth quarter of 1996.

     Expenses - Expenses for the first quarter of 1997 were $66.5 million, a 17%
increase, as compared to $56.9 million during the first quarter of 1996.

     Personnel  costs were $38.3  million for the first  quarter of 1997,  an 8%
increase,  as compared with $35.5  million for the first  quarter of 1996.  This
increase occurred during a period which had 18% lower  originations and 4% lower
origination fees, because of costs associated with the Company's expanded retail
distribution  network. The expansion,  which was largely completed by the end of
1996, included the addition of 172 new retail loan officers.

     Other  operating costs increased 19% to $19.5 million for the first quarter
of 1997  from  $16.3  million  for the  first  quarter  of 1996.  This  increase
primarily  was related to the retail  expansion,  for which the Company added 44
new production locations during 1996.

     Amortization of capitalized loan servicing increased to $4.2 million in the
first quarter of 1997,  as compared to $2.7 million  during the first quarter of
1996.  This increase was primarily  attributable to the higher carrying value of
the asset during the first quarter of 1997.

     Recovery for impairment of capitalized  loan servicing was $267,000  during
the first  quarter of 1997,  as compared to $2.1 million in the first quarter of
1996. This resulted from a relatively  stable interest rate  environment  during
the first  quarter of 1997,  as  compared  with the upward  turn in rates  which
occurred  during March of 1996.  Interest  rates affect the  prepayment  speeds,
which impact the value of the capitalized loan servicing asset.

LIQUIDITY AND CAPITAL RESOURCES

     The Company's cash flow requirements primarily depend on both the level and
cost of its  originations,  the level of its  servicing  sales and the cash flow
generated by, or required by, its other operating activities.  Additionally, the
Company  may use or provide  cash  through  its  investing  and other  financing
activities.

     Liquidity Sources - The Company's loan originations are primarily  financed
through warehouse  borrowings,  commercial paper borrowings,  and with corporate
funds. This financing requirement begins at the time of loan closing and extends
for an  average  of  approximately  30 days  until  the  loan is sold  into  the
secondary  market. On January 23, 1996, the Company entered into a new warehouse
line of credit  facility which will expire on January 23, 1999. The  outstanding
commitment under this facility was $1.0 billion at March 31, 1997. The Company's
management expects,  although there can be no assurance, that this facility will
continue to be available in the future.

     The Company also has a commercial paper program. Borrowings under this $500
million  program  replace,  at a reduced  interest  rate,  borrowings  under the
Company's  warehouse  line of credit.  The warehouse  line of credit acts as the
liquidity backup facility for the commercial paper borrowings.

     At  times,  the  Company  will  accelerate  the sale of its  mortgage  loan
inventory  through the use of "gestation"  facilities  provided by an investment
bank and the Federal National Mortgage Association.

     The Company's  corporate  funds are generally  invested in its inventory of
mortgage  loans  held for sale.  The level of funds  available  to  support  its
inventory  has  decreased  since 1995 because of the cash used for the investing
and other financial activities detailed below.

     In October 1993,  the Company  implemented a $250 million  Medium Term Note
(MTN) program. Since 1993, $126 million in MTNs have been issued and $76 million
remain outstanding at March 31, 1997.

INVESTING AND OTHER FINANCIAL ACTIVITIES

     Common Stock Repurchases - On February 7, 1996, the Company  authorized the
repurchase of up to 1.5 million shares of Common Stock.  Through March 31, 1997,
the Company had  repurchased  1,217,500  shares under this  authorization  at an
aggregate  cost of $22.2  million.  As of  March  31,  1997,  the  Company  held
2,358,016  shares in treasury  stock,  which have been acquired since 1994 under
the current and prior  repurchase  authorizations  at an aggregate cost of $41.4
million.  The Company repurchased 35,100 shares at a cost of $694,000 during the
first quarter of 1997.

     Dividends - The Company has paid quarterly Common Stock dividends since the
initial public offering on July 15, 1992.  Dividend payments totaled $844,000 in
the first  quarter of 1997 and  $907,000  in the first  quarter of 1996.  In May
1997, the Company's board of directors  approved a Common Stock dividend of $.06
per share.

     Property,  Plant and  Equipment  During the first quarter of 1997 and 1996,
the Company  purchased  property and  equipment  totaling  $2.2 million and $1.7
million, respectively.
<PAGE>

PART II - OTHER INFORMATION

Item 1.   Legal Proceedings.

          The Company is a defendant in certain litigation arising in the normal
          course of its business.  Although the ultimate  outcome of all pending
          litigation  cannot be precisely  determined at this time,  the Company
          believes that any  liability  resulting  from the aggregate  amount of
          damages for  outstanding  lawsuits and claims will not have a material
          adverse effect on its financial position.

Item 2.   Changes in Securities.

          None.

Item 3.   Defaults Upon Senior Securities.

          None.

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

          None.

Item 5.   Other Information.

          None.


<PAGE>

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

          a.   Exhibits
 
               11    Statement re Computation of Per Share Earnings

               27    Financial Data Schedule

          b.   Reports on Form 8-K

               None.


<PAGE>

                                    SIGNATURE


     Pursuant to the  requirements  of the Securities  Exchange Act of 1934, the
registrant has duly caused this report to be signed by the undersigned thereunto
duly authorized.




                                          NORTH AMERICAN MORTGAGE COMPANY



May 14, 1997                              By:   /s/ Martin S. Hughes
                                                -------------------- 
                                                (Martin S. Hughes)
                                              Executive Vice President
                                            Chief Financial Officer and
                                             Principal Financial Officer
<PAGE>
 
                                INDEX TO EXHIBITS


Exhibit
Number            Description                                       Page Number
------            -----------                                       -----------
                  
11       Statement re Computation of Per Share Earnings

27       Financial Data Schedule