SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                    FORM 10-K

                                   (Mark One)

[X]   Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange
      Act of 1934 for the Fiscal Year Ended December 31, 2001.

[_]   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 000-27081

                      AMERICAN HOME MORTGAGE HOLDINGS, INC.
             (Exact Name of Registrant as Specified in its Charter)

            Delaware                                    13-4066303
(State or Other Jurisdiction of             (I.R.S. Employer Identification No.)
 Incorporation or Organization)

                    520 Broadhollow Road, Melville, NY 11747
               (Address of Principal Executive Offices) (Zip Code)

                                 (516) 949-3900
              (Registrant's Telephone Number, Including Area Code)

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

     TITLE OF EACH CLASS                                  NAME OF EACH EXCHANGE

Common Stock, $0.01 par value                             NASDAQ National Market


        Securities registered Pursuant to Section 12(b) of the Act: None

            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] or No [ ].

            Indicate by a check mark if disclosure of delinquent filers pursuant
to Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K. [ ]

            The aggregate market value of the voting stock held by
non-affiliates of the registrant based upon the closing sale price of its Common
Stock on March 21, 2002, on the NASDAQ National Market was $83,362,347.

            As of March 21, 2002, there were 12,042,275 shares of Common Stock
outstanding.

                      Documents Incorporated by Reference:

            The information required to be furnished pursuant to Part III of
this Form 10-K will be set forth in, and incorporated by reference from, the
registrant's definitive proxy statement for the registrant's 2002 annual meeting
of stockholders, which definitive proxy statement will be filed by the
registrant with the Securities and Exchange Commission not later than 120 days
from the end of the fiscal year ended December 31, 2001.


<PAGE>


                                TABLE OF CONTENTS

                                                                            Page
                                                                            ----

                                     PART I

ITEM 1.   BUSINESS ..........................................................  3

ITEM 2.   PROPERTIES ........................................................ 11

ITEM 3.   LEGAL PROCEEDINGS ................................................. 11

ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS ............... 11

                                     PART II

ITEM 5.   MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
             MATTERS ........................................................ 12

ITEM 6.   SELECTED FINANCIAL DATA ........................................... 12

ITEM 7.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
             AND RESULTS OF OPERATIONS ...................................... 14

ITEM 8.   FINANCIAL STATEMENTS .............................................. 23

ITEM 9.   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
             AND FINANCIAL DISCLOSURES ...................................... 23

                                    PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT ................ 24

ITEM 11.  EXECUTIVE COMPENSATION ............................................ 24

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT .... 24

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS .................... 24

                                     PART IV

ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K ... 25

SIGNATURES .................................................................. 26

INDEX TO FINANCIAL STATEMENTS

INDEX TO EXHIBITS


                                       2
<PAGE>

                                     PART I

      This report contains forward-looking statements within the meaning of
Section 21E of the Securities Exchange Act of 1934, as amended. Readers are
cautioned that actual results could differ materially from those indicated in
such statements as a result of certain factors, including those set forth under
"Business - Special Notes of Caution" and "Management's Discussion and Analysis
of Financial Condition and Results of Operations" and elsewhere in, or
incorporated by reference into, this report.

ITEM 1. BUSINESS

      GENERAL

      American Home Mortgage Holdings, Inc. ("American Home" and, together with
its wholly-owned subsidiary, American Home Mortgage Corp. ("AHM"), the
"Company") is an independent retail mortgage banking company primarily engaged
in the business of originating and selling residential mortgage loans. The
Company offers a broad array of residential mortgage products targeted primarily
to high-credit-quality borrowers over the Internet, as well as through its
approximately 551 primarily commission-compensated loan originators. The Company
operates from 63 loan offices in the New York metropolitan area and six other
eastern states, and in California, Illinois, New Mexico and Arizona. The Company
operates primarily as a mortgage banker, underwriting, funding and selling its
loan products to more than 45 different buyers. The Company also markets its
mortgage products over the Internet through its Internet site,
MORTGAGESELECT.COM. Mortgage products are originated online through arrangements
with a number of popular Web sites and through the Company's own Web site.

      Since its founding in 1988, AHM has increased its origination volume
through the expansion of its branch office network and the addition of sales
personnel. The Company's loan originations totalled $7.8 billion in 2001. The
Company traditionally focuses on residential purchase transactions rather than
refinancing by concentrating its marketing, advertising and personnel resources
on lending to home buyers rather than to home owners seeking to refinance their
mortgage loans.

      On June 15, 1999, American Home was formed to serve as a holding company
for AHM. In conjunction with the closing of the initial public offering of the
common stock of American Home, all of the issued and outstanding shares of
common stock of AHM were exchanged for 4,999,900 shares of American Home's
common stock. On October 6, 1999, American Home completed its initial public
offering of 2.5 million shares of common stock at a price of $6.00 per share.

      On December 30, 1999, American Home acquired Marina Mortgage Company, Inc.
("Marina"), a California mortgage banking corporation. Marina is a full service
retail mortgage lender. Marina, which initially operated as a wholly-owned
subsidiary of American Home, was merged into AHM on December 31, 2001.

      On June 30, 2000, American Home acquired First Home Mortgage Corp. ("First
Home"), an Illinois corporation. Prior to the acquisition, First Home was an
independent mortgage lender based in metropolitan Chicago. Formed in 1987, First
Home originates primary residential mortgage loans. First Home now operates as a
division of American Home. The acquisitions of Marina, in 1999, and First Home,
in 2000, represent an expansion of the Company's traditional east coast lending
activities into the west and midwest geographic regions of the country.

      On October 31, 2000, the Company acquired from Roslyn National Mortgage
Corporation ("RNMC") four RNMC branches (located in Columbia, Maryland, Vienna,
Virginia, West Hartford, Connecticut and Patchogue, New York) (the "Roslyn
Branches"), RNMC's mortgage application pipeline and certain fixed assets, and
assumed the real property leases of the Roslyn Branches. The Roslyn Branches
have become part of the American Home branch network and have helped the Company
expand its originations in the mid-Atlantic region through both a retail and
wholesale presence.

      On March 30, 2001, the Company acquired the Pennsylvania and Maryland loan
production offices of ComNet Mortgage Services (the "ComNet Branches"), the
residential mortgage division of Commonwealth Bank, a subsidiary of Commonwealth
Bancorp, Inc. ("Commonwealth"), Commonwealth's mortgage application pipeline and
certain fixed assets, and assumed the real property leases of the ComNet
Branches. The ComNet Branches have also been integrated into the American Home
branch network, further supporting the Company's expansion of its originations
in the mid-Atlantic region.

      The Company is currently licensed to conduct its business in all 50 states
and the District of Columbia.


                                       3
<PAGE>

      RECENT DEVELOPMENTS

      In August of 2001, the Company entered into an agreement to acquire Valley
Bancorp, Inc. ("Valley Bancorp") and its wholly-owned subsidiary, Valley Bank of
Maryland ("Valley Bank"), a federal savings bank located in suburban Baltimore,
Maryland, for a combination of cash and stock, subject to certain adjustments.
Under the terms of the definitive agreement, the Company will pay 1.25 times
Valley Bancorp's book value, or approximately $5.5 million. It is anticipated
that the acquisition of Valley Bank will substantially increase net interest
income and provide a more stable and diverse funding base. This transaction is
subject to regulatory approval and is expected to close by the end of the third
quarter of 2002.

      OPERATIONS

      Lending to Home Buyers. The Company has focused on making loans to home
buyers rather than to home owners seeking to refinance their mortgages. However,
because of the historically low interest rates, there was substantial
refinancing activity in 2001. In 2001, 42.7% of the mortgage loans the Company
originated were made to home buyers, compared to 57.3% which were made to home
owners seeking refinancing.

      Web Site. The Company's Web site, MORTGAGESELECT.COM, provides customers
with 24-hour access to its interest rates and product terms and the ability to
lock in an interest rate, to file a pre-approval request or application, to
check the status of their pending applications and to obtain their credit
reports. The Company's Web site also provides mortgage customers with an array
of "tools" that assist them in determining how much financing they can afford,
what kind of mortgage best suits their needs and otherwise provides answers to
frequently asked questions.

      Underwriting Loans to the Standards of Investors who Buy the Company's
Loans. The Company's underwriting process is designed to ensure that virtually
every loan it originates is in a standardized form and can be sold to a
third-party investor by conforming the loan to the underwriting and credit
standards of that investor. Whenever possible, the Company uses "artificial
intelligence" underwriting systems, including Fannie Mae's Desktop
Underwriter(R), to ensure consistency with its investors' predetermined
standards. These systems interface with the Company's "enterprise" computer
system. In addition, the Company has a series of internal and external quality
control procedures in place to ensure compliance with its underwriting
standards.

      Sales. The Company's loan originators are primarily compensated through
sales commissions, which is customary in the industry and encourages
responsiveness to the Company's customers. The Company's loan originators
actively guide customers through the loan application process, keeping customers
informed about rate changes and market conditions.

      BUSINESS DIVISIONS AND MARKETS

      The Company's business is organized into the following three divisions,
each of which focuses on a distinct production channel of the residential loan
market: the retail division, the Internet division and the wholesale division.

THE RETAIL DIVISION

      In 2001, the Company's retail division accounted for approximately 75% of
its origination volume. Prior to the acquisition of Marina, First Home, the
Roslyn Branches and the ComNet Branches, this division consisted of 14 offices
in the eastern United States, including the Company's Melville, New York
headquarters. With the addition of Marina, First Home, the Roslyn Branches and
the ComNet Branches, the Company expanded its retail base by an additional 49
offices located in the western and midwestern United States and on the eastern
seaboard. The Company's retail division has six origination channels: community
loan offices; direct-to-consumer advertising; realtor joint ventures; the
Corporate Affinity Program; telemarketing; and the Real Estate Direct Program.

      Community Loan Offices. The Company's community loan offices serve the
regions in which they operate and obtain business by developing and nurturing a
referral network of realtors, real estate attorneys, builders and accountants.
They also facilitate the efficient processing and closing of a borrower's loan.
Available services include pre-approval commitments based on Fannie Mae's
Desktop Underwriter(R), flexible rate lock-in and extension policies, holding of
escrows and other accommodations that help a borrower and facilitate a real
estate transaction. The Company's community loan offices provide special
services to builders, including issuing commitments to lend to buyers in their
projects as their onsite resource for mortgage financing.

      In order to attract and retain experienced loan originators, the Company
offers a high level of support that includes a broad product range, technical
help desk support, flexible extension policies, expenditures on trade shows,
educational seminars and other marketing initiatives and promotional materials.


                                       4
<PAGE>

      Direct to Consumer Advertising. The Company advertises its products in
selected local and regional print media. Customer calls generated by advertising
are handled by the Company's more experienced loan originators who use the
Company's consultative sales approach.

      Joint Ventures. The Company uses joint ventures with mid-size real estate
brokerage firms to expand distribution of its mortgage offerings. Typically, the
Company and its partners each have a 50% interest in the venture. Each venture
makes loans, retaining the application and processing fees, points and discounts
earned in connection with the mortgages it originates. The venture then sells
the mortgage loans to the Company, which in turn resells the loans to
institutional buyers.

      Corporate Affinity Program. Under this program, the Company makes loans to
employees of large companies and firms who are members of its Corporate Affinity
Program. The employees receive special group discounts, service guarantees and
other accommodations.

      Telemarketing. The Company maintains a staff of loan originators and
telemarketers who place calls to persons identified as having high-interest rate
loans due to poor past credit history, but who have improved their credit
history and would now qualify for lower interest rate mortgages.

      Real Estate Direct. The Company established its Real Estate Direct Program
to reach customers at the beginning of the home-buying process. Under this
program, the Company places advertisements for a particular home that not only
describe the home, but also a package of available mortgage financing terms. The
Company believes that it benefits by having early access to potential borrowers,
many of whom, although they may not buy the particular property advertised, may
become customers of the Company.

THE INTERNET DIVISION

      The Company launched its Internet division, MORTGAGESELECT.COM, in January
of 1999. In 2001, the Company's Internet division accounted for approximately
17% of its origination volume. MORTGAGESELECT.COM primarily reaches customers by
serving as the exclusive or semi-exclusive mortgage provider on other
destination Web sites, including aggregators, specialty interest sites, and bank
sites serviced under private label outsourcing agreements. Customers also reach
MORTGAGESELECT.COM directly by accessing WWW.MORTGAGESELECT.COM. Internet
customers can apply online, shop for rates, check their loan status, receive
e-mail notification when a desired rate becomes available, educate themselves on
the loan process, use analytical tools and perform other functions, 24 hours a
day, seven days a week.

      The Company, which currently has three full service call centers, built
its call center capacity by transferring experienced managers and personnel from
its traditional origination channels to its Internet division. The Company's
experience is that having a number of smaller call centers allows it to best
manage and motivate its sales representatives and create an atmosphere that is
most conducive to its consultative sales approach. Innovative technology also
allows the Company to transfer calls and work freely between centers for peak
efficiency and ease of growth.

THE WHOLESALE DIVISION

      The Company has established relationships with more than 75 mortgage
brokers. The Company's wholesale division actively solicits referrals of
borrowers from this network of independent mortgage brokers.

      A mortgage broker deals directly with the borrower and submits the fully
processed loan application to the Company for an underwriting determination. The
Company applies its usual underwriting standards to each wholesale-originated
mortgage, issues a written commitment and, upon satisfaction of all lending
conditions, closes the mortgage. The Company offers mortgage brokers direct
access to Fannie Mae's Desktop Underwriter(R), which enables them to give their
clients immediate approvals. The Company also offers to these mortgage brokers
the Company's entire product line, the ability to provide approval within 24 to
48 hours of receipt of a file, flexible lock-in and extension policies,
personalized service, knowledgeable and experienced wholesale loan originators
and support of mortgage broker industry events, such as trade shows and
educational seminars.

      THE COMPANY'S MORTGAGE PRODUCTS

      The Company offers a broad and competitive range of mortgage products that
aim to meet the mortgage needs of all borrowers. Its product line includes
Fannie Mae-eligible loans, jumbo loans, adjustable rate mortgages, FHA-insured
and VA-guaranteed loans, alternate "A" loans, non-prime loans, home equity or
second mortgage loans, construction loans and bridge loans. The Company provides
its full product line through each of its three divisions.


                                       5
<PAGE>

      The Company's network of loan buyers allows it to identify specific loan
features, to identify a loan buyer who will purchase loans with those specific
features and to select a buyer who will accept the lowest yield for loans with
those features. As a result, the Company is able to offer a wide range of
products that it believes are well-priced and that have many different features
to suit a customer's needs.

      The following table summarizes information with respect to the most
important categories of mortgage loans the Company originated for the year ended
December 31, 2001:

                        MORTGAGE LOAN ORIGINATION SUMMARY

<TABLE>
<CAPTION>
                                                                                      % OF TOTAL
MORTGAGE TYPE                    NUMBER OF LOANS            DOLLAR VOLUME           DOLLAR VOLUME
                             YEAR ENDED DECEMBER 31,   YEAR ENDED DECEMBER 31,   YEAR ENDED DECEMBER 31,
                             -----------------------   -----------------------   -----------------------
                                2001        2000         2001          2000          2001        2000
                               ------      ------      --------      --------       -----       -----
                                                           ($ in millions)
<S>                            <C>         <C>         <C>           <C>            <C>         <C>
Fannie Mae Eligible Fixed      27,850       8,179      $4,569.1      $1,420.8        58.8%       46.7%
Jumbo Fixed .............       1,709         501         668.1         183.4         8.6         6.0
Adjustable Rate (ARMs) ..       2,987       1,643         960.6         449.1        12.4        14.8
FHA/VA ..................      10,228       5,888       1,368.5         768.4        17.6        25.3
Alternate "A" Loans .....          62         351          12.7          69.5         0.2         2.3
Non-Prime Loans .........         577         662          79.4          64.0         1.0         2.1
Home Equity/Second ......       2,670       1,638          91.7          77.1         1.2         2.5
Construction Loans ......          13          11           7.1           6.0         0.1         0.2
Bridge Loans ............          67          50           8.5           4.3         0.1         0.1
                               ------      ------      --------      --------       -----       -----
       TOTAL ............      46,163      18,923      $7,765.7      $3,042.6       100.0%      100.0%
                               ======      ======      ========      ========       =====       =====
</TABLE>

      Conforming and Government-Insured Fixed Rate Loans. These mortgage loans
conform to the underwriting standards established by Federal National Mortgage
Association ("Fannie Mae") or the Federal Home Loan Mortgage Corporation
("Freddie Mac"). This product is limited to high-quality borrowers with good
credit records and involves adequate down payments or mortgage insurance. These
loans may qualify for insurance from the Federal Housing Authority (FHA) or
guarantees from the Veterans Administration (VA). The Company has been
designated by the U.S. Department of Housing and Urban Development (HUD) as a
direct endorser of loans insured by the FHA and as an automatic endorser of
loans partially guaranteed by the VA, allowing it to offer FHA or VA mortgages
to qualified borrowers. FHA and VA mortgages must be underwritten within
specific governmental guidelines, which include borrower income verification,
asset verification, borrower credit worthiness, property value and property
condition.

      Jumbo Loans. Jumbo loans are considered non-conforming mortgage loans
because they have a principal loan amount in excess of the loan limits set by
Fannie Mae and Freddie Mac (currently, $300,700 for single-family, one-unit
mortgage loans in the continental United States). The Company offers jumbo loans
with creative financing features, such as the pledging of security portfolios.
Its jumbo loan program is geared to the more financially-sophisticated borrower.

      Adjustable Rate Mortgages (ARM). The ARM's defining feature is a variable
interest rate that fluctuates over the life of the loan, usually 30 years.
Interest rate fluctuations are based on an index that is related to Treasury
bill rates, regional or national average cost of funds of savings and loan
associations, or another widely published rate, such as LIBOR. The period
between the rate changes is called an adjustment period and may change every six
months or one year. The Company also offers ARMs with a fixed period of three
years, five years or ten years. Some of the Company's ARMs may include payment
caps, which limit the interest rate increase for each adjustment period.

      Alternate "A" Loans. From a credit risk standpoint, alternate "A" loan
borrowers present a risk profile comparable to that of conforming loan
borrowers, but entail special underwriting considerations, such as a higher loan
to value ratio or limited income verification.

      Non-Prime Mortgage Loans. The non-prime mortgage loan focuses on customers
whose borrowing needs are not served by traditional financial institutions.
Borrowers of non-prime mortgage loans may have impaired or limited credit
profiles, high levels of debt service to income, or other factors that
disqualify them for conforming loans. By originating mortgage loans to borrowers
with higher credit risk, the Company offsets this risk with higher interest
rates than would be charged for its conventional loans. Offering this category
of mortgage loans on a limited basis allows the Company to provide loan products
to borrowers with a variety of differing credit profiles.

      Home Equity or Second Mortgage Loans. These loans are generally secured by
second liens on the related property. Home equity mortgage loans can take the
form of a home equity line of credit, which generally bears an adjustable
interest rate,


                                       6
<PAGE>

while second mortgage loans are closed-end loans with fixed interest rates. Both
types of loans are designed for borrowers with high-quality credit profiles.
Home equity lines generally provide for a 5- or 15-year draw period where the
borrower withdraws needed cash and pays interest only, followed by a 10- to
20-year repayment period. Second mortgage loans are fixed in amount at the time
of origination and typically amortize over 15 to 30 years with a balloon payment
due after 15 years.

      Construction Loans. The Company offers a variety of construction loans for
owner-occupied single-family residences. These loans are available on a rollover
basis, meaning that the borrower can secure funding for the land purchase and
construction of the home, then roll the financing over into a permanent mortgage
loan. During the construction period, interest-only payments are made.
Withdrawals during the construction period, to cover the costs associated with
each stage of completion, are usually made in five to ten disbursements.

      Bridge Loans. The bridge loans that the Company makes are short-term loans
and may be used in conjunction with the other loan products. Bridge loans
provide a means for a borrower to obtain cash based on the equity of a current
home that is on the market but not yet sold and to use that cash to purchase a
new home.

      SALE OF LOANS AND SERVICING RIGHTS

      The Company's business strategy is to sell the loans it originates,
typically within 45 days of origination, rather than hold them for investment.
The Company sells its loans to Fannie Mae, large national banks, thrifts and
smaller banks, securities dealers, real estate investment trusts and other
institutional loan buyers. The Company also swaps loans with Fannie Mae for
mortgage-backed securities, which the Company then sells.

      Typically, the Company sells or swaps the loans with limited recourse. By
doing so, the Company reduces its exposure to default risk at the time it sells
the loan, except that it may be required to repurchase the loan if it breaches
the representations or warranties that it makes in connection with the sale of
the loan, in the event of an early payment default, or if the loan does not
comply with the underwriting standards or other requirements of the ultimate
investor.

      The Company sells or swaps the loans under agreements to the buyers and
institutions described above, many of whom compete directly with the Company for
mortgage originations. The agreements generally do not have a limit as to the
principal amount of loans that the Company may sell, and establish an ongoing
sale program under which these investors and institutions stand ready to buy so
long as the loans the Company offers for sale meet their underwriting standards.

      Generally, the Company sells the servicing rights to its loans at the time
it sells those loans. When it swaps loans for mortgage-backed securities, at the
time of completing the swap it sells the servicing rights to the loans to an
independent loan servicer. The prices at which the Company is able to sell its
mortgage servicing rights vary over time and may be materially adversely
affected by a number of factors, including the general supply of, and demand
for, mortgage servicing rights and changes in interest rates.

      In 2001, the three institutional investors that bought the most loans from
the Company were Wells Fargo Funding, Principal Residential Funding and Astoria
Federal Savings Bank, which accounted for 65.9%, 8.8% and 4.7% of the Company's
total loan sales, respectively.

      LOAN UNDERWRITING

      The Company's primary goal in making a decision whether to extend a loan
is whether that loan conforms to the expectations and underwriting standards of
the institution that buys that type of loan. Typically, these buyers focus on a
potential borrower's credit history, often as summarized by credit scores,
income and stability of income, liquid assets and net worth and the value and
the condition of the property to be pledged. Whenever possible, the Company uses
artificial intelligence underwriting systems to determine whether a particular
loan meets those standards and expectations. In those cases where artificial
intelligence is not available, the Company relies on its credit officer staff to
make the determination.

      QUALITY CONTROL

      The Company has hired an outside firm to perform quality control testing
for it. The firm randomly samples 10% of the loans the Company originates. It
checks the accuracy of the borrower's income and assets and the credit report
used to make the loan, reviews whether the loan buyer's underwriting standards
were properly applied, examines whether the loan complies with government
regulations and, for 1% of the loans the Company originates, it reappraises the
underlying property. The firm issues monthly reports which the Comapny uses to
identify areas that need corrective action or could use improvement. To date,
those reports have not identified material quality control concerns, although
there can be no assurances that the Company will not experience material quality
control concerns in the future.


                                       7
<PAGE>

      GOVERNMENT REGULATION

      The Company's business is subject to extensive and complex rules and
regulations of, and examinations by, various federal, state and local government
authorities and government sponsored enterprises, including, without limitation,
HUD, FHA, VA, Fannie Mae, Freddie Mac and Ginnie Mae. These rules and
regulations impose obligations and restrictions on the Company's loan
origination and credit activities, including, without limitation, the
processing, underwriting, making, selling, securitizing and servicing of
mortgage loans.

      The Company's lending activities also are subject to various federal laws,
including the Federal Truth-in-Lending Act and Regulation Z thereunder, the
Homeownership and Equity Protection Act of 1994, the Federal Equal Credit
Opportunity Act and Regulation B thereunder, the Fair Credit Reporting Act of
1970, the Real Estate Settlement Procedures Act of 1974 and Regulation X
thereunder, the Fair Housing Act, the Home Mortgage Disclosure Act and
Regulation C thereunder and the Federal Debt Collection Practices Act, as well
as other federal statutes and regulations affecting its activities. The
Company's loan origination activities also are subject to the laws and
regulations of each of the states in which it conducts its activities.

      These laws, rules, regulations and guidelines limit mortgage loan amounts
and the interest rates, finance charges and other fees the Company may assess,
mandate extensive disclosure and notice to its customers, prohibit
discrimination, impose qualification and licensing obligations on it, establish
eligibility criteria for mortgage loans, provide for inspections and appraisals
of properties, require credit reports on prospective borrowers, regulate payment
features, and prohibit kickbacks and referral fees, among other things. These
rules and requirements also impose on the Company certain reporting and net
worth requirements. Failure to comply with these requirements can lead to, among
other things, loss of approved status, termination of contractual rights without
compensation, demands for indemnification or mortgage loan repurchases, certain
rights of rescission for mortgage loans, class action lawsuits and
administrative enforcement actions.

      The Company is subject to audits by various regulatory authorities. To
date, the audits have not found any material violations. In addition, the
Company's "enterprise" computer application assists it in complying with
government regulations by automatically selecting the requisite loan disclosure
documents, calculating permissible fees and charges and assuring that products
offered to a particular borrower meet the requirements of that borrower's state.
The Company's legal compliance is reviewed as part of its quality control
process, which is performed by an independent contractor with expertise in these
matters.

      Although the Company believes that it has systems and procedures in place
to ensure compliance with these requirements and believes that it currently is
in compliance in all material respects with applicable federal, state and local
laws, rules and regulations, there can be no assurance of full compliance with
current laws, rules and regulations, that more restrictive laws, rules and
regulations will not be adopted in the future, or that existing laws, rules and
regulations or the mortgage loan documents with borrowers will not be
interpreted in a different or more restrictive manner. The occurrence of any
such event could make compliance substantially more difficult or expensive,
restrict the Company's ability to originate, purchase, sell or service mortgage
loans, further limit or restrict the amount of interest and other fees and
charges earned from mortgage loans that the Company originates, purchases or
services, expose it to claims by borrowers and administrative enforcement
actions, or otherwise materially and adversely affect its business, financial
condition and results of operations.

      Members of Congress, government officials and political candidates have
from time to time suggested the elimination of the mortgage interest deduction
for federal income tax purposes, either entirely or in part, based on borrower
income, type of loan or principal amount. Because many of the Company's loans
are made to borrowers for the purpose of purchasing a home, the competitive
advantage of tax deductible interest, when compared with alternative sources of
financing, could be eliminated or seriously impaired by this type of
governmental action. Accordingly, the reduction or elimination of these tax
benefits could have a material adverse effect on the demand for the kind of
mortgage loans the Company offers.

      The Company also is performing various mortgage-related operations on the
Internet. The Internet, and the laws, rules and regulations related to it, are
new and still evolving. As such, there exist many opportunities for the
Company's business operations on the Internet to be challenged or to become
subject to legislation, any of which may materially and adversely affect its
business, financial condition and results of operations.

      INFORMATION SYSTEMS

      The Company's enterprise system controls most aspects of the Company's
operations, from the processing of a loan application through the closing of the
loan and the sale of the loan to institutional investors. The system also
performs checks and balances on many aspects of the Company's operations, and it
supports the Company's marketing efforts. The Company's enterprise system
functions on a wide area network that connects all of its branches in "real
time." With its wide area network, a transaction at any one of its locations is
committed centrally and is therefore immediately available to all personnel at
all other locations. An important benefit of the enterprise system is that it
aids the Company in controlling its business process.


                                       8
<PAGE>

The system assures that the Company's underwriting policies are adhered to, that
only loans that are fully approved are disbursed, and that the correct
disclosures and loan documents are used based on a borrower's state and loan
program. The Company's enterprise system also provides its management with
operating reports and other key data. MORTGAGESELECT.COM has developed a
proprietary Web site and supporting call center software through the efforts of
its in-house computer programming staff.

      COMPETITION

      Mortgage banking is highly competitive. A large number of banks, non-bank
mortgage lenders, and mortgage brokers offer mortgage loans. Many of these
competing mortgage originators share a business strategy and capability similar
to that of the Company and many of them are larger than the Company, with
substantially more capital and greater marketing and technical resources than
the Company.

                            SPECIAL NOTES OF CAUTION

      REGARDING FORWARD-LOOKING STATEMENTS

      Some of the information in this report may constitute "forward-looking
statements" within the meaning of the federal securities laws. Forward-looking
statements generally discuss the Company's plans and objectives for future
operations. They also include statements containing a projection of revenues,
income, capital expenditures, dividends, capital structure or other financial
terms. The following statements particularly are forward-looking in nature:

      o     the Company's strategy;

      o     development of the Company's Internet capabilities;

      o     projected joint ventures or acquisitions; and

      o     projected capital expenditures.

      The forward-looking statements in this report are based on the Company's
management's beliefs, assumptions and expectations of its future economic
performance, taking into account the information currently available to them.
These statements are not statements of historical fact. Forward-looking
statements involve risks and uncertainties, some of which are not currently
known to the Company, that may cause its actual results, performance or
financial condition to be materially different from the expectations of future
results, performance or financial condition it expresses or implies in any
forward-looking statements. Some of the important factors that could cause the
Company's actual results, performance or financial condition to differ
materially from its expectations are:

      o     general volatility of the capital markets and the market price of
            the Company's shares;

      o     changes in the real estate market, interest rates or the general
            economy of the markets in which the Company operates;

      o     economic, technological or regulatory changes affecting the use of
            the Internet;

      o     the Company's ability to employ and retain qualified employees;

      o     changes in government regulations that are applicable to the
            Company's regulated brokerage and property management businesses;

      o     the Company's ability to identify and complete acquisitions and
            successfully integrate businesses it acquires;

      o     changes in the demand for the Company's services;

      o     the degree and nature of the Company's competition; and

      o     the other factors referenced in this report, including, without
            limitation, those under the captions "Management's Discussion and
            Analysis of Financial Condition and Results of Operations" and
            "Business."


                                       9
<PAGE>

      When used in this report, the words "plan," "believe," "anticipate,"
"estimate," "expect," "objective," "projection," "forecast," "goal" or similar
words are intended to identify forward-looking statements. The Company qualifies
any and all of its forward-looking statements entirely by these cautionary
factors.


                                       10
<PAGE>

ITEM 2. PROPERTIES

      The Company's current Executive and Administrative Offices are located at
520 Broadhollow Road, Melville, New York 11747, and consist of approximately
58,200 square feet. The lease covering these premises expires in January of 2009
and the annual rent is $1,140,000. The Company also has a New York office
located at 114 West 47th Street, 17th Floor, New York, New York 10036. These
premises consist of approximately 7,000 square feet and the lease expires in
December of 2006. The annual rent is $371,496. The Company owns an office
building in Mt. Prospect, Illinois, which serves as the regional operation
center for the First Home division, and consists of approximately 35,700 square
feet.

      The Company leases an aggregate of 47 spaces for its regional operation
center and lending offices in Arizona, California, Connecticut, Florida,
Illinois, Maryland, New Mexico, New York and Virginia (including its New York,
New York offices and Melville, New York headquarters). As of December 31, 2001,
these facilities had an annual aggregate base rental of approximately $4.6
million, and ranged in size from 400 to 57,100 square feet with remaining lease
terms ranging from one to seven years.

ITEM 3. LEGAL PROCEEDINGS

      In the ordinary course of its business, the Company is at times subject to
various legal proceedings. The Company does not believe that any of its current
legal proceedings, individually or in the aggregate, will have a material
adverse effect on its operations or financial condition.

      A multitude of class action lawsuits have been filed against companies in
the mortgage banking industry, which allege, among other things, violations of
the terms of the mortgage loan documents and certain laws, rules and regulations
(including, without limitation, consumer protection laws). These lawsuits may
result in similar suits being filed against the Company. In addition, the
publicity generated by such lawsuits may result in legislation that affects the
manner in which the Company conducts its business and its relationships with
mortgage brokers, correspondents and others. Any of these developments may
materially and adversely affect the Company's business, financial condition and
results of operations.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

      None.


                                       11
<PAGE>

                                    PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

      The Company's common stock is listed on the NASDAQ National Market under
the symbol AHMH and began trading on October 4, 1999. The following table sets
forth the high, low and closing sales prices for the Company's common stock as
reported by the NASDAQ National Market for the periods indicated.

<TABLE>
<CAPTION>
                                      2001                                             2000
                  --------------------------------------------     --------------------------------------------
                    1st         2nd          3rd         4th         1st          2nd         3rd         4th
                  Quarter     Quarter      Quarter     Quarter     Quarter      Quarter     Quarter     Quarter
<S>               <C>        <C>          <C>         <C>          <C>          <C>         <C>         <C>
High              $ 8.130    $ 13.090     $ 18.000    $ 20.873     $ 8.875      $ 6.375     $ 5.250     $ 5.375
Low                 5.130       6.600       10.450      11.873       6.000        4.563       4.375       3.875
End of period       7.500      11.900       10.450      12.073       6.375        4.563       5.250       4.750
</TABLE>

      As of March 21, 2002, the closing sales price of the Company's common
stock, as reported on the NASDAQ National Market, was $13.51.

      The Company began paying a quarterly cash dividend in the amount of $0.03
per share of common stock in April of 2001. The Company paid three such
dividends in 2001.

      As of March 21, 2002, the Company had 26 stockholders of record. The
Company believes, based on the number of proxy statements and related materials
requested in connection with its annual meeting of stockholders, that there are
approximately 1,092 beneficial owners of its common stock.

ITEM 6. SELECTED FINANCIAL DATA

      The following selected financial data as of December 31, 2001 and 2000 and
for the years ended December 31, 2001, 2000 and 1999 have been derived from the
Company's audited consolidated financial statements, included elsewhere in this
report. The selected financial data as of December 31, 1999, 1998 and 1997 and
for the years ended December 31, 1998 and 1997 have been derived from prior year
audited consolidated financial statements. These consolidated financial
statements include all adjustments, which the Company considers necessary for a
fair presentation of its consolidated financial position and results of
operations for these periods. You should not assume that the results below
indicate results that the Company will achieve in the future. The operating data
are derived from unaudited financial information that the Company compiled.


                                       12
<PAGE>

      You should read the information below along with all the other financial
information and analysis presented in this report, including the Company's
financial statements and related notes, and "Management's Discussion and
Analysis of Financial Condition and Results of Operations."

<TABLE>
<CAPTION>
                                                                                      YEAR ENDED DECEMBER 31,
                                                                                      -----------------------
                                                                       2001       2000      1999      1998      1997
                                                                     --------   --------   -------   -------   -------
                                                                           (In thousands, except per share data)
<S>                                                                  <C>        <C>        <C>       <C>       <C>
STATEMENT OF INCOME DATA:
   Revenues
     Gain on sales of mortgage loans .............................   $118,554   $ 52,731   $21,957   $18,981   $10,597
     Interest income, net ........................................      9,098      3,271     1,704       734       369
     Other .......................................................        401      2,278     1,201       502       356
                                                                     --------   --------   -------   -------   -------
         Total revenues ..........................................    128,053     58,280    24,862    20,217    11,321
                                                                     --------   --------   -------   -------   -------
   Expenses
     Salaries, commissions and benefits, net .....................     55,778     27,894    11,611     9,430     5,317
     Occupancy and equipment .....................................      8,250      5,584     2,429     1,654       909
     Marketing and promotion .....................................      6,313      4,058     1,774     1,236       962
     Data processing and communications ..........................      4,442      2,826     1,133       952       612
     Provision for loss ..........................................        352        127        28       153       117
     Other .......................................................     12,331      7,625     2,550     1,543       946
                                                                     --------   --------   -------   -------   -------
         Total expenses ..........................................     87,466     48,114    19,525    14,968     8,862
                                                                     --------   --------   -------   -------   -------
   Income before income taxes and minority interest ..............     40,587     10,166     5,337     5,249     2,459
         Income taxes(1) .........................................     16,253      4,267     1,441       328       140
         Minority interest .......................................      1,028        508        35        51        --
                                                                     --------   --------   -------   -------   -------
   Net income before cumulative effect of change in
     accounting principle ........................................     23,306      5,391     3,861     4,870     2,319
   Cumulative effect of change in accounting principle,
       net of income taxes .......................................      2,143         --        --        --        --
                                                                     --------   --------   -------   -------   -------
                  Net income .....................................   $ 25,448   $  5,391   $ 3,861   $ 4,870   $ 2,319
                                                                     ========   ========   =======   =======   =======
   Net income per share:
     Basic before cumulative effect of change in accounting
       Principle .................................................   $   2.25   $   0.63   $  0.69   $  0.97   $  0.46
     Basic after cumulative effect of change in accounting
       principle .................................................   $   2.45   $   0.63   $  0.69   $  0.97   $  0.46
     Diluted before cumulative effect of change in accounting
       principle .................................................   $   2.14   $   0.63   $  0.69   $  0.97   $  0.46
     Diluted after cumulative effect of change in accounting
       principle .................................................   $   2.34   $   0.63   $  0.69   $  0.97   $  0.46
   Weighted average number of shares outstanding:
     Basic .......................................................     10,374      8,580     5,595     5,000     5,000
     Diluted .....................................................     10,883      8,580     5,603     5,000     5,000
BALANCE SHEET DATA:
     Cash and cash equivalents ...................................   $ 26,393   $  6,005   $ 3,414   $ 2,892   $ 2,058
     Mortgage loans held for sale, net ...........................    419,900    143,967    65,115    34,667    24,676
     Total assets ................................................    501,125    183,532    85,884    42,392    28,914
     Warehouse lines of credit ...................................    351,454    130,484    56,805    34,070    24,454
     Other liabilities ...........................................     70,477     25,855    11,056     2,298     1,886
     Total stockholders' equity ..................................     78,617     26,612    18,000     5,924     2,574
OPERATING DATA:
     Total mortgage originations (in millions) ...................   $  7,764   $  3,043   $ 1,348   $ 1,158   $   724
         Home purchases ..........................................   $  3,326   $  2,590   $   978   $   749   $   562
         Refinancings ............................................   $  4,438   $    452   $   370   $   409   $   162
     Number of loans originated ..................................     46,163     18,923     7,732     6,543     4,361
     Loan originators at period end ..............................        551        475       220        76        71
     Number of branches at period end ............................         63         53        28        12         8
</TABLE>

----------
 (1) Prior to September 29, 1999, the Company elected to be treated as an S
     corporation for federal and state income tax purposes. Prior to the
     Company's election to be treated as an S corporation, all federal taxes
     were taxable to and paid by the Company's sole shareholder. Income taxes
     for the years ended December 31, 1998, 1997, and 1996 reflect state income
     taxes only.


                                       13
<PAGE>

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

      GENERAL

      The Company has made forward-looking statements in this annual report on
Form 10-K that are subject to risks and uncertainties. Forward-looking
statements include information concerning the Company's possible or assumed
future results of operations. Also, when the Company has used such words as
"believe," "expect," "anticipate," "plan," "could," "intend" or similar
expressions, it is making forward-looking statements. You should note that an
investment in the Company's securities involves certain risks and uncertainties
that could affect its future financial results. The Company's actual results
could differ materially from those anticipated in these forward-looking
statements as a result of certain factors, including those set forth in
"Business - Special Notes of Caution" and elsewhere in this report on Form 10-K.

      The Company is an independent retail mortgage banking company primarily
engaged in the business of originating and selling residential mortgage loans.
The Company offers a broad array of residential mortgage products targeted
primarily to high-credit-quality borrowers over the Internet, as well as through
its 551 primarily commission-compensated loan originators. The Company operates
from 63 loan offices in New York, California, Illinois, Maryland, Virginia,
Pennsyvania, New Mexico, Connecticut, New Jersey, Arizona, Massachusetts,
Florida and Colorado. The Company operates primarily as a mortgage banker,
underwriting, funding and selling its loan products to more than 45 different
buyers. In January of 1999, the Company began marketing its mortgage products
over the Internet through its Internet site, MORTGAGESELECT.COM. Mortgage
products are originated online through arrangements with a number of popular Web
sites and through the Company's own Web site.

      As a mortgage bank, the Company generates revenues through the origination
and subsequent resale of funded loans. These revenues are made up of net gain on
sale and interest income. Net gain on sale consists of the net gain on the sale
of mortgage loans and mortgage servicing rights, which are sold generally within
45 days of origination. This net gain is recognized based on the difference
between the combined selling price of the loan and its related servicing rights,
and the carrying value of the mortgage loans and servicing rights sold. Net gain
on sale also includes loan-related fees consisting of application,
documentation, commitment and processing fees paid by borrowers. Net interest
income consists of the difference between interest received by the Company on
its mortgage loans held for sale and interest paid by it under its credit
facilities.

      The Company's expenses largely consist of:

      o     salaries and benefits paid to employees;

      o     occupancy and equipment costs;

      o     Internet-related expenses, including licensing and participation
            fees and advertising costs;

      o     marketing, promotion and advertising costs; and

      o     data processing and communication costs.

A substantial portion of these expenses is variable in nature. Commissions paid
to loan originators are 100% variable, while other salaries and benefits
fluctuate from quarter to quarter based on the Company's assessment of the
appropriate levels of non-loan originator staffing, which correlates to the
current level of loan origination volume and the Company's perception of future
loan origination volume.

      Seasonality affects the mortgage industry, as loan originations are
typically at their lowest levels during the first and fourth quarters due to a
reduced level of home buying activity during the winter months. Loan
originations generally increase during the warmer months, beginning in March and
continuing through October. As a result, the Company may experience higher
earnings in the second and third quarters and lower earnings in the first and
fourth quarters.

      Interest rate and economic cycles also affect the mortgage industry, as
loan originations typically fall in rising interest rate environments. During
these periods, refinancing originations decrease, as higher interest rates
provide reduced economic incentives for borrowers to refinance their existing
mortgages. Due to stable and decreasing interest rate environments over recent
years, the Company's to-date performance may not be indicative of results in
rising interest rate environments. In addition, the Company's recent and rapid
growth may distort some of its ratios and financial statistics and may make
period-to-period comparisons difficult. In light of this growth, the Company's
to-date earnings performance may be of little relevance in


                                       14
<PAGE>

predicting future performance. Furthermore, the Company's financial statistics
may not be indicative of its results in future periods.

      On December 30, 1999, the Company acquired Marina, a residential mortgage
lender headquartered in Irvine, California, with offices in California and
Arizona. The Company agreed to issue 753,420 shares of its common stock in
exchange for the 34,600 outstanding shares of Marina common stock and to pay
$2.5 million in cash over five years. The Company issued 201,043 shares on
October 15, 2000 and 157,985 shares on January 31, 2001 to the prior Marina
shareholders in accordance with the first and second earnout provisions of the
merger agreement and the prior shareholders may receive additional consideration
over the next four years based on two additional earnout provisions, which are
primarily based on derived earnings formulas. The Company accounted for this
transaction as a purchase transaction and generated goodwill of approximately
$4.5 million, which was originally to be amortized over 20 years. The results of
operations for Marina were not included in the Company's consolidated financial
statements as of December 31, 1999. Marina was merged into American Home, the
Company's wholly-owned subsidiary, on December 31, 2001.

      On June 30, 2000, American Home acquired First Home, an Illinois
corporation, which was merged into AHM, the Company's wholly-owned subsidiary.
The shareholders of First Home will receive an aggregate of 489,760 shares of
American Home's common stock and $3.6 million over a period of two years. In
addition, the shareholders of First Home may receive additional consideration
consisting of cash and shares of common stock of the Company based on the future
results of the financial performance of the First Home division of the Company.
First Home is a full-service retail lender based in metropolitan Chicago. First
Home originates and purchases mortgage loans for sale in the secondary mortgage
market. It operates 24 branch offices in three states.

      On October 31, 2000, American Home acquired the Roslyn Branches for
$509,478 and the assumption of certain liabilities, including the assumption of
the real property leases for the four acquired branch offices. These branch
offices are located in Maryland, Virginia, Connecticut and New York and are
full-service retail lending offices.

      On March 30, 2001, the Company closed an asset purchase transaction with
Commonwealth. Under the agreement, the Company acquired five loan production
offices of ComNet. The terms of the transaction included a nominal amount of
cash consideration for the purchase of ComNet's mortgage application pipeline,
fixed assets and trademark, as well as the assumption of real property leases of
the five acquired branch offices, which are located in Pennsylvania and
Maryland.

      In August of 2001, the Company entered into an agreement to acquire Valley
Bancorp and its wholly-owned subsidiary, Valley Bank, a federal savings bank
located in suburban Baltimore, Maryland, for a combination of cash and stock,
subject to certain adjustments. Under the terms of the definitive agreement, the
Company will pay 1.25 times Valley Bancorp's book value, or approximately $5.5
million. It is anticipated that the acquisition of Valley Bank will
substantially increase net interest income and provide a more stable and diverse
funding base. This transaction is subject to regulatory approval and is expected
to close by the end of the third quarter of 2002.

      The Company may, from time to time, engage in other acquisitions. Any
acquisition made by the Company may result in potentially dilutive issuances of
equity securities, the incurrence of additional debt and the amortization of
expenses related to goodwill and other intangible assets. The Company also may
experience difficulties in integrating the operations, services, products and
personnel of acquired companies or the diversion of management's attention from
ongoing business operations.

      CRITICAL ACCOUNTING POLICIES

      Financial Reporting Release No. 60, recently released by the Securities
and Exchange Commission, requires all companies to include a discussion of
critical accounting policies or methods used in the preparation of financial
statements.

      MORTGAGE LOANS HELD FOR SALE - Mortgage loans held for sale represent
mortgage loans originated and held pending sale to interim and permanent
investors. The mortgages are carried at the lower of cost or market as
determined by outstanding commitments from investors or current investor yield
requirements calculated on the aggregate loan basis. The Company separately
evaluates for impairment the estimated fair value of its commitments to lend. If
it is determined that impairment exists, the Company records a charge to
earnings in the current period. The Company generally sells whole loans without
servicing retained. Gains or losses on such sales are recognized at the time
legal title transfers to the investor based upon the difference between the
sales proceeds from the final investor and the basis of the loan sold, adjusted
for net deferred loan fees and certain direct costs and selling costs. The
Company defers net loan origination costs as a component of the loan balance on
the balance sheet. Such costs are not amortized and are recognized into income
as a component of the gain or loss upon sale.

      DERIVATIVE FINANCIAL INSTRUMENTS - The Company has developed risk
management programs and processes designed to manage market risk associated with
normal business activities.


                                       15
<PAGE>

      Risk Management of the Mortgage Pipeline. The Company's mortgage-committed
pipeline includes interest rate lock commitments ("IRLCs") that have been
extended to borrowers who have applied for loan funding and meet certain defined
credit and underwriting criteria. Effective with the adoption of the Financial
Accounting Standards Board Statement of Financial Accounting Standard No. 133,
"Accounting for Derivative Instruments and Hedging Activities," as amended, the
Company classifies and accounts for the IRLCs as free-standing derivatives.
Accordingly, IRLCs are recorded at fair value with changes in fair value
recorded to current earnings. The Company uses other derivative instruments to
economically hedge the IRLCs, which are also classified and accounted for as
free-standing derivatives. Gains (losses) on IRLCs represent the change in value
from rate-lock inception to funding date.

      Risk Management of Mortgage Loans Held for Sale. The Company's risk
management objective for its mortgage loans held for sale is to protect earnings
from an unexpected charge due to a decline in value. The Company's strategy is
to engage in a risk management program involving the use of mortgage forward
delivery contracts designated as fair value hedging instruments to hedge 100% of
its agency-eligible conforming and non-conforming loans. At the inception of the
hedge, the Company formally documents the relationship between the forward
delivery contracts and the mortgage inventory as well as its objective and
strategy for undertaking the hedge transactions. The notional amount of the
forward delivery contracts, along with the underlying rate and terms of the
contracts, are equivalent to the unpaid principal amount of the mortgage
inventory being hedged; hence, the forward delivery contracts effectively fix
the forward sales price and thereby substantially eliminate interest rate and
price risk to the Company.

      Termination of Hedging Relationships. The Company employs a number of risk
management monitoring procedures to ensure that the designated hedging
relationships are demonstrating, and are expected to continue to demonstrate, a
high level of effectiveness. Hedge accounting is discontinued on a prospective
basis if it is determined that the hedging relationship is no longer effective
or expected to be effective in offsetting changes in fair value of the hedged
item. Additionally, the Company may elect to de-designate a hedge relationship
during an interim period and re-designate upon the rebalancing of a hedge
profile and the corresponding hedge relationship. When hedge accounting is
discontinued, the Company continues to carry the derivative instruments at fair
value with changes in their value recorded in earnings.

      LOAN ORIGINATION FEES - The Company records loan fees, discount points and
certain direct origination costs as an adjustment of the cost of the loan. These
fees and costs are included in gain on sales of loans when the loan is sold.

      INTEREST RECOGNITION - The Company accrues interest income as it is
earned. Loans are placed on a nonaccrual status when any portion of the
principal or interest is 90 days past due or earlier when concern exists as to
the ultimate collectibility of principal or interest. Loans are returned to an
accrual status when principal and interest become current and are anticipated to
be fully collectible. Interest expense is recorded on outstanding lines of
credit at a rate based on a spread to the LIBOR and the Fed Funds rate.


                                       16
<PAGE>

      RESULTS OF OPERATIONS

      The following table sets forth, for the periods indicated, information
derived from the Company's statement of operations expressed as a percentage of
total revenues. Any trends illustrated in the following table are not
necessarily indicative of future results.

<TABLE>
<CAPTION>
                                                                             YEAR ENDED DECEMBER 31,
                                                                           --------------------------
                                                                            2001      2000      1999
                                                                           ------    ------    ------
<S>                                                                         <C>       <C>       <C>
RESULTS OF OPERATIONS:
     Gain on sales of mortgage loans ...................................     92.6%     90.5%     88.3%
     Interest income - net .............................................      7.1       5.6       6.9
     Other .............................................................      0.3       3.9       4.8
                                                                           ------    ------    ------
         Total revenues ................................................    100.0     100.0     100.0
                                                                           ------    ------    ------
     Salaries, commissions and benefits, net ...........................     43.6      47.9      46.7
     Occupancy and equipment ...........................................      6.4       9.6       9.8
     Marketing and promotion ...........................................      4.9       7.0       7.1
     Data processing and communications ................................      3.5       4.8       4.6
     Provision for loss ................................................      0.3       0.2       0.1
     Other .............................................................      9.6      13.1      10.3
                                                                           ------    ------    ------
         Total expenses ................................................     68.3      82.6      78.6
                                                                           ------    ------    ------
     Income before income taxes and minority interest in income
          of in consolidated joint ventures ............................     31.7      17.4      21.4
     Income taxes ......................................................     12.7       7.3       5.8
     Minority interest in income of consolidated joint ventures ........      0.8       0.8       0.1
                                                                           ------    ------    ------
         Net income before cumulative effect of change in accounting
             principle, as reported ....................................     18.2%      9.3%     15.5%
                                                                           ======    ======    ======
</TABLE>

      YEAR ENDED DECEMBER 31, 2001 COMPARED TO YEAR ENDED DECEMBER 31, 2000

      Total Revenues. The Company's total revenues for the year ended December
31, 2001, compared to the year ended December 31, 2000, increased to $128.1
million from $58.3 million in 2000, an increase of $69.8 million, or 119.7%,
primarily as a result of strong origination growth and the subsequent sale of
loans and a generally favorable interest rate environment. Loan sales increased
to $7.5 billion in 2001 from $2.7 billion in 2000 (which amounts include $443.9
million and $272.8 million of originations in which the Company acted as broker,
respectively).

      Net gain on the sales of mortgage loans increased to $118.6 million in
2001 from $52.7 million in 2000, an increase of $65.8 million, or 124.8%. The
increase primarily resulted from an increased loan volume, due in large part to
the First Home, ComNet and Roslyn acquisitions and Internet-generated loan
closings.

      Interest income - net increased to $9.1 million in 2001 from $3.3 million
in 2000, an increase of $5.8 million, or 178.1%. The improvement resulted
primarily from an increase in loans held for sale and an in increase in the
Company's effective interest rate spread.

      Other income totaled $401,000 in 2001 compared to $2.3 million in 2000.
Other income primarily consists of volume incentive bonuses received from loan
purchasers. The decline was a result of the Company selling loans to loan buyers
that offer high prices, but do not offer volume bonuses.

      Salaries, Commissions and Benefits. Salaries, commissions and benefits
increased to $55.8 million in 2001 from $27.9 million in 2000, an increase of
$27.9 million, or 100.0%. The increase was largely due to the inclusion of a
full year of expenses for First Home and the Roslyn Branches, and the inclusion
of the ComNet Branches following their acquisition, increased staffing levels
and overtime at the Company's corporate headquarters and increased staffing
levels at MORTGAGESELECT.COM'S call centers. As of December 31, 2001, the
Company employed 1,325 people compared to 1,006 people at December 31, 2000.

      Occupancy and Equipment Expenses. Occupancy and equipment expenses
increased to $8.3 million in 2001 from $5.6 million in 2000, an increase of $2.7
million, or 47.7%. The increase in costs reflects the inclusion of First Home
and the Roslyn Branches for a full year and the acquisition of the ComNet
Branches, opening of new community loan offices and greater depreciation charges
as a result of the Company's increased investments in computer networks.


                                       17
<PAGE>

      Marketing and Promotion Expenses. Marketing and promotion expenses
increased to $6.3 million in 2001 from $4.1 million in 2000, an increase of $2.2
million, or 55.6%. Increased advertising expenses in support of retail
operations and our MORTGAGESELECT.COM Internet Web site accounted for the
increase.

      Data Processing and Communications. Data processing and communication
costs increased to $4.4 million in 2001 from $2.8 million in 2000, an increase
of $1.6 million, or 57.2%. The increase was a result of operating First Home and
the Roslyn Branches for a full year, the acquisition of the ComNet Branches, the
growth at MORTGAGESELECT.COM'S call centers and the opening of new community
loan offices.

      Other Expenses. Other expenses increased to $12.3 million in 2001 from
$7.6 million in 2000, an increase of $4.7 million, or 61.7%. These expenses,
which consist generally of office supplies, travel, professional fees and
insurance, have increased as a result of the growth at MORTGAGESELECT.COM'S call
centers, the inclusion of a full year of expenses for First Home and the Roslyn
Branches, and the inclusion of the ComNet Branches following their acquisition,
new office openings and higher loan production.

      Income Taxes. Income taxes increased to $16.3 million in 2001 from $4.3
million. in 2000, an increase of $12.0 million, or 280.1%. The increase was
primarily due to increased revenue.

      Net Income. Net income, before cumulative effect of change in accounting
principle, increased to $23.3 million in 2001 from $5.4 million in 2000, an
increase of $17.9 million, or 332.3%. The increase was generally a result of an
increase in loan volume, due in large part to a favorable interest rate
enviornment, the inclusion of First Home and the Roslyn Branches for a full
year, the ComNet acquisition and Internet-generated loan closings.

      YEAR ENDED DECEMBER 31, 2000 COMPARED TO YEAR ENDED DECEMBER 31, 1999

      Total Revenues. The Company's total revenues for the year ended December
31, 2000, compared to the year ended December 31, 1999, increased to $58.3
million from $24.9 million in 1999, an increase of $33.4 million, or 134.4%,
primarily as a result of strong origination growth and the subsequent sale of
loans and a generally favorable interest rate environment. Loan sales increased
to $2.7 billion in 2000 from $1.3 billion in 1999 (which amounts include $272.8
million and $64.6 million of originations in which the Company acted as broker,
respectively).

      Net gain on the sales of mortgage loans increased to $52.8 million in 2000
from $22.0 million in 1999, an increase of $30.8 million, or 140.2%. The
increase was generally a result of an increase in loan volume, due in large part
to the Marina and First Home acquisitions and increased Internet-generated loan
closings.

      Interest income - net increased to $3.3 million in 2000 from $1.7 million
in 1999, an increase of $1.6 million, or 92.0%. The improvement resulted from
increased loan originations and from more efficient cash management, including
the implementation of sweep accounts, which use existing cash balances overnight
to reduce outstanding borrowings.

      Other income increased to $2.3 million in 2000 from $1.2 million in 1999,
an increase of $1.1 million, or 89.6%. The increase was due primarily to volume
incentive bonuses from various investors. These bonuses represent payments
received by the Company when it meets certain volume targets specified in its
various agreements with loan purchasers. The Company accrues volume incentive
income when targets are reached.

      Salaries, Commissions and Benefits. Salaries, commissions and benefits
increased to $27.9 million in 2000 from $11.6 million in 1999, an increase of
$16.3 million, or 140.2%. The increase was largely due to the inclusion of
expenses of Marina, First Home and the Roslyn Branches following these
acquisitions and increased staffing levels related to our MORTGAGESELECT.COM
Internet Web site. As of December 31, 2000, the Company employed 1,006 people
compared to 543 people at December 31, 1999.

      Occupancy and Equipment Expenses. Occupancy and equipment expenses
increased to $5.6 million in 2000 from $2.4 million in 1999, an increase of $3.2
million, or 129.9%. The increase in costs is reflective of the acquisitions of
Marina, First Home and the Roslyn Branches, the opening of new community loan
offices and Internet call centers and greater depreciation charges as a result
of the Company's increased investments in computer networking.

      Marketing and Promotion Expenses. Marketing and promotion expenses
increased to $4.1 million in 2000 from $1.8 million in 1999, an increase of
$2.3, or 128.7%. Increased advertising expenses in support of retail operations
and our MORTGAGESELECT.COM Internet Web site accounted for the increase.

      Data Processing and Communications. Data processing and communication
costs increased to $2.8 million in 2000 from $1.1 million in 1999, an increase
of $1.7 million, or 149.4%. The increase was a result of the acquisitions of
Marina, First


                                       18
<PAGE>

Home and the Roslyn Branches, the growth in our MORTGAGESELECT.COM Internet Web
site and the opening of new office locations.

      Other Expenses. Other expenses increased to $7.6 million in 2000 from $2.5
million in 1999, an increase of $5.1 million, or 199.1%. These expenses, which
consist generally of office supplies, travel, professional fees and insurance,
have increased as a result of the growth in our MORTGAGESELECT.COM Internet Web
site, the acquisitions of Marina, First Home and the Roslyn Branches, new office
openings and higher employment levels.

      Income Taxes. Income taxes increased to $4.3 million in 2000 from $1.4
million in 1999, an increase of $2.8 million, or 196.1%. The increase was
primarily due to increased revenue and a change in the tax status of AHM. Prior
to September 29, 1999, AHM elected to be treated as an S corporation. Income
taxes for 1999 also include a non-cash, non-recurring tax expense of $625,000
resulting from this change.

      Net Income. Net income increased to $5.4 million in 2000 from $3.9 million
in 1999, an increase of $1.5 million, or 39.6%. The increase was generally a
result of an increase in loan volume, due in large part to the Marina and First
Home acquisitions and increased Internet-generated loan closings.

      LIQUIDITY AND CAPITAL RESOURCES

      To originate a mortgage loan, the Company draws against a $310 million
pre-purchase facility with UBS Paine Webber ("Paine Webber"), a $100 million
facility with Residential Funding Corporation ("RFC"), and a facility of $75
million with Morgan Stanley Dean Witter Mortgage Capital, Inc. ("Morgan
Stanley"). These facilities are secured by the mortgages owned by the Company,
and by certain of its other assets. Advances drawn under the facilities bear
interest at rates that vary depending on the type of mortgages securing the
advances. These loans are subject to sublimits, advance rates and terms that
vary depending on the type of securing mortgages and the ratio of the Company's
liabilities to its tangible net worth. At March 21, 2002, the aggregate
outstanding balance under the warehouse facilities was $205 million, the
aggregate outstanding balance in drafts payable was $8 million and the aggregate
maximum amount available for additional borrowings was $280 million.

      The documents governing the Company's warehouse facilities contain a
number of compensating balance requirements and restrictive financial and other
covenants that, among other things, require the Company to maintain a minimum
ratio of total liabilities to tangible net worth and maintain a minimum level of
tangible net worth, liquidity, stockholder's equity and leverage ratios, as well
as to comply with applicable regulatory and investor requirements. The facility
agreements also contain covenants limiting the ability of the Company's
subsidiary to:

      o     transfer or sell assets;

      o     create liens on the collateral; and

      o     incur additional indebtedness,

without obtaining the prior consent of the lenders, which consent may not be
unreasonably withheld. These limits on its subsidiary may in turn restrict
American Home's ability, as the holding company, to pay cash or stock dividends
on its stock.

      In addition, under the Company's warehouse facilities, the Company will
not continue to finance a mortgage loan that it holds if:

      o     the loan is rejected as "unsatisfactory for purchase" by the
            ultimate investor and has exceeded its permissible 120-day warehouse
            period;

      o     the Company fails to deliver the applicable mortgage note or other
            documents evidencing the loan within the requisite time period;

      o     the underlying property that secures the loan has sustained a
            casualty loss in excess of 5% of its appraised value; or

      o     the loan ceases to be an eligible loan (as determined pursuant to
            the warehousing agreement).

      In addition to the Paine Webber, RFC and Morgan Stanley warehouse
facilities, the Company has purchase and sale agreements with Fannie Mae and
Paine Webber. Pursuant to these arrangements, the Company obtains commitments
from the ultimate buyer, which may be a bank, a pension fund or an investment
bank, to purchase its loans. These loans are then sold together with the
commitment from the ultimate buyer to one of the two institutions above, who
subsequently take


                                       19
<PAGE>

responsibility for consummating the final transaction. These agreements allow
the Company to accelerate the sale of its mortgage loan inventory resulting in a
more effective use of the warehouse facility. The combined capacity available
under the Company's purchase and sale agreements is $603 million. Amounts sold
and being held under these agreements at December 31, 2001 and December 31, 2000
were $499 million and $259 million, respectively. Amounts so held under these
agreements at March 21, 2002 were $352 million. At March 21, 2002, the maximum
combined amount was $603 million. These agreements are not committed facilities
and may be terminated at the discretion of the counterparties.

      The Company makes certain representations and warranties under the
purchase and sale agreements regarding, among other things, the loans'
compliance with laws and regulations, their conformity with the ultimate
investor's underwriting standards and the accuracy of information. In the event
of a breach of these representations or warranties or in the event of an early
payment default, the Company may be required to repurchase the loans and
indemnify the investor for damages caused by that breach. The Company has
implemented strict procedures to ensure quality control and conformity to
underwriting standards and minimize the risk of being required to repurchase
loans. In addition, an outside firm performs quality control tests for it.
Please see "Business--Quality Control." The Company has been required to
repurchase loans it has sold from time to time; however, these repurchases have
not had a material impact to the Company.

      As of December 31, 2001, the Company's warehouse facility borrowings were
$351.5 million and its outstanding drafts payable were $35.4 million, compared
to $130.5 million in borrowings and $8.3 million in drafts payable as of
December 31, 2000. At December 31, 2001, its loans held for sale were $419.9
million compared to $144.0 million at December 31, 2000.

      Cash and cash equivalents increased to $26.4 million at December 31, 2001
from $6.0 million at December 31, 2000.

      The Company's primary sources of cash and cash equivalents during the year
ended December 31, 2001 were as follows:

      o     $ 6.0 million increase in accrued expenses and other liabilities;

      o     $ 27.0 million increase in drafts payable;

      o     $ 27.2 million proceeds from issuance of capital stock; and

      o     $221.0 million increase in warehouse lines of credit.

      The Company's primary uses of cash and cash equivalents during the year
ended December 31, 2001 were as follows:

      o     $  1.4 million increase in prepaid expenses and security deposits;

      o     $  1.1 million increase in loans held for investment;

      o     $  2.8 million for the acquisition of businesses;

      o     $  3.6 million to purchase furniture and office and computer
               equipment for new branch offices;

      o     $ 14.9 million increase in accounts receivable; and

      o     $275.9 million net increase in mortgage loans held for sale.

Cash and cash equivalents increased to $6.0 million at December 31, 2000 from
$3.4 million at December 31, 1999.

The Company's primary sources of cash and cash equivalents during the year ended
December 31, 2000 were as follows:

      o     $ 1.2 million decrease in prepaid expenses and security deposits;

      o     $ 4.9 million increase in drafts payable; and

      o     $71.0 million increase in warehouse lines of credit.


                                       20
<PAGE>

      The Company's primary uses of cash and cash equivalents during the year
ended December 31, 2000 were as follows:

      o     $ 0.9 million increase in accounts receivable;

      o     $ 2.1 million for the acquisition of businesses;

      o     $ 2.1 million to purchase furniture and office and computer
              equipment for new branch offices;

      o     $ 5.3 million decrease in accounts payable, net of assumed
              liabilities; and

      o     $75.6 million net increase in mortgage loans held for sale.

      The Company's ability to originate loans depends in large part on its
ability to sell these mortgage loans at par or for a premium in the secondary
market so that it may generate cash proceeds to repay borrowings under its
warehouse facility. The value of the Company's loans depends on a number of
factors, including:

      o     interest rates on the Company's loans compared to market interest
            rates;

      o     the borrower credit risk classification;

      o     loan-to-value ratios; and

      o     general economic conditions.

      The Company's existing cash balances and funds available under its working
capital credit facilities, together with cash flows from operations, are
expected to be sufficient to meet its liquidity requirements for at least the
next 12 months. The Company does, however, expect to continue its expansion and
expects that eventually it will have to arrange for additional sources of
capital through the issuance of debt or equity or additional bank borrowings.
The Company has no commitments for any additional financings, and it cannot
ensure that it will be able to obtain any additional financing at the times
required and on terms and conditions acceptable to it. If the Company fails to
obtain needed additional financing, its growth could slow and operations could
be affected.

      INFLATION

      For the period 1997 to 2001, inflation has been relatively low and the
Company believes that inflation has not had a material effect on its results of
operations. To the extent inflation increases in the future, interest rates will
also likely rise, which would impact the number of loans the Company originates.
This impact would adversely affect the Company's future results of operations.

      COMMITMENTS

      The Company had the following commitments (excluding derivative financial
instruments) at December 31, 2001:

<TABLE>
<CAPTION>
                                        LESS THAN                                   AFTER
                           TOTAL         1 YEAR      1 - 3 YEARS   4 - 5 YEARS     5 YEARS
<S>                    <C>            <C>            <C>           <C>           <C>
Warehouse facilities   $419,900,181   $419,900,181   $        --   $        --   $       --

Operating leases         20,265,266      4,576,750     6,969,465     4,973,070    3,745,981

Notes payable             3,014,314        752,796     1,240,558       167,264      853,704
</TABLE>

      RISK MANAGEMENT

      The Company depends on substantial borrowings to conduct its business.
Movements in interest rates can pose a major risk to the Company in either a
rising or declining interest rate environment. When interest rates rise, loans
held for sale and any applications in process with agreed upon rates decrease in
value. To preserve the value of such loans or applications in process with
agreed upon rates, the Company executes mandatory loan sale agreements (forward
sales of mortgage-backed securities) to be settled at future dates with fixed
prices. However, when interest rates decline, customers may choose to abandon
their applications. In that case, the Company may be required to purchase loans
at current market prices to fulfill existing mandatory loan sale agreements,
thereby incurring losses upon sale. The Company uses an interest rate hedging


                                       21
<PAGE>

program to attempt to manage these risks. Through this program, the Company
purchases and forward sells mortgage-backed securities and acquires options on
mortgage and treasury futures.

      Although the Company generally sells its loans within 45 days after
funding, there may be unexpected delays that could increase its interest rate
exposure. Even though the Company uses hedging and other strategies to minimize
its exposure to interest rate risks, no hedging or other strategy can completely
protect it. Moreover, hedging strategies involve transaction and other costs.
The Company cannot ensure that its hedging strategy and the hedges that it makes
will adequately offset the risk of interest rate volatility or that its hedges
will not result in losses.

      The Company performs daily analysis to determine its risk exposures under
various interest rate scenarios and manages these risks through a combination of
forward sales of mortgage-backed securities and options on treasury futures. All
derivatives are obtained for hedging (or other than trading) purposes, and
management evaluates the effectiveness of the hedges on an ongoing basis.

      The following tables summarize the Company's interest rate sensitive
instruments:

<TABLE>
<CAPTION>
                                                                           DECEMBER 31, 2001              DECEMBER 31, 2000
                                                                           -----------------              -----------------
                                                                      NOTIONAL AMOUNT  FAIR VALUE    NOTIONAL AMOUNT   FAIR VALUE
                                                                      ---------------  ----------    ---------------   ----------
<S>                                                                     <C>            <C>             <C>            <C>
Instruments:
Commitments to fund mortgages at agreed-upon rates.............         $718,040,976   $6,498,114      $241,926,526   $7,453,609
     Forward delivery commitments..............................          575,786,980      291,449       224,172,000   (3,738,524)
     Option contracts to buy securities........................          175,000,000      161,750        10,000,000      167,150
</TABLE>

In the event that the Company does not deliver into the forward delivery
commitments or exercise its option contracts, the instruments can be settled on
a net basis. Net settlement entails paying or receiving cash based upon the
change in market value of the existing instrument. All forward delivery
commitments and option contracts to buy securities are to be contractually
settled within six months of the balance sheet date.

      The following describes the methods and assumptions the Company uses in
estimating fair values of the above financial instruments:

      o     Fair value estimates are made as of a specific point in time based
            on estimates using present value or other valuation techniques.
            These techniques involve uncertainties and are significantly
            affected by the assumptions used and the judgments made regarding
            risk characteristics of various financial instruments, discount
            rates, estimates of future cash flows, future expected loss
            experience, and other factors.

      o     Changes in assumptions could significantly affect these estimates
            and the resulting fair values. Derived fair value estimates cannot
            be substantiated by comparison to independent markets and, in many
            cases, could not be realized in an immediate sale of the instrument.
            Also, because of differences in methodologies and assumptions used
            to estimate fair values, the fair values used by the Company should
            not be compared to those of other companies.

      o     The fair value of commitments to fund with agreed upon rates are
            estimated using the fees and rates currently charged to enter into
            similar agreements, taking into account the remaining terms of the
            agreements and the present creditworthiness of the
            counterparties.For fixed rate loan commitments, fair value also
            considers the difference between current market interest rates and
            the existing committed rates.

      o     The fair value of these instruments is estimated using current
            market prices for dealer or investor commitments relative to the
            Company's existing positions.

      The Company's hedging program contains an element of risk because the
counterparties to its mortgage and treasury securities transactions may be
unable to meet their obligations. While the Company does not anticipate
nonperformance by any counterparty, it is exposed to potential credit losses in
the event the counterparty fails to perform. The Company's exposure to credit
risk in the event of default by a counterparty is the difference between the
contract and the current market price. The Company minimizes its credit risk
exposure by limiting the counterparties to well-capitalized banks and securities
dealers who meet established credit and capital guidelines.

      NEWLY ISSUED ACCOUNTING PRONOUNCEMENTS

      On July 20, 2001, the Financial Accounting Standards Board issued
Statements of Financial Accounting Standards No. 141, "Business Combinations"
("SFAS 141"), and No. 142, "Goodwill and Other Intangible Assets" ("SFAS 142").
These


                                       22
<PAGE>

Statements make significant changes to the accounting for business combinations,
goodwill, and intangible assets. SFAS 141 eliminates the pooling-of-interests
method of accounting for business combinations. In addition, it further
clarifies the criteria for recognition of intangible assets separately from
goodwill. This statement is effective for business combinations completed after
June 30, 2001.

      SFAS 142 discontinues the practice of amortizing goodwill and indefinite
lived intangible assets and initiates an annual review for impairment.
Impairment would be examined more frequently if certain indicators of such are
encountered. Intangible assets with a determinable useful life will continue to
be amortized over that period. Recorded goodwill and intangible assets will be
affected when SFAS 142 is adopted effective January 1, 2002, however, the
Company has not completed its assessment of the impact.

      The Financial Accounting Standards Board is considering a number of
mortgage banking industry-related issues concerning the implementation of
Statement of Financial Accounting Standards No. 133, "Accounting for Derivative
Instruments and Hedging Activities." The ultimate conclusions reached concerning
these issues could result in material changes to the recorded carrying values of
the Company's derivative instruments, which would have a significant impact on
its reported earnings.

ITEM 7A QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

      The information required to be included in this Item 7A regarding
Quantitative and Qualitative Disclosures about Market Risk is included in
"Management's Discussion and Analysis of Financial Condition and Results of
Operations--Risk Management."

ITEM 8. FINANCIAL STATEMENTS

      INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

      The information required by this Item 8 is incorporated by reference to
the Company's Consolidated Financial Statements and Independent Auditors' Report
included in this Form 10-K.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
        FINANCIAL DISCLOSURE

      None.


                                       23
<PAGE>

                                    PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

      The Company intends to file with the Securities and Exchange Commission a
definitive proxy statement (the "Proxy Statement") pursuant to Regulation 14A,
which will involve the election of directors, within 120 days of the end of the
year covered by this Form 10-K. Information regarding directors of the Company
will appear under the caption "Election of Directors" in the Proxy Statement for
the Company's 2002 Annual Meeting of Stockholders, and is incorporated herein by
reference. Information regarding executive officers of the Company will appear
under the caption "Executive Officers" in the Proxy Statement and is
incorporated herein by reference.

ITEM 11. EXECUTIVE COMPENSATION

      Information regarding executive compensation will appear under the caption
"Executive Compensation" in the Proxy Statement and is incorporated herein by
reference.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

      Information to be included under the caption "Securities Ownership of
Certain Beneficial Owners and Management" in the Proxy Statement is incorporated
herein by reference.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

      Information to be included under the caption "Certain Relationships and
Related Transactions" in the Proxy Statement is incorporated herein by
reference.


                                       24
<PAGE>

                                     PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

(a)   Documents Filed with this Report.

      The following documents are filed as part of this Report on Form 10-K.

      1.    Financial Statements

      The information called for by this paragraph is set forth in the Financial
      Statements and Independent Auditors' Report beginning at page F-1 of this
      Form 10-K.

      2.    Financial Statement Schedules

      None.

      3.    Exhibits

      The information called for by this paragraph is contained in the Index to
      Exhibits of this Report on Form 10-K, which is incorporated herein by
      reference.

(b)   Reports on Form 8-K.

      During the quarter ended December 31, 2001, the Company did not file any
      Reports on Form 8-K with the Securities and Exchange Commission.


                                       25
<PAGE>

                                   SIGNATURES

      Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant, American Home Mortgage Holdings, Inc., a
corporation organized and existing under the laws of the State of Delaware, has
duly caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized, on the 29th day of March, 2002.


                                AMERICAN HOME MORTGAGE HOLDINGS, INC.


                                By: /s/ Michael Strauss
                                    --------------------------------------------
                                    Name:  Michael Strauss
                                    Title:  President & Chief Executive Officer

      Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed by the following persons on behalf of the Registrant and
in the capacities and on the dates indicated.


<TABLE>
<CAPTION>
Signature                                                    Title                              Date


<S>                                             <C>                                   <C>
/s/ Michael Strauss                             Chairman of the Board, President &
--------------------------------------------    Chief Executive Officer
Michael Strauss                                 (Principal Executive Officer)         March 29, 2002


/s/ Richard D. Silver                           Controller
--------------------------------------------    (Principal Financial Officer and
Richard D. Silver                               Principal Accounting Officer)         March 29, 2002


/s/ John A. Johnston
--------------------------------------------
John A.  Johnston                               Director                              March 29, 2002


/s/ Nicholas R. Marfino
--------------------------------------------
Nicholas R. Marfino                             Director                              March 29, 2002


/s/ Michael A. McManus Jr.
--------------------------------------------
Michael A. McManus Jr.                          Director                              March 29, 2002


/s/ C. Cathleen Raffaeli
--------------------------------------------
C. Cathleen Raffaeli                            Director                              March 29, 2002


/s/ Leonard Schoen, Jr.
--------------------------------------------
Leonard Schoen, Jr.                             Director                              March 29, 2002


/s/ Kenneth Slosser
--------------------------------------------
Kenneth Slosser                                 Director                              March 29, 2002
</TABLE>


                                       26
<PAGE>

                          INDEX TO FINANCIAL STATEMENTS

AMERICAN HOME MORTGAGE HOLDINGS, INC.

TABLE OF CONTENTS
--------------------------------------------------------------------------------

                                                                       PAGE

INDEPENDENT AUDITORS' REPORT                                            F-1

CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2001 AND 2000
   AND FOR EACH OF THE THREE YEARS IN THE PERIOD ENDED DECEMBER
   31, 2001:

   Consolidated Balance Sheets as of December 31, 2001 and 2000         F-2

   Consolidated Statements of Income for the Years Ended December
      31, 2001, 2000 and 1999                                           F-3

   Consolidated Statements of Stockholders' Equity for the Years
      Ended December 31, 2001, 1999 and 1998                            F-4

   Consolidated Statements of Cash Flows for the Years Ended
      December 31, 2001, 1999 and 1998                                  F-5

   Notes to Consolidated Financial Statements                         F-6 - F-26


<PAGE>


INDEPENDENT AUDITORS' REPORT

To the Board of Directors and Stockholders of
  American Home Mortgage Holdings, Inc.

We have audited the accompanying consolidated balance sheets of American Home
Mortgage Holdings, Inc. and its subsidiaries (the "Company") as of December 31,
2001 and 2000, and the related consolidated statements of income, changes in
stockholders' equity, and cash flows for each of the three years in the period
ended December 31, 2001. These consolidated financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these consolidated financial statements based on our audits.

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

In our opinion, such consolidated financial statements present fairly, in all
material respects, the financial position of American Home Mortgage Holdings,
Inc. and its subsidiaries at December 31, 2001 and 2000, and the results of
their operations and their cash flows for each of the three years in the period
ended December 31, 2001 in conformity with accounting principles generally
accepted in the United States of America.



March 20, 2001


                                      F-1
<PAGE>

AMERICAN HOME MORTGAGE HOLDINGS, INC.

CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 2001 AND 2000
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                              2001           2000
<S>                                                                       <C>            <C>
ASSETS

Cash and cash equivalents                                                 $ 26,392,590   $  6,005,392
Accounts receivable                                                         23,877,352      8,982,453
Mortgage loans held for sale- net                                          419,900,181    143,967,142
Mortgage loans held for investment - net                                     1,305,902        260,243
Real estate owned                                                              438,533        355,817
Mortgage servicing rights - net                                                 45,551         37,014
Premises and equipment - net                                                 9,072,133      7,152,454
Prepaid expenses and security deposits                                       3,218,545      1,835,279
Goodwill                                                                    16,874,185     14,936,582
                                                                          ------------   ------------

TOTAL ASSETS                                                              $501,124,972   $183,532,376
                                                                          ============   ============

LIABILITIES AND STOCKHOLDERS' EQUITY

LIABILITIES:
  Warehouse lines of credit                                               $351,453,879   $130,483,671
  Drafts payable                                                            35,359,821      8,349,482
  Accrued expenses and other liabilities                                    15,108,385      9,065,255
  Income taxes payable                                                      12,951,628      2,358,254
  Deferred income taxes                                                      4,042,787      2,110,150
                                                                          ------------   ------------
  Notes payable                                                              3,014,314      3,972,281
                                                                          ------------   ------------

           Total liabilities                                               421,930,814    156,339,093
                                                                          ------------   ------------

COMMITMENTS AND CONTINGENCIES (Note 12)                                             --             --

MINORITY INTEREST                                                              577,392        581,418

STOCKHOLDERS' EQUITY:
  Preferred stock, $1.00 per share, 1,000,000 shares authorized, none
    issued and outstanding                                                          --             --
  Common stock, $.01 per share par value, 19,000,000 shares authorized,
    11,991,200 and 8,985,584 shares issued and outstanding in 2001 and
    2000, respectively                                                         119,912         89,855
  Additional paid-in capital                                                47,952,517     20,462,791
  Retained earnings                                                         30,544,337      6,059,219
                                                                          ------------   ------------

           Total stockholders' equity                                       78,616,766     26,611,865
                                                                          ------------   ------------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                $501,124,972   $183,532,376
                                                                          ============   ============
</TABLE>

See notes to consolidated financial statements.


                                      F-2
<PAGE>

AMERICAN HOME MORTGAGE HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF INCOME
YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                            2001          2000          1999
<S>                                                                    <C>            <C>           <C>
REVENUES:
  Gain on sales of mortgage loans                                      $118,553,988   $52,730,668   $21,957,076
  Interest income - net                                                   9,098,292     3,271,064     1,703,498
  Other                                                                     400,685     2,278,321     1,201,436
                                                                       ------------   -----------   -----------
           Total revenues                                               128,052,965    58,280,053    24,862,010
                                                                       ------------   -----------   -----------
EXPENSES:
  Salaries, commissions and benefits - net                               55,778,233    27,893,827    11,611,275
  Occupancy and equipment                                                 8,249,806     5,583,648     2,428,870
  Marketing and promotion                                                 6,312,777     4,058,105     1,774,169
  Data processing and communications                                      4,441,850     2,825,895     1,132,970
  Provision for loss                                                        352,463       127,000        27,967
  Other                                                                  12,331,139     7,625,057     2,549,636
                                                                       ------------   -----------   -----------
           Total expenses                                                87,466,268    48,113,532    19,524,887
                                                                       ------------   -----------   -----------
INCOME BEFORE INCOME TAXES AND MINORITY INTEREST
  IN INCOME OF CONSOLIDATED JOINT VENTURES                               40,586,697    10,166,521     5,337,123
INCOME TAXES                                                             16,252,852     4,266,727     1,441,125
                                                                       ------------   -----------   -----------
INCOME BEFORE MINORITY INTEREST IN INCOME OF
  CONSOLIDATED JOINT VENTURES                                            24,333,845     5,899,794     3,895,998
MINORITY INTEREST IN INCOME OF CONSOLIDATED
  JOINT VENTURES                                                          1,027,912       508,344        35,112
                                                                       ------------   -----------   -----------
NET INCOME BEFORE CUMULATIVE EFFECT OF
  CHANGE IN ACCOUNTING PRINCIPLE                                         23,305,933     5,391,450     3,860,886
CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING
  PRINCIPLE, NET OF INCOME TAXES                                          2,142,552            --            --
                                                                       ------------   -----------   -----------
NET INCOME                                                             $ 25,448,485   $ 5,391,450   $ 3,860,886
                                                                       ============   ===========   ===========
Per share data:
  Basic before cumulative effect of change in accounting principle     $       2.25   $      0.63   $      0.69
  Basic after cumulative effect of change in accounting principle      $       2.45   $      0.63   $      0.69


  Diluted before cumulative effect of change in accounting principle   $       2.14   $      0.63   $      0.69
  Diluted after cumulative effect of change in accounting principle    $       2.34   $      0.63   $      0.69

Weighted average number of shares - basic                                10,373,858     8,579,859     5,595,251
Weighted average number of shares - diluted                              10,883,403     8,579,859     5,602,587
</TABLE>

See notes to consolidated financial statements.

                                      F-3
<PAGE>

AMERICAN HOME MORTGAGE HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                           ADDITIONAL                       TOTAL
                                                COMMON      PAID-IN       RETAINED      STOCKHOLDERS'
                                                STOCK       CAPITAL       EARNINGS         EQUITY
<S>                                            <C>        <C>           <C>             <C>
BALANCE, DECEMBER 31, 1998                     $ 50,000   $   267,600   $  5,606,507    $   5,924,107
  Net income                                         --            --      3,860,886        3,860,886
  Distributions                                      --            --       (994,013)        (994,013)
  S corporation distribution note                    --            --     (7,805,611)      (7,805,611)
  Issuance of common stock,
     initial public offering - net               25,000    12,139,180             --       12,164,180
  Issuance of common stock,
    purchase of Marina Mortgage Co., Inc.         7,534     4,842,610             --        4,850,144
                                               --------   -----------   ------------    -------------

BALANCE, DECEMBER 31, 1999                       82,534    17,249,390        667,769       17,999,693
  Net income                                         --            --      5,391,450        5,391,450
  Issuance of common stock,
    purchase of First Home Mortgage Corp.         4,898     2,206,462             --        2,211,360
  Issuance of common stock,
    purchase of Marina Mortgage Co., Inc.         2,010       968,019             --          970,029
  Issuance of common stock,
    Omnibus Stock Plan                              333            --             --              333
  Issuance of common stock,
    purchase of Coastline                            80        38,920             --           39,000
                                               --------   -----------   ------------    -------------

BALANCE, DECEMBER 31, 2000                       89,855    20,462,791      6,059,219       26,611,865
  Net income                                         --            --     25,448,485       25,448,485
  Issuance of common stock,
    purchase of Marina Mortgage Co., Inc.         1,580       968,449             --          970,029
  Issuance of common stock,
    Omnibus Stock Plan - net of income taxes      2,705     3,309,726             --        3,312,431
  Issuance of common stock, warrants              1,750     1,363,250             --        1,365,000
  Issuance of common stock, secondary
    stock offering                               24,022    21,848,301             --       21,872,323
  Dividends paid                                     --            --       (963,367)        (963,367)
                                               --------   -----------   ------------    -------------
Balance, December 31, 2001                     $119,912   $47,952,517   $ 30,544,337    $  78,616,766
                                               ========   ===========   ============    =============
</TABLE>

See notes to consolidated financial statements.


                                      F-4
<PAGE>

AMERICAN HOME MORTGAGE HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                  2001               2000               1999
<S>                                                    <C>                <C>                <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income                                           $    25,448,485    $     5,391,450    $     3,860,886
  Adjustments to reconcile net income to net cash
    (used in) provided by operating activities:
  Depreciation and amortization                              2,568,590          1,562,334            378,282
  Provision for loss                                           352,463            127,000             27,967
  Origination of mortgage loans held for sale           (7,328,170,495)    (2,769,766,933)    (1,283,174,874)
  Proceeds on sale of mortgage loans                     7,052,237,440      2,694,153,009      1,265,275,964
  Increase in income taxes payable                          10,593,374          1,511,791            846,463
  Deferred income taxes                                      1,932,637          1,578,125            532,025
  Other                                                         26,378             (6,667)            (1,000)
  (Increase) decrease in operating assets:
    Accounts receivable                                    (14,894,899)          (893,109)        (4,007,135)
    Prepaid expenses and security deposits                  (1,383,266)         1,167,511         (1,194,400)
  Increase (decrease) in operating liabilities:
    Minority interest                                           (4,026)           558,046            (77,388)
    Accrued expenses and other liabilities                   6,043,130         (5,345,612)           (89,800)
                                                       ---------------    ---------------    ---------------

           Net cash used in operating activities          (245,250,189)       (69,963,055)       (17,623,010)
                                                       ---------------    ---------------    ---------------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchase of real estate owned - net                          (82,716)          (242,952)                --
  Net (purchases) sales of loans held for investment        (1,135,498)           728,342            (64,634)
  Acquisition of businesses                                 (2,771,427)        (2,072,376)          (329,844)
  Purchases of premises and equipment - net                 (3,647,966)        (2,057,712)        (1,352,171)
                                                       ---------------    ---------------    ---------------

           Net cash used in investing activities            (7,637,607)        (3,644,698)        (1,746,649)
                                                       ---------------    ---------------    ---------------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Increase in warehouse lines of credit                    220,970,208         71,030,144         11,266,343
  Increase in drafts payable                                27,010,339          4,933,072          3,313,686
  Proceeds from issuance of capital stock                   27,215,781                 --         12,164,180
  (Decrease) increase in notes payable                        (957,967)           235,912          1,947,578
  Dividends paid                                              (963,367)                --                 --
  S Corporation distributions                                       --                 --         (8,799,624)
                                                       ---------------    ---------------    ---------------

           Net cash provided by financing activities       273,274,994         76,199,128         19,892,163
                                                       ---------------    ---------------    ---------------

NET INCREASE IN CASH                                        20,387,198          2,591,375            522,504

CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR                 6,005,392          3,414,017          2,891,513
                                                       ---------------    ---------------    ---------------

CASH AND CASH EQUIVALENTS, END OF YEAR                 $    26,392,590    $     6,005,392    $     3,414,017
                                                       ===============    ===============    ===============

SUPPLEMENTAL DISCLOSURE - Cash paid for:

  Interest                                             $     6,878,771    $     6,533,695    $     2,121,589
  Taxes                                                      3,417,444          1,176,811            536,607
</TABLE>

See notes to consolidated financial statements.


                                      F-5
<PAGE>

AMERICAN HOME MORTGAGE HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999
--------------------------------------------------------------------------------

1.    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

      OWNERSHIP - American Home Mortgage Holdings, Inc. is a holding company
      whose principal assets are its investments in its wholly-owned
      subsidiaries, American Home Mortgage Corp. ("American Home Mortgage") and
      Marina Mortgage Company, Inc. ("Marina") (collectively referred to herein
      as "the Company"). On December 31, 2001, Marina was merged into American
      Home Mortgage. On June 15, 1999, American Home Mortgage Holdings, Inc. was
      formed. On September 29, 1999, Michael Strauss exchanged his shares of
      American Home Mortgage for 4,999,900 shares of common stock of American
      Home Mortgage Holdings, Inc. American Home Mortgage is a residential
      mortgage lender headquartered in New York with offices in metropolitan New
      York and five other eastern states. The Company operates solely in the
      residential lending operating segment.

      On October 6, 1999, the Company completed its initial public offering of
      2.5 million shares of common stock, $0.01 par value (the "Common Stock"),
      at a price of $6.00 per share. Certain shares of Common Stock issued in
      connection with the initial public offering and the acquisitions of Marina
      and First Home Mortgage Corp. ("First Home") are subject to restrictions
      as to disposition into the market, ranging from 1 to 4 years.

      CONSOLIDATION - Because the Company exercises significant influence on the
      operations of the joint ventures (see Note 14), their balances and
      operations have been fully consolidated in the accompanying consolidated
      financial statements and all intercompany accounts and transactions have
      been eliminated.

      BASIS OF PRESENTATION - The preparation of financial statements in
      conformity with accounting principles generally accepted in the United
      States of America requires management to make estimates and assumptions
      that affect the reported amounts of assets and liabilities and disclosure
      of contingent liabilities at the date of the financial statements and the
      reported amounts of revenues and expenses during the reporting period. The
      Company's estimates and assumptions primarily arise from risks and
      uncertainties associated with interest rate volatility, credit exposure
      and regulatory changes. Although management is not currently aware of any
      factors that would significantly change its estimates and assumptions in
      the near term, future changes in market trends and conditions may occur
      which could cause actual results to differ materially.

      CASH AND CASH EQUIVALENTS - Cash and cash equivalents include cash on
      hand, amounts due from banks and overnight deposits.

      MORTGAGE LOANS HELD FOR SALE - Mortgage loans held for sale represent
      mortgage loans originated and held pending sale to interim and permanent
      investors. The mortgages are carried at the lower of cost or market as
      determined by outstanding commitments from investors or current investor
      yield requirements calculated on the aggregate loan basis. The Company
      separately evaluates for impairment the estimated fair value of its
      commitments to lend. If impairment exists, the Company records a charge to
      earnings in the current period. The Company generally sells whole loans
      without servicing retained. Gains or losses on such sales are recognized
      at the time legal title transfers to the investor based upon the
      difference between the sales proceeds from the final investor and the
      basis of the loan sold, adjusted for net deferred loan fees and certain
      direct costs and selling costs. The Company defers net loan origination


                                      F-6
<PAGE>

      costs as a component of the loan balance on the balance sheet. Such costs
      are not amortized and are recognized into income as a component of the
      gain or loss upon sale.

      MORTGAGE LOANS HELD FOR INVESTMENT - Periodically, the Company originates
      or repurchases loans which are unable to be sold through normal investor
      channels. When loans are transferred or repurchased into this category,
      they are recorded at the lower of cost or market and are subsequently
      carried at amortized cost, less allowance for loan losses. The Company has
      the intent and ability to hold these loans for the foreseeable future. The
      Company defers net loan origination costs as a component of the loan
      balance and amortizes the deferred costs into interest income over the
      life of the loan using the effective interest method. The loans are
      evaluated for impairment based on the collateral value of the property
      securing the loan.

      PROVISION FOR FORECLOSURE AND LOAN LOSSES - A provision for loss is
      provided based on management's periodic evaluation of its loss exposures
      for loans held for investment. The provision for loans held for investment
      is based on certain default and foreclosure. Due to the relatively small
      number of loans held for investment, analysis is performed on a specific
      loan basis. The pertinent factors in determining the exposures include the
      underlying quality of the loans, actual loss experience, current economic
      conditions, detailed analysis of individual loans for which full
      collectibility may not be assured, and determination of the existence and
      realizable value of the collateral and any guarantees securing such loans.

      MORTGAGE SERVICING RIGHTS - The Company generally sells whole loans
      without servicing retained. Mortgage servicing rights represent servicing
      retained on loans sold to one of the Company's permanent investors who
      requires the Company to continue to service the loans as a condition of
      sale. The Company does not service loans in-house, thus they have a
      sub-servicing contract with a third party. The Company capitalizes the
      mortgage servicing rights by allocating the original cost basis in the
      loans based upon the relative fair value of the underlying mortgage loans
      and mortgage servicing rights at the time the servicing rights are
      contractually separated from the underlying loans. The Company records
      amortization expense over the period of the projected net servicing
      income. Impairment is recorded as a direct reduction of the asset balance
      and a charge to amortization expense in the period it is determined.

      PREMISES AND EQUIPMENT - Premises and equipment is stated at cost less
      accumulated depreciation and amortization. Depreciation is provided in
      amounts sufficient to relate the cost of depreciable assets to operations
      over their estimated service lives using the straight-line method.
      Leasehold improvements are amortized over the lesser of the life of the
      lease or service lives of the improvements using the straight-line method.
      Depreciation and amortization are recorded within occupancy and equipment
      expense within the consolidated financial statements.

      GOODWILL - Goodwill represents the excess purchase price over the fair
      value of net assets stemming from business acquisitions and is being
      amortized over its initial estimated life, generally 20 years. The Company
      evaluates the recoverability of goodwill for each applicable business
      acquisition on at least a quarterly basis. The recoverability of goodwill
      is determined by comparing the carrying value of the goodwill to the
      estimated operating income of the related entity on an undiscounted cash
      flow basis. Should the carrying value of the goodwill exceed the estimated
      operating income for the expected period of benefit, impairment for the
      excess would be recorded at that time.

      DRAFTS PAYABLE - Drafts payable represent outstanding mortgage loan
      disbursements that the Company has provided to its customers for the
      purchase of a home. The amounts outstanding do not bear interest and are
      transferred into the warehouse facility when they are presented to a bank.


                                      F-7
<PAGE>

      DERIVATIVE FINANCIAL INSTRUMENTS - The Company has developed risk
      management programs and processes designed to manage market risk
      associated with normal business activities.

      Risk Management of the Mortgage Pipeline. The Company's mortgage committed
      pipeline includes interest rate lock commitments ("IRLCs") that have been
      extended to borrowers who have applied for loan funding and meet certain
      defined credit and underwriting criteria. Effective with the adoption of
      Statement of Financial Accounting Standards No. 133, "Accounting for
      Derivative Instruments and Hedging Activities" ("SFAS 133"), as amended,
      the Company classifies and accounts for the IRLCs as free-standing
      derivatives. Accordingly, IRLCs are recorded at fair value with changes in
      fair value recorded to current earnings. The Company uses other derivative
      instruments to economically hedge the IRLCs, which are also classified and
      accounted for as free-standing derivatives. Gains (losses) on IRLCs
      represent the change in value from rate-lock inception to funding date.

      Risk Management of Mortgage Loans Held for Sale. The Company's risk
      management objective for its mortgage loans held for sale is to protect
      earnings from an unexpected charge due to a decline in value. The
      Company's strategy is to engage in a risk management program involving the
      use of mortgage forward delivery contracts designated as fair value
      hedging instruments to hedge 100% of its agency-eligible conforming and
      non-conforming loans At the inception of the hedge, the Company formally
      documents the relationship between the forward delivery contracts and the
      mortgage inventory as well as its objective and strategy for undertaking
      the hedge transactions. The notional amount of the forward delivery
      contracts, along with the underlying rate and terms of the contracts, are
      equivalent to the unpaid principal amount of the mortgage inventory being
      hedged, hence the forward delivery contracts effectively fix the forward
      sales price and thereby substantially eliminate interest rate and price
      risk to the Company.

      Termination of Hedging Relationships. The Company employs a number of risk
      management monitoring procedures to ensure that the designated hedging
      relationships are demonstrating, and are expected to continue to
      demonstrate, a high level of effectiveness. Hedge accounting is
      discontinued on a prospective basis if it is determined that the hedging
      relationship is no longer effective or expected to be effective in
      offsetting changes in fair value of the hedged item. Additionally, the
      Company may elect to de-designate a hedge relationship during an interim
      period and re-designate upon the rebalancing of a hedge profile and the
      corresponding hedge relationship. When hedge accounting is discontinued,
      the Company continues to carry the derivative instruments at fair value
      with changes in their value recorded in earnings.

      During the year ended 2001, the ineffective portion of fair value hedges
      of the Company's mortgage loans held for sale was de minimus. All of the
      Company's derivative financial instruments are designated as either fair
      value hedges of recognized assets, or they are free-standing derivatives
      which economically hedge the fair value of IRLCs. IRLCs and derivative
      assets or liabilities arising from the Company's hedging activities are
      included in either accounts receivable or accrued expenses and other
      liabilities. Changes in the fair values of these derivatives and the
      associated basis adjustments for mortgage loans held for sale are recorded
      within gain on sales of mortgage loans. The Company also evaluates its
      contractual arrangements, assets and liabilities for the existence of
      embedded derivatives.

      LOAN ORIGINATION FEES - Loan fees, discount points and certain direct
      origination costs are recorded as an adjustment of the cost of the loan
      and are included in gain on sales of loans when the loan is sold.
      Accordingly, salaries, compensation and benefits have been reduced by
      approximately $44,235,000, $16,732,000 and $8,736,000 due to direct loan
      origination costs, including commission costs, incurred for the years
      ended December 31, 2001, 2000 and 1999, respectively.


                                      F-8
<PAGE>

      INTEREST RECOGNITION - Interest income is accrued as earned. Loans are
      placed on a nonaccrual status when any portion of the principal or
      interest is 90 days past due or earlier when concern exists as to the
      ultimate collectibility of principal or interest. Loans return to accrual
      status when principal and interest become current and are anticipated to
      be fully collectible. Interest expense is recorded on outstanding lines of
      credit at a rate based on a spread to the LIBOR and the Fed Funds rate.
      Interest expense has been netted with interest income within the
      consolidated statements of income in the amounts of $36,396,081,
      $7,469,603, and $2,214,876 for the years ended December 31, 2001, 2000 and
      1999, respectively.

      MARKETING AND PROMOTION - The Company charges the costs of marketing,
      promotion and advertising to expense in the period incurred.

      INCOME TAXES - Through September 28, 1999, the Company elected for both
      Federal and State income tax purposes to be treated as an S corporation
      (effective April 1, 1988). As an S corporation, the net earnings of the
      Company were taxed directly to the stockholders rather than the Company.

      On September 29, 1999, the Company became a C corporation. All income
      earned from that date is subject to corporate tax at statutory rates for
      both Federal and State income tax purposes. The Company accounts for
      income taxes from that date using an asset and liability approach for
      accounting and reporting of income taxes.

      STOCK OPTION PLANS - The Company has elected to account for their stock
      option plans using Accounting Principles Board ("APB") Opinion No. 25,
      Accounting for Stock Issued to Employees, and to provide pro forma net
      income and pro forma earnings per share disclosures for employee stock
      option grants as if the fair-value based method, as required in Statement
      of Financial Accounting Standards No. 123, Accounting for Stock-Based
      Compensation, had been applied.

      EARNINGS PER SHARE - Basic EPS excludes dilution and is computed by
      dividing net income available to common stockholders by the
      weighted-average number of common shares outstanding for the period.
      Diluted EPS reflects the potential dilution that could occur if securities
      or other contracts to issue common stock were exercised or converted into
      common stock or resulted in the issuance of common stock that then shared
      in the earnings of the Company.

      CASH FLOWS - Cash and cash equivalents are demand deposits and short-term
      investments with a maturity of 90 days or less. The supplemental
      information for the cash flow statement for the Company's noncash
      investing and financing activities are as follows:

      On October 15, 2000 and January 31, 2001, the Company issued 201,043 and
      157,985 shares of common stock, respectively, as additional consideration
      for the purchase of Marina.

      On August 31, 2000, the Company issued 8,000 shares of common stock for
      the purchase of Coastline.

      On June 30, 2000, the Company issued 489,804 shares of common stock in
      exchange for 100% of the outstanding shares of First Home.

      On December 30, 1999, the Company issued 753,413 shares of common stock in
      exchange for 100% of the outstanding shares of Marina.


                                      F-9
<PAGE>

      The Company purchased all of the stock of First Home and Marina. during
      2000 and 1999, respectively. In conjunction with the acquisitions,
      liabilities were assumed as follows:

                                                       2000              1999

Fair value of assets acquired                      $18,518,210       $20,346,988
  Stock issued                                       2,211,360         4,850,145
  Cash paid                                          3,075,000                --
                                                   -----------       -----------
    Liabilities assumed                            $13,231,850       $15,496,843
                                                   ===========       ===========

2.    ACCOUNTS RECEIVABLE

      Accounts receivable consist of the following as of December 31:

                                                       2001              2000

Investor receivables                               $18,462,181        $6,553,085
Mortgage payments receivable                         3,973,252         1,686,760
Sundry receivables                                   1,058,394           479,358
Due from related parties                               368,950           238,250
Accrued interest                                        14,575            25,000
                                                   -----------        ----------
Accounts receivable                                $23,877,352        $8,982,453
                                                   ===========        ==========

3.    MORTGAGE LOANS HELD FOR SALE - NET

      Mortgage loans held for sale consist of the following as of December 31:

                                                      2001               2000

Mortgage loans held for sale                      $412,564,706      $139,509,395
Deferred origination costs - net                     7,335,475         4,457,747
                                                  ------------      ------------
Mortgage loans held for sale - net                $419,900,181      $143,967,142
                                                  ============      ============

4.    MORTGAGE LOANS HELD FOR INVESTMENT - NET

      Mortgage loans held for investment consist of the following as of December
      31:

                                                         2001           2000

Mortgage loans held for investment                   $ 1,546,152      $ 410,654
Less allowance for loss                                 (240,250)      (150,411)
                                                     -----------      ---------
Mortgage loans held for investment - net             $ 1,305,902      $ 260,243
                                                     ===========      =========


                                      F-10
<PAGE>

      The activity in the allowance for loss was as follows:

                                           2001           2000           1999

Balance, beginning of year              $ 150,411      $ 121,911      $ 121,911

Provision                                 352,463        127,000         27,967
Charge-offs                              (262,624)       (98,500)       (27,967)
                                        ---------      ---------      ---------

Balance, end of year                    $ 240,250      $ 150,411      $ 121,911
                                        =========      =========      =========

5.    PREMISES AND EQUIPMENT - NET

      Premises and equipment consist of the following as of December 31:

                                                       2001            2000

Office equipment                                   $  8,386,371    $  5,509,815
Furniture and fixtures                                3,563,640       2,942,344
Building                                              1,993,369       1,950,500
Leasehold improvements                                  350,432         243,187
                                                   ------------    ------------
Subtotal                                             14,293,812      10,645,846

Less accumulated depreciation and amortization       (5,221,679)     (3,493,392)
                                                   ------------    ------------
Premises and equipment - net                       $  9,072,133    $  7,152,454
                                                   ============    ============

      Depreciation and amortization expense for the years ended December 31,
      2001, 2000 and 1999 was $1,728,287, $1,065,364 and $371,865, respectively.

6.    WAREHOUSE FACILITIES

      American Home Mortgage has committed facilities with Morgan Stanley Dean
      Witter Mortgage Capital, Inc. ("Morgan Stanley") and Residential Funding
      Corporation ("RFC") and a pre-purchase facility with UBS Paine Webber
      ("Paine Webber"). The Morgan Stanley facility is for $75,000,000, the RFC
      facility is for $100,000,000 and the Paine Webber facility is for
      $310,000,000. The interest rate on outstanding balances fluctuates daily
      based on a spread to the LIBOR and interest is paid monthly.

      On December 30, 2001, a committed facility with First Union National Bank,
      as agent ("First Union"), was not renewed. First Union extended the line
      for an additional 30 days to allow the loans remaining to settle.

      The lines of credit are secured by mortgage loans and all other assets of
      American Home Mortgage and Marina. The lines contain various covenants
      pertaining to maintenance of net worth and working capital and include
      certain restrictions on dividends to shareholders. At December 31, 2001,
      American Home Mortgage and Marina were in compliance with the loan
      covenants.


                                      F-11
<PAGE>

      Warehouse lines of credit consist of the following as of December 31:

<TABLE>
<CAPTION>
                                                 2001                            2000
                                                       Weighted                         Weighted
                                     Outstanding       Average        Outstanding       Average
                                       Balance           Rate           Balance           Rate
<S>                                  <C>                <C>           <C>                <C>
Paine Webber                         $309,600,955       3.93%         $  5,779,961       7.36%

First Union                            13,959,508       3.32           106,218,218       7.36

Morgan Stanley                         27,893,416       2.67            18,485,492       7.36

RFC                                            --       3.33                    --       0.00
                                     ------------                     ------------
Total warehouse lines of credit      $351,453,879       3.81%         $130,483,671       7.00%
                                     ============                     ============
</TABLE>

7.    NOTES PAYABLE

      Notes payable represent a mortgage note on an office building at a rate of
      7.5% and the discounted value of note obligations incurred for acquiring
      Marina and First Home. The Company is obligated to pay Marina's prior
      shareholders $2.5 million over a five-year period expiring in 2004. The
      Company is obligated to pay First Home's shareholders $600,000 over a
      two-year period expiring in 2002. The payments for other notes have been
      discounted at an imputed interest rate of 10%.

      Notes payable consists of the following as of December 31:

                                                           2001             2000

Notes to Marina shareholders                         $1,570,809       $2,211,677
Note - office building                                1,229,304        1,284,400
Notes to First Home shareholders                        214,201          476,204
                                                     ----------       ----------
Notes payable                                        $3,014,314       $3,972,281
                                                     ==========       ==========

      Maturities of notes payable are as follows:

2002                                                                  $  752,796
2003                                                                     591,271
2004                                                                     649,279
2005                                                                      80,507
2006                                                                      86,757
Thereafter                                                               853,704
                                                                      ----------
                                                                      $3,014,314
                                                                      ==========


                                      F-12
<PAGE>

8.    OTHER REVENUES AND EXPENSES

      The significant components of other revenues and expense are as follows:

                                                2001          2000          1999
Other revenues:
  Volume incentives                      $   336,157    $2,028,997    $1,076,594
  Other                                       64,528       249,324       124,842
                                         -----------    ----------    ----------

  Other revenues                         $   400,685    $2,278,321    $1,201,436
                                         ===========    ==========    ==========

Other expenses:
  Legal and accounting                   $ 1,693,188    $1,465,605    $  335,762
  Office supplies and expenses             3,087,616     1,583,955       622,641
  Travel                                     997,930       538,752       314,907
  Other                                    6,552,405     4,036,745     1,276,326
                                         -----------    ----------    ----------

  Other expenses                         $12,331,139    $7,625,057    $2,549,636
                                         ===========    ==========    ==========

9.    INCOME TAXES

      As discussed in Note 1, the Company was an S corporation through September
      28, 1999 pursuant to the Internal Revenue Code of 1986, as amended, and as
      such did not incur any federal income tax expense. The Company was liable
      for New York State and New York City income taxes and that provision is
      included below under current state provision.

      A reconciliation of the statutory income tax provision and income tax rate
      to the effective income tax provision and rate, as applied to income for
      the years ended December 31, is as follows:

<TABLE>
<CAPTION>
                                                2001                    2000                    1999
                                                         %                       %                       %
<S>                                    <C>             <C>      <C>            <C>      <C>            <C>
Tax at statutory rate                  $ 14,205,344    35.0%    $ 3,455,317    34.0%    $ 1,814,622    34.0%
Income taxed directly to shareholder             --                      --              (1,323,850)  (24.8)
Minority income adjustment                 (389,923)   (0.1)       (172,836)    1.7         (11,938)   (0.2)
Change in tax status                             --                      --                 625,000    11.7
State and local taxes                     2,014,729     5.0         754,526     7.4         107,116     2.0
S corporaton state and local tax                 --                      --                 218,275     4.1
Goodwill                                    289,076     0.7         155,380     1.5              --
Other                                       133,626     0.3          74,340     0.7          11,900     0.2
                                       ------------             -----------             -----------

Income taxes                           $ 16,252,852    40.0%    $ 4,266,727    41.2%    $ 1,441,125    27.0%
                                       ============             ===========             ===========
</TABLE>


                                      F-13
<PAGE>

      The income tax provision for each of the years ended December 31 is
      comprised of the following components:

                                           2001            2000            1999
Current tax provision
  Federal                          $ 12,676,275      $2,234,671     $   466,243
  State                               3,191,470         453,931         380,220
                                   ------------      ----------     -----------
                                     15,867,745       2,688,602         846,463
Deferred tax provision
  Federal                               476,994       1,277,530         (39,440)
  State                                 (91,887)        300,595           9,102
                                   ------------      ----------     -----------
                                        385,107       1,578,125         (30,338)
Change in tax status:
  Federal                                    --              --         520,833
  State                                      --              --         104,167
                                   ------------      ----------     -----------
Income taxes                       $ 16,252,852      $4,266,727     $ 1,441,125
                                   ============      ==========     ===========

      The major sources of temporary differences and their deferred tax effect
      at December 31 are as follows:

                                                               2001         2000
Deferred tax liabilities:
  Capitalized cost of mortgage servicing rights          $   24,268   $   16,207
  Loan origination costs                                  3,617,672    1,874,940
  Cumulative effect of change in accounting principle     1,697,016           --
  Depreciation                                              304,448      155,109
  Mark to market adjustment                                      --       53,909
  Other                                                          --        9,985
                                                         ----------   ----------
Total deferred tax liabilities                            5,643,404    2,110,150

Deferred tax assets:
  Allowance for bad debts                                   114,958           --
  Mark to market adjustment                               1,476,003           --
  Other                                                       9,656           --
                                                         ----------   ----------
Net deferred tax liability                               $4,042,787   $2,110,150
                                                         ==========   ==========


                                      F-14
<PAGE>

10.   EARNINGS PER SHARE

      The following is a reconciliation of the denominators used in the
      computations of basic and diluted EPS.

<TABLE>
<CAPTION>
                                                             2001           2000         1999
<S>                                                     <C>             <C>            <C>
Numerator:
  Numerator for basic earnings per share - Net income
    Net income before cumulative effect of change in
      accounting principle                              $  23,305,933   $  5,391,450   $3,860,886
                                                        =============   ============   ==========

    Net income                                          $  25,448,485   $  5,391,450   $3,860,886
                                                        =============   ============   ==========
Denominator:
  Denominator for basic earnings per share
  Weighted average number of common shares
    outstanding during the period                          10,373,858      8,579,859    5,595,251

Net effect of dilutive stock options                          509,545             --        7,336
                                                        -------------   ------------   ----------

Denominator for diluted earnings per share                 10,883,403      8,579,859    5,602,587
                                                        =============   ============   ==========

Net income per share:
  Basic before cumulative effect of change in
    accounting principle                                $        2.25   $       0.63   $     0.69
                                                        =============   ============   ==========
  Basic after cumulative effect of change in
    accounting principle                                $        2.45   $       0.63   $     0.69
                                                        =============   ============   ==========

  Diluted before cumulative effect of change in
    accounting principle                                $        2.14   $       0.63   $     0.69
                                                        =============   ============   ==========
  Diluted before cumulative effect of change in
    accounting principle                                $        2.34   $       0.63   $     0.69
                                                        =============   ============   ==========
</TABLE>

11.   STOCK OPTIONS

      In 1999, the Company established the 1999 Omnibus Stock Option Plan (the
      "Plan"). The Plan provides for the granting of options to employees as
      well as non-employee directors of the Company to purchase up to 1,500,000
      shares of common stock at the fair market value at the date of grant.
      Substantially all of the options issued vest on the two-year anniversary
      from the grant date and expire ten years from the grant date.


                                      F-15
<PAGE>

      The following table summarizes certain information regarding the Plan at
      December 31, 2001:

<TABLE>
<CAPTION>
                                                                           WEIGHTED
                                                                           AVERAGE
                                              NUMBER OF   EXERCISE PRICE   EXERCISE
                                               SHARES       PER SHARE        RATE
<S>                                           <C>         <C>              <C>
Balance at December 31, 1998                        --                     $     --

Options granted                                650,000    $         6.00       6.00
Options cancelled                               10,000    $         6.00       6.00
                                             ---------                     --------
Balance at December 31, 1999                   640,000                         6.00


Options granted                                318,765    $4.75 - $ 6.44       5.71
Options cancelled                             (208,894)   $4.75 - $ 6.44       5.97
                                             ---------                     --------

Balance at December 31, 2000                   749,871                         5.87

Options granted                                470,028    $4.75 - $19.61       7.89
Options exercised                             (253,800)   $         6.00       6.00
Options cancelled                               (3,951)   $5.13 - $ 5.50       5.31
                                             ---------                     --------

Balance at December 31, 2001                   962,148    $4.75 - $19.61   $   6.84
                                             =========                     ========

Options exercisable                            353,701    $6.00 - $ 6.44   $   6.16
                                             =========                     ========
</TABLE>

      The following table summarizes stock options outstanding at December 31,
      2001:

<TABLE>
<CAPTION>
                                                                                                 WEIGHTED AVG.
                       NUMBER OF         OUTSTANDING         NUMBER OF           EXERCISABLE       REMAINING
    RANGE OF            OPTIONS       WEIGHTED AVERAGE        OPTIONS         WEIGHTED AVERAGE  CONTRACTUAL LIVE
 EXERCISE PRICE       OUTSTANDING      EXERCISE PRICE       EXERCISABLE        EXERCISE PRICE       (YEARS)

<C>                     <C>                <C>                 <C>                  <C>               <C>
$ 4.75 - $ 5.50         299,404            $ 5.37                   --              $ 5.37            9
  6.00 -   6.44         399,701              9.54              353,701                9.54            8
  7.13 -   8.88          40,000              7.80                   --                7.80            9
 10.25 -  12.25         106,000             11.42                   --               11.42            9
 14.20 -  19.61          37,043             16.33                   --               16.33            9
                        -------                                -------
                        882,148            $ 6.16              353,701              $ 6.16            8
                        =======                                =======
</TABLE>

      The Plan is a compensatory stock option plan. There was no intrinsic value
      of the options granted, as the exercise price was equal to the quoted
      market price at the grant date. No compensation cost has been recognized
      for the years ended December 31, 2001, 2000 and 1999.

      Had compensation cost for the Plan been determined based on the fair value
      at the grant dates for awards under the Plan, the Company's net income
      before cumulative effect of change in accounting principle would have been
      $19.1 million for 2001, $4.7 million for 2000 and $3.3 million for 1999.
      Earnings per share would have been $1.76 for 2001, $0.55 for 2000 and
      $0.59 for 1999 for basic and diluted.


                                      F-16
<PAGE>

                                             2001          2000          1999

Net income, as reported                  $25,448,485    $5,391,450    $3,860,886

Net Income, as adjusted                   21,254,240     4,662,226     2,886,808

Earnings per share, as adjusted          $      1.76    $     0.55    $     0.52

      The weighted-average fair value of options granted during 2001, 2000 and
      1999 was $8.65, $5.69 and $6.63, respectively. The fair value of the
      options granted is estimated using the Black-Scholes option-pricing model
      with the following weighted-average assumptions used for the grants:

                                                  2001        2000        1999

Dividend yield                                      1.0%         --          --
Expected volatility                                85.0%       57.0%       24.0%
Risk-free interest rate                             5.0%        5.0%        5.0%
Expected life                                    2 years     2 years     2 years

12.   COMMITMENTS AND CONTINGENCIES

      LOANS SOLD TO INVESTORS - Generally, the Company is not exposed to
      significant credit risk on its loans sold to investors. In the normal
      course of business, the Company is obligated to repurchase loans which are
      subsequently unable to be sold through normal investor channels.
      Management believes this is a rare occurrence and that the Company can
      usually sell the loans directly to a permanent investor.

      LOAN FUNDING AND DELIVERY COMMITMENTS - At December 31, 2001 and 2000, the
      Company had commitments to fund loans approximating $734 million and $633
      million, respectively. At December 31, 2001 and 2000, the Company had
      commitments to fund loans with agreed upon rates approximating $668
      million and $242 million, respectively. The Company hedges the interest
      rate risk of such commitments primarily with mandatory delivery
      commitments, which totaled $858 million at December 31, 2001. The
      remaining commitments to fund loans with agreed-upon rates are anticipated
      to be sold through "best-efforts" and investor programs. The Company does
      not anticipate any material losses from such sales.

      NET WORTH REQUIREMENTS - The Company's subsidiary is required to maintain
      certain specified levels of minimum net worth to maintain its approved
      status with Fannie Mae, FHLMC, HUD and other investors. At December 31,
      2001, the highest minimum net worth requirement applicable to the
      subsidiary was $1,000,000.

      OUTSTANDING LITIGATION - The Company is involved in litigation arising in
      the normal course of business. Although the amount of any ultimate
      liability arising from these matters cannot presently be determined, the
      Company does not anticipate that any such liability will have a material
      effect on the Company's consolidated financial position or results of
      operations.

      PENDING ACQUISITION - See Note 20.

13.   OPERATING LEASES

      Certain facilities and equipment are leased under short-term lease
      agreements expiring at various dates through December 31, 2009. All such
      leases are accounted for as operating leases. Total rental expense


                                      F-17
<PAGE>

      for premises and equipment, which is included in occupancy and equipment
      expense within the consolidated financial statements, amounted to
      $6,208,132, $3,466,025 and $1,866,723 for the years ended December 31,
      2001, 2000 and 1999, respectively.

      Obligations under noncancelable operating leases which have an initial
      term of more than a year are as follows:

                                                                         2002
      2002                                                           $ 4,576,750
      2003                                                             3,827,835
      2004                                                             3,141,630
      2005                                                             2,600,590
      2006                                                             2,372,480
      Thereafter                                                       3,745,981
                                                                     -----------
      Total                                                          $20,265,266
                                                                     ===========

14.   MINORITY INTEREST

      On April 23, 1998, the Company entered into a joint venture with a realtor
      in which the Company and the realtor each own a 50% interest. The Company
      entered into a second joint venture on March 31, 1999, with a realtor in
      which the Company and the realtor each own a 50% interest. The Company
      entered into a third joint venture on May 14, 2000, with a home
      builder/developer in which the Company and home builder/developer each own
      a 50% interest. The latest joint venture had no activity prior to 2001.
      The Company sold its interest in the second joint venture in June 2000 and
      took a one-time charge of $79,214. The Company purchases many of the loans
      originated by the joint ventures.

      The Company acquired a 50% interest in five joint ventures as a result of
      the acquisition of First Home. Three of the joint ventures are managed by
      independent parties, and the other two are managed by an employee of First
      Home. The employment agreement for this employee requires First Home to
      pay the employee all profit or loss associated with the two joint
      ventures. Minority interest in income was reduced in the following table
      by $334,735, which was offset against a receivable from this employee. The
      Company purchases all of the loans originated by the joint ventures.

      The activity in the Minority interest account is as follows:

Balance, December 31, 1998                                            $  23,372

Capital contribution by minority partner                                366,319
Minority interest in income                                             314,475
Sale of Calloway Mortgage                                                34,252
Distribution to minority partner                                       (157,000)
                                                                      ---------

Balance, December 31, 1999                                              581,418

Minority interest in income                                             693,177
Distribution to minority partners                                      (697,203)
                                                                      ---------

Balance, December 31, 2000                                            $ 577,392
                                                                      =========


                                      F-18
<PAGE>

15.   RELATED PARTY TRANSACTIONS

      The majority stockholder of the Company is a majority stockholder in
      another company that provides title services to the Company in the normal
      course of business. The total amounts due from this related party was
      $99,600 and $52,000 as of December 31, 2001 and 2000, respectively. On
      January 1, 2002, the stock of this company was contributed to American
      Home Mortgage. The estimated fair value of this contributed enterprise was
      de minimus.

16.   CONCENTRATIONS OF CREDIT RISK

      The Company has originated loans predominately in the northeastern United
      States, California, Illinois, New Mexico and Arizona. Loan concentrations
      are considered to exist when there are amounts loaned to a multiple number
      of borrowers with similar characteristics, which would cause their ability
      to meet contractual obligations to be similarly impacted by economic or
      other conditions. In management's opinion, at December 31, 2001 and
      December 31, 2000, there were no significant concentrations of credit risk
      within loans held for sale.

      The Company had originations of loans during the year ended December 31,
      2001, exceeding 5% of total originations as follows:

      Illinois                                                             23.5%
      California                                                           16.8
      New York                                                             15.0
      Maryland                                                              8.6
      Virginia                                                              5.4
      New Jersey                                                            5.4

17.   FAIR VALUE OF FINANCIAL INSTRUMENTS

      Fair value estimates are made as of a specific point in time based on
      estimates using present value or other valuation techniques. These
      techniques involve uncertainties and are significantly affected by the
      assumptions used and the judgments made regarding risk characteristics of
      various financial instruments, discount rates, estimates of future cash
      flows, future expected loss experience, and other factors.

      Changes in assumptions could significantly affect these estimates and the
      resulting fair values. Derived fair value estimates cannot be
      substantiated by comparison to independent markets and, in many cases,
      could not be realized in an immediate sale of the instrument. Also,
      because of differences in methodologies and assumptions used to estimate
      fair values, the Company's fair values should not be compared to those of
      other companies. All forward delivery commitments and option contracts to
      buy securities are to be contractually settled within six months of the
      balance sheet date.

      Fair value estimates are based on existing financial instruments without
      attempting to estimate the value of anticipated future business and the
      value of assets and liabilities that are not considered financial
      instruments. Accordingly, the aggregate fair value amounts presented do
      not represent the underlying value of the Company.

      The fair value of certain assets and liabilities approximate cost due to
      their short-term nature, terms of repayment or interest rate associated
      with the asset or liability. Such assets or liabilities include cash,
      accounts receivable, accrued expenses and other liabilities, and warehouse
      lines of credit.


                                      F-19
<PAGE>

      The following describes the methods and assumptions used by the Company in
      estimating fair values of other financial instruments:

      a.    Mortgage Loans Held for Sale - Fair value is estimated using the
            quoted market prices for securities backed by similar types of loans
            and current investor or dealer commitments to purchase loans.

      b.    Mortgage Loans Held for Investment - Fair value is estimated by
            using the quoted market prices for securities backed by similar
            types of loans and current investor or dealer commitments to
            purchase loans.

      c.    Commitments to Fund with Agreed Upon Rates - The fair value of
            commitments to fund with agreed upon rates is estimated using the
            fees and rates currently charged to enter into similar agreements,
            taking into account the remaining terms of the agreements and the
            present creditworthiness of the counterparties. For fixed rate loan
            commitments, fair value also considers the difference between
            current levels of interest rates and the committed rates. These
            commitment obligations are considered in conjunction with the
            Company's lower of cost or market valuation of its mortgage loans
            held for sale.

      d.    Commitments to Deliver Mortgages and Option Contracts to Buy
            Securities - The fair value of these instruments is estimated using
            current market prices for dealer or investor commitments relative to
            the Company's existing positions. These instruments contain an
            element of risk in the event that the counterparties may be unable
            to meet the terms of such agreements. In the event a counterparty to
            a delivery commitment was unable to fulfill its obligation, the
            Company would not incur any material loss by replacing the position
            at market rates in effect at December 31, 2001 and December 31,
            2000. The Company minimizes its risk exposure by limiting the
            counterparties to those major banks, investment bankers and private
            investors who meet established credit and capital guidelines.
            Management does not expect any counterparty to default on its
            obligations and, therefore, does not expect to incur any loss due to
            counterparty default. These commitments and option contracts are
            considered in conjunction with the Company's lower of cost or market
            valuation of its mortgage loans held for sale.


                                      F-20
<PAGE>

      The following tables set forth information about financial instruments and
      other selected assets, except for those noted above for which the carrying
      value approximates fair value.

                                                          DECEMBER 31, 2001
                                                      CARRYING      ESTIMATED
                                                       AMOUNT       FAIR VALUE
Assets:
  Mortgage loans held for sale                      $419,900,181   $421,425,372
  Mortgage loans held for investment                   1,305,902      1,468,844

Commitments and contingencies:
  Mortgage loans held for sale related positions:
    Commitments to fund mortgage loans at
      agreed-upon rates                             $  6,498,114   $  6,498,114
    Forward delivery commitments                         291,449        291,449
    Option contracts to buy securities (1)               161,750        161,750

                                                           DECEMBER 31, 2000
Assets:
  Mortgage loans held for sale                      $143,967,142   $ 144,803,562
  Mortgage loans held for invistment                     410,654              --

Commitments and contingencies:
  Mortgage loans held for sale related positions:
    Commitments to fund mortgage loans at
      agreed-upon rates                             $         --      7,453,609
    Forward delivery commitments                              --     (3,738,524)
    Option contracts to buy securities (1)                56,250        167,150

      (1)   The carrying value and estimated fair value of option contracts are
            included as a component of loans held for sale (see Note 3).

18.   NEWLY ISSUED ACCOUNTING STANDARDS

      On January 1, 2001, the Company adopted Financial Accounting Standards
      Board Statements of SFAS 133 which requires the recognition of all
      derivative financial instruments at fair value and reported as either
      assets or liabilities in the balance sheet. The accounting for gains and
      losses associated with changes in the fair value of derivatives are
      reported in current earnings, net of tax, depending on whether they
      qualify for hedge accounting and whether the hedge is highly effective in
      achieving offsetting changes in the fair value or cash flows of the asset
      or liability hedged. Under the provisions of SFAS 133, the method used for
      assessing the effectiveness of a hedging derivative, as well as the
      measurement approach for determining the ineffective aspects of the hedge,
      must have been established at the inception of the hedge. Those methods
      must also be consistent with the entity's approach to managing risk.
      Although the Company continues to hedge its exposures to interest rate
      changes under the same risk management approach, SFAS 133 may cause an
      increase or decrease to reported net income in certain periods depending
      on levels of interest rates and other variables affecting the fair values
      of derivative instruments and hedged items, but will have no effect on
      actual cash flows or the overall economics of the transactions.

      As part of the Company's secondary marketing and related hedging
      activities, mortgage-backed securities are purchased and sold forward, and
      options are acquired on mortgage and treasury securities. At December 31,
      2001, forward delivery commitments amounted to approximately $858 million
      and options to buy securities amounted to approximately $175 million.
      These contracts have a high


                                      F-21
<PAGE>

      correlation to the price movement of the loans being hedged. The Company
      considers these hedges to be fair value hedges.

      On January 1, 2001, the Company recognized the fair value of all
      freestanding derivative instruments which resulted in recording an asset
      in the amount of $7.5 million and a liability in the amount of $3.7
      million. The net transition adjustment for the Company's derivatives
      resulted in an after tax gain of $2.1 million and was recognized as a
      cumulative-effect-type adjustment to net income, effective January 1,
      2001. The related derivative asset and liability accounts have been
      adjusted for changes in their respective fair values, which had an
      immaterial net impact on the earnings for the year ended December 31,
      2001.

      On July 20, 2001, the Financial Accounting Standards Board issued
      Statements of Financial Accounting Standards No. 141, "Business
      Combinations" ("SFAS 141"), and No. 142, "Goodwill and Other Intangible
      Assets" ("SFAS 142"). These Statements make significant changes to the
      accounting for business combinations, goodwill, and intangible assets.
      SFAS 141 eliminates the pooling-of-interests method of accounting for
      business combinations. In addition, it further clarifies the criteria for
      recognition of intangible assets separately from goodwill. This statement
      is effective for business combinations completed after June 30, 2001.

      SFAS 142 discontinues the practice of amortizing goodwill and indefinite
      lived intangible assets and initiates an annual review for impairment.
      Impairment would be examined more frequently if certain indicators of such
      are encountered. Intangible assets with a determinable useful life will
      continue to be amortized over that period. Recorded goodwill and
      intangible assets will be affected when SFAS 142 is adopted on January 1,
      2002, however, the impact to the Company is not considered material. For
      the years ended December 31, 2001, 2000 and 1999, the Company amortized
      goodwill in the amount of $833,839, $419,400 and $0, respectively.

      The Financial Accounting Standards Board is considering a number of
      mortgage banking industry-related issues concerning the implementation of
      SFAS 133. The ultimate conclusions reached concerning these issues could
      result in material changes to the recorded carrying values of the
      Company's derivative instruments, which would have a significant impact on
      its consolidated financial statements.


                                      F-22
<PAGE>

19.   CONDENSED FINANCIAL INFORMATION OF AMERICAN HOME MORTGAGE HOLDINGS, INC.

      The following provides condensed financial information for the financial
      position, results of operations and cash flows of American Home Mortgage
      Holdings, Inc. (parent company only):

                            CONDENSED BALANCE SHEETS
                           DECEMBER 31, 2001 AND 2000

<TABLE>
<CAPTION>
                                                               2001          2000
<S>                                                        <C>           <C>
ASSETS:
  Cash                                                     $     1,000   $     1,000
  Investment in subsidiaries                                78,615,766    26,610,865
                                                           -----------   -----------
TOTAL ASSETS                                               $78,616,766   $26,611,865
                                                           ===========   ===========

LIABILITIES AND STOCKHOLDERS' EQUITY
  Liabilities                                              $        --   $        --

STOCKHOLDERS' EQUITY:
    Preferred stock, $1.00 par value, 1,000,000 shares
      authorized, no shares issued and outstanding                  --            --
    Common stock, $0.01 par value, 19,000,000 shares
      authorized, 11,991,200 and 8,985,584 shares issued
      and outstanding, respectively                            119,912        89,855
    Additional paid-in-capital                              47,952,517    20,462,791
    Retained earnings                                       30,544,337     6,059,219
                                                           -----------   -----------
           Total stockholders' equity                       78,616,766    26,611,865
                                                           -----------   -----------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                 $78,616,766   $26,611,865
                                                           ===========   ===========
</TABLE>

                           CONDENSED INCOME STATEMENTS
                  YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999

<TABLE>
<CAPTION>
                                                       2001           2000            1999
<S>                                                <C>             <C>            <C>
REVENUES
  Equity in earnings of subsidiaries               $ 25,448,485    $ 5,391,450    $  3,860,886
                                                   ------------    -----------    ------------

NET INCOME                                         $ 25,448,485    $ 5,391,450    $  3,860,886
                                                   ============    ===========    ============
</TABLE>


                                      F-23
<PAGE>

                       CONDENSED STATEMENTS OF CASH FLOWS
                  YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999

<TABLE>
<CAPTION>
                                                       2001           2000            1999
<S>                                                <C>             <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income                                       $ 25,448,485    $ 5,391,450    $    667,769

  Increase in:
    Investment in earnings of subsidiaries          (25,448,485)    (5,391,450)       (667,769)
                                                   ------------    -----------    ------------

           Cash provided by operating activities             --             --              --
                                                   ------------    -----------    ------------

CASH FLOWS FROM INVESTING ACTIVITIES
  Investment in subsidiaries                                 --             --     (17,331,924)
                                                   ------------    -----------    ------------

           Cash used in investing activities                 --             --     (17,331,924)

CASH FLOWS FROM FINANCING ACTIVITIES
  Proceeds from issuance of capital stock                    --             --      17,332,924
                                                   ------------    -----------    ------------

           Cash provided by financing activities             --             --      17,332,924
                                                   ------------    -----------    ------------

NET INCREASE IN CASH                                         --             --           1,000

CASH, BEGINNING OF PERIOD                                 1,000          1,000              --
                                                   ------------    -----------    ------------

CASH, END OF PERIOD                                $      1,000    $     1,000    $      1,000
                                                   ============    ===========    ============
</TABLE>

20.   ACQUISITIONS

      On June 30, 2000, the Company acquired First Home, a residential mortgage
      lender headquartered in Illinois, which was immediately merged into
      American Home Mortgage. The Company issued 489,804 shares of common stock
      and will pay $3.6 million over a period of two years. In addition, the
      shareholders of First Home may receive additional consideration consisting
      of cash and shares of the Company's common stock based on the future
      results of the financial performance of the First Home division of the
      Company.

      The following table summarizes the required disclosures of the pro forma
      combined entity, as if the merger occurred at the beginning of the first
      year presented, for the years ended December 31 (the acquisition of
      certain assets of Commonwealth Bank in 2001 did not have a significant
      impact on the Company's financial statement presentation):


                                                      2000               1999

      Revenue                                     $80,183,581        $45,511,419

      Income before income taxes                    9,574,330          5,281,954

      Net income                                    4,789,390          3,573,338

      Earnings per share - basic                  $      0.56        $      0.64
                                                  ===========        ===========

      Earnings per share - diluted                $      0.56        $      0.64
                                                  ===========        ===========

      On December 30, 1999, the Company acquired Marina Mortgage Company, Inc.
      ("Marina"), a residential mortgage lender headquartered in Irvine,
      California, with offices in California and Arizona.


                                      F-24
<PAGE>

      The Company issued 753,420 shares of common stock in exchange for 34,600
      shares of Marina common stock and will pay $2.5 million in cash over five
      years. The Company issued 201,043 shares on October 15, 2001 and 157,985
      shares on January 31, 2001 to the prior Marina shareholders in accordance
      with the first and second earn-out provisions and the prior Marina
      shareholders may receive additional consideration over the next three
      years based on an additional earn-out provision, which is primarily based
      on the future results of the financial performance of the Marina division
      of the Company. This transaction was accounted for under purchase
      accounting and generated goodwill of approximately $4.5 million, which
      will be amortized over 20 years. The results of operations for Marina were
      not included in the consolidated financial statements as of December 31,
      1999.

      The following table summarizes the required disclosures of the pro forma
      combined entity, as if the merger occurred at the beginning of each
      respective period, for the year ended December 31:

                                                                        1999

      Revenue                                                        $45,243,217

      Income before income taxes                                       4,490,153

      Net income                                                       3,573,338

      Earnings per share - basic                                     $      0.53
                                                                     ===========

      Earnings per share - diluted                                   $      0.53
                                                                     ===========

      On October 31, 2000, the Company acquired from Roslyn National Mortgage
      Corporation ("RNMC") four RNMC branches (located in Columbia, Maryland;
      Vienna, Virginia; West Hartford, Connecticut; and Patchogue, New York)
      (the "Roslyn Branches"), RNMC's mortgage application pipeline and certain
      fixed assets and assumed the real property leases of the Roslyn Branches.
      The Roslyn Branches have become part of the American Home branch network
      and have helped the Company to expand its originations in the mid-Atlantic
      region through both a retail and wholesale presence.

      On March 30, 2001, the Company acquired the Pennsylvania and Maryland loan
      production offices of ComNet Mortgage Services (the "ComNet Branches"),
      the residential mortgage division of Commonwealth Bank, a subsidiary of
      Commonwealth Bancorp, Inc. ("Commonwealth"), Commonwealth's mortgage
      application pipeline and certain fixed assets and assumed the real
      property leases of the ComNet Branches. The ComNet Branches have become
      part of the American Home branch network and have helped the Company to
      expand its originations in the mid-Atlantic region through both a retail
      and wholesale presence.

      In August 2001, the Company entered into an agreement to acquire Valley
      Bancorp, Inc. ("Valley Bancorp") and its wholly-owned subsidiary, Valley
      Bank of Maryland ("Valley Bank"), a federal savings bank located in
      suburban Baltimore, Maryland, for a combination of cash and stock, subject
      to certain adjustments. Under the terms of the definitive agreement, the
      Company will pay 1.25 times Valley Bancorp's book value, or approximately
      $5.5 million. It is anticipated that the acquisition of Valley Bank will
      substantially increase net interest income and provide a more stable and
      diverse funding base. This transaction is subject to regulatory approval
      and is expected to close by the end of the third quarter of 2002.


                                      F-25
<PAGE>

      The following table summarizes the required disclosures of the pro forma
      combined entity, as if the merger occurred at the beginning of 2001, for
      the year ended December 31, 2001 (Valley Bank financial information is for
      the fiscal year ended September 30, 2001):

                                                                            2001

Revenue                                                             $129,452,242

Income before income taxes                                            40,789,705

Net income                                                            25,573,582

Earnings per share - basic                                          $       2.47
                                                                    ============

Earnings per share - diluted                                        $       2.35
                                                                    ============

21.   SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)

      Selected quarterly financial data are presented below by quarter for the
      years ended December 31, 2001 and 2000 (dollars in thousands, except per
      share amounts):

<TABLE>
<CAPTION>
                                                   DECEMBER 31,   SEPTEMBER 30,   JUNE 30,   MARCH 31,
                                                       2001           2001          2001       2001
<S>                                                <C>            <C>             <C>        <C>
Gain on sale of mortgage loans                     $     38,722   $      29,192   $ 29,479   $  21,158
Total revenues                                           41,656          31,986     32,350      22,062
Income before income taxes and minority interest         16,028           9,960      9,807       4,793
Net income before cumulative effect of change
  in accounting principle                                 9,596           5,618      5,558       2,534
Net income                                                9,596           5,618      5,558       4,676
Earnings per share:
  Basic before cumulative effect of change in
    accounting principle                           $       0.80   $        0.49   $   0.62   $    0.28
  Basic after cumulative effect of change in
    accounting principle                           $       0.80   $        0.49   $   0.62   $    0.52
  Dilutive before cumulative effect of change in
    accounting principle                           $       0.77   $        0.47   $   0.59   $    0.28
  Dilutive after cumulative effect of change in
    accounting principle                           $       0.77   $        0.47   $   0.59   $    0.51

<CAPTION>
                                                   DECEMBER 31,   SEPTEMBER 30,   JUNE 30,   MARCH 31,
                                                       2000           2000          2000       2000
<S>                                                <C>            <C>             <C>        <C>
Gain on sale of mortgage loans                     $     19,449   $      15,412   $  9,838   $   8,032
Total revenues                                           20,352          16,993     11,467       9,468
Income before income taxes and minority interest          3,760           2,781      2,108       1,518
Net income                                                1,799           1,521      1,184         888
Earnings per share - basic                         $       0.20   $        0.17   $   0.14   $    0.11
Earnings per share - diluted                       $       0.20   $        0.17   $   0.14   $    0.11

<CAPTION>
                                                   DECEMBER 31,   SEPTEMBER 30,   JUNE 30,   MARCH 31,
                                                       1999           1999          1999       1999
<S>                                                <C>            <C>             <C>        <C>
Gain on sale of mortgage loans                     $      6,119   $       5,016   $  5,632   $   5,190
Total revenues                                            6,866           5,829      6,509       5,658
Income before income taxes and minority interest          1,360           1,273      1,947         757
Net income                                                  747             585      1,822         707
Earnings per share - basic                         $       0.13   $        0.10   $   0.33   $    0.13
Earnings per share - diluted                       $       0.13   $        0.10   $   0.33   $    0.13
</TABLE>

                                     ******


                                      F-26
<PAGE>

                                INDEX TO EXHIBITS
                                -----------------

      Exhibit No.         Description
      -----------         -----------

      2.1             --  Agreement and Plan of Merger, dated December 29, 1999,
                          between the Registrant, Marina Mortgage Company, Inc.
                          ("Marina") and the Stockholders of Marina listed on
                          the signature pages thereto.*

      2.2             --  Agreement and Plan of Merger, dated January 17, 2000,
                          by and among the Registrant, American Home Mortgage
                          Sub II, Inc., First Home Mortgage Corp. ("First Home")
                          and the Stockholders of First Home listed on the
                          signature pages thereto.**

      2.3             --  Agreement and Plan of Reorganization, dated as of
                          August 24, 2001, between the Registrant and Valley
                          Bancorp, Inc.##

      3.1             --  Amended and Restated Certificate of Incorporation of
                          the Registrant.***

      3.2             --  Amended and Restated Bylaws of the Registrant.***

      4.1             --  Reference is hereby made to Exhibits 3.1 and 3.2.

      4.2             --  Specimen Certificate for the Registrant's Common
                          Stock.****

      10.1.1          --  Employment Agreement, dated as of August 26, 1999,
                          between the Registrant and Michael Strauss.****

      10.1.2          --  Amendment to Employment Agreement, dated as of April
                          1, 2000, between the Registrant and Michael Strauss.#

      10.2            --  Employment Agreement, dated as of January 6, 1989,
                          between the Registrant and Leonard Schoen, Jr., as
                          amended on August 26, 1999.****

      10.3            --  Employment Agreement, dated as of April 3, 1997,
                          between the Registrant and Robert E. Burke, as amended
                          on August 26, 1999.***

      10.4.1          --  Employment Agreement, dated as of March 9, 1998,
                          between the Registrant and James P. O'Reilly.

      10.4.2          --  Amendment to Employment Agreement, dated as of
                          February 1, 2001, between the Registrant and James P.
                          O'Reilly.#

      10.5            --  1999 Omnibus Stock Incentive Plan.+

      10.6            --  Sublease, dated as of December 17, 1997, between
                          Suntory International Corp. and Michael Strauss, Inc.,
                          d/b/a American Home Mortgage.

      10.7            --  Software Licensing Agreement, dated as of July 7,
                          1999, between American Home Mortgage Corp. and James
                          P. O'Reilly.

      10.8            --  Form of Warrant Agreement, between the Registrant and
                          Friedman, Billings, Ramsey & Co., Inc.***

      10.9            --  Loan Purchase Agreement, dated as of July 6, 1998,
                          between Michael Strauss, Inc., d/b/a American Home
                          Mortgage, and Norwest Funding, Inc.


<PAGE>


      Exhibit No.         Description
      -----------         -----------

      10.10           --  Origination and Sales Agreement, dated as of July 8,
                          1994, between American Home Mortgage Corp. and Chase
                          Manhattan Mortgage Corporation.

      10.11           --  Master Agreement for the Sale and Purchase of
                          Mortgages, dated as of April 19, 1994, between Astoria
                          Federal Savings and Loan Association and Michael
                          Strauss, Inc., d/b/a American Home Mortgage.

      10.12           --  Tax Indemnification Agreement, by and among the
                          Registrant, American Home Mortgage Corp. and Michael
                          Strauss.****

      10.13           --  Employment Agreement, dated December 29, 1999, between
                          the Registrant and John A. Johnston.*

      10.14           --  Employment Agreement, dated December 29, 1999, between
                          the Registrant and Ronald Bergum.*

      10.15           --  Non-Competition Agreement, dated December 29, 1999,
                          between the Registrant and John A. Johnston.*

      10.16           --  Non-Competition Agreement, dated December 29, 1999,
                          between the Registrant and Ronald Bergum.*

      10.17           --  Agreement and Plan of Merger, dated December 29, 1999,
                          between the Registrant, Marina Mortgage Company, Inc.
                          ("Marina") and the Stockholders of Marina listed on
                          the signature pages thereto.*

      10.18           --  Employment Agreement, dated January 17, 2000, between
                          the Registrant and John A. Manglardi.**

      10.19           --  Employment Agreement, dated January 17, 2000, between
                          the Registrant and Vincent Manglardi.**

      10.20           --  Employment Agreement, dated January 17, 2000, between
                          the Registrant and Jeffrey L. Lake.**

      10.21           --  Employment Agreement, dated January 17, 2000, between
                          the Registrant and Thomas J. Fiddler.**

      10.22           --  Non-Competition Agreement, dated January 17, 2000,
                          between the Registrant and John A. Manglardi.**

      10.23           --  Non-Competition Agreement, dated January 17, 2000,
                          between the Registrant and Vincent Manglardi.**

      10.24           --  Non-Competition Agreement, dated January 17, 2000,
                          between the Registrant and Jeffrey L. Lake.**

      10.25           --  Non-Competition Agreement, dated January 17, 2000,
                          between the Registrant and Thomas J. Fiddler.**

      10.26           --  Agreement and Plan of Merger, dated January 17, 2000,
                          by and among the Registrant, American Home Mortgage
                          Sub II, Inc., First Home Mortgage Corp. ("First Home")
                          and the Stockholders of First Home listed on the
                          signature pages thereto.**


<PAGE>


      Exhibit No.         Description
      -----------         -----------

      10.27           --  Amended and Restated Mortgage Warehousing Loan and
                          Security Agreement, dated as of December 6, 1999, by
                          and among American Home Mortgage Corp., First Union
                          National Bank and Certain Banking Institutions named
                          therein, as amended.++++

      10.28           --  Seventh Amendment to Amended and Restated Mortgage
                          Loan Warehousing Agreement, dated as of May 15, 2001,
                          by and among American Home Mortgage Corp., First Union
                          National Bank and Certain Banking Institutions named
                          therein.#

      10.29           --  Eighth Amendment to Amended and Restated Mortgage Loan
                          Warehousing Agreement, dated as of May 31, 2001, by
                          and among American Home Mortgage Corp., First Union
                          National Bank and Certain Banking Institutions named
                          therein.#

      10.30           --  Lease Agreement, dated December 8, 1999, between the
                          Registrant, as Tenant, and 47th and 6th Associates
                          L.L.C., as Landlord.++++

      10.31           --  Agreement of Lease, dated October 20, 1995, between
                          Reckson Operating Partnership, L.P., as Landlord,
                          Choicecare Long Island, Inc., as Assignor, and
                          American Home Mortgage Corp., as Assignee, as amended
                          on September 30, 1999.++++

      10.32           --  Master Loan and Security Agreement, dated as of June
                          21, 2000, by and among American Home Mortgage Corp.,
                          Marina Mortgage Company, Inc., and Morgan Stanley Dean
                          Witter Mortgage Capital Inc.###

      10.33           --  Amendment No. 5, dated June 29, 2001, to the Master
                          Loan and Security Agreement, dated June 21, 2000, by
                          and among American Home Mortgage Corp., Marina
                          Mortgage Company, Inc., and Morgan Stanley Dean Witter
                          Mortgage Capital Inc.###

      10.34.1         --  Mortgage Loan Purchase Agreement, dated February 26,
                          1999, between Paine Webber Real Estate Securities Inc.
                          and American Home Mortgage.###

      10.34.2         --  Mortgage Loan Repurchase Agreement, dated February 26,
                          1999, between Paine Webber Real Estate Securities Inc.
                          and American Home Mortgage.###

      10.34.3         --  Mortgage Loan Custodial Agreement, dated February 26,
                          1999, between Paine Webber Real Estate Securities Inc.
                          and American Home Mortgage.###

      10.35           --  Warehousing Credit and Security Agreement, dated as of
                          December 19, 2001, between American Home Mortgage
                          Corp., Marina Mortgage Company, Inc. and Residential
                          Funding Corporation.###

      10.36           --  Employment Agreement, dated January 11, 2001, between
                          the Registrant and Donald Henig.###

      10.37           --  Employment Agreement, dated January 19, 2001, between
                          the Registrant and Dena Kwaschyn.###

      10.38           --  Employment Agreement, dated January 14, 2002, between
                          the Registrant and Richard Silver.###


<PAGE>


      10.39           --  Employment Agreement, dated January 23, 2002, between
                          the Registrant and Lisa Schreiber.###

      10.40           --  Employment Agreement, dated March 6, 2002, between the
                          Registrant and Stephen Hozie.###

      10.41           --  Employment Agreement, dated March 22, 2002, between
                          the Registrant and Wade Hotsenpiller.###

      21.1            --  Subsidiaries of the Registrant.###

      23.1            --  Consent of Deloitte & Touche LLP.###


      All nonmarked Exhibits listed above are incorporated by reference to the
      Exhibits to the Registration Statement on Form S-1 (file no. 333-82409)
      filed with the Securities and Exchange Commission on July 9, 1999.

*     Incorporated by reference to the Form 8-K (file no. 000-27081) filed with
      the Securities and Exchange Commission on January 12, 2000.

**    Incorporated by reference to the Form 8-K (file no. 000-27081) filed with
      the Securities and Exchange Commission on February 1, 2000.

***   Incorporated by reference to the Exhibits to Amendment No. 4 to the
      Registration Statement on Form S-1 (file no. 333-82409) filed with the
      Securities and Exchange Commission on September 30, 1999.

****  Incorporated by reference to the Exhibits to Amendment No. 3 to the
      Registration Statement on Form S-1 (file no. 333-82409) filed with the
      Securities and Exchange Commission on August 31, 1999.

+     Incorporated by reference to the Exhibits to Amendment No. 2 to the
      Registration Statement on Form S-1 (file no. 333-82409) filed with the
      Securities and Exchange Commission on August 18, 1999.

++    Incorporated by reference to Exhibit B of the Schedule 13D (file no.
      005-57001) filed with the Securities and Exchange Commission on October
      14, 1999.

+++   Incorporated by reference to Exhibit A attached to Exhibit 1.1 to
      Amendment No. 4 to the Registration Statement on Form S-1 (file no.
      333-82409) filed with the Securities and Exchange Commission on September
      30, 1999.

++++  Incorporated by reference to the Exhibits to the Form 10-K (file no.
      000-27081) filed with the Securities and Exchange Commission on March 30,
      2000.

#     Incorporated by reference to the Exhibits to Amendment No. 2 to Form S-3
      on Form S-1 (file no. 333-60050) filed with the Securities and Exchange
      Commission on June 6, 2001.

##    Incorporated by reference to the Exhibits to the Registration Statement on
      Form S-4 (file no. 333-76384) filed with the Securities and Exchange
      Commission on January 7, 2002.

###   Filed herewith.