UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

(Mark one)
[x ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND 
     EXCHANGE ACT OF 1934

     For the quarterly period ended December 31, 1998

                                       OR

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

                           Commission File No. 1-12979

                             HomeSide Lending, Inc.
             (Exact name of registrant as specified in its charter)

                     Florida                               59-2725415
(State or other jurisdiction of incorporation 
     or organization)                       (I.R.S. Employer Identification No.)

                   7301 Baymeadows Way, Jacksonville, FL 32256
               (Address of principal executive offices) (Zip Code)

                                                             (904) 281-3000
              (Registrant's telephone number, including area code)



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



Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common stock, as of the latest practicable date.

           Class                    Outstanding at February 12, 1998

Common stock $1.00 par value                  100 shares











                              FINANCIAL INFORMATION

ITEM 1.  Financial Statements
<TABLE>

                             HOMESIDE LENDING, INC.
                           CONSOLIDATED BALANCE SHEETS

                    (Dollars in Thousands, Except Share Data)

<CAPTION>

(Unaudited)
                                                              December 31, 1998         September 30, 1998
                                                              -----------------         ------------------
<S>                                                           <C>                       <C>       
      ASSETS
      Cash and cash equivalents                                     $    92,008                 $   35,008
      Mortgage loans held for sale, net                               2,216,981                  2,048,989
      Mortgage servicing rights, net                                  2,162,452                  1,766,214
      Early pool buyout advances                                        487,027                    759,579
      Accounts receivable, net                                          263,603                    272,005
      Premises and equipment, net                                        50,502                     45,657
      Goodwill, net                                                     669,026                    677,049
      Other assets                                                      119,320                    115,654
                                                             -------------------         ------------------

      Total Assets                                                   $6,060,919                 $5,720,155
                                                             ===================         ==================

      LIABILITIES AND STOCKHOLDER'S EQUITY

      Notes payable                                                  $3,022,367                 $2,749,000
      Accounts payable and accrued liabilities                          309,949                    236,940
      Deferred income taxes                                             209,090                    192,781
      Long-term debt                                                  1,185,576                  1,185,926
                                                             -------------------         ------------------

      Total Liabilities                                               4,726,982                  4,364,647
                                                             -------------------         ------------------

      Stockholder's Equity:
      Common stock:
           Common stock, $1.00 par value, 100 shares authorized,
               issued and outstanding, all pledged as second 
      priority                                                                -                         -
               collateral on the long-term debt of the Parent
      Additional paid-in capital                                       1,323,071                 1,322,387
      Retained earnings                                                   10,866                    33,121
                                                              ------------------          -----------------

      Total Stockholder's Equity                                       1,333,937                 1,355,508
                                                              ------------------          -----------------

      Total Liabilities and Stockholder's Equity                      $6,060,919                $5,720,155
                                                              ==================          =================
</TABLE>
The accompanying notes are an integral part of these financial statements.

<PAGE>

<TABLE>

                             HOMESIDE LENDING, INC.
                        CONSOLIDATED STATEMENTS OF INCOME
                                   (UNAUDITED)

                             (Dollars in Thousands)

<CAPTION>
                                                                                  Predecessor
                                                         For the Three           For the Three
                                                          Months Ended           Months Ended
                                                        December 31, 1998       November 30, 1997
                                                        -----------------       -----------------
<S>                                                    <C>                      <C>    
REVENUES:

Mortgage servicing fees                                       $ 133,197              $ 107,606
Amortization of mortgage servicing rights                       (82,947)               (58,004)
                                                       ------------------       ----------------
    Net servicing revenue                                        50,250                 49,602

Interest income                                                  46,175                 28,470
Interest expense                                                (29,719)               (23,349)
                                                       ------------------       ----------------
    Net interest revenue                                         16,456                  5,121

Net mortgage origination revenue                                 38,286                 20,676
Other income                                                      1,786                    220
                                                       ------------------       ----------------
    Total Revenues                                              106,778                 75,619
                                                                

EXPENSES:

Salaries and employee benefits                                   34,514                 19,191
Occupancy and equipment                                           6,447                  4,262
Servicing losses on investor-owned loans
   and foreclosure-related expenses                               9,784                  5,171
Goodwill amortization                                             8,707                    154
Other expenses                                                   16,202                  9,463
                                                        ------------------      ----------------
    Total Expenses                                               75,654                 38,241
        
Income before income taxes                                       31,124                 37,378
             
Income tax expense                                               15,535                 14,577
                                                        ------------------      ----------------
                                                       
Net income                                                     $ 15,589               $ 22,801
                                                        ==================      ================

</TABLE>


The  accompanying  notes are an integral  part of these financial statements.

<PAGE>

<TABLE>

                             HOMESIDE LENDING, INC.
                      CONSOLIDATED STATEMENT OF CASH FLOWS
                                   (UNAUDITED)

                             (Dollars in Thousands)

<CAPTION>
                                                                                                       Predecessor
                                                                            For the Three              For the Three
                                                                             Months Ended              Months Ended
                                                                          December 31, 1998          November 30, 1997
                                                                          -----------------          -----------------
<S>                                                                       <C>                        <C>   
      CASH FLOWS PROVIDED BY OPERATING ACTIVITIES:

      Net income                                                                   $15,589                $   22,801
                                                                        
      Adjustments to  reconcile  net income to net cash  provided                                               
          by  operating activities:                                                  
        Amortization of mortgage servicing rights                                   82,946                    58,004              
                                                                                                                        
        Depreciation and amortization                                               10,563                     2,829       
                                                                                                                        
        Servicing losses on investor-owned loans                                     3,673                     3,682       
                                                                                                                        
        Change in deferred income tax liability                                     16,309                    18,396        
                                                                                                                        
        Origination and purchase of loans held for sale, net of repayments        (167,992)                   44,914        
                                                                                                            
        Change in accounts receivable                                                4,442                   (71,814)       
                                                                                                                     
        Change in other assets and accounts payable and accrued liabilities         62,101                   (16,891)  
     

                                                                       

      CASH FLOWS (USED IN) PROVIDED BY  INVESTING ACTIVITIES:

      Purchase of premises and equipment, net                                       (6,457)                   (4,539)
                                                                                                 
      Acquisition of mortgage servicing rights                                    (254,234)                 (146,598)
                                                                                              
      Net (purchases of) proceeds from risk management contracts                  (220,933)                  148,058
                                                                                                 
      Early pool buyout reimbursements                                             272,552                    56,689
                                                                                     
                                                                                ------------              -----------
      Net cash (used in) provided by investing activities                         (209,072)                   53,610
                                                                        

      CASH FLOWS PROVIDED BY (USED IN) FINANCING ACTIVITIES:

      Net borrowings from (repayments to) banks                                 (1,031,899)                 (135,680)
                                                                                                
      Issuance of commercial paper                                               1,308,367                       -
                                                                                                
      Issuance of notes payable                                                      -                        45,000
                                                                                                
      Payment of debt issue costs                                                    -                          (825)
                                                                                                
      Repayment of long term debt                                                     (182)                     (154)
                                                                                                
      Dividends paid to Parent                                                     (37,846)                   (7,313)
                                                                                    
                                                                                -------------             ------------
      Net cash provided by (used in) by financing activities                       238,440                   (98,972)
                                                                        

      Net increase in cash and cash equivalents                                     57,000                    16,559
                                                                                         
      Cash and cash equivalents at beginning of period                              35,008                        31
                                                                                   
                                                                        ---------------------     ----------------------

      Cash and cash equivalents at end of period                                   $92,008                  $ 16,590
                                                                                            
                                                                        =====================     ======================

      Supplemental disclosure of cash flow information:
      Interest paid                                                                $31,865                  $23,231
                                                                                    
      Income taxes paid                                                            $14,953                  $(3,818)
                                                                        
      Cash received for reinstated loans from early pool buyout advances           $ 2,572                  $    -
                                                              
</TABLE>

The  accompanying  notes are an integral  part of these financial statements.




<PAGE>

                             HOMESIDE LENDING, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

1.  BASIS OF PRESENTATION

     The accompanying  consolidated  financial  statements have been prepared in
accordance with generally accepted  accounting  principles for interim financial
information and with the  instructions to Form 10-Q and Rule 10-01 of Regulation
S-X.  Accordingly,  they do not include  all of the  information  and  footnotes
required by generally  accepted  accounting  principles  for complete  financial
statements. In the opinion of management,  all adjustments (consisting of normal
recurring  adjustments)  considered  necessary for a fair presentation have been
included.

     On February  10, 1998,  National  Australia  Bank,  Ltd.  (the  "National")
acquired all outstanding  shares of the common stock of HomeSide  International,
Inc. (the "Parent") and HomeSide Lending,  Inc.  ("HomeSide  Lending") adopted a
fiscal year end of September  30 to conform to the fiscal year of the  National.
Accordingly,  comparative  financial statements for the same period in the prior
year have not been presented.  Instead,  a comparison of the period of the prior
year that most closely corresponds to the present period is presented.  HomeSide
Lending's  operating  results  are not  directly  comparable  to its  historical
operating results due, in part, to different balance sheet valuations (estimated
fair value as  compared to  historical  cost).  In  addition,  because  HomeSide
Lending's operating results are produced and managed on a quarterly basis, it is
not practicable to furnish a period prior to February 11, 1998 that  corresponds
to any period  other than the period  reported  according  to the  predecessor's
prior fiscal year periods.

     Operating  results for the three  months ended  December 31, 1998,  and the
predecessor's   three  months  ended  November  30,  1997  are  not  necessarily
indicative  of the results  that may be expected  for the fiscal  period  ending
September 30, 1999. For further information, refer to the consolidated financial
statements and footnotes  thereto  included in the Form 10-K for the period from
February 11, 1998 to September 30, 1998 of HomeSide Lending, Inc.

2.  ORGANIZATION

     On December 11,  1995,  HomeSide  Lending was formed by an investor  group,
consisting of Thomas H. Lee Company and Madison Dearborn Partners (collectively,
the  "Investors"),  and signed a definitive  stock  purchase  agreement with The
First  National  Bank of Boston  ("BankBoston")  for the  purpose  of  acquiring
certain  assets  and  liabilities  of the  mortgage  banking  business  owned by
BankBoston.  BankBoston (the "BBMC Predecessor")  received cash and an ownership
interest  in  HomeSide  Lending . The  transaction  closed on March 15, 1996 and
HomeSide Lending began operations on March 16, 1996.

     On May 31,  1996,  Barnett  Banks,  Inc.  ("Barnett")  sold  certain of its
mortgage  banking  operations,   primarily  its  servicing  portfolio,  mortgage
servicing  operations and proprietary  mortgage  banking  software  systems,  to
HomeSide Lending . Barnett  received cash and an ownership  interest in HomeSide
Lending . The accompanying  financial  statements reflect the effects of both of
these  acquisitions.  From May 31, 1996 until the 1997 public offering of common
stock, the Investors,  BankBoston and Barnett each owned approximately one-third
of HomeSide Lending . Following the public offering,  the Investors,  BankBoston
and Barnett owned in the aggregate  approximately 79% of the outstanding  common
stock.

     On January 9, 1998, NationsBank Corporation, now BankAmerica,  Corporation,
acquired all the outstanding common stock of Barnett Banks, Inc.

     On February  10, 1998,  National  Australia  Bank,  Ltd.  (the  "National")
acquired  all  outstanding  shares  of  the  common  stock  of  the  Parent.  As
consideration,  the National  paid $27.825 per share for all of the  outstanding
common stock and $17.7 million cash to retire all outstanding stock options. The
total purchase price was approximately  $1.2 billion.  The National paid for the
purchase with borrowed and available funds. The transaction was accounted for as
a purchase.  As a result, all assets and liabilities were recorded at their fair
value on February 11, 1998,  and the purchase  price in excess of the fair value
of net assets acquired of $713.6 million was recorded as goodwill. Following the
transaction  described  above, the National now owns 100% of the Parent's common
stock and the Parent  has  become an  indirect  wholly-owned  subsidiary  of the
National.  HomeSide  Lending  also  adopted a fiscal year end of September 30 to
conform to the fiscal year of the National.





3.  MORTGAGE SERVICING RIGHTS

The  change in the  balance of  mortgage  servicing  rights  was as follows  (in
thousands):


Balance, September 30, 1998                  $1,766,214
Additions                                       254,235
Sales of servicing                                   -
Deferred hedge loss                             224,950
Amortization                                    (82,947)
                                         ----------------

Balance, December 31, 1998                   $2,162,452
                                         ================



4.    NOTES PAYABLE

Notes payable consist of the following (in thousands):
<TABLE>
<CAPTION>

                                                                         Weighted Average        Interest Rate
                                                  Total Outstanding       At Period End        During the Period
                                                  -----------------      ----------------      -----------------
<S>                                               <C>                    <C>                   <C>    
Commercial paper                                     $ 1,308,367              5.40%                 5.50%
Bank line of credit                                           -               5.99%                 5.55%
National Australia Bank unsecured facility             1,714,000              5.44%                 5.49%
                                                 ---------------------
  Total, December 31, 1998                           $ 3,022,367
                                                 =====================

Bank line of credit                                    $ 995,000              5.88%                 5.86%
National Australia Bank unsecured facility             1,754,000              5.66%                 5.67%
                                                 --------------------- 
  Total, September 30, 1998                          $ 2,749,000
                                                 =====================
</TABLE>


     On October 21, 1998,  HomeSide  Lending,  Inc.  established  a $1.5 billion
commercial paper program. The program is supported by the Company's bank line of
credit and outstanding  commercial paper reduces available  borrowings under the
bank line of credit. At December 31, 1998, a total of $1.3 billion of commercial
paper was  outstanding.  The weighted  average interest rate on commercial paper
outstanding during the three months ended December 31, 1998 was 5.50%.

     On June  23,  1998,  HomeSide  Lending  entered  into an  agreement  for an
unsecured revolving credit facility with the National. HomeSide can borrow up to
$2.1  billion,  subject  to limits  imposed  by  regulatory  authorities.  As of
December 31, 1998,  regulations  limited the National's ability to lend funds to
HomeSide Lending , a non-bank affiliate,  to $1.8 billion.  The interest rate is
charged at the 30 day LIBOR rate.  At December  31, 1998,  this credit  facility
totaled  $1.7  billion.  The  weighted  average  interest  rate  on  outstanding
borrowings  under this facility  during the three months ended December 31, 1998
was 5.49%.

     HomeSide  Lending  borrows  funds on a  demand  basis  from an  independent
syndicate of banks under a $2.0 billion credit facility which, at the request of
HomeSide Lending,  may be increased to $3.0 billion. The line of credit includes
both a warehouse credit  facility,  which is limited to 98% of the fair value of
eligible mortgage loans held for sale, and a servicing-related  facility,  which
is capped  at  $950.0  million.  Borrowings  under the bank line of credit  bear
interest  at rates per annum,  based on, at  HomeSide  Lending's  option (A) the
highest of (i) the lead bank's  prime rate,  (ii) the  secondary  market rate of
certificates  of deposit plus 100 basis points and (iii) the federal  funds rate
in effect from time to time plus 0.5% or (B) various rates based on federal fund
rates.  On February  14,  2000,  the line of credit will  terminate.  The credit
agreement  contains  covenants  that  impose  limitations  and  restrictions  on
HomeSide Lending, including requirements to maintain certain net worth and ratio
requirements.  Under certain  circumstances  set forth in the credit  agreement,
borrowings  under the  agreement  become  collateralized  by HomeSide  Lending's
assets.  HomeSide Lending is in compliance with all requirements included in the
credit agreement.  At December 31, 1998, there was no balance  outstanding under
the credit line. At September 30, 1998, the amount  outstanding under the credit
line, all of which was under the warehouse credit facility, was $1.0 billion.





5.  LONG-TERM DEBT

11.25 % Notes

      On May 14, 1996,  the Parent  issued  $200.0  million of 11.25% notes (the
"Parent Notes")  maturing on May 15, 2003, and paying  interest  semiannually in
arrears on May 15 and November 15 of each year.  The Parent Notes are redeemable
at the option of the  Parent,  in whole or in part,  at any time on or after May
15, 2001, at certain fixed redemption  prices.  The indenture contains covenants
that impose  limitations and  restrictions,  including  requirements to maintain
certain net worth and ratio  requirements.  In  addition,  the Parent  Notes are
secured by a second priority pledge of the common stock of HomeSide Lending. The
Parent is in compliance  with all net worth and ratio  requirements  included in
the  indenture  relating to the Parent  Notes.  The Parent used a portion of the
proceeds  from its February 5, 1997  offering of common  stock to pre-pay  $70.0
million of the Parent Notes at a premium of $7.9 million. The amount outstanding
at December  31,  1998 was $130.0  million.  The balance of the Parent  Notes at
December 31, 1998, including the fair value adjustment resulting from the merger
with the National, was $150.6 million.

Medium-term notes

        As of  December  31,  1998,  outstanding  medium-term  notes  issued  by
HomeSide  Lending  under a $1.5 billion  shelf  registration  statement  were as
follows (in thousands):
<TABLE>
<CAPTION>

Issue Date                     Outstanding Balance            Coupon Rate              Maturity Date
----------                     -------------------            -----------              -------------
<S>                            <C>                            <C>                      <C>   

May 20, 1997                     $   250,000                     6.875%                May 15, 2000
June 30, 1997                        200,000                     6.875%                June 30, 2002
June 30, 1997                         40,000                     6.820%                July 2, 2001
July 1, 1997                          15,000                     6.860%                July 2, 2001
July 31, 1997                        200,000                     6.750%                August 1, 2004
September 15, 1997                    45,000                     6.770%                September 17, 2001
March 19, 1998                        60,000                     5.6875%               March 20, 2000
April 23, 1998                       125,000                     5.7875%               April, 24, 2001
May 22, 1998                         225,000                     6.200%                May 15, 2003
                              --------------------
  Total                          $ 1,160,000
                              ====================
</TABLE>

      As of December 31, 1998,  $850.0  million of the  outstanding,  fixed rate
medium-term  notes  had  been  effectively   converted  by  interest  rate  swap
agreements  to  floating-rate  notes.  The weighted  average  borrowing  rate on
medium-term borrowings issued for the quarter ended December 31, 1998, including
the effect of the interest rate swap  agreements,  was 5.87%.  Net proceeds from
the issuances were primarily  used to reduce the amounts  outstanding  under the
bank credit  agreement and to fund a $16.6 billion  portfolio  acquisition  from
Banc One. The balance of the medium-term  notes at December 31, 1998,  including
the fair value adjustment resulting from the merger with the National,  was $1.2
billion.

Mortgage note payable

          In connection with the acquisition of BancBoston Mortgage Corporation,
HomeSide  Lending  assumed a mortgage note payable that is due in 2017 and bears
interest at a stated rate of 9.5%.  HomeSide  Lending's main office  building is
pledged as collateral for the mortgage note payable. The balance of the mortgage
payable at December 31, 1998,  including  the fair value  adjustments  resulting
from the merger with the National, was $24.1 million.

6.  EARLY POOL BUYOUT ADVANCES AND SALES

        On November 30, 1998, HomeSide Lending formed a wholly-owned subsidiary,
HomeSide Funding,  Inc. ("HomeSide  Funding"),  whose sole purpose is to acquire
delinquent loans from HomeSide Lending's servicing portfolio that are insured by
the Federal Housing  Administration  or guaranteed by the Department of Veterans
Affairs. The purchases are funded through sales to a trust.  HomeSide Funding is
a non-consolidated, qualifying special purpose entity.

        In December 1998,  HomeSide Lending entered into a Pooling and Servicing
Agreement with Bank One Trust Company,  N.A., as Trustee,  and HomeSide Funding,
as  Transferor,  pursuant  to which  approximately  $191  million of  delinquent
mortgage  loans were sold to HomeSide  Funding.  Subsequently,  these loans were
sold to the  HomeSide  Mortgage  Loan  Buyout  Trust  1998-A.  Residual  amounts
recorded  as assets  and gains and  losses on sales of loans as a result of this
transaction were immaterial.


7.    NEW ACCOUNTING STANDARDS

      In June 1998, the Financial Accounting Standards Board issued Statement of
Financial  Accounting Standard No. 133,  "Accounting for Derivative  Instruments
and  Hedging  Activities."  This  statement   standardizes  the  accounting  for
derivative  instruments  and  hedging  activities  by  requiring  that an entity
recognize  those items as assets or  liabilities  in the  statement of financial
position  and  measure  them at fair  value.  If certain  conditions  are met, a
derivative  instrument  may be  specifically  designated  as (a) a hedge  of the
exposure to changes in the fair value of a recognized asset or liability,  or of
an unrecognized  firm commitment,  (b) a hedge of the exposure to variability in
the cash flows of a recognized  assets,  liability or forecasted  transaction or
(c) a hedge of the foreign currency exposure of an unrecognized firm commitment,
an available-for-sale  security, a forecasted transaction or a net investment in
a foreign  operation.  This statement is effective for fiscal quarters of fiscal
years  beginning  after June 15, 1999.  Management  has not yet  determined  the
impact of this  statement on the  presentation  of the  financial  statements of
HomeSide Lending.

        In  October  1998,  the  Financial  Accounting  Standards  Board  issued
Statement  of  Financial   Accounting   Standards  No.  134,   "Accounting   for
Mortgage-Backed  Securities Retained after Securitization of Mortgage Loans Held
for Sale by a  Mortgage  Banking  Enterprise."  This  statement  further  amends
Statement No. 65 to require that after the securitization of mortgage loans held
for sale,  an  entity  engaged  in  mortgage  banking  activities  classify  the
resulting  mortgage-backed  securities or other retained  interests based on its
ability  and  intent  to sell or  hold  those  investments.  This  statement  is
effective  for the first  fiscal  quarter  beginning  after  December  15, 1998.
Management  expects that the impact of this statement on the presentation of the
financial statements of HomeSide Lending will be immaterial.



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

General

      HomeSide  Lending,  Inc. (the "Company) is one of the largest full service
residential mortgage banking companies in the United States.  HomeSide Lending's
strategy emphasizes variable cost mortgage origination,  low cost servicing, and
effective risk  management.  Headquartered in  Jacksonville,  Florida,  HomeSide
Lending ranks as the 9th largest  originator and the 6th largest servicer in the
United States at September 30, 1998,  based on data published by Inside Mortgage
Finance .

       HomeSide Lending plans to build its core operations  through (i) improved
economies  of  scale in  servicing  costs;  (ii)  increased  productivity  using
proprietary  technology;  and  (iii)  expanded  and  diversified  variable  cost
origination channels. In addition, HomeSide Lending intends to pursue additional
loan portfolio  acquisitions and strategic origination  relationships similar to
the existing BankBoston and Banc One relationships.

      On February 10, 1998,  National  Australia  Bank,  Ltd.  (the  "National")
acquired  all  outstanding  shares  of  the  common  stock  of  the  Parent.  As
consideration,  the National  paid $27.825 per share for all of the  outstanding
common stock and $17.7 million cash to retire all outstanding stock options. The
total  purchase  price was  approximately  $1.2  billion.  The  transaction  was
accounted  for as a  purchase.  As a result,  all  assets and  liabilities  were
recorded at their fair value on February  11, 1998,  and the  purchase  price in
excess of the fair value of net assets  acquired of $713.6  million was recorded
as goodwill.  Following the transaction  described above, the National owns 100%
of the Parent's common stock and the Parent has become an indirect  wholly-owned
subsidiary of the National.

         As a result of the merger with the National, HomeSide Lending adopted a
fiscal year end of September  30 to conform to the fiscal year of the  National.
Accordingly,  comparative  financial statements for the same period in the prior
year have not been presented.  Instead,  a comparison of the period of the prior
year that most closely corresponds to the present period is presented.  HomeSide
Lending's  operating  results  are not  directly  comparable  to its  historical
operating results due, in part, to different balance sheet valuations (estimated
fair value as  compared to  historical  cost).  In  addition,  because  HomeSide
Lending's operating results are produced and managed on a quarterly basis, it is
not practicable to furnish a period prior to February 11, 1998 that  corresponds
to any period other than the periods  reported  according  to the  predecessor's
prior fiscal year periods.  Therefore, the prior three months ended November 30,
1997 have been presented in accordance with Regulation 15d-10(e)(4).

        Operating  results for the three months ended  December 31, 1998 and the
predecessor three months ended November 30, 1997 are not necessarily  indicative
of the results  that may be expected  for the fiscal year ending  September  30,
1999. For further  information,  refer to the consolidated  financial statements
and  footnotes  thereto  included  in the Form 10-K for the fiscal  period  from
February 11, 1998 to September 30, 1998 of HomeSide Lending, Inc.

  Forward-Looking Statements

      The  Private  Securities  Litigation  Reform Act of 1995  provides a "safe
harbor" for certain  forward-looking  statements.  This Quarterly Report on Form
10-Q contains  forward-looking  statements  which reflect the Company's  current
views  with  respect  to  future   events  and  financial   performance.   These
forward-looking  statements  are  subject  to certain  risks and  uncertainties,
including  those  identified  below,  which could cause actual results to differ
materially from historical  results or those  anticipated.  The words "believe,"
"expect,"   "anticipate,"  "intend,"  "estimate"  and  other  expressions  which
indicate future events and trends  identify  forward-looking  statements,  which
speak only as of their dates.  The Company  undertakes no obligation to publicly
update or  revise  any  forward-looking  statements  whether  as a result of new
information,  future  events or  otherwise.  The  following  factors could cause
actual  results  to  differ   materially  from   historical   results  or  those
anticipated:  (1) the Company's  ability to grow which depends on its ability to
obtain additional  financing in the future for originating loans,  investment in
servicing  rights,  working capital,  capital  expenditure and general corporate
purposes,   (2)  economic   downturns  may   negatively   affect  the  Company's
profitability  as the  frequency  of loan  default  tends  to  increase  in such
environments  and (3)  changes in  interest  rates may affect the volume of loan
originations and acquisitions,  the interest rate spread on loans held for sale,
the  amount of gain or loss on the sale of loans and the value of the  Company's
servicing  portfolio.  These risks and  uncertainties are more fully detailed in
the Company's filings with the Securities and Exchange Commission.

   Loan Production Activities

      As a multi-channel loan production lender, HomeSide Lending has one of the
industry's largest correspondent lending production  operations,  a full-service
brokered  loan  program and a national  production  center for  consumer  direct
mortgage lending.  HomeSide Lending also purchases servicing rights in bulk from
time to time. By focusing on production channels with a variable cost structure,
HomeSide Lending eliminates the fixed costs associated with traditional mortgage
branch  offices.  Without  the burden of high fixed cost  origination  overhead,
HomeSide  Lending  is well  positioned  to weather a variety  of  interest  rate
environments.

      The  following   information  regarding  loan  production  activities  for
HomeSide Lending is presented to aid in understanding  the results of operations
and financial  condition of HomeSide Lending for the three months ended December
31,  1998  and the  predecessor's  three  months  ended  November  30,  1997 (in
millions):

                                                                Predecessor
                                        For the Three          For the Three
                                        Months Ended           Months Ended
                                      December 31, 1998      November 30, 1997
                                      -----------------      -----------------

Correspondent                                $    5,298              $   3,310
Co-issue                                            872                  1,745
Broker                                            1,090                    319
                                      ------------------     ------------------
  Total wholesale                                 7,260                  5,374
Direct                                              323                    106
                                      ------------------     ------------------
  Total production                                7,583                  5,480
Bulk acquisitions                                 7,046                  1,085
                                      ------------------     ------------------
  Total production and acquisitions           $  14,629              $   6,565
                                      ==================     ==================


      Total loan production,  excluding bulk acquisitions,  was $7.6 billion for
the three  months  ended  December  31, 1998  compared  to $5.5  billion for the
predecessor  three months ended  November  30,  1997, a 38%  increase.  HomeSide
Lending's   correspondent   lending  and  broker   channels   were  the  primary
contributors to production volume increases.  The correspondent  lending channel
volume  increased 60% from the predecessor  three months ended November 30, 1997
to the three months  ended  December  31,  1998.  A primary  contributor  to the
increase was the addition of Banc One as a Preferred Partner on June 5, 1998. As
a Preferred Partner, Banc One will sell a significant portion of the residential
mortgage loans it originates to HomeSide Lending for five years.

         On May 29, 1998,  HomeSide  Lending also  purchased  the  operations of
NationsBank's  subsidiary Loan America, a national broker network. This purchase
is  contributing  to  HomeSide  Lending's  expansion  of its broker  network,  a
production  channel that is key to HomeSide  Lending's variable cost origination
strategy.  The broker channel volume  increased 242% from the three months ended
November 30, 1997 to the three months ended December 31, 1998.

      The interest rate environment has  significantly  affected the size of the
mortgage origination market. When interest rates decline,  increasing numbers of
mortgagees  refinance their loans. As a result, the mortgage  origination market
grows.  During this period of high  refinances,  HomeSide Lending has strived to
keep production at a level which is sustainable should the market size return to
1997 and 1996  volumes.  To maintain and increase the servicing  portfolio  size
during this period of relatively  high portfolio  runoff,  HomeSide  Lending has
emphasized its acquisitions strategy.

         HomeSide Lending also completed bulk acquisitions totaling $7.0 billion
during the three months ended December 31, 1998 compared to $1.1 billion for the
predecessor three months ended November 30, 1997. The increase in purchases is a
continuation  of HomeSide  Lending's  targeted  approach  to grow the  servicing
portfolio.  Included  in these  bulk  acquisitions  for the three  months  ended
December 31, 1998 is the November 23, 1998 servicing portfolio of People's Bank.
People's  Bank  is  the  largest  mortgage  lender  in  Connecticut.  This  bulk
acquisition added $5 billion to HomeSide Lending's servicing portfolio. People's
Bank also became a Preferred  Partner and has committed to sell its  residential
mortgage originations to HomeSide Lending for five years.

         HomeSide Lending continues to examine a number of ways to diversify and
grow revenue  sources from its existing and new customer  base.  As part of this
effort, HomeSide Lending has formed an alliance with a subprime mortgage lender,
which allows HomeSide Lending to offer additional  mortgage-related  products to
the production network.

   Servicing Portfolio

      Management  believes  that HomeSide  Lending is one of the most  efficient
mortgage  servicers in the industry based on its servicing cost per loan and the
number of loans serviced per employee.  The servicing  operation makes extensive
use  of  state-of-the-art   technology,   process   re-engineering  and  expense
management. With a portfolio size of $118 billion, HomeSide Lending services the
loans of approximately 1.4 million  homeowners from across the United States and
is committed to protecting the value of this important  asset by a sophisticated
risk management strategy. HomeSide Lending anticipates its low cost of servicing
loans will continue to maximize the bottom-line  impact of its growing servicing
portfolio.  HomeSide  Lending's  focus on  efficient  and low cost  processes is
pursued  through  the  selective  use of  automation  as well  as the  strategic
outsourcing   of  selected   servicing   functions  and  effective   control  of
delinquencies and foreclosures.

      The  following  information  on the dollar  amounts of loans  serviced  is
presented  to aid in  understanding  the  results of  operations  and  financial
condition of HomeSide  Lending for the three months ended  December 31, 1998 and
the predecessor's three months ended November 30, 1997 (in millions):

                                                                 Predecessor
                                        For the Three           For the Three
                                        Months Ended            Months Ended
                                      December 31, 1998       November 30, 1997
                                      -----------------       -----------------

Balance at beginning of period             $ 114,902               $  95,429
   Additions                                  14,629                   6,565
   Scheduled amortization                        771                     534
   Prepayments                                 9,523                   3,120
   Foreclosures                                  313                     220
   Sales of servicing                            961                     337
                                     --------------------    -------------------
       Total reductions                       11,569                   4,211
                                     --------------------    -------------------
Balance at end of period                    $117,962               $  97,783
                                     ====================    ===================

      The number of loans  serviced at December 31, 1998 was 1,412,420  compared
to 1,161,547 at November 30, 1997.  HomeSide  Lending's strategy is to build its
mortgage servicing  portfolio by concentrating on variable cost loan origination
strategies,  and as a result, benefit from improved economies of scale. A key to
HomeSide  Lending's future growth is its proprietary  servicing  software.  This
system allows HomeSide Lending to double the number of loans typically  serviced
on a single system. For the three months ended December 31, 1998,  substantially
all of the servicing portfolio is serviced on the proprietary system.


Results of Operations

For the three months ended December 31, 1998 compared to the  predecessor  three
months ended November 30, 1997

   Summary

      HomeSide Lending's net income,  excluding  goodwill  amortization from the
acquisition  of HomeSide by the National,  increased 7% to $24.3 million for the
three  months  ended  December  31,  1998  compared  to  $22.8  million  for the
predecessor  three months ended November 30, 1997. Net income after the goodwill
amortization  from the  acquisition  of HomeSide by the  National  for the three
months ended December 31, 1998 was $15.6  million.  Total revenues for the three
months ended December 31, 1998 were $106.8 million compared to $75.6 million for
the  predecessor  three months ended  November  30,  1997, a 41%  increase.  The
increases in net income,  excluding goodwill amortization,  and revenues for the
three months ended  December 31, 1998 compared to the  predecessor  three months
ended November 30, 1997 were primarily attributable to increases in net mortgage
origination revenue and net interest revenue.  Net mortgage  origination revenue
increased due to loan production  volume increases and increased margins on loan
production  activities.  Net interest revenue  increased due to increases in the
balances  of  average  interest-earning  assets,  and  as a  result  of  reduced
borrowing  costs from improved  credit  ratings and the issuance of  medium-term
notes and commercial paper. Net servicing revenue increased  primarily due to an
increase in the size of the servicing portfolio,  partially offset by the effect
of declining  interest rates,  which increased  mortgage  prepayments speeds and
consequently  increased  amortization  expense.  Total  expenses  increased as a
result of increases in production volume,  expenses  associated with the growing
mortgage servicing portfolio and high loan prepayment activity, and amortization
expense of $8.7 million related to the goodwill  associated with the merger with
the National.

    Net Servicing Revenue

      Net  servicing  revenue  was  $50.3  million  for the three  months  ended
December 31, 1998  compared to $49.6  million for the  predecessor  three months
ended  November  30,  1997.  Net  servicing  revenue is  comprised  of  mortgage
servicing  fees,  ancillary  servicing  revenue,  and  amortization  of mortgage
servicing rights.

      Mortgage  servicing  fees  increased  24% to $133.2  million for the three
months ended  December 31, 1998 compared to $107.6  million for the  predecessor
three months ended November 30, 1997, primarily as a result of portfolio growth.
The servicing  portfolio  increased  $20.2 billion to $118.0 billion at December
31, 1998  compared to $97.8  billion at November  30, 1997,  a 21%  increase.  A
significant portion of this portfolio growth was due to the purchase of Banc One
Mortgage's  $16.6 billion  servicing  portfolio on June 5, 1998.  The prepayment
rate of the servicing  portfolio was 31% for the three months ended December 31,
1998, up from 15% for the three months ended  November 30, 1997.  The prepayment
rate is  affected  by the level of  refinance  activity,  which is driven by the
relative  level of mortgage  interest  rates and  activity in the home  purchase
market.  HomeSide Lending's weighted average interest rate of the mortgage loans
in the servicing portfolio was 7.65% and 7.87% at December 31, 1998 and November
30, 1997, respectively.  The weighted average servicing fee, including ancillary
income,  for the  servicing  portfolio  was  0.463% for the three  months  ended
December  31, 1998  compared to 0.444% for the  predecessor  three  months ended
November 30, 1997. The increase in the weighted average servicing fee was due to
growth of ancillary  revenues,  including late fees and other  mortgage  related
products.

      Amortization expense was $82.9 million for the three months ended December
31,  1998  compared to $58.0  million for the  predecessor  three  months  ended
November 30, 1997, a 43% increase.  Amortization  expense  increased mainly as a
result of a higher average balance of mortgage  servicing  rights and a decrease
of 61 basis points in average mortgage interest rates from 7.50% at November 30,
1997 to 6.89% at December 31, 1998.  Amortization  charges are highly  dependent
upon the level of  prepayments  during  the period  and  changes  in  prepayment
expectations,  which are significantly  influenced by the direction and level of
long-term interest rate movements. A decrease in mortgage interest rates results
in an increase in prepayment estimates used in calculating periodic amortization
expense.  Because  mortgage  servicing  rights are  amortized  over the expected
period of service fee  revenues,  an increase  in mortgage  prepayment  activity
typically results in a shorter  estimated life of the mortgage  servicing assets
and, accordingly, higher amortization expense.

   Net Interest Revenue

      Net  interest  revenue  is  driven  by the level of  interest  rates,  the
direction in which rates are moving and the spread  between  short and long-term
interest rates and the rates at which HomeSide Lending is able to borrow.  These
factors  influence  the size of the  residential  mortgage  origination  market,
HomeSide  Lending's  loan  production  volumes and the interest  rates  HomeSide
Lending earns on loans and pays to its lenders.

      Loan refinancing levels are the largest contributor to changes in the size
of the mortgage  origination market. To reduce the cost of their home mortgages,
borrowers  tend to refinance  their loans during  periods of declining  interest
rates, increasing the size of the origination market and HomeSide Lending's loan
production  volumes.  Higher loan  production  volumes  result in higher average
balances  of loans  held for sale and  consequently  higher  levels of  interest
income from interest earned on such loans prior to their sale. This higher level
of interest  income due to increased  volumes is  partially  offset by the lower
rates earned on the loans.

      Overall  borrowing  costs also fluctuate  with changes in interest  rates.
Currently,  the interest expense HomeSide Lending pays to finance mortgage loans
held for sale and other net assets is  generally  calculated  with  reference to
short-term  interest  rates. In addition,  because  mortgage loans held for sale
earn  interest  based on longer term interest  rates,  the level of net interest
revenue  is also  influenced  by the spread  between  long-term  and  short-term
interest rates.

      Net  interest  revenue  totaled  $16.5  million for the three months ended
December  31, 1998  compared to $5.1  million for the  predecessor  three months
ended November 30, 1997. Increases in net interest revenue were due to increases
in net interest  earned on mortgage loans held for sale,  escrow  deposits,  and
early pool buyout advances.  The average balance of mortgage loans held for sale
increased 82% to $2.0 billion for the three months ended  December 31, 1998 from
$1.1  billion for the  predecessor  three months  ended  November 30, 1997.  The
average  escrow  deposits  balance  increased  79% to $3.4 billion for the three
months  ended  December  31, 1998 from $1.9  billion for the  predecessor  three
months ended November 30, 1997. The principal balances of prepaid mortgage loans
are accumulated in escrow accounts before they are remitted to investors. During
periods of  declining  interest  rates,  prepayments,  escrow  balances  and the
related  earnings  increase.  The average  balance of early pool buyout advances
increased 133% to $0.7 billion for the three months ended December 31, 1998 from
$0.3 billion for the three months ended  November 30, 1998.  Lower funding rates
obtained through improved credit ratings and the issue of medium-term  notes and
commercial paper also contributed to increases in net interest income.

  Net Mortgage Origination Revenue

      Net  mortgage  origination  revenue  is  comprised  of fees  earned on the
origination of mortgage loans,  gains and losses on the sale of loans, gains and
losses resulting from hedging of secondary marketing activities and fees charged
to review loan documents for purchased loan production.

      Net mortgage  origination  revenue was $38.3  million for the three months
ended  December 31, 1998  compared to $20.7  million for the  predecessor  three
months ended  November  30,  1997,  an 85%  increase.  This  increase was due to
increases  in  HomeSide  Lending's  loan  production  volumes and an increase in
margins due to a declining  interest rate  environment.  The declining  mortgage
interest  rates  sparked  significant  increases in  refinancing  levels and the
origination  market.  As a result,  HomeSide  Lending's loan production  volumes
increased, primarily through HomeSide Lending's correspondent lending and broker
channels.

   Other Income

       Other  income  for the three  months  ended  December  31,  1998 was $1.8
million compared to $0.2 million for the predecessor three months ended November
30, 1997.  The  increase was due to volume  increases in real estate tax service
fees.

   Salaries and Employee Benefits

      Salaries and  employee  benefits  expense was $34.5  million for the three
months ended  December 31, 1998  compared to $19.2  million for the  predecessor
three months ended November 30, 1997. The average number of full-time equivalent
employees  was 2,496 for the three  months ended  December 31, 1998  compared to
1,805 for the predecessor three months ended November 30, 1997. The increases in
salaries  and  employee   benefits  expense  and  average  number  of  full-time
equivalent  employees are  primarily  attributable  to  additional  expenses and
employees  to  service  the  growing  mortgage  servicing  portfolio,  increased
prepayment activity and increased production volume.

   Occupancy and Equipment Expense

      Occupancy and equipment expense primarily includes rental expense, repairs
and maintenance  costs,  certain computer  software expenses and depreciation of
HomeSide Lending's  premises and equipment.  Occupancy and equipment expense for
the three  months  ended  December  31, 1998 was $6.4  million  compared to $4.3
million for the  predecessor  three months ended November 30, 1997. The increase
in  expense  was  mainly  due to the  increased  expenses  incurred  to  enhance
processing  systems and technology  expenditures  necessary to support  targeted
business growth.


Servicing Losses on Investor-Owned Loans and Foreclosure-Related Expenses

      Servicing  losses on  investor-owned  loans represent  anticipated  losses
primarily  attributable  to  servicing  FHA and VA loans  for  investors.  These
amounts   include   actual   losses   for  the  final   disposition   of  loans,
non-recoverable  foreclosure costs,  accrued interest for which payment has been
curtailed  and  estimates  for  potential  losses  based on  HomeSide  Lending's
experience as a servicer of government loans.

      The  servicing  losses on  investor-owned  loans  and  foreclosure-related
expenses  totaled  $9.8  million for the three  months  ended  December 31, 1998
compared to $5.2 million for the  predecessor  three  months ended  November 30,
1997.  The  increase  was  due to the  growth  of the  portfolio  and  increased
foreclosure losses,  which may continue at this level as the servicing portfolio
ages.

      Included  in the balance of accounts  payable and accrued  liabilities  at
December 31, 1998 is a reserve for estimated  servicing losses on investor-owned
loans of $21.4 million.  The reserve has been  established for potential  losses
related to the  mortgage  servicing  portfolio.  Increases  to the  reserve  are
charged to earnings as servicing losses on investor-owned  loans. The reserve is
decreased  for  actual  losses  incurred  related  to  the  mortgage   servicing
portfolio.  HomeSide Lending's  historical loss experience on VA loans generally
has been consistent with industry experience.  Management believes that HomeSide
Lending has an adequate  level of reserve based on servicing  volume,  portfolio
composition,  credit  quality and  historical  loss rates,  as well as estimated
future losses.  Servicing losses are generally  greatest during the three to six
year age of the loan.

        The  following  table  sets forth  HomeSide  Lending's  delinquency  and
foreclosure experience:

<TABLE>
<CAPTION>

                        Servicing Portfolio Delinquencies
                             (percent by loan count)

                                                                                                           Predecessor
                                                                                December 31, 1998       November 30, 1997
                                                                                -----------------       -----------------
<S>                                                                             <C>                     <C>  
Servicing Portfolio Delinquencies, excluding bankruptcies (at end of period)
          30 days                                                                     3.84%                   4.12%
          60 days                                                                     0.78%                   0.82%
          90+ days                                                                    0.72%                   0.69%
                                                                                ===================     ==================
               Total past due                                                         5.34%                   5.63%
                                                                                ===================     ==================

          Foreclosures pending                                                        0.73%                   0.73%
                                                                                ===================     ==================
</TABLE>

      As a result of a more mature  portfolio at December  31, 1998  compared to
the   predecessor   portfolio  at  November  30,  1997,   servicing   losses  on
investor-owned loans and foreclosure-related  expenses increased while servicing
portfolio delinquencies decreased.

   Other Expenses and Goodwill Amortization

      Other  expenses  consist  mainly  of  professional  fees,   communications
expense,  advertising and public relations, data processing expenses and certain
loan origination expenses.  The level of other expenses fluctuates in part based
upon the level of  HomeSide  Lending's  mortgage  servicing  portfolio  and loan
production volumes.

      Other expenses,  excluding  goodwill  amortization from the acquisition of
HomeSide  Lending by National  Australia  Bank, were $16.2 million for the three
months  ended  December 31, 1998  compared to $9.6  million for the  predecessor
three  months  ended  November  30,  1997.  The  increase in other  expenses was
primarily  due to expenses  associated  with higher  production  volumes and the
growing  mortgage  servicing  portfolio.  Other  expenses,   including  goodwill
amortization  of $8.7  million  and $0.2  million,  respectively,  for the three
months ended December 31, 1998 and the  predecessor  three months ended November
30, 1997 were $24.9 million and $9.6 million, respectively.

   Income Tax Expense

      HomeSide  Lending's  income tax  expense  was $15.5  million for the three
months ended  December 31, 1998  compared to $14.6  million for the  predecessor
three months ended  November 30, 1997.  The  effective  income tax rates for the
three months  ended  December  31, 1998 and the  predecessor  three months ended
November  30, 1997 were 51% and 39%,  respectively.  The increase was due to the
tax effects of goodwill as a result of the merger with the National.


Risk Management Activities

     HomeSide  Lending  has a risk  management  program  designed to protect the
economic value of its mortgage servicing portfolio from declines in value due to
increases in estimated loan prepayment speeds, which are primarily influenced by
declines in interest rates. When loans prepay faster than anticipated,  the cash
flow HomeSide  Lending  expects to receive from servicing such loans is reduced.
The value of mortgage servicing rights is based on the present value of the cash
flows to be received over the life of the loan and  therefore,  the value of the
servicing portfolio declines as prepayments increase.

     During the three months ended December 31, 1998,  HomeSide Lending utilized
options on U.S.  Treasury bond and note futures and U.S.  Treasury bond and note
futures to protect a  significant  portion of the market  value of its  mortgage
servicing portfolio from a decline in value. The risk management  contracts used
by  HomeSide  Lending  have  characteristics  such that they tend to increase in
value as interest rates decline.  Conversely,  these risk  management  contracts
tend to decline in value as interest rates rise.  Accordingly,  changes in value
of these risk management instruments will tend to move inversely with changes in
value of HomeSide Lending's mortgage servicing rights.

     These risk management  instruments are designated as hedges on the purchase
date and such  designation  is at a level at least as  specific  as the level at
which  mortgage  servicing  rights  are  evaluated  for  impairment.   The  risk
management  instruments  are  marked-to-market  with  changes  in  market  value
deferred  and  applied as an  adjustment  to the basis of the  related  mortgage
servicing  right asset being  hedged.  As a result,  any changes in market value
that are deferred are amortized and evaluated for  impairment in the same manner
as  the  related  mortgage  servicing  rights.  The  effectiveness  of  HomeSide
Lending's hedging activity can be measured by the correlation between changes in
the  value  of the risk  management  instruments  and  changes  in the  value of
HomeSide Lending's mortgage servicing rights.  This correlation is assessed on a
quarterly  basis to ensure that high  correlation is maintained over the term of
the hedging program. If management's ongoing assessment of correlation indicates
that high  correlation is not being achieved,  the Company will  discontinue the
application  of hedge  accounting and recognize a gain or loss to the extent the
hedge  results  have not been  offset by changes  in value of the  hedged  asset
during the hedge  period.  During the periods  presented,  HomeSide  Lending has
experienced  a high  measure  of  correlation  between  changes  in the value of
mortgage servicing rights and the risk management contracts. However, in periods
of rising interest rates,  the increase in values of mortgage  servicing  rights
may outpace the decline in value of the options  included in the hedge position,
because the loss on the options is limited to the premium paid.

     During the three months ended  December 31, 1998,  deferred  losses on risk
management  contracts  resulted in net  deferred  hedge gains of $153.5  million
which are included in the carrying value of mortgage servicing rights.  Activity
in the deferred hedge account during the three months ended December 31, 1998 is
as follows (in thousands):

 Net deferred hedge balance at September 30, 1998         $  389,572
 Net deferred hedge losses                                  (224,950)
 Amortization                                                (11,086)
                                                       ================
 Net deferred hedge balance at December 31, 1998          $  153,536
                                                       ================

     HomeSide  Lending's future cash needs as they relate to its hedging program
will be influenced by such factors as long-term  interest rates, loan production
levels and growth in the mortgage  servicing  portfolio.  The fair value of open
risk  management  contracts  at December 31, 1998 was $49.5  million,  which was
equal  to their  carrying  amount  because  the risk  management  contracts  are
marked-to-market  at each reporting date. See "Liquidity and Capital  Resources"
for further  discussion of HomeSide Lending's sources and uses of cash. See Note
3 of Notes to  Consolidated  Financial  Statements for a description of HomeSide
Lending's  accounting policy for its risk management  contracts and Notes 13 and
14 of Notes to  Consolidated  Financial  Statements  for  additional  fair value
disclosures  with  respect  to  HomeSide  Lending's  risk  management  contracts
included in HomeSide  Lending's  Form 10-K for the period from February 11, 1998
to September 30, 1998.


Liquidity and Capital Resources

      The  Company's  principal  financing  needs  are  the  financing  of  loan
origination  activities and the investment in mortgage servicing rights. To meet
these needs,  the Company  currently  utilizes funding from its commercial paper
program, a credit facility with the National,  medium-term notes, an independent
syndicate   of   banks,   including   a   warehouse   credit   facility   and  a
servicing-related  facility,  and cash flow from  operations.  HomeSide  Lending
continues to investigate  and pursue  alternative and  supplementary  methods to
finance its growing  operations  through the public and private capital markets.
These may include methods  designed to expand the Company's  financial  capacity
and  reduce  its  cost of  capital.  In  addition,  to  facilitate  the sale and
distribution of certain mortgage products, HomeSide Lending Mortgage Securities,
Inc., a wholly-owned subsidiary of HomeSide Lending, Inc., may continue to issue
mortgage-backed securities.

Operations

     Net cash  provided by  operations  for the three months ended  December 31,
1998 was $27.6  million.  Net cash  provided by operations  for the  predecessor
three  months ended  November 30, 1997 was $61.9  million.  Cash  provided  from
servicing fee income, loan sales and principal  repayments were partially offset
by cash used to fund loan  originations and pay corporate  expenses.  Cash flows
from loan  originations are dependent upon current  economic  conditions and the
level of  long-term  interest  rates.  Decreases  in  long-term  interest  rates
generally  result in higher loan refinancing  activity,  which results in higher
cash demands to meet increased loan  production  levels.  Higher cash demands to
meet increased loan production  levels are primarily met through  borrowings and
loan sales.

Investing

    Net cash used in investing  activities  for the three months ended  December
31, 1998 was $209.1 million.  Net cash provided by investing  activities for the
predecessor three months ended November 30, 1997 was $53.6 million. Cash used in
investing  activities was for the purchase of mortgage servicing rights and risk
management  contracts.  Cash was  provided  by  proceeds  from  risk  management
contracts  and early pool buyout  reimbursements.  Other assets  increased  $3.6
million to $119.3  million at December 31, 1998 from $115.7 million at September
30, 1998 primarily as a result of increases in HomeSide  Lending's  hedge assets
partially  offset by decreases in loans held for  investment.  Early pool buyout
advances  totaled $487.0 million at December 31, 1998 compared to $759.6 million
at September  30, 1998 as a result of  re-instatements  and sales of advances to
HomeSide  Funding,  Inc.  Future uses of cash for investing  activities  will be
dependent on the mortgage  origination  market and  HomeSide  Lending's  hedging
needs.  HomeSide  Lending is not able to estimate  the timing and amount of cash
uses  for  future  acquisitions  of other  mortgage  banking  entities,  if such
acquisitions were to occur.

Financing

    Net cash  provided  by  financing  activities  for the  three  months  ended
December 31, 1998 was $238.4 million.  Net cash used in financing activities for
the predecessor three months ended November 30, 1997 was $99.0 million. Cash was
provided by the issuance of commercial paper and medium-term  notes,  borrowings
from the National,  and  borrowings on HomeSide  Lending's line of credit during
the periods and used to repay  borrowings  from the National,  borrowings on the
line of credit and to pay dividends to the Parent.

      HomeSide Lending expects that to the extent cash generated from operations
is  inadequate  to meet its  liquidity  needs,  those  needs can be met  through
financing  from its bank  credit  facility  and  other  facilities  which may be
entered into from time to time, as well as from the issuance of debt  securities
in  the  public  markets.  Accordingly,  HomeSide  Lending  does  not  currently
anticipate that it will make sales of servicing rights to any significant degree
for the purpose of generating  cash.  Nevertheless,  in addition to its cash and
mortgage loans held for sale balances,  HomeSide Lending's portfolio of mortgage
servicing  rights  provides  a  potential  source  of  funds  to meet  liquidity
requirements,   especially  in  periods  of  rising  interest  rates  when  loan
origination volume slows.  Repurchase  agreements also provide an alternative to
the bank line of credit  for  mortgages  held for sale.  Future  cash  needs are
highly  dependent on future loan  production  and servicing  results,  which are
influenced by changes in long-term interest rates.

Year 2000

General.  In common with many business users of computers  around the world, the
Company  has  investigated  to what extent the date change from 1999 to 2000 may
affect its business.  The Company has established a program designed to minimize
the impact of the change to 2000 on the Company and its customers.  The Board of
Directors  has made the work  associated  with the change to 2000 a key priority
for management.

The Company uses and is dependent upon a significant number of computer software
programs  and  operating  systems to conduct its  business.  Such  programs  and
systems  include  those  developed and  maintained by the Company,  software and
systems  purchased  from  outside  vendors and  software and systems used by the
Company's third party providers. The Company recognizes that the Year 2000 issue
is one of  the  most  complex  data  processing  problems  faced  by  businesses
worldwide.  As the Company  approaches the century change, its primary objective
is to maintain "business as usual."

The  Company  began  its   information   technology  Year  2000  assessment  and
remediation  efforts  in the third  quarter  of  calendar  year  1996  under the
sponsorship  of its  executive  management.  A formal,  enterprise-wide  program
commenced  in January  1998.  The Year 2000 issue has been  identified  as a top
priority. The Company's executive management and Board of Directors are provided
with frequent detailed updates.  The Company has dedicated  resources to assess,
repair and test programs,  applications,  equipment and facilities.  The Company
has established a Year 2000 Program Office that is coordinating the preparations
for the change to 2000 with each business unit throughout the Company.

The Company's  program  involves an extensive  review of its own  operations and
scoping the work that needs to be completed to minimize  any  potential  impact.
This includes  reviewing the possible  effects on the Company arising out of how
third parties manage their transition to 2000. The work  demonstrates that there
are two possible key impacts:

         Internal  - the  change to 2000 could  cause  interruptions,  errors in
         calculations or delays to the Company's critical business processes via
         unexpected system or application malfunctioning.

         External  - the  impact on the  Company's  own  operations  from  third
         parties,  including  customers,  vendors,  suppliers,   regulators  and
         electronic distribution channels which may be impacted by the change to
         2000.  This  includes any  secondary or systemic  impact that may arise
         from the change to 2000 and the risk of  disruption  in the capital and
         secondary mortgage markets on which the Company is dependent.

The Company's  strategy for  addressing  Year 2000 focuses on four teams,  which
together  address  all  aspects  of  the  Company's  business.  The  Information
Technology  team  addresses  all  of  the  Mainframe,   LAN  and  client  server
applications.  The End User  Computing (or Business) team addresses the business
risks within each of the operating departments, including facilities' risk. This
area of the strategy involves the greatest  concentration of embedded chips. The
Enterprise  team  addresses  the  corporate-wide  risks  posed by the Year 2000,
including business  continuity planning to be implemented by individual business
units. Finally, the Year 2000 Program Office coordinates the Company's Year 2000
readiness  efforts and is responsible  for  communications,  vendor  management,
project documentation and reporting.  The Company's Year 2000 Program Office and
overall  Year 2000  Program are managed by a Year 2000  Program  Director  whose
full-time resources and  responsibilities are dedicated to this effort under the
sponsorship of the Chief Financial Officer and Chief Information Officer.

Throughout  all phases of the Year 2000  Program,  including  the  inventory and
assessment  phases,  the Year  2000  teams aim to  complete  all  required  work
maximize  coverage while  minimizing  disruption to the current service delivery
levels of the Company. Central management of the project is executed using fully
dedicated staff with high levels of subject matter knowledge.  In order to speed
the  assessment  and  remediation  aspects of the mainframe and client server IT
projects,   a  factory  philosophy  has  been  adopted  using  Paragon  Computer
Professionals,  Inc. as the primary outsourcer.  Contractors are used internally
where subject matter expertise is not required.

State of Readiness.  The Company's  approach to preparing for the change to 2000
includes a standard set of methods and tools,  customized  as applicable to each
team, to coordinate and drive the project to completion.  The approach  consists
of six phases:

         1.   Assessment  - Defining  each  system and process to  determine  if
              there are date  dependencies and how to resolve them. For business
              continuity  purposes,  assessment  includes  identifying event and
              dependency risk.

         2.   Remediation - Implementing  the steps identified in the assessment
              phase,  including code  remediation and development of contingency
              plans.

         3.   Testing - Developing and implementing test scripts to determine if
              remediated  code is correct  and  assurance  testing  of  business
              continuity plans.

         4.   Implementation  - Moving all  approved  changes  from testing into
              production and execution of contingency plans as may be required.

         5.  Check-Off  -  Formally  acknowledging  that each  process  has been
               implemented and is functioning correctly.

         6.   Clean  Management - Employing  procedures and practices to prevent
              the  reintroduction  of non-compliant  applications,  products and
              processes into the operating environment,  once check-off has been
              completed.


The Company's  Information  Technology and Business  Teams have completed  their
assessment  of the  Company's  systems  and  business  processes  for Year  2000
vulnerability.  The  assessment  has  included  substantially  all  hardware and
software  systems,  embedded  systems,  buildings  and  equipment,  and business
processes.   The  assessment  has  also  included  a  review  of  the  Company's
dependencies on third parties, including vendors, suppliers and customers.

The Company has  established  certain key  milestones  in its Year 2000 Program.
Those milestones are:

      Assessment of substantially all systems and processes by July 31, 1998;

      Remediation and internal  testing of all mission  critical  applications 
           substantially  completed by December 31, 1998;

      End-to-end  testing of all mission  critical systems with
           material  third parties  substantially  completed by March
           31, 1999; and

      Remediation  and  testing  of all  non-mission  critical
           systems and clean management of all systems through 1999.

The  Company  has  completed  its  assessment  of  all  systems  and  processes.
Remediation and internal  testing of mission  critical  systems is substantially
complete.  The Company is presently "on time" in complying  with the  milestones
and internal timetable the Company has established in preparation for the change
to 2000 in line  with  its  regulator's  suggested  completion  dates  for  core
systems.  Set forth below is a graphical  depiction  of the  Company's  state of
readiness in the first five action phases of the Company's project plan, divided
to show progress as to the  Information  Technology (IT) portion of the project,
the Company's two primary servicing systems,  and the end-user computing portion
of the project as of December 11, 1998:


<PAGE>
<TABLE>
<CAPTION>

                    IT Achievements (excludes servicing systems)                                     
                                                                                          Date            % Complete
     <S>                                                                                  <C>             <C>   
    Full assessment of all IT components impacted by the turn of the century.            6/30/98              100%

    Remediation
    Repair or Replace all IT components found to be non-compliant.                       9/30/98               68%
                                                                                        10/31/98               91%
                                                                                        12/31/98              100%
    Testing Internal
    Test all IT Y2K impacted internal components in a simulated and real future          9/30/98               30%
    date environment.                                                                   10/31/98               41%
                                                                                        12/11/98               76%
                                                                                        12/31/98               80%
                                                                                         1/31/99               93%
                                                                                         3/31/99              100%
    Testing External
    Testing with customers, and vendors/service providers.                              12/11/98                0%
                                                                                         1/31/99                0%
                                                                                         3/31/99               80%
                                                                                         6/30/99              100%
    Implementation
    Place into the production operating environment all IT components tested             9/30/98               17%
    and deemed to be Y2K ready.                                                         10/31/98               26%
                                                                                        12/31/98               87%
                                                                                         1/31/99               89%
                                                                                         3/31/99              100%
    Check-off
    Official sign-off by the business and technology owner of the component              9/30/98                5%
    that the component is Y2K ready.                                                    10/31/98               17%
                                                                                        12/31/98               65%
                                                                                         1/31/99               78%
                                                                                         3/31/99               90%
                                                                                         6/30/99              100%
</TABLE>

The charts set forth above show the status of  completion of the number of gross
technology  applications  identified by the Company for remediation  measured by
each of the  various  phases of the  Company's  Year 2000  Program.  This  chart
measures  the  progress  on   thirty-four   (34)  key   Information   Technology
applications,  of which 14 have been designated as mission critical. As to these
thirty-four (34) key applications,  as of December 31, 1998, assessment was 100%
complete,  remediation was 100% complete, and internal testing was 80% complete.
As to these thirty-four (34) key applications,  as of January 31, 1999, the most
recent date for which  information is available  prior to this filing,  internal
testing was 93% complete. The balance of testing is primarily end-to-end testing
with material third parties, which is scheduled to take place prior to March 31,
1999.

As to the  fourteen  (14) mission  critical  applications  (excluding  servicing
systems  which  are  separately  discussed  below),  as of  December  31,  1998,
assessment  was 100%  complete,  remediation  was 100%  complete,  and  internal
testing was 88%  complete.  As of January 31,  1999,  internal  testing of these
mission critical applications was substantially complete.

The Company's two most critical  business  applications are its primary mortgage
servicing  software  systems:   MSP  (licensed  from  and  supported  by  Alltel
Information Services, Inc.) and ALSS (a proprietary software system supported by
the Company).  Because of their critical importance to the Company's operations,
these systems are not included in the above charts. Rather, progress as to these
two  systems  is set  forth  separately  in the  charts  below.  As to these two
systems, as of December 31, 1998, assessment was 100% complete,  remediation was
100% complete,  and internal testing was 95% complete.  As to these two systems,
as of January 31, 1999, internal testing was substantially complete. However the
Company will continue testing of these two systems  throughout  1999,  including
end-to-end  testing with material  parties that is scheduled to take place prior
to March 31, 1999.


<PAGE>

<TABLE>
<CAPTION>


                        IT Achievements (servicing systems)                                          
                                                                                           Date           % Complete
    <S>                                                                                    <C>            <C>   
    Full assessment of all IT components impacted by the turn of the century.            9/30/98              100%

    Remediation
    Repair or Replace all IT components found to be non-compliant.                       9/30/98               90%
                                                                                        12/31/98              100%
    Testing Internal
    Test all IT Y2K impacted internal components in a simulated and real future         12/31/98               95%
    date environment.                                                                    1/31/99              100%
                                                                                         3/31/99              100%

    Testing External
    Testing with customers, and vendors/service providers.                              12/31/98                0%
                                                                                         1/31/99                0%
                                                                                         3/31/99              100%
    Implementation
    Place into the production operating environment all IT components tested            12/31/98               50%
    and deemed to be Y2K ready.                                                          1/31/99               50%
                                                                                         3/31/99              100%

    Check-off
    Official sign-off by the business and technology owner of the component             12/31/98               50%
    that the component is Y2K ready.                                                     1/31/99               50%
                                                                                         3/31/99               75%
                                                                                         6/30/99              100%
</TABLE>

The  Company's  Year 2000  Program  also  addresses  end-user  computing  issues
presented by the year 2000 change.  The  following  chart  depicts the Company's
progress in addressing  systems and business  processes  other than  information
technology  systems.  As to those business processes and systems, as of December
31, 1998, assessment was 100% complete, remediation was 96% complete and testing
was 56% complete.  As to those business processes and systems, as of January 31,
1999,  remediation was 96% complete and testing was 76% complete. The balance of
remediation   is  scheduled  for   completion   by  March  31,  1999.   Testing,
implementation  and  check-off is  scheduled  to be completed  prior to June 30,
1999.

<TABLE>
<CAPTION>

                           End-User Computing Achievements                                           
                                                                                          Date            % Complete
    <S>                                                                                   <C>             <C>   
    Full assessment of all non-IT components impacted by the turn of the century.       12/31/98              100%

    Remediation
    Repair or replace all non-IT components found to be non-compliant.                  12/31/98               96%
                                                                                         1/31/99               96%
                                                                                         3/31/99              100%
    Testing
    Test all non-IT Y2K impacted components in a simulated and real future date         12/31/98               56%
    environment. Includes testing with customers, and vendors/service providers.         1/31/99               76%
                                                                                         3/31/99               85%
                                                                                         6/30/99              100%
    Implementation
    Place into the production operating environment all non-IT components               12/31/98               22%
    tested and deemed to be Y2K ready.                                                   1/31/99               76%
                                                                                         3/31/99               80%
                                                                                         6/30/99              100%
    Check-off
    Official sign-off by the business owner of the non-IT component that the            12/31/98               28%
    component is Y2K ready.                                                              1/31/99               69%
                                                                                         3/31/99               75%
                                                                                         6/30/99              100%
</TABLE>

<PAGE>


The  information  set  forth  above is not  weighted  to  reflect  the  relative
criticality of individual  applications.  Moreover, not all applications require
the same level of effort for remediation and testing.  Therefore,  a significant
percentage of completion of one phase of the program,  taken out of context, may
not fully reflect the Company's overall state of preparedness.  In addition, the
reality of the Year 2000 work, its breadth, dependencies and linkages (including
satisfactory  and timely  delivery by key vendors)  means that there may be some
work which will not be completed by the milestone target.

The Company has  relationships  with vendors,  customers and other third parties
that rely on software  and systems that may not be ready for the change to 2000.
However, it is not possible in all cases to obtain complete, accurate and timely
information  regarding the Year 2000  programs of third  parties.  Further,  the
Company's  ability to direct such third parties efforts or change relations with
such  third  parties  is often  limited.  There can be no  assurance  that third
parties on which the Company  relies will  complete  their Year 2000 programs on
time or that Year 2000  failures by such third  parties will not have a material
adverse effect on the Company's results of operations.

The Company is currently reviewing the Year 2000 efforts of its mission critical
vendors, customers and service providers. The Company has identified a number of
mission  critical  third  parties  whose Year 2000  failure  may  reasonably  be
expected  to  have a  material  adverse  impact  on  the  Company's  results  of
operations.  Examples  of such third  parties  include:  the  Company's  primary
software  licensor,  Alltel  Information  Services,  Inc.;  the  Company's  sole
provider of insurance  processing  services;  the Company's sole provider of tax
payment  services;  and the  Company's  sole provider of  foreclosure  services.
Catastrophic  failure by any of these  parties  would  have a  material  adverse
effect on the Company.  The Company is targeting  these mission  critical  third
parties for particular  scrutiny  regarding their preparations for the change to
2000.  That  process is ongoing and testing is planned for the first  quarter of
1999.  The  Company  is also  scheduled  to  participate  in the MBA  Year  2000
Readiness  Test,  an  industry-wide  test  coordinated  by the Mortgage  Bankers
Association of America, in the first quarter of 1999.

The Company has been  successful  in  negotiating  Year 2000  amendments  to its
contracts  with several  mission  critical  vendors.  These  amendments  contain
representations  and warranties by the vendors as to their state of readiness to
meet the Year 2000 challenge and  indemnification and other remedies in favor of
the Company in the event the Company  suffers a loss because the vendor does not
successfully manage the change to 2000.

Cost of Year 2000  Efforts.  The  Company  acknowledges  that  work  needs to be
carried out in virtually  all aspects of its business to ensure that the Company
successfully  manages the change to 2000. The Company presently  estimates these
costs to total  approximately  $13.5  million.  The Company has revised its Year
2000 budget from $15.0 million to $13.5  million.  The  adjustment to the budget
resulted  from lower than  anticipated  expenses  relating to: (1) the Company's
primary  remediation  contractor,  (2) software upgrades,  (3) non-Y2K compliant
equipment  write-offs,  (4) contract labor expenses,  and (5) accounting charges
resulting from  capitalization  of certain software costs which were budgeted to
have been expensed.

Year 2000 costs are based on  management's  best  estimates,  which were derived
utilizing  numerous   assumptions  of  future  events  including  the  continued
availability  of certain  resources,  third party  modification  plans and other
factors.  However,  there  can be no  guarantee  that  these  estimates  will be
achieved and actual  results  could  differ  materially  from those  plans.  The
Company does not  separately  track the indirect costs incurred in its Year 2000
program.

Through December 31, 1998, the Company had expended  approximately  $6.4 million
of its total Year 2000 budget.  Through  January 31, 1999,  the most recent date
for which  information  is  available  prior to this  filing,  the  Company  had
expended approximately $6.8 million of its total Year 2000 budget. A significant
portion of the budget is allocated to testing and will be expended in the period
ending March 31, 1999,  the  scheduled  conclusion  of  end-to-end  testing.  In
addition, the Company anticipates significant  expenditures after March 31, 1999
associated with employee retention efforts,  continued testing, clean management
of systems and maintenance of its Year 2000 Program Office. The Company expensed
its remediation costs as they were incurred,  with the exception of new hardware
and software  purchases,  which were  capitalized.  The source of funds for Year
2000  remediation  is operating  income of the Company.  The  percentage  of the
Company's  information  technology  budget  devoted to Year 2000  efforts in the
quarter ended December 31, 1998 was approximately  18%. The Company is unable to
readily  determine the cost of  replacement  of  non-compliant  systems that are
being replaced in the ordinary  course of business.  No significant  information
technology projects have been deferred due to Year 2000 efforts.

The Company's  Year 2000 Program is complex and reliant upon  coordination  with
numerous  third parties.  Accordingly,  the effort and costs in any given period
will depend upon progress. The Company's current Year 2000 budget of $15 million
is based on the  current  status  of the Year 2000  Program  and is  subject  to
change.  The budget of $15  million  does not take into  account  any  potential
losses the Company may suffer as a result of Year 2000  failures,  or any claims
for loss or damage  that may be asserted  against the Company by third  parties,
which may result if the Company or third parties do not successfully  manage the
effect of the Year 2000 date change.

Risks.  The  Company's  risk  management  office  is  actively  involved  in the
Company's  Year 2000 Program.  The most  reasonably  likely worst case Year 2000
scenario,   disregarding  the  Company's  remediation  efforts  and  contingency
planning,  is a failure in its loan servicing  software and/or  systems.  Such a
failure  would  result  in  material  disruption  in  the  Company's  operations
preventing it from  discharging its contractual  obligations to service mortgage
loans in an accurate and timely  fashion.  The  consequences  of such disruption
could  include,  among other things,  revocation  of the Company's  status as an
FHA/VA   approved   lender/servicer   and  Fannie   Mae/Freddie   Mac   approved
seller/servicer,  incorrect processing and/or reporting of payments to consumers
and investors,  a material loss of revenue,  and  litigation  with third parties
alleging losses related to servicing failure.

While  working to ensure that the  Company's  primary  objective  of business as
usual  before,  during and through 2000 is  achieved,  there can be no guarantee
that its Year 2000 program will be  successful  in all respects or that the date
change for 1999 to 2000 will not  materially  affect the  Company's  business in
some form.

Contingency Planning. The Company's Year 2000 Program is based on the assumption
that 100% impact coverage is neither feasible nor practical. It is possible that
the  Company or third  parties on which the Company  depends may have  unplanned
system  difficulties  during the transition  through 2000, or that third parties
may not successfully manage the change to 2000.  Therefore,  an integral part of
the  Company's  Year 2000 Program is the  development  of  contingency  plans in
anticipation  of systems or third party  failure.  These  contingency  plans are
being  developed for individual  applications,  systems and business  processes.
Individual  departments  within the Company,  acting under the  supervision  and
direction of the Year 2000 Program  Enterprise team, are reviewing and adjusting
existing business continuity planning to incorporate these circumstances, and to
seek to ensure that the Company  meets its primary  objective  of  "business  as
usual" before, during and through 2000.

The foregoing  disclosure,  including the  description of a worst case Year 2000
scenario,  is furnished in response to and in  compliance  with the Statement of
the  Commission  Regarding  Disclosure of Year 2000 Issues and  Consequences  by
Public  Companies,  Investment  Advisers,  Investment  Companies,  and Municipal
Securities Issuers, Securities Act Rel. No. 33-7448 (July 30, 1998).

Quantitative and Qualitative Market Risk

     There have been no  material  changes  in the  Company's  market  risk from
September 30, 1998. For information  regarding the Company's  market risk, refer
to Form  10-K  for  the  fiscal  year  ended  September  30,  1998  of  HomeSide
International, Inc.


                         PART II - OTHER INFORMATION

ITEM 1.  Legal Proceedings

      HomeSide Lending is a defendant in a number of legal  proceedings  arising
in the normal course of business.  HomeSide Lending, in management's estimation,
has  recorded  adequate  reserves  in  the  financial   statements  for  pending
litigation.  Management,  after  reviewing all actions and  proceedings  pending
against or involving HomeSide Lending, considers that the aggregate liability or
loss, if any,  resulting  from the final outcome of these  proceedings  will not
have a material effect on the financial position of HomeSide Lending.

      In recent years,  the mortgage  banking industry has been subject to class
action  lawsuits  which  allege   violations  of  federal  and  state  laws  and
regulations,  including the propriety of collecting  and paying various fees and
charges.  Class action  lawsuits may be filed in the future against the mortgage
banking industry.


ITEM 6.  Exhibits and Reports on Form 8-K

(a) The following documents are filed as a part of this Report:

 Number    Description

  10.1     U.S. Commercial Paper Offering Memorandum between HomeSide Lending,
               Inc. and Chase Securities, Inc.
  10.2     Commercial Paper Dealer Agreement between HomeSide Lending, Inc.
               and Morgan Stanley & Co., Inc.
  10.3     Commercial Paper Dealer Agreement between HomeSide Lending, Inc.
               and Chase Securities, Inc.
  12       Computation of the ratio of earnings to Fixed Charges
  27       Financial Data Schedule



 (b)   Reports on form 8-K

         HomeSide  Lending  has filed no  reports  on Form 8-K  during the three
months ended December 31, 1998.




                                   SIGNATURES

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

                          HomeSide Lending, Inc.
                          (Registrant)
Date: February 12, 1999   By:  __/S/_____________________
                                Joe K. Pickett
                          Chairman of the Board, Chief Executive Officer
                                 and Director (Principal Executive Officer)

Date: February 12, 1999   By:  __/S/______________________
                                Kevin D. Race
                          Vice President, Chief Financial Officer and Treasurer
                                    (Principal Financial and Accounting Officer)