<PAGE>   1
                                  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, 2000

                                       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                (I.R.S. Employer Identification
incorporation or organization)                  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 14, 2001
           -----                                --------------------------------

Common stock $1.00 par value                                100 shares



<PAGE>   2


                              FINANCIAL INFORMATION

ITEM 1.  Financial Statements


                             HOMESIDE LENDING, INC.
                           CONSOLIDATED BALANCE SHEETS
                                   (UNAUDITED)
                    (DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)


<TABLE>
<CAPTION>
                                                             DECEMBER 31,     SEPTEMBER 30,
                                                                2000              2000
                                                           ---------------- ----------------
<S>                                                        <C>              <C>
   ASSETS

   Cash and cash equivalents                                 $      59,022      $   110,737
   Mortgage loans held for sale, net                             1,329,690        1,441,216
   Mortgage servicing rights, net                                4,423,013        4,464,312
   Risk management instruments at fair value                       280,907                -
   Early pool buyout advances                                      126,657          141,255
   Accounts receivable, net                                        333,346          324,028
   Premises and equipment, net                                      82,276           80,052
   Goodwill, net                                                   588,656          597,228
   Other assets                                                     85,881           93,414
                                                           ---------------- ----------------
   Total Assets                                              $   7,309,448      $  7,252,242
                                                           ================ ================


   LIABILITIES AND STOCKHOLDER'S EQUITY

   Accounts payable and accrued liabilities                  $     677,810      $   581,361
   Notes payable                                                 2,939,000        3,235,400
   Long-term debt                                                2,020,649        1,757,813
   Deferred income taxes, net                                      323,151          310,672
                                                           ---------------- ----------------
   Total Liabilities                                             5,960,610        5,885,246
                                                           ---------------- ----------------

   Stockholder's Equity:
   Common stock:
     Common stock, $1.00 par value, 100 shares
       authorized, issued, and outstanding,
       all pledged as collateral on the long-term debt
       of the Parent                                                     -                -


   Additional paid-in capital                                    1,342,541        1,342,541
   Retained earnings                                                 9,263           24,455
   Accumulated other comprehensive income                           (2,966)               -
                                                           ---------------- ----------------


   Total Stockholder's Equity                                    1,348,838        1,366,996
                                                           ---------------- ----------------

   Total Liabilities and Stockholder's Equity                $   7,309,448      $ 7,252,242
                                                           ================ ================



</TABLE>




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



                                       2
<PAGE>   3




                             HOMESIDE LENDING, INC.
           CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
                                   (UNAUDITED)
                             (DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>




                                                      FOR THE THREE       FOR THE THREE
                                                       MONTHS ENDED        MONTHS ENDED
                                                    DECEMBER 31, 2000    DECEMBER 31, 1999
                                                    ------------------   -----------------


<S>                                                    <C>            <C>
        REVENUES:

        Mortgage servicing fees                           $208,198         $171,198
        Amortization of mortgage servicing rights        (120,262)         (97,528)
        Risk management of mortgage servicing rights         7,050               -
                                                       ------------   --------------
           Net servicing revenue                            94,986          73,670


        Interest income                                     28,684           36,165
        Interest expense                                   (45,454)         (33,151)
                                                       ------------   --------------
            Net interest (expense) revenue                 (16,770)           3,014

        Net mortgage origination revenue                    22,623           17,008
        Other income                                         5,803              863
                                                       ------------   --------------
            Total Revenues                                 106,642           94,555


        EXPENSES:

        Salaries and employee benefits                      29,879           29,818
        Occupancy and equipment                              9,838            8,550
        Servicing losses on investor-owned loans
           and foreclosure-related expenses                 10,091            8,368
        Goodwill amortization                                8,572            8,797
        Other expenses                                      19,357           13,325
                                                       ------------   --------------
            Total Expenses                                  77,737           68,858


        Income before income taxes and cumulative
        effect of a change in accounting principle          28,905           25,697
        Income tax expense                                  13,666            5,777
                                                       ------------   --------------
        Income before cumulative effect of a change
        in accounting principle                             15,239           19,920

        Cumulative effect of a change in accounting
        for derivative instruments and hedging
        activities, net of income tax expense of $507          883                -
                                                       ------------   --------------


        Net income                                          16,122           19,920
                                                       ------------   --------------
        Other comprehensive income, net of tax:
          Cumulative effect of a change in
          accounting for derivative
          instruments and hedging activities               (9,133)                -
          Net losses on current period cash flow
          hedges                                           (2,915)                -
          Less: reclassification adjustment for
          losses included in net
          income                                             9,082                -
                                                       ------------   --------------

        Other comprehensive income                         (2,966)                -
                                                       ------------   --------------
        Comprehensive income                               $13,156          $19,920
                                                       ============   ==============
</TABLE>

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


                                       3
<PAGE>   4

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

                             (DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
                                                      FOR THE THREE       FOR THE THREE
                                                       MONTHS ENDED        MONTHS ENDED
                                                    DECEMBER 31, 2000    DECEMBER 31, 1999
                                                    ------------------   -----------------

        CASH FLOWS  PROVIDED BY OPERATING ACTIVITIES:

<S>                                                     <C>               <C>
        Net income                                      $   16,122        $  19,920
        Adjustments to reconcile net income to net
        cash provided by operating activities:

          Amortization of mortgage servicing rights        120,262           97,528

          Depreciation and amortization                     13,288           12,505
          Cumulative effect of a change in accounting
          for derivative instruments
          and hedging activities, net                        (883)                -
          Change in fair value of derivative and
          hedge instruments, net                          (15,074)                -
          Valuation provision                               10,500                -
          Servicing losses on investor-owned loans           3,560            2,530
          Change in deferred income tax liability           11,048            5,781
          Origination, purchase and sale of loans
          held for sale, net of Repayments                 125,026          112,334
          Change in accounts receivable                   (13,122)         (35,769)
          Change in other assets and accounts payable
          and accrued liabilities                          140,338          (4,983)
                                                       ------------   --------------
        Net cash provided by operating activities          411,065          209,846


        CASH FLOWS USED IN INVESTING ACTIVITIES:

        Purchase of premises and equipment, net            (6,082)          (6,251)
        Acquisition of mortgage servicing rights         (437,385)        (234,919)
        Net cash provided from (used for) risk
        management contracts                                45,605        (138,807)
        Net early pool buyout reimbursements                14,410           94,996
                                                       ------------   --------------
        Net cash used in investing activities            (383,452)        (284,981)

        CASH FLOWS (USED IN) PROVIDED BY FINANCING ACTIVITIES:


        Net (repayments to) borrowings from banks         (61,400)          494,599
        Issuance of commercial paper, net of
        repayments                                       (235,000)           17,354
        Issuance of medium-term notes                      250,000                -
        Payment of debt issue costs                        (1,536)          (2,122)
        Repayment of long-term debt                           (79)            (221)
        Dividends paid to Parent                          (31,313)         (31,313)
                                                       ------------   --------------
        Net cash (used in) provided by financing
        activities                                        (79,328)          478,297

        Net (decrease) increase in cash and cash
        equivalents                                       (51,715)          403,162
        Cash and cash equivalents at beginning of
        period                                             110,737          202,859
                                                       ------------   --------------

        Cash and cash equivalents at end of period      $   59,022        $ 606,021
                                                       ============   ==============

        Supplemental disclosure of cash flow
        information:
        Interest paid                                   $   44,734        $  32,426


        Income taxes paid                               $        2        $       3

        Income taxes refunded                           $       14        $       7

        Impact of cash flow hedges on other
        comprehensive income, net                       $    2,966        $       -
</TABLE>




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

                                       4
<PAGE>   5


                             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 March 6, 2000, HomeSide Holdings, Inc. ("HomeSide Holdings") was merged with
and into HomeSide Lending, Inc. ("HomeSide" or the "Company"). Prior to the
merger, HomeSide Holdings was a wholly-owned subsidiary of HomeSide
International, Inc. (the "Parent"). Pursuant to the merger, (i) the Company
succeeded to all of the assets of, and assumed all of the liabilities of,
HomeSide Holdings, and (ii) the shares of capital stock of HomeSide Holdings
issued and outstanding as of the date of the merger were canceled and exchanged
for 10,000 shares of common stock of the Company which were issued to the
Parent. In order to facilitate the exchange of shares required by the merger,
the Company amended its Articles of Incorporation to increase the authorized
number of shares of common stock to 10,100. Thereafter, the Company amended and
restated its Articles of Incorporation to reduce the number of authorized,
issued and outstanding shares of capital stock to 100 shares of common stock,
par value $1.00. The merger does not have a material affect on the financial
statements of the Company. All prior period consolidated financial statements
have been restated to include the combined results of operations, financial
position and cash flows of HomeSide Holdings.

Operating results for the three-month periods ended December 31, 2000 and 1999
are not necessarily indicative of the results that may be expected for the
fiscal year ending September 30, 2001. For further information, refer to the
consolidated financial statements and footnotes thereto included in the Form
10-K for the fiscal year ended September 30, 2000 of HomeSide Lending, Inc.

2.    CASH AND CASH EQUIVALENTS

Cash and cash equivalents include cash and cash due from banks and
interest-bearing deposits with an original maturity of three months or less.
Margin deposits associated with the risk management program for mortgage
servicing rights are maintained with counterparties and the Company in
accordance with the requirements of International Swap Dealer Agreements. At
December 31, 2000 counterparty margin deposits with the Company were
approximately $156.3 million. At September 30, 2000, the Company's margin
deposits with counterparties totaled approximately $84.0 million.

3.    MORTGAGE SERVICING RIGHTS

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

<TABLE>
<CAPTION>

<S>                          <C>
Balance, September 30, 2000  $4,464,312
Additions                       437,385
Change in value due to
hedged risk                   (347,922)
Amortization                  (120,262)
Valuation provision            (10,500)
                             ------------
Balance, December 31, 2000   $4,423,013
                             ============
</TABLE>


4.   RISK MANAGEMENT AND THE ACCOUNTING FOR DERIVATIVE INSTRUMENTS AND HEDGING
     ACTIVITIES

The Company has developed risk management programs and processes designed to
manage market risk associated with the Company's business activities. As more
fully described herein, interest rate risk is a predominant risk that further
influences a number of other

                                       5
<PAGE>   6


business risks such as pricing risk, prepayment risk, valuation risk, balance
sheet management and funding risk. As part of its risk management programs, the
Company utilizes a number of derivative instruments to manage these risks.

In June of 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133, "Accounting for Derivative Instruments
and Hedging Activities" (SFAS 133). SFAS 133, as amended, standardizes the
accounting for derivative instruments and hedging activities and requires that
all derivative instruments be recognized as assets and liabilities at fair
value. If certain conditions are met, "hedge accounting" may be applied and the
derivative instruments may be specifically designated as: (a) a hedge of the
exposure to changes in the fair value of a recognized asset or liability or an
unrecognized firm commitment ("fair value hedge"), (b) a hedge of the exposure
to variability of cash flows of a recognized asset, liability or forecasted
transaction ("cash flow hedge") or (c) a hedge of certain foreign currency
exposures. In the case of a qualifying fair value hedge, changes in the value of
the derivative instruments that have been highly effective are recognized in
current earnings along with the change in value of the designated hedge item. In
the case of a qualifying cash flow hedge, changes in the value of the derivative
instruments that have been highly effective are recognized in other
comprehensive income ("OCI"), until such time that earnings are affected by the
variability of the cash flows of the underlying hedged item. In either a fair
value hedge or a cash flow hedge, net earnings are impacted to the extent the
changes in the value of the derivative instruments do not perfectly offset the
changes in the value of the hedge items (so called "ineffectiveness").
Derivative instruments that are non-designated or do not meet the relevant hedge
accounting criteria are accounted for at fair value with gains and losses
recorded to current earnings. The Company is not a party to any foreign currency
hedge relationships.

Effective with its first fiscal quarter beginning October 1, 2000, the Company
adopted SFAS 133 as required. Accordingly, all derivative instruments are
recognized on balance sheet at fair value and are either designated as fair
value hedges, cash flow hedges, or are non-designated pursuant to the Company's
risk management policies. At October 1, 2000, the Company recognized a
cumulative-effect transition adjustment of $1.4 million to increase pre-tax
income for the effect of the change in accounting principle. Additionally, the
Company recognized a pre-tax cumulative-effect transition adjustment to reduce
OCI by $14.4 million. The transition adjustments are more fully explained in the
following sections along with the risk management activities and hedge
accounting results for the quarter ended December 31, 2000.

Risk Management of Loan Production Activities

Loan production activities include the origination or acquisition of mortgage
loans, the warehousing of those loans in inventory and the resale of those loans
to investors in the secondary mortgage market. The Company maintains a risk
management program to protect and manage interest rate risk and pricing risk
associated with its mortgage committed pipeline and mortgage inventory. The
Company does not presently originate or acquire loans for investment (portfolio)
purposes.

Mortgage Pipeline:

The Company's mortgage committed pipeline includes interest rate lock
commitments ("IRLCs") that have been extended to borrowers who have applied for
loan funding and meet certain defined credit and underwriting criteria. All of
the Company's IRLCs will be classified as held for sale upon funding of the
underlying loan. Effective with the adoption of SFAS 133, the Company classifies
and accounts for IRLCs as non-designated derivative instruments. Accordingly,
IRLCs are recorded at fair value with changes in value recorded to current
earnings. Risk management derivative contracts used to economically hedge the
IRLCs are also classified and accounted for as non-designated derivatives. In
summary, since a derivative instrument cannot hedge another derivative
instrument (for accounting purposes) the pipeline is effectively accounted for
as a mark-to-market book of business.

The fair value of the Company's IRLCs generally approximate zero at inception
(the lock-in date) since the Company's practice is to extend loan commitments at
market rates of interest and to exclude from its fair value calculation the
normal profit margin associated with the future loan execution. The future loan
execution involves the sale of the loan and, typically, the retention of the
servicing rights. IRLCs have value characteristics that are somewhat analogous
to certain option contracts in that the commitments tend to: (i) decrease in
value at an accelerating rate as interest rates increase and the probability of
the borrower's loan closing increases, and (ii) increase in value at a
decelerating rate as interest rates decline and the probability of the
borrower's loan closing decreases. The Company manages the interest rate and
pricing risks associated with its IRLCs using mortgage forward delivery
contracts, options on mortgage-backed securities and certain treasury
instruments. The Company's risk management program employs the use of financial
modeling to maintain a high degree of economic correlation between the changes
in values of the IRLCs and the related non-designated hedges. However, due to
imprecisions in projecting the timing and rate of loan closings (which are
influenced by borrower behavior), some level of economic ineffectiveness can be
expected.


                                       6
<PAGE>   7

Following is a summary of the net ineffectiveness recognized on non-designated
risk management hedging relationships related to the pipeline at December 31,
2000 (in thousands):

<TABLE>
<CAPTION>

<S>                                                 <C>
Gains on IRLCs recognized to income                 $    17,692
Losses on mortgage forward delivery contracts          (13,818)
Losses on options contracts                             (1,546)
                                                   ------------
   Total losses recognized to income                   (15,364)

Net ineffectiveness recognized on non-designated
derivatives                                         $     2,328
                                                    ============
</TABLE>

Gains on interest rate lock commitments represent increases in the value of the
commitments from the rate-lock inception date to the loan funding date (for
those commitments that are funded), or to the current reporting date for those
IRLCs that are open at December 31, 2000. The basis of the IRLCs at the loan
funding date, representing cumulative gains or losses on the IRLCs, is included
as a component of the initial cost basis of the loans. Approximately $11.1
million of the gains recognized on IRLCs (reported above) were applied to the
initial basis of the underlying loans funded and are included in the carrying
amount of loans held for sale at December 31, 2000. The balance of the gains
totaling $6.6 million are recognized as open derivative contracts at December
31, 2000 and are recorded at fair value in the consolidated balance sheets.
During the quarter ended December 31, 2000, net gains of $7.0 million
attributable to pipeline hedging results were recognized to earnings.
Approximately $4.7 million of the net gains relates to transactions that were
settled during the quarter while the balance of $2.3 million relates to the risk
management relationships presented above. The net ineffectiveness of
non-designated risk management relationships (related to the pipeline) is
included in net mortgage origination revenue in the accompanying consolidated
statements of income.

Mortgage Inventory

The Company's mortgage inventory includes closed loans that are held for resale
pending completion of normal post-closing review, collateral document
preparation and other pooling requirements necessary to consummate the sale
and/or securitization. Based on the status of such, as well as historical
delivery patterns and investor settlement dates, the Company is able to forecast
the amount and timing of loan sales. Approximately $1.21 billion of the
Company's loans at December 31, 2000 are conforming loans which have been
underwritten pursuant to the requirements of the secondary marketing agencies
(FNMA, FHLMC or GNMA as appropriate). The Company's risk management program
involves the use of mortgage forward delivery contracts to hedge 100% of its
agency-eligible conforming loans as forecasted loan sales. At December 31, 2000,
a total of $1.21 billion of mortgage forward delivery contracts were designated
as cash flow hedges. At the inception of the hedge, the Company formally
documents the relationship between the forward delivery contracts and the
forecasted loan sales as well as its risk management objective and strategy for
undertaking the hedge transactions. The dollar amount of the forward delivery
contracts along with the underlying rate and terms of the contracts are
equivalent to the forecasted loan sales that are probable of occurring. Hence,
the forward delivery contracts effectively fix the forward sales price and
thereby substantially eliminate interest rate and pricing risk to the Company.
Cumulative losses related to the hedge instruments in the amount of $4.7 million
were recorded in OCI at December 31, 2000 and will be reclassified to earnings
during the next 90 days, concurrent with the recognition in earnings of the
changes in cash flows of the forecasted loans sales. Pursuant to SFAS 133, the
unrealized gains (representing the expected offset from the variability in cash
flows) associated with the forecasted loan sales are not recorded in the
consolidated balance sheet at December 31, 2000 but are represented as a
component of the fair value of loans held for sale in excess of their carrying
value.

Mortgage loans held for sale at December 31, 2000 include non-conforming loans
aggregating $113 million which will be sold to non-agency, private investors.
During the three-month period ended December 31, 2000, losses of $0.4 million on
non-designated mortgage forward delivery contracts maintained as economic hedges
of non-conforming loans were recorded to earnings and are included in net
mortgage origination revenue in the accompanying consolidated statement of
income.


                                       7
<PAGE>   8
 The fair values of risk management hedging relationships at December 31, 2000
are as follows (in thousands):


<TABLE>
<CAPTION>
<S>                                                <C>
Mortgage Pipeline:
IRLCs at period end                                       $  6,581
Non-designated mortgage forward delivery contracts        (13,818)
Options on mortgage-backed securities                          159
                                                    ---------------
   Total fair value of pipeline derivatives                (7,078)
                                                    ===============

</TABLE>

<TABLE>
<CAPTION>

<S>                                                 <C>
Mortgage Inventory:
Designated mortgage forward delivery contracts              (4,670)
Non-designated mortgage forward delivery contracts            (429)
                                                    ---------------
   Total fair value of derivatives related to
   inventory                                                (5,099)

Net liability recorded for fair value derivatives      $   (12,177)
                                                    ===============

Carrying value of mortgage loans held for sale         $ 1,329,690
Fair value of loans held for sale                        1,342,361
                                                    ---------------
     Unrealized gains in mortgage inventory            $    12,671
                                                    ===============
</TABLE>

Transition Adjustments and Current Period Activity in OCI

As discussed above, the cumulative effect of the adoption of SFAS 133 was to
increase pre-tax net income by $1.4 million. This amount relates solely to the
mortgage pipeline at October 1, 2000 and represents the net effect of the
adjustments necessary to record IRLCs and the related non-designated derivatives
at fair value.

The pre-tax cumulative-effect transition adjustment to reduce OCI by $14.4
million relates solely to the hedging activities of the mortgage inventory at
October 1, 2000. Specifically, this amount represents the cumulative losses (to
September 30, 2000) of mortgage forward delivery contracts that were off-balance
sheet prior to the adoption of SFAS 133. Such cumulative losses did not exceed
cumulative unrealized gains in the designated mortgage inventory at October 1,
2000. Pursuant to the requirements of SFAS 133, cumulative losses in OCI of
$14.3 million were reclassified to earnings during the three-month period ended
December 31, 2000, concurrent with the recognition of the gains (or favorable
variability in cash flows) of the related forecasted loan sales that were
settled. Gains and losses on such hedge relationships are included in net
mortgage origination revenue in the accompanying consolidated statement of
income. Activity in OCI related to cash flow hedges of forecasted loan sales is
summarized as follows for the quarter ended December 31, 2000 (in thousands):

<TABLE>
<CAPTION>
                                                                      Tax
                                                      Before-tax   (expense)  Net-of-tax
                                                        Amount    or benefit    amount
                                                      ------------------------------------
<S>                                                   <C>         <C>          <C>
Balance at September 30, 2000                         $        -  $      -     $      -
Cumulative effect of a change in accounting for
derivative instruments and hedging activities           (14,383)      5,250     (9,133)
Reclassification of losses to net income                  14,302    (5,220)       9,082
Net losses on current period cash flow hedges            (4,589)      1,674     (2,915)
                                                      ------------------------------------
Balance at December 31, 2000                          $  (4,670)  $   1,704    $(2,966)
                                                      ====================================
</TABLE>




                                       8
<PAGE>   9

Risk Management of Mortgage Servicing Rights

HomeSide utilizes a number of risk management derivative instruments to manage
the interest rate risk associated with its mortgage servicing rights. Such
instruments include interest rate swaps, swaptions and caps, mortgage forward
delivery contracts, options on mortgage-backed securities, and options and
futures on exchange traded Treasury and Eurodollar contracts. Given the unique
value determinants and convexity of mortgage servicing rights, management uses a
combination of derivative instruments to construct a hedge portfolio that is
intended to provide effective protection of the value of the Company's mortgage
servicing rights from interest rate risk.

Pursuant to the requirements of SFAS 133, mortgage servicing rights are
stratified into portfolios of similar assets based on their price sensitivity
such that the mortgage servicing rights in a given portfolio can be expected to
respond in a generally proportionate manner to the expected changes in the total
value of the designated portfolio. The Company uses vendor provided valuation
models to determine the price sensitivity of the mortgage servicing rights for
selected rate shock scenarios such that individual portfolios can be established
and qualify for hedge designation (hereinafter referred to as the "designated
portfolios"). Certain mortgage servicing rights with dissimilar value
determinants and unique convexity profiles may fail to meet the Company's price
sensitivity criteria and are excluded from the portfolios that are designated
for hedging (such portfolios are hereinafter referred to as "non-designated
portfolios").

The Company's risk-management derivative contracts are designated as fair value
hedges of the designated mortgage servicing rights (designated portfolios). As
permitted by SFAS 133, the "hedged risk" is defined and measured as the change
in value of the designated portfolios due to changes in benchmark interest
rates. For its monthly hedge periods in the quarter ended December 31, 2000, the
Company defined swap rates as the designated benchmark interest rate. At the
inception of the hedge period, the Company formally documents the relationship
between the hedging instruments and the hedged items (representing the
individual designated portfolios described above), as well as its
risk-management objective and strategy for undertaking the hedging
relationships. The Company employs statistical correlation techniques - both at
the inception of the hedge period and on an ongoing basis - to formally assess
its expectation that changes in the value of the derivative contracts will be
highly effective in offsetting changes in the value of the designated hedge
portfolios. In its assessment of hedge effectiveness, the Company excludes the
change in the value of the derivative contracts due to time decay (theta) which
is recorded to current earnings. During the three-month period ended December
31, 2000, the Company's hedging relationships were highly effective.
Accordingly, the increase in the value of the designated derivative contracts
(net of theta) of $370.4 million was recorded to earnings along with the
decrease in the value of the designated mortgage servicing rights (due to the
benchmark interest rate) of $347.9 million.

HomeSide's risk management program also employs the use of non-designated
derivative contracts that are used to provide a level of economic offset against
the value changes attributable to the non-designated portfolios that do not
qualify for hedge accounting treatment under SFAS 133. Additionally, the Company
is party to certain risk management strategies that are structured to mitigate
yield curve risk and to provide a level of economic offset to the time decay
(theta). These non-designated derivatives are marked-to-market with changes in
value recorded to earnings.

Risk management results related to mortgage servicing rights for the quarter
ended December 31, 2000 are summarized below and are included in the caption
entitled risk management of mortgage servicing rights in the accompanying
consolidated statements of income (in thousands):

<TABLE>
<CAPTION>

<S>                                                  <C>
Gains on designated derivative contracts             $  370,419
Decrease in value of designated mortgage servicing
rights                                                (347,922)
                                                     ------------
Net hedge ineffectiveness                                22,497


Non-designated derivatives and excluded component
(time decay)                                            (4,947)
Valuation provision on non-designated portfolio        (10,500)
                                                     ------------
Total risk management of mortgage servicing rights   $    7,050
                                                     ============

</TABLE>

The fair value of the Company's derivative instruments used in the risk
management of mortgage servicing rights are as follows at December 31, 2000 (in
thousands):

<TABLE>
<CAPTION>

<S>                                                  <C>
Derivatives designated as fair value hedges          $  169,425

Non-designated derivatives related to
non-designated portfolios                            $  110,426
</TABLE>


                                       9
<PAGE>   10

Risk Management of Corporate Funding

To meet its funding requirements, the Company periodically issues fixed-rate,
medium-term notes which are converted to floating-rate debt as part of its
Corporate funding strategies. As of the quarter ended December 31, 2000, the
Company had $750 million of fixed-rate, medium term notes that had been swapped
to floating rates of interest with $750 million in notional interest rate swaps.
The Company has designated the interest rate swaps as fair value hedges of the
change in value of the medium-term notes due to LIBOR interest rates. At the
inception of the hedge, the Company formally documents the hedging relationships
between the hedge instruments and the hedged items, as well as the risk
management objectives and strategy for undertaking the hedge transactions. The
medium-term notes are not prepayable and the key terms of the interest rate
swaps are equivalent to those of the medium-term notes. Accordingly, the Company
expects that changes in the value of the interest rate swaps will offset the
changes in the value of the fixed-rate debt attributable to LIBOR interest
rates. During the quarter ended December 31, 2000, the value of the interest
rate swap contracts increased by $13.4 million and offset the changes in the
fair value of the medium-term notes due to the hedge risk. The fair value of
interest rate swap contracts designated as fair value hedges of medium-term
notes was $13.2 million at December 31, 2000.

Termination of Hedging Relationships

The Company employs a number of risk management monitoring procedures to ensure
that the designated hedging relationships are demonstrating, and are expected to
continue to demonstrate, a high level of effectiveness. Hedge accounting is
discontinued on a prospective basis if it is determined that the hedging
relationship is no longer effective or expected to be effective in offsetting
changes in the fair value or cash flows of the hedge item, or if a forecasted
transaction is no longer probable of occurring. When hedge accounting is
discontinued, the Company continues to carry the derivative instruments at fair
value with changes in their value recorded to earnings. However, in the case of
a fair value hedge that is discontinued, the carrying amount of the previously
hedged asset or liability may not be adjusted for changes in their fair value,
except in the case where a decline in fair value creates impairment to the
Company. In the case of a cash flow hedge of a forecasted transaction that is no
longer probable of occurring, gains and losses that were previously accumulated
in other comprehensive income are immediately recognized to earnings. During the
three months ended December 31, 2000, no hedging relationships were terminated.

Fair Value of Derivative Instruments

Derivative Contracts: The fair value of mortgage forward delivery contracts,
options on mortgage-backed securities and exchange traded futures and options
on Treasury and Eurodollar contracts are determined based on market quotes.
Interest rate swaps, swaptions and caps are determined based on discounted
valuation models and are periodically validated against dealer quotes.

Interest Rate Lock Commitments Classified as Derivatives: The fair value of
interest rate lock commitments is determined using a vendor provided valuation
model which references market quotes of the underlying mortgages. The valuation
model also considers a number of other key value determinants including the
remaining commitment period, the rate of the commitment in relation to current
market rates, interest rate volatility and the probability of the loan closing.
The probability of the loan closing is estimated based on historical
pull-through rates which are stored in matrix detail within the model database
by product type for an established set of interest rate shock scenarios. The
fair value of the Company's IRLCs generally approximate zero at inception (the
lock-in date) since the Company's practice is to extend loan commitments at
market rates of interest and to exclude from its fair value calculation the
normal profit margin associated with the future loan sale transactions.


                                       10
<PAGE>   11

5.      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>
December 31, 2000:
Commercial paper                      $1,265,000       6.66%               6.63%
National Australia Bank
unsecured facility                     1,674,000       6.76%               6.70%
                                  ---------------
  Total                               $2,939,000
                                  ===============

September 30, 2000:
Commercial Paper                     $ 1,500,000       6.63%               6.16%
National Australia Bank
Unsecured Facility                     1,735,400       6.70%               6.25%
                                  ---------------
  Total                               $3,235,400
                                  ===============

</TABLE>


HomeSide has established a $1.5 billion commercial paper program which is
supported by an independent syndicate of banks under a credit facility. On
October 16, 2000, HomeSide entered into a $1.5 billion back-up credit facility.
This agreement replaces HomeSide's previous bank credit facility and will
terminate on October 15, 2002. Borrowings under the credit facility bear
interest at rates per annum, based on, at HomeSide's option, (i) the Eurodollar
rate plus an applicable margin, (ii) the greater of the federal funds rate plus
an applicable margin or the prime rate, (iii) in the case of swingline loans,
the federal funds rate plus an applicable margin, or (iv) in the case of
competitive bid loans, the lowest competitive Eurodollar or fixed rate submitted
by a bidding lender. The primary purpose of this credit facility is to provide
liquidity back-up for HomeSide's $1.5 billion commercial paper program. The
outstanding commercial paper reduces available borrowings under the credit
facility. At December 31, 2000, there were no amounts outstanding under the
credit facility.

 HomeSide's unsecured revolving credit facility with the National provides
short-term funding up to $2.5 billion, subject to limits imposed by the
National's regulatory authorities. As of December 31, 2000, the National's limit
to lend funds to HomeSide, a non-bank affiliate, was approximately $2.0 billion.
Borrowings under the credit facility may be overnight or for periods of 7,30,60
or 90 days. For overnight borrowings, the interest rate is determined by the
National at the time of the borrowing. For LIBOR - based borrowings, the
interest rate is charged at the corresponding LIBOR rate.


                                       11
<PAGE>   12

6.    LONG-TERM DEBT

Medium-term notes

As of December 31, 2000, outstanding medium-term notes issued by HomeSide
Lending under its shelf registration statement were as follows (in thousands):

<TABLE>
<CAPTION>
                       OUTSTANDING
    ISSUE DATE           BALANCE          COUPON RATE       MATURITY DATE
    ----------         -----------        -----------       -------------

<S>                    <C>                <C>               <C>
June 30, 1997          $ 200,000             6.88%           June 30, 2002

June 30, 1997             40,000             6.82%           July 2, 2001

July 1, 1997              15,000             6.86%           July 2, 2001

July 31, 1997            200,000             6.75%           August 1, 2004

September 15, 1997        45,000             6.77%           September 17, 2001

April 23, 1998           125,000             5.79% *         April 24, 2001

May 22, 1998             225,000             6.20%           May 15, 2003

June 9, 2000             215,000             7.07% *         June 10, 2002

June 9, 2000             200,000             6.89% *         April 9, 2002

June 9, 2000              85,000             7.07% *         June 10, 2002

August 1, 2000            75,000             6.97% *         August 1, 2002

September 14, 2000        75,000             6.79% *         September 16, 2002

September 14, 2000        60,000             6.94% *         September 15, 2003

September 14, 2000        25,000             7.00%           September 16, 2002

September 15, 2000       100,000             6.79% *         September 16, 2002

September 15, 2000        50,000             6.86% *         September 16, 2002

December 4, 2000         125,000             6.98% *         December 4, 2002

December 4, 2000          75,000             6.98% *         December 4, 2002

December 4, 2000          50,000             6.87% *         December 4, 2002
                    -------------------
  Total               $1,985,000
                    ===================
</TABLE>


*  Represents initial interest rate for floating rate note

As of December 31, 2000, the outstanding fixed rate medium-term notes of $750
million had been effectively converted by interest rate swap agreements to
floating-rate notes. During the quarter ended December 31, 2000, the value of
the interest rate swap contracts increased by $13.4 million and offset the
changes in the fair value of the medium-term notes due to the hedge risk. The
fair value of interest rate swap contracts designated as fair value hedges of
medium-term notes was $13.2 million at December 31, 2000. See note 4. The
weighted average borrowing rates on medium-term borrowings issued for the three-
month period ended December 31, 2000, including the effect of the interest rate
swap agreements, was 6.97%. Net proceeds from the issuances were primarily used
to reduce the amounts outstanding under the bank credit agreement and to fund
acquisitions of servicing rights.

Mortgage note payable

 In connection with the acquisition of BancBoston Mortgage Corporation, HomeSide
assumed a mortgage note payable that is due in 2017 and bears interest at a
stated rate of 9.5%. HomeSide's main office building is pledged as collateral
for the mortgage note payable. The balance of the mortgage payable at December
31, 2000, including the fair value adjustments resulting from the merger with
the National, was $22.3 million.

 Parent Notes

HomeSide International, the Parent, has $130 million outstanding on a previous
issue of 11.25% notes (the "Parent Notes") which mature on May 15, 2003. The
Patent Notes are redeemable at the option of HomeSide International, in whole or
in part, at any time on or after May 15, 2001, at certain fixed redemption. The
Parent Notes are secured by a pledge of the common stock of HomeSide Lending.
HomeSide International is in compliance with all requirements included in the
indenture relating to the Parent Notes.


                                       12
<PAGE>   13



7.    NEW ACCOUNTING STANDARDS

In September 2000, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 140, "Accounting for Transfers and Servicing
of Financial Assets and Extinguishments of Liabilities" ("SFAS 140") which
replaces Statement No. 125. This statement revises the standards of accounting
for securitizations and other transfers of financial assets and collateral along
with requiring certain disclosures. This statement is effective for the
transfers and servicing of financial assets and extinguishments of liabilities
occurring after March 31, 2001. It is effective for recognition and
reclassification of collateral for fiscal years ending after December 15, 2000.
Management does not expect the requirements of this standard to have a
significant impact on the financial statements.


8.    DIVIDENDS

On October 23, 2000 the Company paid dividends to the Parent in the amount of
$31.3 million.



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

General

HomeSide Lending, Inc. ("HomeSide or the "Company") is one of the largest full
service residential mortgage banking companies in the United States. 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 the Company adopted a fiscal year end of September 30 to conform
to the fiscal year of the National. The Company was formed through the
acquisition of the mortgage banking operations of BankBoston, N.A. ("BBMC
Predecessor") on March 16, 1996 and subsequently purchased the mortgage banking
operations of Barnett Banks, Inc.

On March 6, 2000, HomeSide Holdings, Inc. ("HomeSide Holdings") was merged with
and into HomeSide. Prior to the merger, HomeSide Holdings was a wholly-owned
subsidiary of HomeSide International, Inc. (the "Parent"). Pursuant to the
merger, (i) the Company succeeded to all of the assets of, and assumed all of
the liabilities of, HomeSide Holdings, and (ii) the shares of capital stock of
HomeSide Holdings issued and outstanding as of the date of the merger were
canceled and exchanged for 10,000 shares of common stock of the Company which
were issued to the Parent. In order to facilitate the exchange of shares
required by the merger, the Company amended its Articles of Incorporation to
increase the authorized number of shares of common stock to 10,100. Thereafter,
the Company amended and restated its Articles of Incorporation to reduce the
number of authorized, issued and outstanding shares of capital stock to 100
shares of common stock, par value $1.00. The merger does not have a material
affect on the financial statements of the Company. All prior period consolidated
financial statements have been restated to include the combined results of
operations, financial position and cash flows of HomeSide Holdings.

HomeSide's strategy emphasizes variable cost mortgage origination, low cost
servicing, and effective risk management. Headquartered in Jacksonville,
Florida, HomeSide ranks as the 10th largest originator and the 5th largest
servicer in the United States at December 31, 2000, based on data published by
Inside Mortgage Finance.

HomeSide plans to continue to expand 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 intends to pursue additional loan
portfolio acquisitions and strategic origination relationships with mortgage
lenders and other entities that offer similar financial services.

Operating results for the three-month periods ended December 31, 2000 and 1999
are not necessarily indicative of the results that may be expected for the
fiscal year ending September 30, 2001. For further information, refer to the
consolidated financial statements and footnotes thereto included in the Form
10-K for the fiscal year ended September 30, 2000 of HomeSide Lending, Inc.


9.    SUBSEQUENT EVENT

On January 31, 2001, the Company filed a registration statement on Form S-3 to
increase its shelf registration related to its medium-term notes by $1.0
billion.

                                       13
<PAGE>   14

   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

HomeSide participates in several origination channels, including wholesale
origination (correspondent, co-issue, and broker) and direct origination
channels. The direct channels include internet, telemarketing, direct mail, and
mortgages related to affinity group and co-branding partnerships. HomeSide also
purchases servicing rights in bulk from time to time. HomeSide's strategy is to
customarily sell all loans that it originates or purchases while retaining the
servicing rights to such loans. This multi-channel production base provides
access to and flexibility among production channels in a wide variety of market
and economic conditions. By focusing on production channels with a variable cost
structure, HomeSide eliminates the fixed costs associated with traditional
mortgage branch offices. Without the burden of high fixed cost origination
overhead, HomeSide is well positioned to weather a variety of interest rate
environments.

The following information regarding loan production activities for HomeSide is
presented to aid in understanding the results of operations and financial
condition of HomeSide for the three-month periods ended December 31, 2000 and
December 31, 1999 (in millions):

<TABLE>
<CAPTION>

                                    FOR THE THREE   FOR THE THREE
                                    MONTHS ENDED     MONTHS ENDED
                                    DECEMBER 31,     DECEMBER 31,
                                        2000             1999
                                    --------------  ---------------
<S>                                 <C>             <C>
               Correspondent              $ 2,774          $ 2,563
               Co-issue                     3,150            2,430
               Broker                         722              469
                                    --------------  ---------------
                 Total wholesale            6,646            5,462
               Direct                         231              147
                                    --------------  ---------------
                 Total production           6,877            5,609
               Bulk acquisitions           13,196            4,558
                                    --------------  ---------------
                 Total production
                  and Acquisitions        $20,073          $10,167
                                    ==============  ===============
</TABLE>

Total loan production, excluding bulk acquisitions, was $6.8 billion for the
three months ended December 31, 2000 compared to $5.6 billion for the three
months ended December 31, 1999, a 21% increase. The increase was a function of
HomeSide's ability to leverage origination alliances and technological
enhancements and was also influenced by a more favorable interest rate
environment. When interest rates decline, the size of the mortgage origination
market increases as home ownership becomes more affordable and as existing
mortgagors refinance their loans. Refinances were 27% of HomeSide's production
volume for the quarter ended December 31, 2000, compared to 21% for the quarter
ended December 31, 1999.

Economies of scale are vital to the long-term viability of mortgage servicing
and are increasingly important to remain competitive in the industry. During the
quarter, HomeSide continued to pursue growth opportunities through bulk
acquisitions of mortgage servicing rights and expansion of its Preferred
Partnership program. Preferred partnerships generally include a bulk servicing
acquisition and an ongoing mortgage origination flow. HomeSide services loans on
a priority basis on behalf of its Preferred Partners and offers the customer
mortgage-related products. Preferred Partner relationships contributed 25% of
HomeSide's production volume for the quarter. Homeside

                                       14
<PAGE>   15


completed bulk acquisitions totaling $13.2 billion and $4.6 billion during the
three-month periods ended December 31, 2000 and 1999, respectively.

Servicing Portfolio

Based on certain industry servicing statistics, management asserts that HomeSide
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 $187.6 billion,
HomeSide services the loans of approximately 2.1 million homeowners from across
the United States and is committed to protecting the associated asset value by a
sophisticated risk management strategy. HomeSide anticipates its low cost of
servicing loans will continue to maximize the bottom-line impact of its growing
servicing portfolio. HomeSide's focus on efficient and low cost processes is
pursued through the selective use of automation, strategic outsourcing of
selected servicing functions and effective control of delinquencies and
foreclosures.

The number of loans serviced at December 31, 2000 was 2,098,711 compared to
1,706,806 at December 31, 1999. HomeSide's strategy is to grow its mortgage
servicing portfolio by concentrating on variable cost loan origination
strategies and selective portfolio acquisitions, and as a result, benefit from
improved economies of scale. A key to HomeSide's future growth is the capacity
provided by its proprietary servicing software. This system allows HomeSide to
double the number of loans typically serviced on a single system and is also
used by the National to service its growing loan portfolio.

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 for the three-month periods ended December 31, 2000 and December 31,
1999 (in millions):

<TABLE>
<CAPTION>

                                          FOR THE
                                           THREE         FOR THE
                                          MONTHS          THREE
                                           ENDED       MONTHS ENDED
                                         DECEMBER        DECEMBER
                                         31, 2000        31, 1999
                                        ------------   -------------
<S>                                     <C>            <C>
                 Balance at beginning of
                  Period                 $ 173,310       $ 145,552
                  Additions, net            20,053          10,157
                  Scheduled amortization     1,196           1,038

                  Prepayments                4,407           3,690
                  Foreclosures                 208             246
                                        ------------   -------------
                     Total reductions        5,811           4,974
                                        ------------   -------------
                 Balance at end of
                 period                   $ 187,552       $ 150,735
                                        ============   =============
</TABLE>


RESULTS OF OPERATIONS

FOR THE THREE MONTHS ENDED DECEMBER 31, 2000 COMPARED TO THE THREE MONTHS ENDED
DECEMBER 31, 1999

   Summary

HomeSide's net income decreased 19% to $16.1 million for the three months ended
December 31, 2000, compared to $19.9 million for the three months ended December
31, 1999. HomeSide's net income, excluding goodwill amortization from the
acquisition of HomeSide by the National, was $24.7 million for the three months
ended December 31, 2000, compared to $28.7 for the three months ended December
31, 1999, a 14% decrease. Total revenues for the three months ended December 31,
2000 were $106.6 million compared to $94.6 million for the three months ended
December 31, 1999, a 13% increase. Net servicing revenue increased 29% for the
three months ended December 31, 2000 compared to the three months ended December
31, 1999, primarily due to an increase in the size of the servicing portfolio
and the impact of risk management results recognized in earnings. Net interest
expense increased primarily due to the narrowing of the spread between
short-term and long-term interest rates and the funding of higher mortgage
servicing assets. Net mortgage origination revenue increased due to the
declining interest rate environment that resulted in increased production
volumes. Total expenses increased as a result of higher expenses associated with
the increase in production volumes and the servicing portfolio. Income tax
expense increased primarily as a result of a cumulative effective income tax
rate adjustment that decreased income tax expense for the three months ended
December 31, 1999.


                                       15
<PAGE>   16


   Net Servicing Revenue

Net servicing revenue was $95.0 million for the three months ended December 31,
2000 compared to $73.7 million for the three months ended December 31, 1999. Net
servicing revenue is comprised of mortgage servicing fees net of guaranty fees,
ancillary servicing revenue, amortization of mortgage servicing rights, and the
net earnings impact of risk management of servicing rights.

Mortgage servicing fees increased 22% to $208.2 million for the three months
ended December 31, 2000 compared to $171.2 million for the three months ended
December 31, 1999, primarily as a result of portfolio growth. The servicing
portfolio increased by $36.9 billion to $187.6 billion at December 31, 2000
compared to $150.7 billion at December 31, 1999, a 25% increase. The portfolio
growth is primarily due to loan production and bulk acquisitions. HomeSide's
weighted average interest rates of the mortgage loans in the servicing portfolio
were 7.59% and 7.45% at December 31, 2000 and December 31, 1999, respectively.
The weighted average servicing fee, net of guaranty fees and including ancillary
income, for the servicing portfolio was 46.6 basis points for the three months
ended December 31, 2000 compared to 46.7 basis points for the three months ended
December 31, 1999.

Amortization expense was $120.3 million for the three months ended December 31,
2000 compared to $97.5 million for the three months ended December 31, 1999, a
23% increase. Amortization expense increased primarily as a result of a higher
average balance of mortgage servicing rights during the quarter and the impact
of declining interest rates during the later part of the quarter. 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 (Expense) Revenue

Net interest (expense) 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 is able to borrow. These factors
influence the size of the residential mortgage origination market, HomeSide's
loan production volumes and the interest income HomeSide earns on loans and the
interest paid to its lenders. These factors also influence risk management
results that affect the level of required funding needs.

Loan refinancing levels are the largest contributor to changes in the size of
the mortgage origination market. As interest rates decline, more borrowers
refinance their mortgages, resulting in an increase in the mortgage origination
market. 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 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 (expense) revenue totaled $(16.8) million for the three months
ended December 31, 2000 compared to $3.0 million for the three months ended
December 31, 1999. The increase in net interest expense was primarily due to the
narrowing of the spread between short-term and long-term interest rates. While
mortgage rates declined by 58 basis points for the quarter, short-term LIBOR
rates declined by only 6 basis points and the spreads continued to narrow from
their recent lows. Despite the decline in mortgage rates during the second half
of the quarter, average mortgage rates for the quarter ended December 31, 2000
of 7.69% were down only 17 basis points from an average of 7.86% in the quarter
ended December 31, 1999. However, the interest rate environment for the most
recent quarter differs quite substantially versus the same quarter from prior
year. The prior year quarter ended December 31, 1999 reflected a pattern of
rising interest rates and economic signs of a strong economy. During the quarter
ended December 31, 2000, interest rates continued to decline as economic
indicators pointed to a slowing economy and the forward yield curve reflected a
bias toward lower interest rates. However, average LIBOR rates for the quarter
ended December 31, 2000 of 6.65% were 87 basis points higher than the average of
5.78% for the quarter ended December 31, 1999. Consequently, average spreads for
the quarter ended December 31, 2000 were 104 basis points versus an average of
208 basis points in the quarter ended December 31, 1999.

The higher short-term rates for the quarter also increased the funding cost
relative to the Company's investment in mortgage servicing rights. The
unfavorable rate variance versus the quarter of a year ago was partially offset
by hedge gains for the quarter of $370 million

                                       16
<PAGE>   17

which helped to reduce funding needs relative to the mortgage servicing asset.
Additionally, increases in funding costs were offset in part by increased
interest credits earned on custodial balances due to higher short-term interest
rates and the growth of the servicing portfolio.

    Net Mortgage Origination Revenue

Net mortgage origination revenue is comprised of fees earned on the origination
of mortgage loans, fees charged to review loan documents for purchased loan
production, risk management hedge results, and gains and losses on the sale of
loans.

Net mortgage origination revenue was $22.6 million for the three months ended
December 31, 2000 compared to $17.0 million for the three months ended December
31, 1999. The increase was primarily due to an increase in production volumes
resulting from the factors discussed in the section titled loan production
activities.


   Other Income

Other income for the three months ended December 31, 2000 was $5.8 million
compared to $0.9 million for the three months ended December 31, 1999. This
increase primarily resulted from a sale-leaseback transaction involving
HomeSide's facility in San Antonio, Texas entered into on October 2, 2000. In
accordance with SFAS 98 "Accounting for Leases", HomeSide recognized an
immediate gain of $4.5 million. In addition, a deferred gain of $7.3 million was
recorded and is amortized over the life of the lease.


   Salaries and Employee Benefits

Salaries and employee benefits expense of $29.9 million for the three months
ended December 31, 2000 was relatively flat compared to $29.8 million for the
three months ended December 31, 1999. The average number of full-time equivalent
employees was 2,361 for the three months ended December 31, 2000 compared to
2,551 for the three months ended December 31, 1999.

   Occupancy and Equipment Expense

Occupancy and equipment expense primarily includes rental expense, repairs and
maintenance costs, certain computer software expenses and depreciation of
HomeSide's premises and equipment. Occupancy and equipment expense for the three
months ended December 31, 2000 was $9.8 million compared to $8.6 million for the
three months ended December 31, 1999, a 14% increase. 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's experience as a servicer of government
loans.

The servicing losses on investor-owned loans and foreclosure-related expenses
totaled $10.1 million for the three months ended December 31, 2000 compared to
$8.4 million for the three months ended December 31, 1999. The increase was
primarily attributable to an increase in servicing losses related to the growth
of the servicing portfolio.

Included in the balance of accounts payable and accrued liabilities at December
31, 2000 is a reserve for estimated servicing losses on investor-owned loans of
$16.7 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's historical loss experience on VA loans generally has been consistent
with industry experience. Management believes that HomeSide has an adequate
level of reserve based on servicing volume, portfolio composition, credit
quality and historical loss rates, as well as estimated future losses.


                                       17
<PAGE>   18


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

                        SERVICING PORTFOLIO DELINQUENCIES
                             (PERCENT BY LOAN COUNT)

<TABLE>
<CAPTION>
                                                       DECEMBER 31,    DECEMBER 31,
                                                           2000            1999
                                                       --------------  --------------
<S>                                                    <C>             <C>
Servicing Portfolio Delinquencies, excluding
bankruptcies (at end of period)
          30 days                                          3.56%           3.37%
          60 days                                          0.70%           0.62%
          90+ days                                         0.57%           0.59%
                                                       --------------  --------------
               Total past due                              4.83%           4.58%
                                                       ==============  ==============

          Foreclosures pending                             0.51%           0.55%
                                                       ==============  ==============
</TABLE>

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's mortgage servicing portfolio and loan production
volumes.

Other expenses were $19.4 million for the three months ended December 31, 2000,
compared to $13.3 million for the three months ended December 31, 1999, a 46%
increase. The increase is primarily due to an increase in expenses associated
with the increase in the servicing portfolio and increased production volumes.
Goodwill amortization was $8.6 million and $8.8 million for the three-month
periods ended December 31, 2000 and December 31, 1999, respectively.

   Income Tax Expense

HomeSide's income tax expense was $14.2 million for the three months ended
December 31, 2000 compared to $5.8 million for the three months ended December
31, 1999. The effective income tax rates for the three-month periods ended
December 31, 2000 and December 31, 1999 were 47% and 23%, respectively. The
increase in the effective income tax rate was primarily due to a cumulative
effective income tax rate adjustment for the three months ended December 31,
1999.

RISK MANAGEMENT

Mortgage banking entities face a broad range of risk that must be proactively
managed to achieve success in the industry. The Company has utilized the
enterprise-wide risk management structure that has been implemented and proven
at the National and its global entities. The structure comprises a common policy
framework and a set of controls that are utilized to achieve standardization of
risks. Each business function is responsible for using standardized risk
assessment templates along with best practices methodology for the
identification and quantification of the particular risk it is exposed to and
for the implementation of appropriate policies and procedures.

The Company's Risk Council, comprising executive and senior management as well
as representation from internal audit, is the principal risk operating policy
decision making body within the Company. Risk Council's role is to constantly
monitor and assess the Company's risk profile in existing and future business
operations, and to assist business units in the design and implementation of
appropriate risk management policies and strategies.

The Risk Council provides direction and oversight for many types of risks such
as credit, operations, legislative compliance, e-commerce, business continuity
and disaster recovery. Certain of the Company's other major risk areas (e.g.
market risk) are more fully discussed below.


                                       18

<PAGE>   19


Risk Management of Market Risk

Market risk recognizes the potential change in the value of assets, liabilities
and other commitments as a result of movement in interest rates, asset prices
and volatility. Certain members of the Company's Risk Council also comprise the
Company's Asset and Liability Management Committee (ALCO) which, under delegated
authority from the Board, sets policies in relation to the management of market
risk, corporate funding and balance sheet management. Representatives of the
Company's ALCO report to the National's ALCO concerning risk management and also
participate in the National's group ALCO meetings.

As more fully discussed in the notes to the financial statements, the Company
adopted SFAS No. 133, "Accounting for Derivative Instruments and Hedging
Activities", effective October 1, 2000. Accordingly, for the three-month period
ended December 31, 2000, all of the Company's risk management derivative
instruments are recorded at fair value. Changes in the value of risk management
derivatives instruments designated as qualifying fair value hedging
relationships are recognized in current earnings along with the changes in the
value of the qualifying hedged assets or liabilities. Changes in the value of
risk management derivative instruments designated as qualifying cash flow
hedging relationships of forecasted loan sale transactions are recorded to other
comprehensive income ("OCI") and reclassified to earnings concurrent with
settlement of the loan sale transactions. The accounting policies relevant to
derivative instruments and hedging activities for each of the Company's key risk
management areas are more fully discussed in note 4 to the financial statements.

Market Environment

The market environment during the quarter ended December 31, 2000 was extremely
volatile. During the quarter, key interest rates along the one- to ten-year
sectors of the treasury curve declined, on average, by approximately 100 basis
points. Mortgage rates declined by 58 basis points from 7.88% at September 30,
2000 to 7.30% at December 31, 2000 with substantially all of the rate move
occurring in the second half of the quarter. Other key interest rates for the
Company include 5- and 10-year swap rates which declined by 79 and 78 basis
points, respectively.

Overall, interest rate spreads on mortgage products were extremely volatile and
reflected a widening pattern in relation to interest rates on treasury and swap
products. The same cannot be said for the relationship of mortgage rates to
short-term LIBOR rates. One-month LIBOR was down only 6 basis points from 6.62%
at September 30, 2000 to 6.56% at December 31, 2000. As a result, spreads
between mortgage rates and one-month LIBOR narrowed by approximately 50 basis
points during the quarter and have narrowed by just over 100 basis points versus
the same quarter of 1999.

During the quarter, the Company's risk management programs continued to achieve
effective hedge results in relation to the risk being hedged. Following is a
summary of risk management activities and results for the quarter ended December
31, 2000:

Risk Management of Loan Production Activities

The Company maintains a risk management program to protect and manage interest
rate risk and pricing risk associated with its mortgage committed pipeline and
mortgage inventory. In the normal course of business, the Company extends
interest rate lock commitments ("IRLCs" or "commitments") to borrowers who apply
for loan funding and meet certain credit and underwriting criteria. IRLCs in the
mortgage pipeline expose the Company to interest rate and pricing risk. In a
rising rate environment, the aggregate value of the Company's commitments tends
to decrease in value and, generally, at an accelerating rate. In a declining
rate environment, the value of the Company's commitments tends to increase in
value. However, the rate of increase in the value tends to decelerate as the
likelihood of the borrower closing on the loan decreases if market rates decline
by a meaningful amount versus the borrower's committed rate. As part of its risk
management processes, the Company has devoted substantial resources and modeling
solutions to enable management to project the expected percent of IRLCs that
will ultimately fund under different interest rate scenarios (referred to as
"pull-through rates"). The success of the Company's risk management strategies
relies on proactive analysis of historical and projected pull-through rates.
However, since borrower behavior cannot be perfectly predicted and modeled, an
element of economic ineffectiveness can be expected in the Company's pipeline
hedging relationships.

                                       19
<PAGE>   20

In the aggregate, the Company's strategy involves the use of a combination of
mortgage forwards and mortgage options to maintain a risk management coverage.
The Company utilizes mortgage forward delivery contracts to hedge a baseline
portion of the Company's pipeline composed of interest rate lock commitments
that management believes are probable of closing. Additionally, the Company
utilizes options on mortgages and certain other products to hedge an element of
the pipeline which is considered more uncertain of closing, and for which
pull-through rates are likely to be volatile. During the quarter ended December
31, 2000, the Company's risk management strategy was effective in the declining
interest rate environment as the increase in the value of the Company's
commitments more than offset the losses in the value of the related risk
management derivative instruments. During the quarter ended December 31, 2000, a
net gain of approximately $7.0 million attributable to pipeline hedging results
was recognized to earnings and is included in net mortgage origination revenue
in the consolidated statements to income. Pursuant to the requirements of SFAS
133 (which are discussed in note 4 to the Company's consolidated financial
statements) interest rate lock commitments and related risk management
derivative instruments are accounted for as non-designated derivatives with
changes in their values recorded to current earnings.

Interest rate lock commitments that are ultimately funded (closed) are
classified as loans held for sale and are included in the Company's mortgage
inventory. Closed loans in the mortgage inventory are also subject to interest
rate and pricing risk. The Company's risk management program involves the use of
mortgage forward delivery contracts to hedge 100% of its agency-eligible
conforming loans as forecasted loan sales. Pursuant to the terms of SFAS 133,
the Company accounts for the forward delivery contracts as cash flow hedges of
forecasted loan sales. The forward contracts achieve effective offset against
the changes in the value of the loans in that the forward contracts effectively
fix the future loan delivery price. At December 31, 2000, losses on forward
delivery contracts of $4.7 million were included in other comprehensive income
(OCI). Pursuant to the requirements of SFAS 133, the related unrealized gains in
the underlying mortgage loans accounted for as forecasted loan sales are not
recognized in the Company's financial statements at December 31, 2000. Rather,
the unrealized gains will be recognized to earnings on the loan settlement
dates, together with the related deferred hedge losses that will be reclassified
to earnings (from OCI) as the forecasted loan sales are consummated over the
next 90 days.

Risk Management of Mortgage Servicing Rights

Mortgage servicing rights represent the capitalized value of the estimated
future net servicing revenues associated with the Company's servicing portfolio.
The Company maintains a risk management program designed to protect the value of
mortgage servicing rights from changes in value due to changes in estimated loan
prepayment speeds, which are mainly influenced by changes in interest rates.

The value of mortgage servicing rights is extremely sensitive to changes in
interest rates since interest rates are the primary driver of actual and
projected prepayment rates. As interest rates decline, prepayment rates increase
as a result of actual and expected refinancing activities of borrowers. As a
result, the value of mortgage servicing rights decreases in value as interest
rates decline and, generally, at accelerating rates depending in large measure
on the note rates of the underlying loans in relation to market interest rates.
The value of the Company's mortgage servicing rights is based on the present
value of expected cash flows received over the life of the loan using vendor
models which incorporate prepayment estimates to forecast estimated future
servicing revenues, servicing costs, ancillary revenues, escrow earnings, credit
losses and other expenses.

The Company's risk management program involves the use of a portfolio of risk
management derivative instruments which increase in value as interest rates
decline. More specifically, management uses a combination of derivative
instruments designed to provide effective offset to changes in the value of the
mortgage servicing rights in different interest rate scenarios. The Company also
attempts to manage basis risk, term sector risk, and liquidity risk by
diversifying its portfolio with an array of derivative instruments that are
approved for use by the Company's ALCO. Accordingly, the hedge portfolio is
generally comprised of mortgage products, swap products and treasury products
that are structured along various points of the yield curve.

Since the inception of HomeSide in March of 1996, the Company's hedge strategy
has been effective in providing effective offset to changes in the value of its
mortgage servicing rights. This trend continued in the quarter ended December
31, 2000 as gains in the value of risk management instruments more than offset
decreases in the value of the mortgage servicing rights. For the three-month
period ended December 31, 2000, the increases in value of risk management
instruments designated as fair value hedges (net of time decay) was $370.4
million and provided effective offset to the losses in the value of the mortgage
servicing rights (due to the designated hedge risk) of $347.9 million. The net
ineffectiveness of $22.5 million increased pre-tax earnings for the period and
is included in the caption "risk management of mortgage servicing rights" in the
consolidated statements of income.

As permitted by SFAS 133, losses on derivative contracts attributable to the
passage of time (theta) are excluded from the assessment of hedge effectiveness
and are recorded to current earnings. As part of its risk management program,
the Company maintains certain risk management instruments that are accounted
for as non-designated derivatives. These risk management instruments are
structured to provide a level of economic offset and to provide a level of
protection against decreases in the value of certain mortgage servicing rights

                                       20
<PAGE>   21


that do not qualify for hedge designation under the terms of SFAS 133. Aggregate
losses on risk management instruments attributable to the passage of time, net
of gains on non-designated derivatives, decreased pre-tax earnings by $4.9
million. During the quarter ended December 31, 2000, the Company recorded a
valuation provision of $10.5 million related to decreases in the value of
non-designated mortgage servicing rights. Gains and losses attributable to the
passage of time, non-designated derivatives and valuation provisions are
included in the caption "risk management of mortgage servicing rights" in the
consolidated statements of income.

Management maintains an ongoing expectation that the Company's risk management
hedging program will be effective in meeting corporate objectives over the
longer term. However, as a result of the new accounting requirements of SFAS
133, quarterly earnings will henceforth be impacted (positively or negatively)
to the extent that changes in the value of the hedged instruments do not
perfectly offset changes in the value of the designated mortgage servicing
rights (ineffectiveness). Given the magnitude of the Company's investment in
mortgage servicing rights, the accounting requirements of SFAS 133 could result
in a higher level of volatility in reported quarterly earnings as a result of
temporary market conditions that may impact quarterly hedge results without
compromise to the long-term hedge objectives.

Risk Management of Corporate Funding

As part of its corporate funding and balance sheet management strategies, the
Company maintains a desired level of its total borrowings through short-term
funding sources. To meet the Company's financing needs, short-term funding is
provided through the Company's commercial paper program and its short-term
facility with the Parent. Additionally, the Company can alter its weighting in
fixed-rate funding by converting medium-term notes to floating rate. During the
three-month period ended December 31, 2000, the Company was party to $750
million in interest rate swaps which were effective in converting $750 million
of medium-term notes to LIBOR-based funding. As discussed in note 4 to the
financial statements, the interest rate swaps were accounted for as fair value
hedges of the designated medium-term notes.


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, repurchase agreements, and cash flow from operations. HomeSide
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 Mortgage Securities, Inc., a
wholly-owned subsidiary of HomeSide Lending, Inc., maintains operational
capabilities to facilitate the issuance of mortgage-backed securities.

Operations

Net cash provided by operations for the quarters ended December 31, 2000 and
December 31, 1999 was $411.1 million and $209.8 million, respectively. Cash
provided from servicing fee income, loan sales and principal repayments was
partially offset by cash used for the origination and purchase of mortgage loans
held for sale. 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 loan production levels.

Investing

Net cash used in investing activities for the quarters ended December 31, 2000
and December 31, 1999 was $383.5 million and $285.0 million, respectively. Cash
used in investing activities was primarily 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. Future uses
of cash for investing activities will be dependent on the mortgage origination
market and HomeSide's hedging needs. HomeSide 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 used in financing activities for the quarter ended December 31, 2000
was $79.3 million. Net cash provided by financing activities for the quarter
ended December 31, 1999 was $478.3 million. For the quarter ended December 31,
2000, cash was used for the re-payment of commercial paper, re-payment of
borrowings from the HomeSide's line of credit, payment of debt issue costs, and
dividends to the Parent. Uses of cash were partially offset by the issuance of
medium term notes. For the quarter ended December 31, 1999, cash


                                       21
<PAGE>   22

was provided by borrowings from the National and the issuance of commercial
paper. Cash was used to repay borrowings from the National, commercial paper,
payment of debt issue costs, and to pay dividends to the Parent.

HomeSide 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 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'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.


QUANTITATIVE AND QUALITATIVE MARKET RISK

There have been no material changes in the Company's market risk from September
30, 2000. For information regarding the Company's market risk, refer to Form
10-K for the fiscal year ended September 30, 2000 of HomeSide Lending, Inc.



                                       22
<PAGE>   23


                           PART II - OTHER INFORMATION

ITEM 1.  Legal Proceedings

HomeSide is a defendant in a number of legal proceedings arising in the normal
course of business. HomeSide, 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,
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.

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 document is filed as a part of this Report:

<TABLE>
<CAPTION>
Number            Description
------            -----------

<S>               <C>
12.1              Computation of the ratio of earnings to fixed charges
</TABLE>

(b)   Reports on form 8-K

      HomeSide filed no reports on Form 8-K during the quarter ended December
31, 2000.





                                       23
<PAGE>   24




                                   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 14, 2001                      By:  /s/
                                                  --------------------------
                                                     Hugh R. Harris
                                                  Chief Executive Officer
                                                 (Principal Executive Officer)

Date: February 14, 2001                       By: /s/
                                                  -----------------------------
                                                     W. Blake Wilson
                                              Executive Vice President and Chief
                                              Financial Officer
                                             (Principal Financial and Accounting
                                              Officer)




                                       24