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

FORM 10-Q

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

For the quarterly period ended:
          
September 30, 2001

OR

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

For the transition period from _______________ to _________________

Commission file number: 1-13563

LASER MORTGAGE MANAGEMENT, INC.
(exact name of registrant as specified in its charter)

|DELAWARE
(State or other jurisdiction of incorporation or
organization) | 22-3535916
(I.R.S. Employer
Identification No.)
|----------------------------------------------------------------------- | -----------------------------------------------

c/o Mariner Mortgage Management L.L.C.
780 Third Avenue, 16th Floor
New York, New York 10017
(Address of principal executive offices)
(Zip Code)

(212) 758-2024
(registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all documents and
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
stock, as of the last practicable date: 14,038,983 shares of common stock,
$0.001 par value, outstanding as of November 1, 2001

LASER MORTGAGE MANAGEMENT, INC.

FORM 10-Q

INDEX

|PART I. FINANCIAL INFORMATION | 3
|----------------------------- | -

| | Item 1. Financial Statements | 3
| | ---------------------------- | -

| | Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations | 16
| | --------------------------------------------------------------------------------------------- | --

| | Item 3. Quantitative and Qualitative Disclosures About Market
Risk | 26
| | ------------------------------------------------------------------ | --

|PART II. OTHER INFORMATION | 29
|-------------------------- | --

| | Item 1. Legal Proceedings | 29
| | ------------------------- | --

| | Item 2. Changes in Securities and Use of Proceeds | 29
| | ------------------------------------------------- | --

| | Item 3. Defaults Upon Senior Securities | 29
| | --------------------------------------- | --

| | Item 4. Submission of Matters to a Vote of Security Holders | 29
| | ----------------------------------------------------------- | --

| | Item 5. Other Information | 30
| | ------------------------- | --

| | Item 6. Exhibits and Reports on Form 8-K | 30
| | ---------------------------------------- | --

|PART I. | FINANCIAL INFORMATION
|------- | ---------------------

`LASER Mortgage Management, Inc.
Statement of Net Assets in Liquidation
 as of September 30, 2001 (Liquidation Basis) and
Balance Sheet
 as of December 31, 2000 (Going Concern Basis)              September 30, 2001  December 31, 2000
                                                               (Unaudited)
Assets
Cash and cash equivalents                                   $       19,780,797  $       3,542,209
Investment in securities                                            71,911,943        315,560,905
Investment in mortgage loans                                         2,080,693          2,699,838
Interest rate agreement                                                      -            380,000
Interest and principal paydowns receivable                           2,105,959          4,328,489
Prepaid expenses                                                             -          1,416,792
                                                            ------------------  -----------------
            Total assets                                            95,879,392  $     327,928,233
                                                                                =================
Liabilities
Repurchase agreements                                               34,960,534  $     239,877,000
Payable for securities acquired                                              -         23,321,844
Accrued interest payable                                                75,790            560,130
Accounts payable and accrued expenses                                  800,656            729,703
Reserve for estimated liquidation costs                                654,542                  -
                                                            ------------------  -----------------
            Total liabilities                                       36,491,522        264,488,677
                                                            ------------------  -----------------

Stockholders' Equity
Common stock: par value $.001 per share; 100,000,000
  shares authorized; 20,118,749 shares issued                                              20,119
Additional paid-in capital                                                            283,012,967
Accumulated other comprehensive loss                                                   (3,673,678)
Accumulated distributions and losses                                                 (183,071,421)
Treasury stock at cost (6,079,766 shares)                                             (32,848,431)
                                                                                -----------------
            Total stockholders' equity                                                 63,439,556
                                                                                -----------------
            Total liabilities and stockholders' equity                          $     327,928,233
                                                                                =================
            Net assets in liquidation                       $       59,387,870
                                                            ==================

                       See notes to financial statements`

`LASER Mortgage Management, Inc.
Statement of Changes in Net Assets in Liquidation
For the Period July 28, 2001 Through September 30, 2001 (Liquidation Basis)     July 28, 2001
(Unaudited)                                                                September 30, 2001

Interest Income:
  Securities and mortgage loans                                            $          874,620
  Cash and cash equivalents                                                           115,120
                                                                           ------------------
            Total interest income                                                     989,740
                                                                           ------------------
Interest expense:
  Repurchase agreements                                                               244,795
                                                                           ------------------

Net interest income                                                                   744,945

Net gain on securities                                                                147,393

General and administrative expenses                                                   239,737
                                                                           ------------------
  Increase in net assets in liquidation from operating activities                     652,601
                                                                           ------------------

Adjustments to reflect the change to liquidation basis accounting:
 Reduction to reflect estimated net realizable value of securities                   (938,188)
Write-off of prepaid expense                                                       (1,098,222)
Reserve for estimated liquidation costs                                              (700,000)
                                                                           ------------------
            Adjustment to liquidation basis accounting                             (2,736,410)
                                                                           ------------------

Net assets in liquidation at beginning of period                                   61,471,679
                                                                           ------------------

Net assets in liquidation at end of period                                 $       59,387,870
                                                                           ==================
                       See notes to financial statements`

`LASER Mortgage Management, Inc.               For the                              For the
Statements of Operations and                   Period                               Period
Comprehensive Income                     July 1, 2001       For the        January 1, 2001       For the
(Going Concern Basis)                         through  Three months ended          through   Nine months ended
(Unaudited)                             July 27, 2001  September 30, 2000    July 27, 2001  September 30, 2000

Interest Income:
  Securities and mortgage loans         $     472,801  $        6,004,785  $     7,231,003  $       11,251,204

  Cash and cash equivalents                    63,137             120,743          525,563           1,176,664
                                        -------------  ------------------  ---------------  ------------------

            Total interest income             535,938           6,125,528        7,756,566          12,427,868
                                        -------------  ------------------  ---------------  ------------------
Interest expense:
  Repurchase agreements                       152,840           3,874,009        4,059,974           6,207,614
  Other                                             -                   -                -             242,101
                                        -------------  ------------------  ---------------  ------------------

            Total interest expense            152,840           3,874,009        4,059,974           6,449,715
                                        -------------  ------------------  ---------------  ------------------

Net interest income                           383,098           2,251,519        3,696,592           5,978,153

Net realized (loss) gain on securities        (24,279)            371,115       (4,218,425)         (1,641,134)

Net loss on interest rate agreement                 -                   -         (120,000)                  -

General and administrative expenses           170,526             318,587        2,527,690             924,979
                                        -------------  ------------------  ---------------  ------------------

Net income (loss)                       $     188,293  $        2,304,047  $    (3,169,523) $        3,412,040
                                        -------------  ------------------  ---------------  ------------------
Other Comprehensive Income (Loss):
Unrealized net gain (loss) on
 securities:
 Unrealized holding gain (loss)
  arising during period                        59,866             138,877       (3,016,779)        (10,590,049)
 Add: reclassification adjustment
  for net realized loss (gain)
  included in net income (loss)                24,279            (371,115)       4,218,425           1,641,134
                                        -------------  ------------------  ---------------  ------------------

 Other comprehensive income (loss)             84,145            (232,238)       1,201,646          (8,948,915)
                                        -------------  ------------------  ---------------  ------------------

Comprehensive income (loss)             $     272,438  $        2,071,809  $    (1,967,877) $       (5,536,875)
                                        =============  ==================  ===============  ==================

Net income (loss) per share:
  Basic                                 $        0.01  $             0.16  $         (0.23) $             0.24
                                        =============  ==================  ===============  ==================
  Diluted                               $        0.01  $             0.16  $         (0.23) $             0.24
                                        =============  ==================  ===============  ==================

Weighted average number of
 shares outstanding:
  Basic                                    14,038,983          14,038,983       14,038,983          14,481,532
                                        =============  ==================  ===============  ==================
  Diluted                                  14,038,983          14,038,983       14,038,983          14,481,532
                                        =============  ==================  ===============  ==================

                       See notes to financial statements`

`LASER Mortgage Management, Inc.
Statement of Stockholders' Equity
For the Period January 1, 2001 Through July 27, 2001 (Going Concern Basis)
 (Unaudited)

                                     -------------------------------------------------------------------------------
                                                               Accumulated
                                                                  Other
                                                              Comprehensive   Accumulated    Treasury
                                     Common     Additional        Income     Distributions     Stock
                                      Stock   Paid-in Capital     (Loss)      and Losses      at Cost       Total
                                     -------------------------------------------------------------------------------

Balance, December 31, 2001          $ 20,119   $283,012,967   $ (3,673,678) $(183,071,421) $(32,848,431) $63,439,556
                                                              -------------                              -----------
Comprehensive income (loss):
 Net loss                                                                      (3,169,523)                (3,169,523)
                                                                                                         ------------
 Other comprehensive income (loss):
   Unrealized holding loss on
    securities during the period                                (3,016,779)                               (3,016,779)
   Reclassification adjustment for
     net realized losses included
     in net loss                                                 4,218,425                                 4,218,425
                                                              -------------                              ------------
 Other comprehensive income                                      1,201,646                                 1,201,646
                                                                                                         ------------
Comprehensive loss                                                                                        (1,967,877)
                                    --------   ------------   ------------- -------------- ------------- ------------

Balance, July 27, 2001              $ 20,119   $283,012,967   $ (2,472,032) $(186,240,944) $(32,848,431) $61,471,679
                                    =========  =============  ============= ============== ============= ============

                       See notes to financial statements`

`LASER Mortgage Management, Inc.

Statement of Cash Flows
 For the Period July 28, 2001 Through September 30, 2001 (Liquidation Basis)
(Unaudited)

CASH FLOWS FROM OPERATING ACTIVITIES
Increase in net assets in liquidation from operating activities            $          652,601
Adjustments to reconcile increase in net assets in
 liquidation from operating activities to net cash provided
 by operating activities:
 Amortization of mortgage premiums and discounts, net                                 (16,455)
 Net gain on securities                                                              (147,393)
 Decrease in interest and principal paydowns receivable                               863,326
 Decrease in accrued interest payable                                                (626,183)
 Decrease in accounts payable and accrued expenses                                    (25,357)
 Decrease in reserve for estimated liquidation costs                                  (45,458)
                                                                           -------------------

Net cash provided by operating activities                                             655,081
                                                                           -------------------
CASH FLOWS FROM INVESTING ACTIVITIES
Principal payments on securities and mortgage loans                                 7,964,413
                                                                           -------------------
CASH FLOWS FROM FINANCING ACTIVITIES
Repayments of repurchase agreements                                               (11,431,041)
                                                                           -------------------

Net decrease in cash and cash equivalents                                          (2,811,547)

Cash and cash equivalents at beginning of period                                   22,592,344
                                                                           -------------------

Cash and cash equivalents at end of period                                 $       19,780,797
                                                                           ===================

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Interest paid                                                              $          (870,978)
                                                                           ====================

SUPPLEMENTAL DISCLOSURE OF NON-CASH OPERATING ACTIVITIES:
Adjustment to liquidation basis accounting                                 $         (2,736,410)
                                                                           ====================

                       See notes to financial statements`

`LASER Mortgage Management, Inc.               For the                              For the
                                               Period                               Period
Statements of Cash Flows                 July 1, 2001       For the        January 1, 2001        For the
(Going Concern Basis)                         through  Three months ended          through   Nine months ended
(Unaudited)                             July 27, 2001  September 30, 2000    July 27, 2001  September 30, 2000

CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss)                       $     188,293  $        2,304,047  $    (3,169,523) $        3,412,040
Adjustments to reconcile net income
 (loss) to net cash (used in) provided
 by operating activities:
 Amortization of mortgage premiums and
  discounts, net                               (7,175)            (66,142)        (186,354)           (434,889)
 Net realized loss (gain) on sale of
  securities and interest rate agreement       24,279            (371,115)       6,918,425           1,641,134
 Unrealized gain on interest rate agreement         -                   -       (2,580,000)                  -
 (Increase) decrease in interest
  and principal paydowns receivable          (597,704)            134,512        1,359,204          (1,303,705)
 Decrease (increase) in prepaid expenses       45,510              18,030          318,570          (1,836,705)
 Decrease in margin deposits on repurchase
  agreements                                        -                   -                -             425,000
 Increase (decrease) increase in accrued
  interest payable                            152,840             (17,568)         141,843             300,907
 Increase (decrease) in accounts payable
  and accrued expenses                         46,563             168,930           96,310            (390,143)
 Increase in payable to manager                     -              50,210                -              69,251
                                        -------------  ------------------  ---------------  ------------------

Net cash provided by (used in)
 operating activities                        (147,394)          2,220,904        2,898,475           1,882,890
                                        -------------  ------------------  ---------------  ------------------

CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of securities                              -         (53,274,121)     (55,048,842)       (424,419,633)
Decrease in payable for securities
 acquired                                           -         (81,110,628)     (23,321,844)                  -
Proceeds from sale of securities                    -          21,647,051      255,982,732         182,955,851
Decrease in receivable for securities
 sold                                               -          (9,890,209)               -          (9,890,209)
Proceeds from sale of interest rate
 agreement                                          -                   -          260,000                   -
Principal payments on securities and
 mortgage loans                             4,490,706           6,743,043       31,765,038          11,091,124
                                        -------------  ------------------  ---------------  ------------------

Net cash (used in) provided by
 investing activities                       4,490,706        (115,884,864)     209,637,084        (240,262,867)
                                        -------------  ------------------  ---------------  ------------------

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from repurchase agreements                 -         631,106,000    1,960,972,986       1,042,248,625
Repayments of repurchase agreements                 -        (509,992,000)  (2,154,458,410)       (805,483,625)
Payments for repurchase of common stock             -                   -                -          (3,150,937)
                                        -------------  ------------------  ---------------  ------------------

Net cash provided by (used in)
 financing activities                               -         121,114,000     (193,485,424)        233,614,063
                                        -------------  ------------------  ---------------  ------------------

Net increase (decrease) in cash and
 cash equivalents                           4,343,312           7,450,040       19,050,135          (4,765,914)

Cash and cash equivalents at beginning
 of period                                 18,249,032           3,849,070        3,542,209          16,065,024
                                        -------------  ------------------  ---------------  ------------------
Cash and cash equivalents at end
 of period                              $  22,592,344  $       11,299,110  $    22,592,344  $       11,299,110
                                        =============  ==================  ===============  ==================

SUPPLEMENTAL DISCLOSURE OF CASH
FLOW INFORMATION:
Interest paid                           $           -  $        3,891,577  $     3,918,131  $        6,148,809
                                        =============  ==================  ===============  ==================

Net change in unrealized gain (loss)
 on available-for-sale securities       $      84,145  $         (232,238) $     1,201,646  $       (8,948,915)
                                        =============  ==================  ===============  ==================`

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

|1. | ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
|-- | ------------------------------------------------

LASER Mortgage Management, Inc. (the "Company") was incorporated in Delaware on
May 1, 2001, as a wholly-owned subsidiary of LASER Mortgage Management, Inc., a
Maryland corporation ("LASER Maryland"). LASER Maryland was incorporated in
Maryland on September 3, 1997 and commenced its operations on November 26, 1997.
On May 30, 2001, the Company's Board of Directors and sole stockholder,
LASER Maryland, approved the liquidation and dissolution of the Company under
the terms and conditions of the Plan of Liquidation and Dissolution, subject to
the approval of the Plan of Liquidation and Dissolution by the stockholders of
LASER Maryland. On July 27, 2001, the stockholders of LASER Maryland, at the
annual meeting, approved the reincorporation of LASER Maryland in Delaware (the
"Reincorporation"), through the merger of LASER Maryland with and into
the Company, and the subsequent liquidation and dissolution of the Company under
the terms and conditions of the Plan of Liquidation and Dissolution. On July 31,
2001, LASER Maryland completed the Reincorporation by merging with and into the
Company. As of the effective date of the Reincorporation, LASER Maryland ceased
to exist. On August 3, 2001, the Company filed a certificate of dissolution with
the Secretary of State of the State of Delaware, and the dissolution of the
Company was effective upon such filing. The Company has ceased to conduct normal
business operations and now operates solely for the purpose of providing for the
satisfaction of its obligations, adjusting and winding-up its business and
affairs and distributing its remaining assets. References herein to
"LASER" or the "Company" include LASER Maryland prior to the
date of the Reincorporation, as applicable.

In accordance with the Plan of Liquidation and Dissolution, on November 8, 2001,
the Board of Directors filed a petition with the Delaware Court of Chancery for
permission to make an initial distribution to stockholders of approximately
$3.00 per outstanding common share. The petition currently is pending. A hearing
on the petition will be held on November 28, 2001. After providing for expenses
and subject to court approval, the Company expects to distribute the majority of
the remaining liquidation proceeds over the next three years with a final
liquidating distribution to occur thereafter. The total amount of distributions
to stockholders is estimated to range between $4.15 and $4.35 per share, but is
subject to change based on numerous factors, including future investment results
and operating expenses, fluctuations in interest rates and spreads, the Delaware
Court of Chancery modifying the distribution amounts and timing currently
envisioned by the Board of Directors under the Plan of Liquidation and
Dissolution, unanticipated claims or expenses and income received, if any, from
its pending litigation against Asset Securitization Corporation ("ASC"), Nomura
Asset Capital Corporation ("Nomura Asset") and Nomura Securitization
International, Inc. ("Nomura"), as well as other factors beyond the control of
the Company.

Basis of Presentation - As described above, stockholders approved
the Plan of Liquidation and Dissolution of the Company on July 27, 2001. As a
result, the Company adopted the liquidation basis of accounting effective July
28, 2001. Accordingly, the Company's assets are stated at their estimated net
realizable values and liabilities are stated at their estimated settlement
amounts, including an accrual for estimated expenses associated with the
liquidation of the Company. Before the adoption of liquidation basis accounting,
the Company operated as a continuing business and followed going concern basis
accounting. Because substantially all of the existing assets and liabilities of
the Company were carried at approximate fair value in accordance with generally
accepted accounting principles ("GAAP"), the adoption of liquidation basis
accounting did not have a material impact on the Company's financial statements
other than requiring the Company to charge stockholders' equity for the:
reduction in the carrying value of securities to reflect their estimated net
realizable value, write-off of the remaining balance of prepaid expenses, and
reserve for estimated expenses associated with the liquidation of the Company.
However, the valuation of assets and liabilities at their estimated net
realizable values and estimated settlement amounts, respectively, necessarily
requires estimates and assumptions. Changes in market conditions, actual costs
associated with the liquidation, and other factors may affect the amounts
ultimately realized or settled, and those amounts may differ, perhaps
materially, from the carrying values on the Company's financial statements.

The accompanying unaudited financial statements have been prepared on
liquidation basis accounting and going concern basis accounting, as appropriate,
in conformity with GAAP for interim financial statements and the instructions to
Form 10-Q and Article 10, Rule 10-01 of Regulation S-X for interim financial
statements. Accordingly, these unaudited financial statements do not include all
of the information and footnotes required by GAAP for complete financial
statements. In the opinion of the Company's management, all adjustments,
consisting only of normal recurring accruals and adjustments upon adoption of
liquidation basis accounting, considered necessary for a fair presentation, have
been included in these financial statements. These unaudited interim financial
statements, as of and for the periods ended September 30, 2001 should be read in
conjunction with the audited financial statements included in the Company's
Annual Report on Form 10-K, as amended on Form 10-K/A for the year ended
December 31, 2000. Operating results for any interim period are not necessarily
indicative of results that may be expected for a full year.

A summary of the Company's significant accounting policies follows:

Cash Equivalents - Cash equivalents consist of an overnight
reverse repurchase agreement. The amount reported on the statement of net assets
in liquidation or balance sheet, as appropriate, represents the amount advanced
under the agreement.

Investments - The Company invested primarily in mortgage-backed
securities and mortgage loans. The mortgage-backed securities included privately
issued or U.S. government or agency issued mortgage pass-through certificates,
collateralized mortgage obligations and other securities representing interests
in, or obligations backed by, pools of mortgage loans (collectively, "Mortgage
Securities"). The Company also invested in other debt and equity securities
("Other Securities" and, together with Mortgage Securities, "Securities"). The
mortgage loans are secured by first or second liens on single-family
residential, multi-family residential, commercial or other real property
("Mortgage Loans" and, together with Securities, "Investments").

Before the adoption of liquidation basis accounting and in accordance with the
provisions of Statement of Financial Accounting Standards ("SFAS") No. 115,
"Accounting for Certain Investments in Debt and Equity Securities", the Company
classified its Securities as available-for-sale. The available-for-sale
classification required that those Securities be carried at estimated fair
value, with unrealized gains and losses reported on the balance sheet as a
separate component of stockholders' equity within accumulated other
comprehensive loss. This classification was appropriate since the Company may
have needed to sell, from time to time, any of its Securities as part of its
overall management of its balance sheet even though the Company generally
intended to hold most of its Securities until maturity.

After the adoption of liquidation basis accounting, the Company's Investments
are carried at estimated net realizable value on the statement of net assets in
liquidation, with unrealized gains and losses reported on the statement of
changes in net assets in liquidation.

The Company's Mortgage Loans are carried at estimated net realizable value on
the statement of net assets in liquidation, with unrealized gains and losses
reported on the statement of changes in net assets in liquidation. Before the
adoption of liquidation basis accounting, the Company's Mortgage Loans were carried
at their unpaid principal balance, net of unamortized discount or premium.

Interest income is accrued based on the outstanding principal or notional amount
of the Investments and their contractual terms. Premiums and discounts
associated with the purchase of the Investments are amortized into interest
income over the lives of the Investments using the effective yield method.

Realized gains and losses on Investment transactions are determined on the
specific identification basis and have been recorded on the statement of changes
in net assets in liquidation or the statement of operations, as appropriate.

Interest Rate Agreements - The Company has followed an
interest-rate risk-management strategy designed to protect against the adverse
effects of major interest rate changes and used derivative interest rate
agreements, such as a purchased interest rate cap ("cap").

A cap is a contractual agreement for which the Company pays an initial premium
in return for subsequent cash flows to the Company to the extent that a specific
interest rate index exceeds the contractual fixed rate, applied to a notional
amount. The amount of the risk of loss on a cap is the premium paid. The cap was
recorded and carried at estimated fair value with changes in fair value reported
on the statement of operations. Interest payments received were recorded as a
component of net interest income on the statement of operations.

Repurchase Agreements - The Company utilized repurchase agreements
to finance most of its Investments. The repurchase agreements are collateralized
by certain of the Company's Investments and bear interest rates that generally
move in close relation to the one-month London Interbank Offered Rate ("LIBOR").
The amount reported on the statement of net assets in liquidation or balance
sheet, as appropriate, represents the contractual amount to be repaid under such
agreements.

Reserve for Estimated Liquidation Costs - Under liquidation basis
accounting, the Company is required to estimate and accrue the costs associated
with the liquidation. The amount recorded in the statement of net assets in
liquidation represents estimated professional fees and other expenses expected
to be paid out over the course of the liquidation. The ultimate amount paid
might vary significantly due to, among other things, the timing of the
liquidation.

Securities Sold, Not Yet Purchased - Securities sold, not yet
purchased represent an obligation to replace borrowed Securities that were sold.
The Company had carried the obligation at its estimated fair value on the
balance sheet, with changes in fair value reported on the statement of
operations. While the transaction was open, the interest accruing on the
borrowed Securities represented an expense to the Company and was recorded as
other interest expense on the statement of operations.

Fair Value of Financial Instruments - The fair values of the
Company's Investments and interest rate agreement are based on prices and
valuations provided by dealers who make markets in these financial instruments.
The fair values reported reflect estimates and may not necessarily be indicative
of the amounts the Company could realize in a current market exchange. The
carrying values of cash equivalents, interest receivable and payable, repurchase
agreements and other financial assets and liabilities approximates their
estimated fair value because of the short-term nature of these financial
instruments. Estimated net realizable value approximates estimated fair value as
presented in these financial statements.

Income Taxes - The Company has elected to be taxed as a real
estate investment trust ("REIT"). The Company currently contemplates that,
unless the liquidation takes longer than 24 months, it will continue to qualify
as a REIT before the final distribution of assets. However, in order for the
Company to continue to qualify as a REIT, it must satisfy a number of asset,
income and distribution tests, and there can be no assurances that it will be
able to satisfy these tests throughout the period during which it liquidates its
assets.

Use of Estimates - The preparation of financial statements in
conformity with GAAP requires the Company to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of income and expenses during the reporting period. Actual
results could differ from those estimates.

Recent Accounting Pronouncements - Effective January 1, 2001, the
Company adopted the provisions of SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities" as amended by SFAS No. 138, "Accounting for
Certain Derivative Instruments and Certain Hedging Activities - an Amendment of
Statement No. 133." The adoption of the provisions of these accounting
pronouncements with respect to the Company's sole derivative instrument at that
time, the interest rate agreement, had no impact on the Company's financial
condition or results of operations.

|2. | MORTGAGE SECURITIES
|-- | -------------------

The following tables show the Company's Mortgage Securities as of September 30,
2001 (stated at estimated net realizable value), and as of December 31, 2000
(stated at estimated fair value), excluding interest-only mortgage derivatives
("IOs").

`September 30, 2001

                           Agency
                           Fixed/
                       Floating Rate          Non-
                          Mortgage          Mortgage
                         Securities       Subordinates         Total

Current, principal     $70,105,513         $5,345,469      $72,263,762
amount

Unamortized discount            --           (600,000)        (600,000)
Unamortized premium        298,722                 --          298,722
                       -----------         ----------      -----------

Amortized cost          70,404,235          4,745,469       75,149,704

Gross unrealized gains   1,507,708                 --        1,507,708
Gross unrealized losses         --         (4,745,469)      (4,745,469)
                       -----------         ----------      -----------
Estimated net
realizable value       $71,911,943           $     --      $71,911,943
                       ===========         ==========      ===========


                           December 31, 2000

                         Agency
                         Fixed/
                        Floating
                          Rate                     Non-
                        Mortgage    Mortgage     Mortgage
                       Securities  Subordinates Subordinates    Total

Current principal     $271,728,664   $7,316,580 $5,722,553  $284,767,797
amount

Unamortized discount    (3,939,630)          --   (600,000)   (4,539,630)
Unamortized premium      1,117,677        2,684         --     1,120,361
                      ------------   ---------- ----------  ------------

Amortized cost        268,906,711     7,319,264  5,122,553  281,348,528

Gross unrealized        6,290,740            --         --    6,290,740
gains
Gross unrealized          (16,251)       (7,256)(3,352,893)  (3,376,400)
                      ------------   ---------- ----------  ------------

Estimated fair value  $275,181,200   $7,312,008 $1,769,660  $284,262,868
                      ============   ========== ==========  ============`

The Company did not hold any IOs in its portfolio as of September 30, 2001. The
following table shows the Company's IOs as of December 31, 2000 (stated at
estimated fair value).

`December 31, 2000

                                 Fixed Rate       Fixed Rate
                                Residential       Commercial        Total

Current notional amount          $104,492,206     $99,844,649    $204,336,855
                                 ============     ===========    ============

Amortized cost                   $31,815,356      $ 6,070,699    $37,886,055

Gross unrealized gains                    --          114,987        114,987
Gross unrealized losses           (6,703,005)              --     (6,703,005)
                                 -----------      -----------    -----------

Estimated fair value             $25,112,351      $ 6,185,686    $31,298,037
                                 ===========      ===========    ===========`

On October 23, 2000 the Company filed suit in the Southern District of New York
against ASC, Nomura Asset and Nomura alleging that the defendants defrauded the
Company into purchasing approximately $19.0 million worth of ASC securities by
failing to disclose, among other things, that one of largest loans in the
mortgage pool was seriously troubled. The Company is seeking rescission of the
purchase of the securities. During the fourth quarter of 2000, the Company
recognized the probable other-than-temporary impairment of the ASC securities.
On December 8, 2000, the defendants filed a motion to dismiss the action. On
September 5, 2001, such motion was granted with respect to the claims brought
under Sections 12(a)(2) and 15 of the Securities Act of 1933 and denied with
respect to the common law fraud claims and claims brought under Sections 10(b)
and 20(a) of Securities Exchange Act of 1934 and Rule 10b-5 promulgated
thereunder. Discovery is proceeding with regard to the surviving claims. A
recovery of this investment may be possible, but management is unable to predict
the likelihood of this occurrence.

|3. | MORTGAGE LOANS
|-- | --------------

The following table shows the Company's Mortgage Loans at September 30, 2001
(stated at estimated net realizable value) and December 31, 2000 (stated at
amortized cost).

`September 30, 2001  December 31, 2000

Principal amount                                $2,080,693         $2,647,455
Unamortized discount                                    --                 --
Unamortized premium                                     --             52,383
                                                ----------         ----------
Net amount                                      $2,080,693         $2,699,838
                                                ==========         ==========`

|4. | INTEREST RATE AGREEMENT
|-- | -----------------------

Caps

The Company used a cap, during 2000 and continuing into January 2001, to reduce
the risk of rising interest rates on the cost of the short-term repurchase
agreements used to finance its Investments.

As a result of the reduction in interest rates in January 2001, the Company
closed out the existing cap, with a notional amount of $100,000,000, for
$260,000 in cash and recognized a net loss of $(120,000) in the statement of
operations that is comprised of a realized loss of $(2,700,000) and an
unrealized gain of $2,580,000 from the reversal of the unrealized loss on the
cap at December 31, 2000 due to its sale. During the second quarter of 2000, the
Company purchased this cap for a premium of $2,960,000. The cap agreement had a
term of three years and provided for monthly payments of interest to the Company
to the extent that the one-month LIBOR exceeded 6.54%, as applied to the
notional amount. By December 31, 2000, the Company had recorded an unrealized
loss of $(2,580,000) in the statement of operations with respect to the cap to
reflect its estimated fair value of $380,000 in the balance sheet at that
time.

|5. | REPURCHASE AGREEMENTS
|-- | ---------------------

Most of the Company's Investments were financed by repurchase agreements. The
repurchase agreements are collateralized by the market value of the Company's
Investments and bear interest rates that generally move in close relation to
one-month LIBOR.

At September 30, 2001 and December 31, 2000, the Company had $34,960,534 and
$239,877,000, respectively, of repurchase agreements outstanding with a weighted
average borrowing rate of 3.26% and 6.66%, respectively, and a weighted average
remaining maturity of 2 days and 11 days, respectively. All of the repurchase
agreements outstanding at September 30, 2001 mature within 30 days. The
associated accrued interest expense payable on the outstanding repurchase
agreements amounted to $75,790 and $560,130 at September 30, 2001 and December
31, 2000, respectively. At September 30, 2001 and December 31, 2000, the
repurchase agreements were collateralized by Investments that had an estimated
value of approximately $36,120,000 (stated at estimated realizable
value) and $249,500,000 (stated at estimated fair value), respectively.

|6. | RESERVE FOR ESTIMATED LIQUIDATION COSTS
|-- | ---------------------------------------

At the time of the adoption of liquidation basis accounting, the Company
recorded $700,000 for estimated professional fees and other expenses anticipated
over the course of the liquidation. At September 30, 2001, the reserve for
estimated liquidation costs amounted to $654,542. During the period July 28,
2001 through September 30, 2001, the Company paid $45,458 of liquidation
costs. During the period January 1, 2001 through July 27, 2001, the Company
incurred approximately $1.4 million of costs directly related to the
liquidation of the Company. Such costs were recorded in general and administrative
expenses on the statement of operations.

|7. | STOCKHOLDERS' EQUITY
|-- | --------------------

Treasury Stock - In November 1998, the Board of Directors
increased the amount of common stock authorized to be repurchased under the
Company's stock repurchase program to $40,000,000. During the nine months ended
September 30, 2000, the Company repurchased 825,600 shares for $3,150,936 (or
approximately $3.82 per share on a weighted average basis), respectively,
pursuant to the stock repurchase program. No shares of common stock were
repurchased during 2001 or during the three months ended September 30, 2000. As
of September 30, 2001, an aggregate of 6,079,766 shares of the Company's common
stock had been reacquired at an aggregate cost of $32,848,431.

|8. | LONG-TERM STOCK INCENTIVE PLAN
|-- | ------------------------------

LASER Maryland had adopted a Long-Term Stock Incentive Plan for directors,
executive officers and key employees (the "Incentive Plan"). The Incentive Plan
authorized the Compensation Committee of the Board of Directors to grant awards,
including incentive stock options as defined under Section 422 of the Code,
options not so qualified and deferred common stock. The Incentive Plan
authorized an aggregate of 2,066,666 shares of LASER Maryland's common stock for
the granting of options or other awards. Upon the effectiveness of the
Reincorporation, the Incentive Plan was terminated.

There were no outstanding awards under the Incentive Plan during 2001. At
September 30, 2000, options to purchase 7,500 shares of LASER Maryland's common
stock were outstanding. The options vested over a four year period subject to
the holder's continued employment or service. LASER Maryland adopted the
disclosure-only provisions of SFAS No. 123, "Accounting for Stock-Based
Compensation" for the options. Accordingly, compensation cost was not recognized
for the options based on the fair value at the grant date for awards as
promulgated by SFAS No. 123. For LASER Maryland's pro-forma net income for the
three and nine months ended September 30, 2000, the compensation cost was
amortized over the four-year vesting period of the options and the resulting
decrease in net income and net income per share was not material.

|9. | EARNINGS (LOSS) PER SHARE ("EPS" or "LPS")
|-- | ------------------------------------------

Basic EPS is computed by dividing the net income (loss) attributable to common
shares by the weighted average number of common shares outstanding during the
period. The calculation of diluted EPS considered the effect of all dilutive
potential common shares that were outstanding during the period under the
Company's Incentive Plan. Basic and diluted EPS for the period July 1, 2001
through July 27, 2001 and for the period January 1, 2001 through July 27, 2001
and for the three and nine months ended September 30, 2000 was as follows:

`For the Period
                       July 1, 2001 through July 27, 2001

                    Net Income          Shares         Per-Share
                   (Numerator)      (Denominator)        Amount

Basic EPS          $    188,293        14,038,983     $      0.01
                   ============      ============     ===========

Diluted EPS        $    188,293        14,038,983     $      0.01
                   ============      ============     ===========

                                 For the Period
                     January 1, 2001 through July 27, 2001

                    Net Income          Shares         Per-Share
                   (Numerator)      (Denominator)        Amount

Basic LPS          $(3,169,523)        14,038,983     $    (0.23)
                   ============      ============     ===========

Diluted LPS        $(3,169,523)        14,038,983     $    (0.23)
                   ============      ============     ===========

                           For the Three Months Ended
                               September 30, 2000

                    Net Income          Shares         Per-Share
                   (Numerator)      (Denominator)        Amount

Basic EPS          $ 2,304,047         14,038,983     $      0.16
                   ===========       ============     ===========

Diluted EPS        $ 2,304,047         14,038,983     $      0.16
                   ===========       ============     ===========

                           For the Nine Months Ended
                               September 30, 2000

                    Net Income          Shares         Per-Share
                   (Numerator)      (Denominator)        Amount

Basic EPS          $ 3,412,040         14,481,532     $      0.24
                   ===========       ============     ===========

Diluted EPS        $ 3,412,040         14,481,532     $      0.24
                   ===========       ============     ===========`

For the period July 1, 2001 through July 27, 2001 and for the period January 1,
2001 through July 27, 2001 and for the three and nine months ended September 30,
2000, there were no deferred common shares reserved for issuance.

For the period July 1, 2001 through July 27, 2001 and for the period January 1,
2001 through July 27, 2001, there were no outstanding options to purchase common
shares of the Company. For the three and nine months ended September 30, 2000,
options to purchase 7,500 shares of the Company's common stock were outstanding
and were excluded from the computation of diluted EPS for the three and nine
months then ended because the strike price ($15.00) was greater than the average
daily market price of the Company's common stock for the period rendering them
anti-dilutive.

|10. | MANAGEMENT AGREEMENT
|--- | --------------------

From November 1, 1999 to November 1, 2001, Mariner Mortgage Management, L.L.C.
("Mariner") served as the external manager of the Company and was responsible
for the day-to-day management of the Company's investments and operations.

Under the management agreement, which was entered into on November 1, 2000 and
terminated on November 1, 2001, Mariner became entitled to be paid an incentive
fee upon the earlier of (1) the termination date of the management agreement or
(2) the date on which the Board of Directors adopted resolutions approving the
liquidation and dissolution, referred to as the anniversary date, which it did
on April 25, 2001, equal to the number of shares outstanding on the applicable
date, multiplied by:

| |  | 10% of the difference between the 15-day average closing market price (plus any
distributions per share other than common stock) of the Company's common stock
preceding November 1, 2001 (or such earlier anniversary date, as set forth in
the agreement) and $3.317 per share (which approximates the average closing
price of the Company's common stock for the fifteen days ended October 31, 2000)
up to the equivalent of $3.50 per share;
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | 15% of the difference between the 15-day average closing market price (plus any
distributions per share other than common stock) of the Company's common stock
preceding November 1, 2001 or on the anniversary date, whichever is earlier, and
$3.50 per share up to $4.00 per share; and
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | 20% of the difference between the 15-day average closing market price (plus any
distributions per share other than common stock) of the Company's common stock
preceding November 1, 2001 or on the anniversary date, whichever is earlier, and
$4.00 per share.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Based upon this calculation, an incentive fee of $1,219,285 was paid to Mariner
on May 1, 2001. Mariner was not entitled to receive any other fee upon the
adoption of the Plan of Liquidation and Dissolution.

In accordance with the terms of the management agreement, Mariner continued to
receive its base management fee of $50,000 per month until the termination of
the management agreement.

For the period November 1, 1999 to November 1, 2000, the annual base fee under
the terms of the management agreement then in effect, was payable monthly in
cash and based on 0.45% of the aggregate value of the Company's outstanding
equity as of the end of such month; the annual incentive fee calculation for
that period was similar to the computation described above.

The table below shows the base fees incurred to the Company pursuant to the
terms of the Mariner management agreement.

`For the period:                                   Base Fees Incurred

     July 28, 2001 through September 30, 2001           $  100,000                                                                                                     $
     July 1, 2001 through July 27, 2001                 $   50,000                                                                                                     $
     January 1, 2001 through July 27, 2001              $  350,000                                                                                                     $
     Three months ended September 30, 2000              $   50,210                                                                                                     $
     Nine months ended September 30, 2000               $  176,973                                                                                                     $`

No incentive fees were incurred during the period July 28, 2001 through
September 30, 2001, the period July 1, 2001 through July 27, 2001 or during the
three and nine months ended September 30, 2000. As described above, an incentive
fee of $1,219,285 was paid to Mariner during the period January 1, 2001 through
July 27, 2001.

Upon the termination of the management agreement on November 1, 2001, the
Company became self managed and entered into employment agreements with William
J. Michaelcheck, the President and Chief Executive Officer of the Company, and
Charles R. Howe, II, the Vice President, Treasurer and Secretary of the Company,
each at a salary of $10,000 per month. Messrs. Michaelcheck and Howe previously
were responsible for managing the Company's portfolio at Mariner. On November 1,
2001, the Company also entered into a support services agreement with Mariner
Investment Group, Inc., an affiliate of Mariner, under which Mariner Investment
Group will provide the Company with office space and services, bookkeeping and
accounting services and such other services as may be agreed upon from time to
time by the Company and Mariner Investment Group for a fee of $30,000 per
month.

|11. | SUBSEQUENT EVENT
|--- | ----------------

In accordance with the Plan of Liquidation and Dissolution, on November 8, 2001,
the Board of Directors filed a petition with the Delaware Court of Chancery for
permission to make an initial distribution to stockholders of approximately
$3.00 per outstanding common share. The petition currently is pending. A hearing
on the petition will be held on November 28, 2001. After
providing for expenses and subject to court approval, the Company expects to
distribute the majority of the remaining liquidation proceeds over the next
three years with a final liquidating distribution to occur thereafter.

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

The following discussion should be read in conjunction with the Company's
financial statements set forth in this Form 10-Q and notes thereto and with the
audited financial statements included in the Company's Annual Report on Form
10-K, as amended by Form 10-K/A, for the year ended December 31, 2000.

Forward-Looking Statements

"Safe Harbor" statement under the Private Securities Litigation Reform Act of
1995: Statements in this discussion regarding the Company and its business,
which are not historical facts, are "forward-looking statements" that involve
risks and uncertainties. Risks and uncertainties, which could cause results to
differ from those discussed in the forward-looking statements herein, are listed
in the Company's Annual Report filed on Form 10-K, as amended by Form 10-K/A and
the Company's Definitive Proxy Statement filed pursuant to Schedule 14A.

Recent Developments

On July 27, 2001, the stockholders of LASER Maryland, at the annual meeting,
approved the Reincorporation of LASER Maryland in Delaware, through the merger
of LASER Maryland with and into the Company, and the subsequent liquidation and
dissolution of the Company under the terms and conditions of the Plan of
Liquidation and Dissolution. On July 31, 2001, LASER Maryland completed the
Reincorporation by merging with and into the Company. As of the effective date
of the Reincorporation, LASER Maryland ceased to exist. On August 3, 2001, the
Company filed a certificate of dissolution with the Secretary of State of the
State of Delaware, and the dissolution of the Company was effective upon such
filing. The Company now operates solely for the purpose of providing for the
satisfaction of its obligations, adjusting and winding-up its business and
affairs and distributing its remaining assets.

In accordance with the Plan of Liquidation and Dissolution, on November 8, 2001,
the Board of Directors filed a petition with the Delaware Court of Chancery for
permission to make an initial distribution to stockholders of approximately
$3.00 per outstanding common share. The petition currently is pending. A hearing
on the petition will be held on November 28, 2001. After
providing for expenses and subject to court approval, the Company expects to
distribute the majority of the remaining liquidation proceeds over the next
three years with a final liquidating distribution to occur thereafter. The total
amount of distributions to stockholders is estimated to range between $4.15 and
$4.35 per share, but is subject to change based on numerous factors, including
future investment results and operating expenses, fluctuations in interest rates
and spreads, the Delaware Court of Chancery modifying the distribution amounts
and timing currently envisioned by the Board of Directors under the Plan of
Liquidation and Dissolution, unanticipated claims or expenses and income
received, if any, from its pending litigation against ASC, Nomura Asset and
Nomura, as well as other factors beyond the control of the Company.

Upon the termination of the management agreement on November 1, 2001, the
Company became self managed and entered into employment agreements with William
J. Michaelcheck, the President and Chief Executive Officer of the Company, and
Charles R. Howe, II, the Vice President, Treasurer and Secretary of the Company,
each at a salary of $10,000 per month. Messrs. Michaelcheck and Howe previously
were responsible for managing the Company's portfolio at the Company's former
external manager, Mariner. On November 1, 2001, the Company also entered into a
support services agreement with Mariner Investment Group, Inc., an affiliate of
Mariner, under which Mariner Investment Group will provide the Company with
office space and services, bookkeeping and accounting services and such other
services as may be agreed upon from time to time by the Company and Mariner
Investment Group for a fee of $30,000 per month.

Changes in Net Assets in Liquidation for the Period July 28, 2001 Through
September 30, 2001

Under liquidation basis accounting, net assets in liquidation increased by $0.7
million to $59.4 million for the period July 28, 2001 through September 30,
2001. The Company's portfolio of interest earning assets, net of interest
bearing liabilities, earned $0.7 million of net interest income. In addition,
the estimated net realizable value of the portfolio increased by $0.2 million.
General and administrative expenses during that period amounted to $0.2 million
and consisted of $0.1 million of management fees and $0.1 million of
professional fees and other expenses.

During the period July 28, 2001 through September 30, 2001, a net $8.6 million
of cash was generated from the Company's operating and investing activities.
Additionally, the Company paid $11.4 million to reduce a portion of its
outstanding repurchase agreements. Cash and cash equivalents amounted to $19.8
million at September 30, 2001.

At adoption of liquidation basis accounting, certain adjustments were made to
stockholders' equity, as determined under going concern basis accounting, to
reflect more accurately the estimated net realizable values of the remaining net
assets of the Company. In that regard, reductions in the aggregate amount of
$2.7 million were charged to stockholders' equity of $61.4 million at that time.
These adjustments consist of a $0.9 million reduction in the carrying value of
securities, the immediate write-off of the remaining balance of all prepaid
expenses and the recognition of the estimated costs associated with the
liquidation. However, the valuation of assets and liabilities at their estimated
net realizable values and estimated settlement amounts, respectively,
necessarily requires estimates and assumptions. Changes in market conditions,
actual costs associated with the liquidation, and other factors may affect the
amounts ultimately realized or settled, and those amounts may differ, perhaps
materially, from the carrying values on the Company's financial statements.

Results of Operations for the Period July 1, 2001 Through July 27, 2001
and the Period January 1, 2001 Through July 27, 2001 Compared to the Three and
Nine Months Ended September 30, 2000

Net Income (Loss) Summary

General. For the period July 1, 2001 through July 27, 2001, the Company
had net income of $0.2 million, or $0.01 per weighted average share. For the
period July 1, 2001 through July 27, 2001, the weighted average number of shares
of common stock outstanding was 14,038,983; no distributions or dividends were
declared or paid and return on average stockholders' equity was 0.29% on an
actual basis.

For the three months ended September 30, 2000, the Company had net income of
$1.9 million, or $0.14 per weighted average share excluding aggregate net gains
from investment activities of $0.4 million, or $0.02 per share. The weighted
average number of shares of common stock outstanding for the three months ended
September 30, 2000 was 14,038,983. No distributions or dividends were declared
during the three months ended September 30, 2000. Return on average
stockholders' equity was 3.68% on an actual basis for the three months ended
September 30, 2000.

For the period January 1, 2001 through July 27, 2001, the Company had net income
of $2.4 million, or $0.17 per weighted average share, excluding aggregate net
losses from investment activities and the interest rate agreement of $(4.3)
million, or $(0.31) per share, and the accrued incentive fee of $(1.2) million,
or $(0.09) per share. For the period January 1, 2001 through July 27, 2001, the
weighted average number of shares of common stock outstanding was 14,038,983; no
distributions or dividends were declared or paid and return on average
stockholders' equity was (4.87)% on an actual basis.

For the nine months ended September 30, 2000, the Company had net income of $5.0
million, or $0.35 per weighted average share, excluding aggregate net losses
from investment activities of $(1.6) million, or $(0.11) per share. The weighted
average number of shares of common stock outstanding for the nine months ended
September 30, 2000 was 14,481,532. No distributions or dividends were declared
during the nine months ended September 30, 2000. Return on average stockholders'
equity was 4.67% on an actual basis for the nine months ended September 30,
2000.

Gains/Losses from investment activities. For the period July 1, 2001
through July 27, 2001, the Company recorded a $0.1 million increase in other
comprehensive income from the unrealized net gain on securities resulting in a
net gain in stockholders' equity from securities of $0.1 million.

The realized gains from securities during the three months ended September 30,
2000 were $0.4 million, or $0.03 per weighted average share. Also during this
period, the Company recorded a $0.5 million increase in other comprehensive
income (loss) from the unrealized net gain on securities resulting in an overall
net gain in stockholders' equity from securities of $0.9 million.

For the period January 1, 2001 through July 27, 2001, the Company sold
securities and recorded a net realized loss of $(4.2) million, or $(0.30) per
share. Also during this period, the Company recorded a $1.2 million increase in
other comprehensive income from the unrealized net gain on securities resulting
in an overall net loss in stockholders' equity from securities of $(3.0)
million.

The realized losses from securities during the nine months ended September 30,
2000 were $(1.6) million, or $(0.11) per weighted average share. Also during
this period, the Company recorded a $(7.1) million decrease in other
comprehensive loss from the unrealized net loss on securities (excluding a
$(1.9) million decrease from the unrealized loss on the interest rate agreement) for an aggregate
net loss in stockholders' equity from securities of $(8.7) million. The
unrealized net loss recorded during the nine months ended September 30, 2000
included a charge of $(9.1) million representing the remaining aggregate
carrying value of certain securities that were affected by the default in one of
the underlying mortgage loans in a trust fund of which the Company owns
subordinated interests. The Company was notified in June 2000 of this event.
Thereafter, the Company was notified that the amount of the recovery of the
securities might be negligible. Accordingly, management increased the unrealized
loss on those securities during the second quarter of 2000 as previously
discussed, pending further developments.

Interest Income and Average Interest Earning Asset Yield

The Company earns interest income primarily from its portfolio of investments
and cash equivalents. The table below shows, for the period July 1, 2001 through
July 27, 2001 and the period January 1, 2001 through July 27, 2001 and for the
three and nine months ended September 30, 2000, the Company's average balance of
cash equivalents, investments, the yields earned on each type of interest
earning asset, the yield on average interest earning assets and total interest
income.

`Total                Yield on   Yield on
                                              Average     Average    Yield on   Average    Average
                                    Average   Amortized  Interest     Average   Amortized  Interest      Total
                                     Cash     Cost of     Earning      Cash     Cost of     Earning    Interest
                                  Equivalents Investments  Assets   Equivalents Investments  Assets     Income
                                                          (dollars in thousands)

For the period July 1, 2001
through
July 27, 2001                       $19,656     $89,153   $108,809     3.73%       6.36%      5.91%       $536
For the three months ended
September 30, 2000                   $7,402    $318,293   $325,695     6.38%       7.55%      7.52%     $6,126

For the period January 1, 2001
through July 27, 2001               $19,109    $169,793   $188,902     4.67%       7.30%      7.04%     $7,757
For the nine months ended
September 30, 2000                  $25,954    $193,419   $219,372     6.07%       7.80%      7.52%    $12,428`

During 2001, the Company reduced its portfolio of Mortgage Securities and
Mortgage Derivatives in contemplation of a liquidation or sale of the Company
and the leverage financing used to maintain the portfolio.

Interest Expense and the Average Cost of Funds

The Company incurs interest expense primarily from borrowed funds under
short-term repurchase agreements that finance most of its portfolio of
investments. Interest expense is calculated in the same manner for tax and GAAP
purposes. The Company generally has structured its borrowings to closely
correlate the Company's cost of borrowed funds with changes in one-month
LIBOR.

The table below shows, for the period July 1, 2001 through July 27, 2001 and the
period January 1, 2001 through July 27, 2001 and for the three and nine months
ended September 30, 2000, the Company's average borrowed funds, interest expense
and average cost of funds compared to average one and six-month LIBOR.

`Average    Average   Average
                                                                                 One-Month   Cost of   Cost of
                                                                                   LIBOR      Funds     Funds
                                                                                 Relative   Relative   Relative
                                                                                    to         to         to
                           Average                Average    Average    Average   Average    Average    Average
                           Borrowed   Interest   Cost of    One-Month  Six-Month Six-Month  One-Month  Six-Month
                            Funds      Expense     Funds      LIBOR     LIBOR      LIBOR      LIBOR      LIBOR
                                                          (dollars in thousands)

For the period July 1,
2001 through July 27, 2001 $ 46,392     $ 153       3.83%      3.82%      3.79%     0.02%      0.01%      0.03%
For the three months
ended September 30, 2000   $247,918    $3,874       6.11%      6.62%      6.84%    (0.22)%    (0.51)%    (0.73)%

For the period January 1,
2001 through July 27, 2001 $126,104    $4,060       5.47%      4.74%      4.53%     0.21%      0.72%      0.94%
For the nine months
ended September 30, 2000   $134,310    $6,208       5.97%      6.33%      6.67%    (0.34)%    (0.36)%    (0.69)%`

During 2001, interest rates decreased and during 2000, interest rates increased
due primarily to the effect of interest rate setting actions taken by the
Federal Reserve Board.

Interest Rate Agreement

The Company has followed an interest rate risk management strategy designed to
protect against the adverse effects of major interest rate changes and had used
derivative interest rate agreements, such as a purchased interest rate cap.

As a result of the reduction in interest rates in January 2001, the Company
closed out the existing cap, with a notional amount of $100.0 million, for $0.3
million in cash and recognized a net loss of $(0.1) million, or $(0.01) per
share in the statement of operations that is comprised of a realized loss of
$(2.7) million and an unrealized gain of $2.6 million from the reversal of the
unrealized loss on the cap at December 31, 2000 due to its sale.

During the second quarter of 2000, the Company purchased this cap for a premium
of $3.0 million to reduce the risk of rising interest rates on the cost of the
short-term repurchase agreements used to finance its investments. The cap
agreement had a term of three years and provided for monthly payments of
interest to the Company to the extent that the one-month LIBOR exceeded 6.54% as
applied to the notional amount. As of September 30, 2000, the Company charged
other comprehensive loss $(1.9) million to reflect the cap's estimated fair
value of $1.1 million in the balance sheet at that time.

The Company did not enter into any other derivatives interest rate agreements
during 2001.

General and Administrative Expenses

General and administrative expenses ("G&A expenses") consist of management
and incentive fees incurred to Mariner and professional and other expenses.
There were no differences in the calculation of G&A expenses for taxable and
GAAP income purposes. The table below shows the G&A expenses for the period
July 1, 2001 through July 27, 2001 and the period January 1, 2001 through July
27, 2001 and the three and nine months ended September 30, 2000.

`Other G&A   Total G&A
                                                       Management Fee Incentive Fee   Expenses    Expenses
                                                                        (dollars in thousands)
For the period July 1, 2001 through July 27, 2001         $   50        $   --     $  121          $  171
For the three months ended September 30, 2000             $   50        $   --     $  269          $  319
For the period January 1, 2001 through July 27, 2001      $  350        $1,219     $  959          $2,528
For the nine months ended September 30, 2000              $  177        $   --     $  748          $  925`

Net Income (Loss) and Return on Average Stockholders' Equity

Net income (loss) was $0.2 million and $(3.2) million for the period July 1,
2001 through July 27, 2001 and the period January 1, 2001 through July 27, 2001,
respectively, compared to net income of $2.3 million and $3.4 million for the
three and nine months ended September 30, 2000, respectively. Return on average
stockholders' equity, on an actual basis, for the period July 1, 2001 through
July 27, 2001 and the period January 1, 2001 through July 27, 2001 was 0.43% and
(3.02)%, respectively, compared to 3.68% and 4.67% for the three and nine months
ended September 30, 2000, respectively.

The table below shows, on an actual basis, for the period July 1, 2001 through
July 27, 2001 and the period January 1, 2001 through July 27, 2001 and the three
and nine months ended September 30, 2000, the Company's net interest income,
gains (losses) from investment activities and G&A expenses each as a
percentage of average stockholders' equity and the return on average
stockholders' equity.

`Gains (Losses)              Return on
                                                                       from                    Average
                                                       Net          Investment       G&A    Stockholders'
                                                 Interest Income    Activities     Expense      Equity

For the  period  July 1, 2001  through  July 27,      0.60%           (0.04)%        0.27%       0.29%
2001
For the three months ended September 30, 2000         3.59%            0.59%         0.51%       3.68%

For the period  January 1, 2001 through July 27,      5.67%           (6.66)%        3.88%      (4.87)%
2001
For the nine months ended September 30, 2000          8.18%           (2.25)%        1.27%       4.67%`

Financial Condition

Investments

As of September 30, 2001 and December 31, 2000, the Company's portfolio
consisted of:

`As of September 30, 2001               As of December 31, 2000
                                    ------------------------               -----------------------
                                 Dollar Amount                          Dollar Amount
            Securities           (in millions)        Percentage        (in millions)       Percentage
            ----------           -------------        ----------        -------------       ----------
Agency Certificates                  $71.9              97.2%              $275.2              86.5%
Subordinate Interests                 --                   --                 7.3               2.3%
IOs                                   --              --                     31.3               9.8%
Mortgage Loans                         2.1               2.8%                 2.7               0.8%
Other fixed-income assets             --                   --                 1.8               0.6%
                              -------------------- ----------------- -------------------- ---------------
Total                                $74.0             100.0%              $318.3             100.0%
                              ==================== ================= ==================== ===============`

During the first two quarters of 2001, in contemplation of either a liquidation
or sale of the Company, the Company reduced its portfolio of Mortgage Securities
and the leverage financing used to maintain the portfolio. The Company has begun
the process of liquidating its assets pursuant to the Plan of Liquidation and
Dissolution. The proceeds from sales of assets will be used to pay off the
repurchase agreements with the excess available for liquidating distributions to
stockholders. See "Distributions and Taxable Income; REIT Status."

At September 30, 2001 and December 31, 2000, the Company had on its balance
sheet $0.6 million and $4.5 million, respectively, of total unamortized discount
(which is the difference between the remaining principal value and the current
historical amortized cost of investments acquired at a price below principal
value) and $0.3 million and $1.2 million, respectively, of total unamortized
premium (which is the difference between the remaining principal amount and the
current historical amortized cost of investments acquired at a price above
principal value) included as part of the amortized cost of the Company's
Mortgage Assets. Unamortized discount balances are accreted as an increase in
interest income over the life of Mortgage Assets purchased at a discount to
principal value and unamortized premium balances are amortized as a decrease in
interest income over the life of Mortgage Assets purchased at a premium to
principal value.

Mortgage principal repayments received were $4.5 million and $31.8 million for
the period July 1, 2001 through July 27, 2001 and the period January 1, 2001
through July 27, 2001, respectively, and $6.7 million and $11.1 million for the
three and nine months ended September 30, 2000, respectively. The tables below
summarize the Company's investments at September 30, 2001 and December 31,
2000.

`SECURITIES (EXCLUDING IOs)
                                         (dollars in thousands)
                                                             Amortized                   Estimated
                                                              Cost to                   Fair Value   Weighted
                       Current                                Current                   to Current    Average
                      Principal      Net       Amortized     Principal     Estimated     Principal     Life
                       Amount      Discount       Cost        Amount       Fair Value     Amount      (Years)

September 30, 2001   $   75,451  $     (301)  $   75,150      99.60%     $    71,912        95.31%       3.0
December 31, 2000    $  284,768  $   (3,419)  $  281,349      98.80%     $   284,263        99.82%       4.8


                                             MORTGAGE LOANS
                                         (dollars in thousands)
                                                             Amortized                 Estimated
                                                              Cost to                 Fair Value
                       Current                                Current                 to Current    Weighted
                      Principal      Net       Amortized     Principal    Estimated    Principal    Average
                       Amount      Premium        Cost        Amount      Fair Value    Amount    Life (Years)

September 30, 2001     $  2,081    $     --     $  2,081       100.00%      $ 2,081     100.00%        15.9
December 31, 2000      $  2,648    $     52     $  2,700       101.98%      $ 2,700     101.98%        17.1


                                       IO SECURITIES
                                  (dollars in thousands)
                                               Amortized                  Estimated
                                                Cost to                  Fair Value
                       Current                  Current                  to Current    Weighted
                      Notional    Amortized     Notional     Estimated    Notional     Average
                       Amount        Cost        Amount     Fair Value     Amount    Life (Years)

September 30, 2001   $       --    $     --          --      $     --            --        --
December 31, 2000    $  204,337    $ 37,886       18.54%     $ 31,298        15.32%       6.8`

The table below shows gross unrealized gains and losses on all securities in the
Company's portfolio at September 30, 2001 (stated at estimated net realizable
value) and December 31, 2000 (stated at estimated fair value).

`UNREALIZED GAINS AND LOSSES
                                             (dollars in thousands)

                                                        At September 30, 2001   At December 31, 2000
                                                        ---------------------   --------------------
Unrealized Gain                                             $      1,508            $      6,405
Unrealized Loss                                                   (4,746)                (10,079)
                                                            -------------           -------------
Net Unrealized Loss                                         $     (3,238)           $     (3,674)
                                                            =============           =============
Net Unrealized Loss as % of Investments
  Principal/Notional Amount                                        (4.18)%                 (0.75)%
Net Unrealized Loss as % of Investments Amortized Cost             (4.19)%                 (1.14)%`

The following table sets forth a schedule of pass-through certificates and
Mortgage Loans owned by the Company at September 30, 2001 and December 31, 2000
classified by issuer and by ratings categories.

`PASS-THROUGH CERTIFICATES AND MORTGAGE LOANS BY ISSUER AND CREDIT RATING
                                                 (dollars in thousands)

                                        At September 30, 2001                     At December 31, 2000
                                        ---------------------                     --------------------
                                  Carrying Value       Portfolio Mix      Carrying Value       Portfolio Mix
                                  --------------       -------------      --------------       -------------
Agency Certificates               $     71,912             97.2%          $      275,181           86.5%
Privately Issued Certificates:
   A Rating                                 --             --                      7,312            2.3%
   BB/Ba Rating and below                   --             --                      1,770            0.6%
IOs                                         --             --                     31,298            9.8%
Mortgage Loans                           2,081              2.8%                   2,700            0.8%
                                  ------------            ------          --------------          ------
              Total               $     73,993            100.0%          $      318,261          100.0%
                                  ============            ======          ==============          ======`

The following tables set forth information about the Company's portfolio of
subordinate interests, IOs and other fixed-income assets as of September 30,
2001 and December 31, 2000.

`SUBORDINATE INTERESTS
                              (dollars in thousands)

                                              Estimated Fair Value at
                                              -----------------------
Description                         September 30, 2001       December 31, 2000
-----------                         ------------------       -----------------
Commercial                        $            --               $      7,312


                                  IO SECURITIES
                              (dollars in thousands)

                                              Estimated Fair Value at
                                              -----------------------
Description          Coupon         September 30, 2001       December 31, 2000
-----------          ------         ------------------       -----------------
Residential          Fixed        $            --               $     25,112
Commercial           Fixed        $            --               $      6,186


                            OTHER FIXED-INCOME ASSETS
                              (dollars in thousands)

                                               Estimated Fair Value at
                                               -----------------------
Description                         September 30, 2001       December 31, 2000
-----------                         ------------------       -----------------
CBO/CLO                            $            --              $      1,770`

Credit Considerations

At September 30, 2001 and December 31, 2000, the Company had limited its
exposure to credit losses on its portfolio by holding 97% and 94% respectively,
of its investments in Mortgage Securities issued by the Federal National
Mortgage Association, the Government National Mortgage Association and the
Federal Home Loan Mortgage Corporation (including IOs, fixed/floating rate
mortgage securities and fixed rate pass through mortgage securities).

Liquidity and Capital Resources

Liquidity measures the Company's ability to turn non-cash assets into cash
during the liquidation period to satisfy its commitments to repay existing
borrowings, to pay ongoing general and administrative expenses including
estimated costs of liquidation, and to make distributions to stockholders.
Potential immediate sources of liquidity for the Company include cash balances
and unused borrowing capacity, which varies over time as the market value of the
Company's securities fluctuates. The Company's balance sheet continues to
generate liquidity through mortgage principal repayments and net earnings held
prior to distribution to stockholders. The Company believes that its cash on
hand, earnings from its investments in Mortgage Assets and proceeds from sales
of its securities will be adequate to support the Company and pay its
obligations during the liquidation period. In the event the Company liquidates a
significant portion of its Mortgage Assets that qualify as qualified real estate
assets the Company cannot ensure that it will continue to maintain its REIT
status and its exemption under the Investment Company Act of 1940, as amended.
See "Distributions and Taxable Income; REIT Status."

The Company's debt has consisted entirely of borrowings collateralized by a
pledge of the Company's investments. These borrowings appear on the statement of
net assets in liquidation and balance sheet as repurchase agreements.
Substantially all of the Company's investments are currently accepted as
collateral for such borrowings. The Company has not established, and currently
does not intend to establish, permanent lines of credit. The Company has
obtained, and believes it will be able to continue to obtain, short-term
financing in amounts and at interest rates consistent with the Company's
financing objectives. At September 30, 2001 and December 31, 2000, the Company
had borrowings outstanding from two and three lenders, respectively. Such
borrowings are generally short-term (up to 30-day terms) and may be renewed by
the lender at its discretion. The availability of financing for the Company's
portfolio has been stable during 2001.

At September 30, 2001, the Company had outstanding $35.0 million of repurchase
agreements with a weighted average remaining maturity of two days compared to
$239.9 million outstanding at December 31, 2000 with a weighted average
remaining maturity of 11 days. All of the Company's borrowings have a cost of
funds that generally moves in relation to the one-month LIBOR. At September 30,
2001 and December 31, 2000, the weighted average cost of funds for all of the
Company's borrowings was 3.3% and 6.7%, respectively. This decrease was due
primarily to the effect of interest rate setting actions taken by the Federal
Reserve Board. At September 30, 2001, investments actually pledged had an
estimated fair value of $36.1 million compared to $249.5 million at December 31,
2000.

In 2001, the Company did not repurchase any shares of common stock under its
stock repurchase program. As of September 30, 2001, an aggregate 6,079,766
shares of the Company's issued common stock had been reacquired at an aggregate
cost of $32.8 million.

Distributions and Taxable Income; REIT Status

The Company has elected to be taxed as a REIT under the Code. As a REIT, the
Company generally is entitled to a deduction for all dividends it pays to its
stockholders for a taxable year. As a result, as a practical matter the Company
is not subject to federal income taxation with respect to its distributed
income. Accordingly, the Company intends to distribute substantially all of its
taxable income for each year to stockholders, including income resulting from
gains on sales of securities. During 2001 and 2000, the Company did not make any
capital distributions or declare any dividends.

In accordance with the Plan of Liquidation and Dissolution, on November 8, 2001,
the Board of Directors filed a petition with the Delaware Court of Chancery for
permission to make an initial distribution to stockholders of approximately
$3.00 per outstanding common share. The petition currently is pending. A hearing
on the petition will be held on November 28, 2001. After providing for expenses
and subject to court approval, the Company expects to distribute the majority of
the remaining liquidation proceeds over the next three years with a final
liquidating distribution to occur thereafter. The total amount of distributions
to stockholders is estimated to range between $4.15 and $4.35 per share, but is
subject to change based on numerous factors, including future investment results
and operating expenses, fluctuations in interest rates and spreads, the Delaware
Court of Chancery modifying the distribution amounts and timing currently
envisioned by the Board of Directors under the Plan of Liquidation and
Dissolution, unanticipated claims or expenses and income received, if any, from
its pending litigation against ASC, Nomura Asset and Nomura, as well as other
factors beyond the control of the Company.

The Company currently contemplates that unless the liquidation takes longer than
24 months, it will continue to qualify as a REIT during the liquidation and
dissolution process before the final distribution of assets. However, for the
Company to continue to qualify as a REIT, it must satisfy a number of asset,
income and distribution tests, and there can be no assurances that it will be
able to satisfy these tests throughout the period during which it would
liquidate its assets. The Company believes that distributions made to
stockholders pursuant to the Plan of Liquidation and Dissolution will be treated
for federal income tax purposes as distributions in a complete liquidation. In
this case, in general, stockholders will realize, for federal income tax
purposes, gain or loss equal to the difference between the cash distributed to
them from the liquidating distributions and their adjusted tax basis in their
shares. Tax consequences to stockholders may differ depending upon their
circumstances. Stockholders are encouraged to consult with their own tax
advisors.

Inflation

Virtually all of the Company's assets and liabilities are financial in nature.
As a result, interest rates are expected to influence the Company's performance
more directly than inflation.

While changes in interest rates do not necessarily correlate with inflation
rates or changes in inflation rates, interest rates ordinarily increase during
periods of high or increasing inflation and decrease during periods of low or
declining inflation. Accordingly, management believes that the Company's
financial condition or results of operations will be influenced by inflation to
the extent interest rates are affected by inflation.

|Item 3. | Quantitative and Qualitative Disclosures About Market Risk
|------- | ----------------------------------------------------------

Market Risk

Market risk is the exposure to loss resulting from changes in interest rates,
foreign currency exchange rates, commodity prices and equity prices. The primary
market risk to which the Company is exposed is interest rate risk, which is
highly sensitive to many factors, including governmental monetary and tax
policies, domestic and international economic and political considerations and
other factors beyond the control of the Company. Changes in the general level of
interest rates can affect the spread between the Company's interest-earning
assets and interest-bearing liabilities. Changes in the level of interest rates
also can affect, among other things, the value of the Company's Mortgage
Securities and its ability to realize gains from the sale of such assets.

The following table quantifies the potential changes in portfolio value as of
September 30, 2001 should interest rates go up or down (shocked) 200 basis
points, assuming the yield curves of the rate shocks will be parallel to each
other. Net portfolio value is defined as interest-earning assets net of
interest-bearing liabilities. All changes in value are measured as percentage
changes from the projected net portfolio value at the base interest rate
scenario. The base interest rate scenario assumes interest rates at September
30, 2001 and various estimates regarding prepayment and all activities are made
at each level of rate shock. Actual results could differ significantly from
these estimates.

`September 30, 2001
                                             Projected Percentage Change In
        Change in Interest Rate                   Net Portfolio Value
        -----------------------                   -------------------
+ 200 Basis Points                                      (1.45)%
+ 100 Basis Points                                      (0.66)%
  Base Interest Rate
- 100 Basis Points                                       0.85%
- 200 Basis Points                                       1.98%`

Asset and Liability Management

Asset and liability management is concerned with the timing and magnitude of the
repricing of assets and liabilities. The Company's objective is to attempt to
control risks associated with interest rate movements. Methods for evaluating
interest rate risk include an analysis of the Company's interest rate
sensitivity "gap," which is defined as the difference between interest-earning
assets and interest-bearing liabilities maturing or repricing within a given
time period. A gap is considered positive when the amount of interest-rate
sensitive assets exceeds the amount of interest-rate sensitive liabilities. A
gap is considered negative when the amount of interest-rate sensitive
liabilities exceeds the amount of interest-rate sensitive assets. During a
period of rising interest rates, a negative gap would tend to adversely affect
net interest income, while a positive gap would tend to result in an increase in
net interest income. During a period of declining interest rates, a negative gap
would tend to result in an increase in net interest income, while a positive gap
would tend to affect net interest income adversely. Because different types of
assets and liabilities with the same or similar maturities may react differently
to changes in overall market rates or conditions, changes in interest rates may
affect net interest income positively or negatively even if an institution were
perfectly matched in each maturity category.

The following table sets forth the estimated maturity or repricing of the
Company's interest-earning assets and interest-bearing liabilities at September
30, 2001. The amounts of assets and liabilities shown within a particular period
were determined in accordance with the contractual terms of the assets and
liabilities, except (i) floating-rate securities are included in the period in
which their interest rates are first scheduled to adjust and not in the period
in which they mature and (ii) fixed-rate Mortgage Assets reflect estimated
prepayments, which were estimated based on analyses of broker estimates.
Management believes that these assumptions approximate actual experience and
considers them reasonable; however, the interest rate sensitivity of the
Company's assets and liabilities in the table could vary substantially if
different assumptions were used or actual experience differs from the historical
experience on which the assumptions are based.

`September 30, 2001
                                                 -----------------------------------------------------------------
                                                                             More than 1
                                                   Within 3      4 to 12      Year to 3      3 Years
                                                    Months        Months        Years        and Over       Total
                                                 ------------  ------------  -----------    ----------   --------
                                                                 (dollars in thousands)
Rate-Sensitive Assets:
   Mortgage Assets and cash equivalents          $     91,675  $         51  $       237    $    1,777   $ 93,740

Rate-Sensitive Liabilities:
   Repurchase agreements                              (34,960)           --           --            --    (34,960)
                                                 ------------  ------------  -----------    ----------   --------

Interest rate sensitivity gap                    $     56,715  $         51  $       237    $    1,777   $ 58,780
                                                 ------------  ------------  -----------    ----------   --------

Cumulative interest rate sensitivity gap         $     56,715  $     56,766  $    57,003    $   58,780   $ 58,780
                                                 ============  ============  ===========    ==========   ========

Cumulative interest rate sensitivity gap as
   a percentage of total rate-sensitive assets          33.0%         33.1%        33.2%         34.2%      34.2%`

|PART II. | OTHER INFORMATION
|-------- | -----------------

References in this Part II to "LASER" or the "Company" include LASER Mortgage
Management, Inc., a Maryland corporation, prior to the date of the
reincorporation merger described under "Item 5. Other Information."

|Item 1. | Legal Proceedings
|------- | -----------------

On October 23, 2000, the Company filed suit in federal court in the Southern
District of New York against ASC, Nomura Asset and Nomura alleging that the
defendants defrauded the Company into purchasing over $19.0 million worth of
mortgage pass-through certificates by failing to disclose among other things,
that one of largest loans in the mortgage pool was seriously troubled. On
December 8, 2000, the defendants filed a motion to dismiss the action. On
September 5, 2001, such motion was granted with respect to the claims brought
under Sections 12(a)(2) and 15 of the Securities Act of 1933 and denied with
respect to the common law fraud claims and claims brought under Sections 10(b)
and 20(a) of Securities Exchange Act of 1934 and Rule 10b-5 promulgated
thereunder. Discovery is proceeding with regard to the surviving claims. A
recovery of this investment may be possible, but management is unable to predict
the likelihood of this occurrence.

In accordance with the Plan of Liquidation and Dissolution, on November 8, 2001,
the Board of Directors filed a petition with the Delaware Court of Chancery for
permission to make an initial distribution to stockholders of approximately
$3.00 per outstanding common share. The petition currently is pending. A hearing
on the petition will be held on November 28, 2001.

|Item 2. | Changes in Securities and Use of Proceeds
|------- | -----------------------------------------

Not applicable.

|Item 3. | Defaults Upon Senior Securities
|------- | -------------------------------

Not applicable.

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

On May 30, 2001, at a special meeting of stockholders, LASER Maryland, the sole
stockholder of the Company prior to the Reincorporation and merger of the
Company with and into LASER Maryland, approved the liquidation and dissolution
of the Company under the terms of the Plan of Liquidation and Dissolution,
subject to the approval of the Plan of Liquidation and Dissolution by the
stockholders of LASER Maryland.

The Annual Meeting of Stockholders of LASER Maryland was held on July 27, 2001.
The following matters were voted on at the Annual Meeting:

Merger with and into the Company. The stockholders approved the merger of
LASER Maryland with and into the Company and the change of LASER Maryland's
state of incorporation from Maryland to Delaware. There were 11,111,943 shares
voted for approval; 8,744 shares voted against and 4,151 abstained.

Approval and Adoption of the Plan of Liquidation and Dissolution of the
Company. The stockholders approved and adopted the plan of liquidation and
dissolution of the Company. There were 11,105,950 shares voted for approval;
9,704 shares voted against and 9,214 abstained.

Election of Directors. The following persons were elected as
directors:

`Number of Shares
                                                   ----------------
                                                              Voted against or
             Name                            Voted for            abstained
             ----                            ---------            ---------

Mark W. Hobbs                                13,363,537            26,092

Arthur House                                 13,363,537            26,092`

Of the remaining three board members, one will stand for election in 2002 and
two will stand for election in 2003.

Appointment of Independent Auditors. The stockholders approved the
appointment of Deloitte & Touche LLP as independent auditors for the Company
for the year 2001. There were 13,382,393 shares voted for approval; 3,010 shares
voted against and 4,226 abstained.

|Item 5. | Other Information
|------- | -----------------

In accordance with the Plan of Liquidation and Dissolution, on November 8, 2001,
the Board of Directors filed a petition with the Delaware Court of Chancery for
permission to make an initial distribution to stockholders of approximately
$3.00 per outstanding common share. The petition currently is pending. A hearing
on the petition will be held on November 28, 2001. After providing for expenses
and subject to court approval, the Company expects to distribute the majority of
the remaining liquidation proceeds over the next three years with a final
liquidating distribution to occur thereafter. The total amount of distributions
to stockholders is estimated to range between $4.15 and $4.35 per share, but is
subject to change based on numerous factors, including future investment results
and operating expenses, fluctuations in interest rates and spreads, the Delaware
Court of Chancery modifying the distribution amounts and timing currently
envisioned by the Board of Directors under the Plan of Liquidation and
Dissolution, unanticipated claims or expenses and income received, if any, from
its pending litigation against ASC, Nomura Asset and Nomura, as well as other
factors beyond the control of the Company.

Upon the termination of the management agreement on November 1, 2001, the
Company became self managed and entered into employment agreements with William
J. Michaelcheck, the President and Chief Executive Officer of the Company, and
Charles R. Howe, II, the Vice President, Treasurer and Secretary of the Company,
each at a salary of $10,000 per month. Messrs. Michaelcheck and Howe previously
were responsible for managing the Company's portfolio at Mariner. On November 1,
2001, the Company also entered into a support services agreement with Mariner
Investment Group, Inc., an affiliate of Mariner, under which Mariner Investment
Group will provide the Company with office space and services, bookkeeping and
accounting services and such other services as may be agreed upon from time to
time by the Company and Mariner Investment Group for a fee of $30,000 per
month.

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

(a) Exhibits

See exhibit index.

(b) Reports

On July 27, 2001, the Company filed a Current Report on Form 8-K pursuant to
Item 5 relating to certain announcements by the Company.

On August 16, 2001, the Company filed a Current Report on Form 8-K pursuant to
Item 5 relating to certain announcements by the Company.

SIGNATURES

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

|Dated: November 14, 2001 | LASER MORTGAGE MANAGEMENT, INC.
By: /s/ Charles R. Howe, II
       Charles R. Howe, II
       Chief Financial Officer
       (principal accounting officer)
       (authorized officer of registrant)
|------------------------ | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

EXHIBIT INDEX

|Exhibit Number | Exhibit
|-------------- | -------

|2.1 | The Articles of Merger (Incorporated by reference to Exhibit 2.1 to Registrant's
Quarterly Report on Form 10-Q dated June 30, 2001.)
|--- | ------------------------------------------------------------------------------------------------------------------------------------

|2.2 | The Certificate of Ownership and Merger (Incorporated by reference to Exhibit
2.2 to Registrant's Quarterly Report on Form 10-Q dated June 30, 2001.)
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------

|2.3 | Plan of Liquidation and Dissolution of LASER Mortgage Management, Inc.
(Incorporated by reference to Exhibit 2.3 to Registrant's Quarterly Report on
Form 10-Q dated June 30, 2001.)
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|3.1 | Restated Certificate of Incorporation of LASER Mortgage Management, Inc., a
Delaware corporation (Incorporated by reference to Exhibit 3.1 to Registrant's
Quarterly Report on Form 10-Q dated June 30, 2001.)
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|3.2 | Bylaws of LASER Mortgage Management, Inc., a Delaware corporation (Incorporated
by reference to Exhibit 3.2 to Registrant's Quarterly Report on Form 10-Q dated
June 30, 2001.)
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.1* | Support Services Agreement dated as of November 1, 2001 between the Registrant
and Mariner Investment Group, Inc.
|----- | -----------------------------------------------------------------------------------------------------------------

|10.2* | Employment Agreement dated as of November 1, 2001 between the Registrant and
William J. Michaelcheck
|----- | ----------------------------------------------------------------------------------------------------

|10.3* | Employment Agreement dated as of November 1, 2001 between the Registrant and
Charles R. Howe, II.
|----- | -------------------------------------------------------------------------------------------------

|99.1* | Certificate of Dissolution
|----- | --------------------------

*Filed herewith.