<PAGE>

                                 EXHIBIT 10.1

<PAGE>

                                                                    EXHIBIT 10.1

<TABLE>
<CAPTION>
 THE                                                                                               Distribution Date: 3/25/00
BANK OF
 NEW
 YORK

101 Barclay Street - 12E
New York, NY 10286

Attn: Anna Felt                                Headlands Mortgage Securities Inc.
212-815-7166                             Mortgage Pass-Through Certificates, Series 1998-3
                                      Headlands Mortgage Company, Seller and Master Servicer

                                          Certificateholder Monthly Distribution Summary

----------------------------------------------------------------------------------------------------------------------------------
                               Certificate                      Pass                                                     Current
                     Class         Rate        Beginning      Through      Principal      Interest          Total        Realized
Class    Cusip    Description      Type         Balance       Rate (%)   Distribution    Distribution    Distribution     Losses
----------------------------------------------------------------------------------------------------------------------------------
<S>    <C>        <C>          <C>          <C>               <C>        <C>             <C>             <C>             <C>
 A-1   42209EGD6     Senior     Fix-30/360  204,032,629.92    6.650000   1,844,214.14    1,130,680.82     2,974,894.96     0.00
 PO    42209EGE4    Strip PO    Fix-30/360      964,602.68    0.000000       1,108.90            0.00         1,108.90     0.00
  R    42209EGF1     Senior     Fix-30/360            0.00    6.650000           0.00            0.00             0.00     0.00
----------------------------------------------------------------------------------------------------------------------------------
 B-1   42209EGG9     Junior     Fix-30/360    4,498,939.04    6.650000       4,361.96       24,931.62        29,293.58     0.00
 B-2   42209EGH7     Junior     Fix-30/360    2,024,488.01    6.650000       1,962.85       11,219.04        13,181.89     0.00
 B-3   42209EGJ3     Junior     Fix-30/360    1,349,691.58    6.650000       1,308.60        7,479.54         8,788.14     0.00
 B-4   42209EGK0     Junior     Fix-30/360      787,361.23    6.650000         763.39        4,363.29         5,126.68     0.00
 B-5   42209EGL8     Junior     Fix-30/360      674,796.42    6.650000         654.25        3,739.50         4,393.75     0.00
 B-6   42209EGM6     Junior     Fix-30/360      787,412.17    6.650000         763.44        4,363.58         5,127.01     0.00
----------------------------------------------------------------------------------------------------------------------------------
Totals                                      215,119,921.05               1,855,137.53    1,186,777.39     3,041,914.91     0.00
----------------------------------------------------------------------------------------------------------------------------------

<CAPTION>
--------------------------------------
                           Cumulative
             Ending         Realized
Class        Balance        Losses
--------------------------------------
<S>       <C>              <C>
 A-1      202,188,415.78     0.00
 PO           963,493.78     0.00
  R                 0.00     0.00
--------------------------------------
 B-1        4,494,577.07     0.00
 B-2        2,022,525.16     0.00
 B-3        1,348,382.99     0.00
 B-4          786,597.84     0.00
 B-5          674,142.17     0.00
 B-6          786,648.74     0.00
--------------------------------------
Totals    213,264,783.53     0.00
--------------------------------------
</TABLE>

                                    Page 1
<PAGE>

<TABLE>
<CAPTION>
  THE                                                                                 Distribution Date: 3/25/00
BANK OF
  NEW
 YORK

101 Barclay Street - 12E
New York, NY 10286
                                                Headlands Mortgage Securities Inc.
Attn: Anna Felt
      212-815-7166                       Mortgage Pass-Through Certificates, Series 1998-3
                                     Headlands Mortgage Company, Seller and Master Servicer


                                                    Principal Distribution Detail

---------------------------------------------------------------------------------------------------------------------------------
                      Original       Beginning       Scheduled                Unscheduled     Net        Current      Ending
                    Certificate     Certificate      Principal    Accretion    Principal    Principal    Realized  Certificate
 Class     Cusip      Balance         Balance       Distribution  Principal   Adjustments  Distribution   Losses     Balance
---------------------------------------------------------------------------------------------------------------------------------
<S>     <C>        <C>             <C>              <C>           <C>
  A-1   42209EGD6  216,562,200.00  204,032,629.92   1,844,214.14       0.00          0.00  1,844,214.14      0.00  202,188,415.78
  PO    42209EGE4    1,002,393.00      964,602.68       1,108.90       0.00          0.00      1,108.90      0.00      963,493.78
   R    42209EGF1          100.00            0.00           0.00       0.00          0.00          0.00      0.00            0.00
---------------------------------------------------------------------------------------------------------------------------------
  B-1   42209EGG9    4,556,300.00    4,498,939.04       4,361.96       0.00          0.00      4,361.96      0.00    4,494,577.07
  B-2   42209EGH7    2,050,300.00    2,024,488.01       1,962.85       0.00          0.00      1,962.85      0.00    2,022,525.16
  B-3   42209EGJ3    1,366,900.00    1,349,691.58       1,308.60       0.00          0.00      1,308.60      0.00    1,348,382.99
  B-4   42209EGK0      797,400.00      787,361.23         763.39       0.00          0.00        763.39      0.00      786,597.84
  B-5   42209EGL8      683,400.00      674,796.42         654.25       0.00          0.00        654.25      0.00      674,142.17
  B-6   42209EGM6      797,452.00      787,412.17         763.44       0.00          0.00        763.44      0.00      786,648.74
---------------------------------------------------------------------------------------------------------------------------------
Totals             227,816,445.00  215,119,921.05   1,855,137.53       0.00          0.00  1,855,137.53      0.00  213,264,783.53
---------------------------------------------------------------------------------------------------------------------------------

<CAPTION>
-----------------------
               Ending
            Certificate
Class         Factor
-----------------------
<S>       <C>
  A-1     0.93362745567
  PO      0.96119364506
   R      0.00000000000
-----------------------
  B-1     0.98645327868
  B-2     0.98645327868
  B-3     0.98645327868
  B-4     0.98645327868
  B-5     0.98645327868
  B-6     0.98645277151
-----------------------
Totals
-----------------------
</TABLE>

                                    Page 2
<PAGE>

<TABLE>
<CAPTION>
  THE                                                                                 Distribution Date: 3/25/00
BANK OF
  NEW
 YORK

101 Barclay Street - 12E
New York, NY 10286
                                                Headlands Mortgage Securities Inc.
Attn: Anna Felt
      212-815-7166                       Mortgage Pass-Through Certificates, Series 1998-3
                                     Headlands Mortgage Company, Seller and Master Servicer


                                                   Interest Distribution Detail

------------------------------------------------------------------------------------------------------------------------------------
             Beginning      Pass        Accrued      Cumulative                 Total          Net        Unscheduled
           Certificate     Through      Optimal        Unpaid      Deferred    Interest     Prepayment      Interest     Interest
Class         Balance      Rate (%)     Interest      Interest     Interest      Due       Int Shortfall   Adjustment      Paid
------------------------------------------------------------------------------------------------------------------------------------
<S>       <C>              <C>        <C>            <C>           <C>        <C>          <C>            <C>           <C>
  A-1     204,032,629.92   6.650000   1,130,680.82        0.00         0.00   1,130,680.82          0.00          0.00  1,130,680.82
  PO          964,602.68   0.000000           0.00        0.00         0.00           0.00          0.00          0.00          0.00
   R                0.00   6.650000           0.00        0.00         0.00           0.00          0.00          0.00          0.00
------------------------------------------------------------------------------------------------------------------------------------
  B-1       4,498,939.04   6.650000      24,931.62        0.00         0.00      24,931.62          0.00          0.00     24,931.62
  B-2       2,024,488.01   6.650000      11,219.04        0.00         0.00      11,219.04          0.00          0.00     11,219.04
  B-3       1,349,691.58   6.650000       7,479.54        0.00         0.00       7,479.54          0.00          0.00      7,479.54
  B-4         787,361.23   6.650000       4,363.29        0.00         0.00       4,363.29          0.00          0.00      4,363.29
  B-5         674,796.42   6.650000       3,739.50        0.00         0.00       3,739.50          0.00          0.00      3,739.50
  B-6         787,412.17   6.650000       4,363.58        0.00         0.00       4,363.58          0.00          0.00      4,363.58
------------------------------------------------------------------------------------------------------------------------------------
Totals    215,119,921.05              1,186,777.39        0.00         0.00   1,186,777.39          0.00          0.00  1,186,777.39
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

                                    Page 3
<PAGE>

       THE                                            Distribution Date: 3/25/00
      BANK OF
       NEW
       YORK

101 Barclay Street - 12E
New York, NY 10286

Attn: Anna Felt
     212-815-7166
                      Headlands Mortgage Securities Inc.
               Mortgage Pass-Through Certificates, Series 1998-3
            Headlands Mortgage Company, Seller and Master Servicer

<TABLE>
<CAPTION>
                                                    Current Payment Information
                                                        Factors per $1,000
-----------------------------------------------------------------------------------------------------------------------------------
                                              Original         Beginning Cert.
                                             Certificate         Notional                 Principal                   Interest
 Class                     Cusip              Balance            Balance                 Distribution                Distribution
-----------------------------------------------------------------------------------------------------------------------------------
<S>                        <C>              <C>                <C>                       <C>                         <C>
  A-1                      42209EGD6        216,562,200.00     942.143319191             8.515863521                 5.221044227
  PO                       42209EGE4          1,002,393.00     962.299900340             1.106255283                 0.000000000
  R                        42209EGF1                100.00       0.000000000             0.000000000                 0.000000000
-----------------------------------------------------------------------------------------------------------------------------------
  B-1                      42209EGG9          4,556,300.00     987.410626156             0.957347472                 5.471900553
  B-2                      42209EGH7          2,050,300.00     987.410626156             0.957347472                 5.471900553
  B-3                      42209EGJ3          1,366,900.00     987.410626156             0.957347472                 5.471900553
  B-4                      42209EGK0            797,400.00     987.410626156             0.957347472                 5.471900553
  B-5                      42209EGL8            683,400.00     987.410626156             0.957347472                 5.471900553
  B-6                      42209EGM6            797,452.00     987.410118491             0.957346980                 5.471897740
-----------------------------------------------------------------------------------------------------------------------------------
 Totals                                     227,816,445.00     944.268624023             8.143123864                 5.209357867
-----------------------------------------------------------------------------------------------------------------------------------

<CAPTION>
------------------------------------------------------------------
                            Ending Cert.            Pass
                             Notional              Through
 Class                       Balance                Rate (%)
------------------------------------------------------------------
<S>                         <C>                    <C>
  A-1                       933.627455670          6.650000
  PO                        961.193645058          0.000000
  R                           0.000000000          6.650000
------------------------------------------------------------------
  B-1                       986.453278684          6.650000
  B-2                       986.453278684          6.650000
  B-3                       986.453278684          6.650000
  B-4                       986.453278684          6.650000
  B-5                       986.453278684          6.650000
  B-6                       986.452771511          6.650000
------------------------------------------------------------------
                            936.125500203
------------------------------------------------------------------
</TABLE>

                                    Page 4
<PAGE>

<TABLE>
<CAPTION>
  THE
BANK OF
  NEW
  YORK

101 Barclay Street - 12E
New York, NY 10286

Attn: Anna Felt                     Headlands Mortgage Securities Inc.
212-815-7166                Mortgage Pass-Through Certificates, Series 1998-3
                          Headlands Mortgage Company, Seller and Master Servicer
<S>                                                                             <C>
Pool Level Data

Distribution Date                                                                      3/25/00
Cut-off Date                                                                           12/1/98
Determination Date                                                                      3/1/00
Accrual Period                            Begin                                         2/1/00
                                          End                                           3/1/00
Number of Days in Accrual Period                                                            29

------------------------------------------------------------------------
                      Collateral Information
------------------------------------------------------------------------

Group 1
-------

Cut-Off Date Balance                                                            227,816,444.00

Beginning Aggregate Pool Stated Principal Balance                               215,119,921.48
Ending Aggregate Pool Stated Principal Balance                                  213,264,783.95

Beginning Aggregate Certificate Stated Principal Balance                        215,119,921.06
Ending Aggregate Certificate Stated Principal Balance                           213,264,783.53

Beginning Aggregate Loan Count                                                             819
Loans Paid Off or Otherwise Removed Pursuant to Pooling and Servicing Agreement              2
Ending Aggregate Loan Count                                                                817

Beginning Weighted Average Loan Rate (WAC)                                            7.152252%
Ending Weighted Average Loan Rate (WAC)                                               7.150677%

Beginning Net Weighted Average Loan Rate                                              6.893750%
Ending Net Weighted Average Loan Rate                                                 6.892175%

Aggregate Pool Prepayment                                                         1,646,531.16
Pool Prepayment Rate                                                                8.8079 CPR

------------------------------------------------------------------------
                        Certificate Information
------------------------------------------------------------------------

Group 1
-------

Senior Percentage                                                                95.2732023965%
Senior Prepayment Percentage                                                    100.0000000000%

Subordinate Percentage                                                            4.7267976035%
Subordinate Prepayment Percentage                                                 0.0000000000%


Prepayment Compensation
Total Gross Prepayment Interest Shortfall                                                 0.00
Compensation for Gross PPIS from Servicing Fees                                           0.00
Other Gross PPIS Compensation                                                             0.00
                                                                                          ----
</TABLE>

                                    Page 1
<PAGE>

    THE
  BANK OF
    NEW
   YORK
101 Barclay Street - 12E
New York, NY 10286
                      Headlands Mortgage Securities Inc.
Attn: Anna Felt   Mortgage Pass-Through Certificates, Series 1998-3
212-815-7166    Headlands Mortgage Company, Seller and Master Servicer


<TABLE>
<S>                                                                                                 <C>
                                                                                                         ----
Total Net PPIS (Non-Supported PPIS)                                                                      0.00


Master Servicing Fees Paid                                                                          93,858.46
Sub Servicing Fees Paid                                                                                  0.38
Trustee Fees Paid                                                                                    1,523.77
                                                                                                    ---------
Total Fees                                                                                          95,382.61
</TABLE>

------------------------------------------------------------
                Delinquency Information
------------------------------------------------------------

<TABLE>
<CAPTION>
Group 1
-------
Delinquency                                     30 - 59 Days        60 - 89 Days       90+ Days        Totals
-----------                                     ------------        ------------       --------        ------
<S>                                             <C>                 <C>               <C>           <C>
Scheduled Principal Balance                             0.00                0.00      58,772.74     58,772.74
Percentage of Total Pool Balance                    0.000000%           0.000000%      0.027559%     0.027559%
Number of Loans                                            0                   0              1             1
Percentage of Total Loans                           0.000000%           0.000000%      0.122399%     0.122399%

Foreclosure
-----------
Scheduled Principal Balance                             0.00                0.00           0.00          0.00
Percentage of Total Pool Balance                    0.000000%           0.000000%      0.000000%     0.000000%
Number of Loans                                            0                   0              0             0
Percentage of Total Loans                           0.000000%           0.000000%      0.000000%     0.000000%

Bankruptcy
----------
Scheduled Principal Balance                             0.00                0.00           0.00          0.00
Percentage of Total Pool Balance                    0.000000%           0.000000%      0.000000%     0.000000%
Number of Loans                                            0                   0              0             0
Percentage of Total Loans                           0.000000%           0.000000%      0.000000%     0.000000%

REO
---
Scheduled Principal Balance                             0.00                0.00           0.00          0.00
Percentage of Total Pool Balance                    0.000000%           0.000000%      0.000000%     0.000000%
Number of Loans                                            0                   0              0             0
Percentage of Total Loans                           0.000000%           0.000000%      0.000000%     0.000000%

Book Value of all REO Loans                                                                              0.00
Percentage of Total Pool Balance                                                                     0.000000%

Current Realized Losses                                                                                  0.00
</TABLE>

                                    Page 2
<PAGE>

     THE
   BANK OF
     NEW
     YORK
101 Barclay Street - 12E
New York, NY 10286
                                 Headlands Mortgage Securities Inc.
Attn: Anna Felt            Mortgage Pass-Through Certificates, Series 1998-3
      212-815-7166      Headlands Mortgage Company, Seller and Master Servicer

<TABLE>
<S>                                                                                                                           <C>
Additional Gains (Recoveries)/Losses                                                                                          0.00
Total Realized Losses                                                                                                         0.00
</TABLE>

-----------------------------------------------------------------
         Subordination/Credit Enhancement Information
-----------------------------------------------------------------

<TABLE>
<CAPTION>
Protection                                                                                       Original                  Current
----------                                                                                       --------                  -------
<S>                                                                                        <C>                      <C>
Bankruptcy Loss                                                                                100,000.00                     0.00
Bankruptcy Percentage                                                                            0.043895%                0.000000%
Credit/Fraud Loss                                                                            2,278,164.00             2,278,164.00
Credit/Fraud Loss Percentage                                                                     1.000000%                1.068233%
Special Hazard Loss                                                                          3,919,310.00             3,869,239.43
Special Hazard Loss Percentage                                                                   1.720381%                1.814289%

Credit Support                                                                                   Original                  Current
--------------                                                                                   --------                  -------

Class A                                                                                    217,564,693.00           203,151,909.56
Class A Percentage                                                                              95.499995%               95.258067%

Class B-1                                                                                    4,556,300.00             4,494,577.07
Class B-1 Percentage                                                                             1.999987%                2.107510%

Class B-2                                                                                    2,050,300.00             2,022,525.16
Class B-2 Percentage                                                                             0.899979%                0.948363%

Class B-3                                                                                    1,366,900.00             1,348,382.99
Class B-3 Percentage                                                                             0.600001%                0.632258%

Class B-4                                                                                      797,400.00               786,597.84
Class B-4 Percentage                                                                             0.350019%                0.368836%

Class B-5                                                                                      683,400.00               674,142.17
Class B-5 Percentage                                                                             0.299978%                0.316106%

Class B-6                                                                                      797,452.00               786,648.74
Class B-6 Percentage                                                                             0.350041%                0.368860%
</TABLE>

                                    Page 3